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Press release from PR Newswire

Nucor Reports Results For Third Quarter And First Nine Months Of 2012

Thursday, October 18, 2012

Nucor Reports Results For Third Quarter And First Nine Months Of 201209:00 EDT Thursday, October 18, 2012CHARLOTTE, N.C., Oct. 18, 2012 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $110.3 million, or $0.35 per diluted share, for the third quarter of 2012.  By comparison, Nucor reported net earnings of $112.3 million, or $0.35 per diluted share, in the second quarter of 2012 and net earnings of $181.5 million, or $0.57 per diluted share, in the third quarter of 2011.  Third quarter of 2012 results include non-cash inventory related purchase accounting charges of approximately $28.2 million ($0.06 per diluted share) associated with our acquisition of Skyline Steel LLC ("Skyline"), which occurred late in the second quarter of 2012.  Third quarter of 2012 results were also negatively impacted by a loss on the sale of the assets of Nucor Wire Products Pennsylvania, Inc. of $17.6 million ($0.04 per diluted share).  In the first nine months of 2012, Nucor reported consolidated net earnings of $367.7 million, or $1.15 per diluted share, compared with consolidated net earnings of $641.1 million, or $2.02 per diluted share, in the first nine months of last year. The year-to-date of impact of Skyline inventory related purchase accounting adjustments was $36.8 million ($.08 per diluted share).  We expect such charges to be much lower in the fourth quarter.  Nucor recorded a credit to value inventories using the last-in, first-out (LIFO) method of accounting of $84.0 million ($0.16 per diluted share) in the third quarter of 2012, compared with a credit of $14.5 million ($0.03 per diluted share) in the second quarter of 2012 and a charge of $28.0 million ($0.05 per diluted share) in the third quarter of 2011.  The LIFO credit in the first nine months of 2012 was $84.0 million ($0.16 per diluted share) compared with a charge of $91.0 million ($0.17 per diluted share) in the first nine months of 2011.  Nucor's consolidated net sales decreased 6% to $4.80 billion in the third quarter of 2012 compared with $5.10 billion in the second quarter of 2012 and decreased 9% compared with $5.25 billion in the third quarter of 2011. Average sales price per ton decreased 3% from the second quarter of 2012 and decreased 8% from the third quarter of 2011. Total tons shipped to outside customers were 5,768,000 tons in the third quarter of 2012, a 3% decrease from the second quarter of 2012 and a slight decrease from the third quarter of 2011.  Total third quarter steel mill shipments were  down  3%  from  the  second  quarter of  2012 and decreased 2%  from  the  third  quarter  of  2011.  Third quarter downstream steel products shipments to outside customers increased 1% over the second quarter of 2012 and 4% over the third quarter of 2011.In the first nine months of 2012, Nucor's consolidated net sales decreased 1% to $14.98 billion, compared with $15.19 billion in last year's first nine months. Total tons shipped to outside customers increased 1% over the first nine months of 2011, while average sales price per ton decreased 3%.The average scrap and scrap substitute cost per ton used in the third quarter of 2012 was $380, a decrease of 11% from $427 in the second quarter of 2012 and a decrease of 15% from $449 in the third quarter of 2011. The average scrap and scrap substitute cost per ton used in the first nine months of 2012 was $418, a decrease of 5% from $439 in the first nine months of 2011.Overall operating rates at our steel mills in the third quarter (71%) were down from the second quarter (76%) and from last year's third quarter (74%).  Year-to-date steel mill utilization was flat (75%) compared with the prior year period.  Total energy costs increased approximately $5 per ton over the second quarter of 2012 primarily due to higher electricity and natural gas unit costs.  Energy costs decreased approximately $2 per ton from the third quarter of 2011 and decreased $3 per ton from the first nine months of 2011 primarily due to lower natural gas unit costs.Construction is going well on our 2,500,000-ton DRI facility in Louisiana. The majority of the equipment will arrive in 2012, and we are on schedule for completion of construction and beginning of start-up in mid-2013.Our liquidity position remains strong with $2.54 billion in cash and cash equivalents, short-term investments, and restricted cash and investments.  