FORT WAYNE, Ind., July 18 /PRNewswire-FirstCall/ -- Steel Dynamics, Inc.
(Nasdaq: STLD) today announced second quarter 2005 earnings of $51 million, or
$1.00 per diluted share, versus $67 million or $1.20 per diluted share in the
second quarter of 2004 and $61 million, or $1.12 per diluted share, in this
year's first quarter. Net sales for the second quarter were $546 million, an
increase of 4 percent from the second quarter of 2004, but 4 percent lower
than the first quarter of 2005.
"Demand for flat-rolled steel in the second quarter was much weaker than
initially expected, particularly toward the end of the quarter," said Keith
Busse, President and CEO of Steel Dynamics. "This resulted in lower selling
prices and a decrease in the spread between selling prices and the cost of the
ferrous scrap consumed during the quarter. Our average consolidated selling
price per ton shipped decreased $61 per ton, from $669 in the first quarter to
$608 in the second quarter, while our metallics costs were down $49 per ton.
Although falling scrap prices in the second quarter are a positive for future
quarters, our raw materials costs in the second quarter reflected the somewhat
higher prices of materials purchased earlier.
"While the Company and the industry experienced reduced order entry rates
in the second quarter, Steel Dynamics performed very well operationally and
continues to operate at historically high levels of profitability. In May the
Flat Roll Division achieved a hot band production record, while yet in June,
due to market conditions, production was off by 15 percent versus our early
expectations. Additionally, the Structural & Rail Division set a new record
for structural steel shipments in June, and its quarterly shipments, for the
first time, exceeded 200,000 tons. The Bar Products Division continues to
expand its offerings of SBQ products and achieved a 20 percent increase in
shipments compared to the first quarter," Busse said.
Second quarter consolidated shipments of 897,000 tons were 1 percent
higher than the second quarter of 2004 and 5 percent higher than the first
quarter of 2005. Steel operations shipments were virtually unchanged compared
to the second quarter of 2004, but were up 4 percent over the first quarter.
Flat Roll shipping volume in the second quarter was unchanged from the first
quarter, but shipments of structural steel and SBQ bars increased.
"The flat roll market remains soft in comparison to 2004, although we are
encouraged by recent order-entry volume and are hopeful this trend will
continue," Busse said. "Our structural steel backlog is at a record level, as
we believe that the non-residential construction market is improving. Our SBQ
bar backlog is weak in comparison to 2004, but with the new contract season
just ahead, SDI is well positioned with a broad array of new products to gain
new business."
Progress on the Mesabi Nugget project remains slow due to challenges to
the permitting process in both Minnesota and Indiana.
New Millennium Building Systems, our wholly owned subsidiary engaged in
the manufacture of steel joists and decking, continues to perform well with
production ramping up at the new Lake City, Florida, plant. Lake City, which
started production in March, is expected to be profitable in the third
quarter.
During the quarter the Company repurchased an additional 3.6 million
shares of its common stock, nearly completing the repurchase programs
authorized by the Board of Directors. During the past three quarters the
company has repurchased 7.3 million shares.
Conference Call and Webcast
On Tuesday, July 19, 2005 at 11:00 a.m. Eastern, Steel Dynamics will host
a conference call in which Steel Dynamics' management will discuss second
quarter 2005 results. You are invited to listen to the live audio broadcast
of the conference call over the Internet, accessible from Steel Dynamics' Web
site:
http://www.steeldynamics.com
Dial-in information is available on our Web site. No telephone replay
will be available. An audio replay of the Webcast will be available from the
SDI Web site.
Forward Looking Statements
This press release contains some predictive statements about future
events, including statements related to conditions in the steel marketplace,
Steel Dynamics' revenue growth, costs of raw materials, future profitability,
and the operation of new or existing facilities. These statements are
intended to be made as "forward-looking," subject to many risks and
uncertainties, within the safe harbor protections of the Private Securities
Litigation Reform Act of 1995. Such predictive statements are not guarantees
of future performance, and actual results could differ materially from our
current expectations.
We refer you to SDI's detailed explanation of the many factors and risks
that may cause such predictive statements to turn out differently, as set
forth in our most recent Annual Report on Form 10-K and in other reports which
we from time to time file with the Securities and Exchange Commission,
available publicly on the SEC Web site, http://www.sec.gov , and on the Steel
Dynamics Web site, http://www.steeldynamics.com
Steel Dynamics, Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Net sales $545,826 $525,657 $1,116,532 $909,802
Costs of goods sold 434,642 388,986 876,571 696,656
Selling, general, and
administrative expenses 20,081 21,555 42,535 39,490
Operating income 91,103 115,116 197,426 173,656
Interest expense 8,898 10,592 16,975 20,096
Other (income)
expense, net (175) (3,143) (753) (5,246)
Income before
income taxes 82,380 107,667 181,204 158,806
Income taxes 31,717 40,375 69,764 59,552
Net income $50,663 $67,292 $111,440 $99,254
Basic earnings per share $1.14 $1.36 $2.42 $2.02
Weighted average
common shares outstanding 44,510 49,340 46,106 49,143
Diluted earnings
per share,
including effect of
assumed conversions $1.00 $1.20 $2.12 $1.78
Weighted average
common shares
and share equivalents
outstanding 51,472 56,545 53,150 56,379
Dividends declared
per share $.10 $ - $.20 $ -
Steel Dynamics, Inc.
