Exhibit 99.1
| | 
|
Press Release | |
October 18, 2010 | | 7575 West Jefferson Boulevard |
| | Fort Wayne, IN 46804-4131 |
| | 260.459.3553 Phone |
| | 260.969.3590 Fax |
| | www.steeldynamics.com |
Steel Dynamics Reports Third Quarter 2010 Results
FORT WAYNE, INDIANA, October 18, 2010 — Steel Dynamics, Inc. (NASDAQ-GS: STLD) today announced net income of $19 million for the third quarter of 2010, or $0.09 per diluted share, compared to $69 million, or $0.30 per diluted share, for the third quarter of 2009, and net income of $49 million, or $0.22 per diluted share, in the second quarter of 2010.
Third quarter net sales of $1.6 billion were 35 percent higher than net sales of $1.2 billion for the third quarter of 2009 and were 3 percent lower than the second quarter of 2010. Third quarter steel shipments of 1.3 million tons were 5 percent higher than the third quarter of 2009, and 4 percent higher than the second quarter of 2010. In metals recycling, OmniSource’s ferrous metals shipments in the third quarter were 1.4 million gross tons, nearly the same as the second quarter, and non-ferrous shipments were 257 million pounds, up 8 percent from the second quarter.
Year-to-date 2010 net sales through September 30 were $4.8 billion, up 72 percent from the same period of 2009, and greater than full-year 2009 net sales of $4.0 billion. Year-to-date net income of $133 million compares to a loss of $35 million in the first nine months of 2009. Operating income for the first nine months of 2010 was $318 million versus $41 million in the first nine months of 2009.
“In mid-September we noted our expectation that our third quarter’s earnings could be weaker due to reduced margins in the steel segment,” said Keith Busse, Chairman and CEO. “While third quarter steel volume remained relatively flat, the decline in steel selling prices, mainly steel sheet, outpaced the decline in scrap prices. Our third-quarter average selling price per ton for steel products was $782, down $47 from $829 in the second quarter, while our average scrap cost per ton charged decreased $23. As a result of the reduced margins, operating income for the steel segment fell to $88 million in the third quarter, down from $134 million in the second quarter.
“In September, our metals recycling business posted a very strong financial performance, driven by higher than expected shipping volumes and expanded non-ferrous margin, which offset the down market experienced earlier in the quarter. However, despite slightly higher quarterly shipping volumes, lower ferrous metal margins resulted in operating income of $22 million in the third quarter as compared to $25 million in the second quarter. In steel fabrication, New Millennium’s operating losses narrowed in the third quarter to less than $500,000 from the prior quarter’s $5 million loss, as a result of increased volume and ongoing efforts to control operating costs,” Busse said.
The Mesabi Nugget start-up progressed well in the third quarter with production increasing to 24,600 metric tons. However, overall productivity continues to be hampered by equipment availability and refractory issues. Solutions are in hand and will be implemented during the fourth quarter. Mesabi nuggets are now supplied on an ongoing basis to SDI’s Flat Roll and Engineered Bar Products divisions. The impact from Mesabi’s start-up operations for Steel Dynamics remained relatively flat in the third quarter at a $12 million operating loss.
During the third quarter, increased steel shipments of long-products combined with weaker flat-rolled volume resulted in a change in product mix, causing flat-roll shipments to decline from 64 percent of total steel shipments in the second quarter to 60 percent in the third. The Engineered Bar Products Division achieved record production levels due to stronger OEM customer demand, and shipped 153,000 tons in the third quarter, up 19 percent from the second quarter. The company’s SBQ
backlog continues to grow, now extending into 2011. In contrast, structural steel demand remains lackluster. Shipments by the Structural and Rail Division decreased slightly, despite increasing shipments of its rail products. With the approvals of SDI’s rail products by all the nation’s leading railroads, rail and welded-rail shipments are expected to continue to grow significantly.
Also of note, the company’s estimated annual tax rate increased, causing the third quarter effective rate to increase in order to reflect the increase for the first six months of the year, decreasing the third quarter diluted earnings per share by approximately $.02.