Our $1.5 billion revolving credit facility that matures in December 2016 remains unused.In September, Nucor's board of directors declared a cash dividend of $0.365 per share payable on November 9, 2012 to stockholders of record on September 28, 2012.  This dividend is Nucor's 158th consecutive quarterly cash dividend, a record we expect to continue.Our third quarter results reflect a continuing trend of reduced operating profits at our steel mills, most significantly in sheet and plate.  Lower steel mill margins are primarily the result of very high import levels, which began rising in 2011.  According to U.S. Census Bureau reports, 2012 steel products imports are on pace to reach 27.7 million short tons in 2012.  This represents an increase of 21% from 2011 imports of 22.8 million tons and is 43% higher than 2010 import levels of 19.3 million tons.  In addition, U.S. sheet steel markets have been negatively impacted by new domestic supply that began ramping up production in 2011.We currently expect to see some further reduction in earnings exclusive of one-time charges for the fourth quarter of 2012.  In addition to high import levels and excess domestic sheet supply, slowing economic growth both domestically and globally is expected to be a negative factor through the end of the year.  Volatility in scrap prices, together with a combination of political and economic uncertainty in global markets, is impacting steel buyer confidence and therefore supply-chain stocking levels.  The strongest end markets continue to be manufactured goods including automotive, energy and heavy equipment.  The construction market continues to be very challenging.Nucor and affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and alloy steel -- in bars, beams, sheet and plate; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating and expanded metal; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.Certain statements contained in this news release are "forward-looking statements" that involve risks and uncertainties.  The words "believe," "expect," "project," "will," "should," "could" and similar expressions are intended to identify those forward-looking statements.  Factors that might cause the Company's actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including scrap steel; (2) market demand for steel products; (3) energy costs and availability; and (4) competitive pressure on sales and pricing, including competition from imports and substitute materials.  These and other factors are outlined in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's December 31, 2011 Annual Report on Form 10-K.  The forward-looking statements contained in this news release speak only as of this date, and Nucor does not assume any obligation to update them.You are invited to listen to the live broadcast of Nucor's conference call in which management will discuss Nucor's third quarter results on October 18, 2012 at 2:00 p.m. eastern time. The conference call will be available over the Internet at www.nucor.com, under Investor Relations. TONNAGE DATA  (in thousands)  Three Months (13 Weeks) Ended  Nine Months (39 Weeks) Ended Sept. 29, 2012Oct. 1, 2011Percentage ChangeSept. 29, 2012Oct. 1, 2011Percentage ChangeSteel mills production4,8194,910-2%15,13914,7962%Steel mills total shipments5,0435,128-2%15,48015,1922%Sales tons to outside customers:Steel mills4,1444,194-1%12,83212,6641%Joist7882-5%217219-1%Deck8083-4%221234-6%Cold finished118118-3883812%Fabricated concretereinforcing steel34331210%91580813%Other1,0059961%3,0413,055-5,7685,785-17,61417,3611% CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)(In thousands, except per share data)  Three Months (13 Weeks) Ended    Nine Months (39 Weeks) Ended  Sept. 29, 2012Oct. 1, 2011Sept. 29, 2012Oct. 1, 2011Net sales$    4,801,206$    5,252,144$  14,977,999$  15,193,887Costs, expenses and other:  Cost of products sold4,452,4734,794,01413,848,80913,662,572  Marketing, administrative and other expenses114,392108,532334,039349,482  Equity in losses ofunconsolidated affiliates2,26111,2479,09314,190  