UNAUDITED SUPPLEMENTAL OPERATING INFORMATION
Three Months Ended Six Months Ended First
June 30, June 30, Quarter
2005 2004 2005 2004 2005
Shipments and Production Data (tons)
Shipments
Steel Operations *
Flat Roll
Division 569,867 608,570 1,139,423 1,178,522 569,556
Structural &
Rail Division 205,433 194,163 392,047 392,411 186,614
Bar Products
Division 108,434 82,323 197,982 101,601 89,548
883,734 885,056 1,729,452 1,672,534 845,718
Other
Operations ** 99,424 88,465 196,665 181,353 97,241
Intercompany (86,072) (84,691) (175,888) (166,429) (89,816)
Consolidated
shipments 897,086 888,830 1,750,229 1,687,458 853,143
Steel Operations*
production 893,559 888,193 1,775,870 1,698,168 882,311
Average consolidated
selling price
per ton $608 $591 $638 $539 $669
* Steel Operations include the company's Flat Roll Division, Structural
and Rail Division and Bar Products Division.
** Other Operations include New Millennium Building Systems, Paragon Steel
Trading and Iron Dynamics.
Steel Dynamics, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2005 2004
(unaudited)
Assets
Current assets
Cash and equivalents $1,645 $16,334
Accounts receivable 239,367 253,861
Inventories 421,894 381,488
Deferred income taxes 7,933 6,856
Other current assets 13,439 18,980
Total current assets 684,278 677,519
Property, plant and equipment, net 1,018,112 1,024,044
Restricted cash 1,588 989
Other assets 31,983 31,067
Total assets $1,735,961 $1,733,619
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $93,147 $141,888
Accrued interest 9,297 8,796
Accrued expenses 52,382 75,750
Current portion of long-term debt 8,572 6,774
Total current liabilities 163,398 233,208
Long-term debt, including bond premium
of $6,303 and $7,147 at June 30, 2005
and December 31, 2004, respectively 564,840 441,605
Deferred income taxes 224,760 209,215
Minority interest 1,035 2,469
Commitments and contingencies
Stockholders' equity
Common stock 527 523
Treasury stock, at cost (264,565) (84,141)
Additional paid-in capital 403,337 390,505
Retained earnings 642,629 540,235
Total stockholders' equity 781,928 847,122
Total liabilities and
stockholders' equity $1,735,961 $1,733,619
Steel Dynamics, Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Operating activities:
Net income $50,663 $67,292 $111,440 $99,254
Adjustments to reconcile
net income to net cash
provided by operating activities:
Depreciation and
amortization 21,579 23,629 43,409 42,408
Deferred income taxes 1,435 20,930 14,468 32,598
Minority interest (1,552) 562 (1,434) 1,211
Changes in certain
assets and liabilities:
Accounts receivable 28,426 (34,558) 14,494 (73,131)
Inventories (26,259) (44,181) (40,405) (95,674)
Accounts payable (40,499) (7,628) (48,021) 41,635
Other working
capital (14,666) 17,371 (19,850) 5,781
Net cash provided by
operating activities 19,127 43,417 74,101 54,082
Investing activities:
Purchase of property,
plant and equipment (17,146) (30,755) (36,287) (54,660)
Financing activities:
Issuance of long-term debt 176,297 134,182 237,605 164,121
Repayment of long-term debt (72,061) (169,749) (112,571) (203,408)
Issuance of common stock
(net of expenses) and
proceeds and tax benefits
from exercise of
stock options 472 4,539 12,836 14,625
Purchase of treasury stock (103,724) - (180,424) (238)
Dividends paid (4,721) - (9,603) -
Debt issuance costs (346) (1,487) (346) (1,511)
Net cash provided by
(used in) financing
activities (4,083) (32,515) (52,503) (26,411)
Decrease in cash and equivalents (2,102) (19,853) (14,689) (26,989)
Cash and equivalents at
beginning of period 3,747 58,294 16,334 65,430
Cash and equivalents at
end of period $1,645 $38,441 $1,645 $38,441
SOURCE Steel Dynamics, Inc.
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Related links:
http://www.steeldynamics.com
CONTACT:
Fred Warner, Investor Relations Manager of
Steel Dynamics, Inc., +1-260-969-3564, fax: +1-260-969-3590, or
f.warner@steeldynamics.com
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