“In terms of steel market conditions, we have seen a slight improvement in our long product order activity; while in contrast, we have seen a significant decline in our sheet steel backlogs,” Busse continued, “Looking to the fourth quarter, we believe that margin improvement is possible in both our steelmaking and metals recycling operations, which could result in a slightly stronger fourth quarter. However, given the uncertainty surrounding demand for flat-rolled steels, we will provide specific fourth-quarter guidance in December. Additionally, we are still assessing the potential impact to near-term earnings related to our recent acquisition of certain steel fabrication assets, but currently anticipate the related costs to be minimal.”
Third Quarter 2010 Operating Segment Information
The following highlights third quarter 2010 results for each of SDI’s three primary operating segments. These operating results exclude profit-sharing costs and amortization related to each of the respective segment’s intangible assets.
Steel Operations. Net sales for Steel Operations for the third quarter (including intra-segment and intra-company sales) were $1.3 billion. The segment represented 61 percent of the company’s external net sales for the quarter. This segment includes five steel mills and related steel processing facilities, including The Techs. SDI’s five steel mills produce a wide variety of flat-rolled and long steel products. The Techs produce galvanized steel sheet using steel that is sourced primarily from third parties.
Third quarter 2010 Steel Operations shipments were 1.3 million tons (including intra-segment and intra-company shipments), of which 788,000 tons were flat-rolled steel shipments. Based on tons shipped, including the steel shipments made by The Techs, flat-rolled products accounted for 60 percent of third quarter steel operations shipments, 12 percent were structural steel and rail shipments, 12 percent was engineered bars, 11 percent was merchant bars, and 5 percent related to Steel of West Virginia. Third quarter operating income for the steel segment was $88 million, or $68 per ton shipped, compared to an operating income of $108 per ton in the second quarter of 2010.
The third quarter’s average external selling price per ton for Steel Operations was $782, a decrease of $47 per ton from $829 in the second quarter of 2010 and an increase of $143 per ton from the year-ago quarter. The average cost of ferrous scrap per net ton charged decreased $23 compared to the second quarter.
Metals Recycling and Ferrous Resources. This segment includes OmniSource Corporation (collecting, processing, and trading of ferrous and non-ferrous metals), Iron Dynamics (a scrap-substitute operation that produces pig iron for use by the Flat Roll Division), Mesabi Nugget (which produces iron nuggets for mini-mill steelmaking and is co-owned by Kobe Steel, Ltd. and SDI, with SDI owning 81 percent), and expenses related to Mesabi Mining (a wholly owned iron mining unit that is awaiting approval of mining permits before it can commence operation).
The segment’s net sales for the third quarter of 2010 were $805 million (including intra-company sales). The segment represented 35 percent of SDI’s third quarter external sales. Operating income for this segment was $9 million, down from $15 million in the second quarter. OmniSource’s stand-alone third quarter operating income on the same basis was $22 million compared to $25 million in the second quarter.
OmniSource’s total ferrous scrap shipments for the third quarter, including shipments to SDI’s Steel Operations, were 1.4 million gross tons, 1 percent higher than the second quarter of 2010, and 18 percent higher than the year-ago quarter. Non-ferrous scrap shipments for the third quarter of 2010 were 257 million pounds (including intra-company shipments), up 8 percent from the second quarter of 2010 and 18 percent higher than the year-ago quarter.
During the third quarter, the company’s scrap operations supplied 556,000 gross tons of ferrous scrap to SDI’s Steel Operations, which was 41 percent of the total tonnage of ferrous scrap OmniSource shipped and was 50 percent of the tonnage of ferrous scrap purchased by our mills during the quarter.
Steel Fabrication Operations. Steel Fabrication Operations consist of the New Millennium Building Systems fabricating plants that produce joists, trusses, and steel decking that is used in the construction of non-residential buildings. Third quarter net sales were $54 million (including intra-company sales). The segment represented 3 percent of SDI’s third quarter external sales. New Millennium reported an operating loss of $494,000 for the quarter, compared to a $5 million loss in the second quarter. Third quarter shipments totaled 47,000 tons (including intra-company shipments), 13 percent higher than the second quarter of 2010 and 37 percent higher than the year-ago quarter.