Impairment of non-current assets-13,94330,00013,943  Interest expense, net40,30540,193123,028125,9434,609,4314,967,92914,344,96914,166,130Earnings before income taxes andnoncontrolling interests191,775284,215633,0301,027,757Provision for income taxes61,88384,104200,159324,946Net earnings129,892200,111432,871702,811Earnings attributable tononcontrolling interests19,58418,59365,16061,679Net earnings attributable to Nucor stockholders$       110,308$       181,518$       367,711$       641,132Net earnings per share:  Basic$0.35$0.57$1.15$2.02  Diluted$0.35$0.57$1.15$2.02Average shares outstanding:  Basic318,463317,194318,042316,866  Diluted318,520317,287318,113317,061  CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)  (In thousands) Sept. 29, 2012Dec. 31, 2011 ASSETS  Current assets:  Cash and cash equivalents $    1,693,197$    1,200,645 Short-term investments 430,2661,362,641 Accounts receivable, net 1,799,3051,710,773 Inventories, net 2,217,3741,987,257 Other current assets 481,931446,765 Total current assets 6,622,0736,708,081 Property, plant and equipment, net 4,106,2383,755,604 Restricted cash and investments 414,203585,833 Goodwill 2,008,4611,830,661 Other intangible assets, net 980,348784,640 Other assets 865,924905,531 Total assets $  14,997,247$  14,570,350 LIABILITIES  Current liabilities:  Short-term debt $         30,865$          1,826 Long-term debt due within one year 900,000650,000 Accounts payable 1,186,665958,645 Salaries, wages and related accruals 286,780333,341 Accrued expenses and other current liabilities 482,717452,247 Total current liabilities 2,887,0272,396,059 Long-term debt due after one year 3,380,2003,630,200 Deferred credits and other liabilities 866,446837,511 Total liabilities 7,133,6736,863,770 EQUITY  Nucor stockholders' equity:  Common stock 150,798150,496 Additional paid-in capital 1,804,1561,756,534 Retained earnings 7,129,2367,111,566 Accumulated other comprehensive income (loss),  net of income taxes 51,313(38,177) Treasury stock (1,502,159)(1,505,534) Total Nucor stockholders' equity 7,633,3447,474,885 Noncontrolling interests 230,230231,695 Total equity 7,863,5747,706,580 Total liabilities and equity $  14,997,247$  14,570,350  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)  (In thousands) Nine Months (39 Weeks) EndedSept. 29, 2012Oct. 1, 2011Operating activities:Net earnings $         432,871$         702,811Adjustments:Depreciation394,690391,847Amortization53,51851,675Stock-based compensation42,85840,323Deferred income taxes(42,548)40,855Equity in losses of unconsolidated affiliates9,09314,190Impairment of non-current assets30,00013,943Loss on sale of facility17,563-Changes in assets and liabilities (exclusive of acquisitions):Accounts receivable62,787(401,237)Inventories41,662(634,048)Accounts payable21,668290,885Federal income taxes11,2482,217Salaries, wages and related accruals(52,561)141,407Other101,83528,616Cash provided by operating activities1,124,684683,484Investing activities:Capital expenditures(613,777)(328,592)Investment in and advances to affiliates(66,423)(76,678)Repayment of advances to affiliates32,50015,000Disposition of plant and equipment42,57422,155Acquisitions (net of cash acquired)(763,657)-Purchases of investments(409,403)(614,982)Proceeds from the sale of investments1,341,913456,055Purchases of restricted investments-(564,994)Proceeds from the sale of restricted investments209,93018,299Changes in restricted cash(38,301)538,644Cash used in investing activities(264,644)(535,093)Financing activities:Net change in short-term debt28,983(5,646)Issuance of common stock10,5156,957Excess tax benefits from stock-based compensation4,377700Distributions to noncontrolling interests(66,562)(55,855)Cash dividends(349,538)(346,005)Other financing activities96230,000Cash used in financing activities (371,263)(369,849)Effect of exchange rate changes on cash3,775(2,511)Increase (decrease) in cash and cash equivalents492,552(223,969)Cash and cash equivalents - beginning of year1,200,6451,325,406Cash and cash equivalents - end of nine months$      1,693,197$      1,101,437Non-cash investing activity:Accrued property and equipment purchases$           77,764$          (10,340)SOURCE Nucor CorporationFor further information: Nucor Executive Offices, +1-704-366-7000, or fax, +1-704-362-4208