Forward-Looking Statements
This press release contains some predictive statements about future events, including statements related to conditions in the steel and metallic scrap markets, Steel Dynamics’ revenue, costs of purchased materials, future profitability and earnings, 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.
Factors that could cause such predictive statements to turn out other than as anticipated or predicted include, among others: the effects of prolonged or deepening recession on industrial demand; general or specific sector (i.e., automotive, consumer appliance or construction) economic conditions affecting steel consumption; the impact of price competition, whether domestic or the result of foreign imports; difficulties in integrating acquired businesses; risks and uncertainties involving new products or new technologies; changes in the availability or cost of steel scrap or substitute materials; increases in energy costs; occurrence of unanticipated equipment failures and plant outages; labor unrest; and the effect of the elements on production or consumption.
More specifically, we refer you to SDI’s detailed explanation of these and other 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, in our quarterly reports on Form 10-Q or in other reports which we from time to time file with the Securities and Exchange Commission, available publicly on the SEC Web site, www.sec.gov, and on the Steel Dynamics Web site, www.steeldynamics.com.
Forward-looking or predictive statements we make are based upon information and assumptions concerning our businesses and the environments in which they operate, which we consider reasonable as of the date on which these statements are made. Due to the foregoing risks and uncertainties however, as well as matters beyond our control which can affect forward-looking statements, you are cautioned not to place undue reliance on these predictive statements, which speak only as of the date of this press release. We undertake no duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Conference Call and Webcast
On Tuesday, October 19, 2010, at 10:00 a.m. Eastern time, Steel Dynamics will host a conference call in which management will discuss second quarter results. You are invited to listen to the live audio broadcast of the conference call over the Internet, accessible from the Steel Dynamics Web site: www.steeldynamics.com
Dial-in information is available on our Web site. An audio replay of the Webcast and a downloadable podcast will be available from the SDI Web site. No telephone replay will be available.
Contact: | | Fred Warner, Investor Relations Manager, (260) 969-3564 or fax (260) 969-3590 |
| | f.warner@steeldynamics.com |
Steel Dynamics, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
| | Three Months Ended | | Nine Months Ended | | Three Months
Ended | |
| | September 30, | | September 30, | | June 30, | |
| | 2010 | | 2009 | | 2010 | | 2009 | | 2010 | |
| | | | | | | | | | | |
Net sales | | $ | 1,584,164 | | $ | 1,172,196 | | $ | 4,772,753 | | $ | 2,779,004 | | $ | 1,632,799 | |
Costs of goods sold | | 1,444,632 | | 955,503 | | 4,230,755 | | 2,534,101 | | 1,440,815 | |
Gross profit | | 139,532 | | 216,693 | | 541,998 | | 244,903 | | 191,984 | |
| | | | | | | | | | | |
Selling, general and administrative expenses | | 54,679 | | 56,133 | | 167,796 | | 162,012 | | 55,957 | |
Profit sharing | | 4,562 | | 451 | | 21,833 | | 409 | | 7,827 | |
Amortization of intangibles | | 11,291 | | 11,661 | | 34,437 | | 41,353 | | 11,565 | |
Operating income | | 69,000 | | 148,448 | | 317,932 | | 41,129 | | 116,635 | |
| | | | | | | | | | | |
Interest expense, net of capitalized interest | | 44,286 | | 34,520 | | 125,249 | | 107,814 | | 43,448 | |
Other income, net | | (6,215 | ) | (2,167 | ) | (12,817 | ) | (2,129 | ) | (3,521 | ) |
Income (loss) before income taxes | | 30,929 | | 116,095 | | 205,500 | | (64,556 | ) | 76,708 | |
| | | | | | | | | | | |
Income taxes (benefit) | | 15,574 | | 47,365 | | 79,959 | | (26,991 | ) | 29,911 | |
Net income (loss) | | 15,355 | | 68,730 | | 125,541 | | (37,565 | ) | 46,797 | |
Net loss (income) attributable to noncontrolling interests | | 3,386 | | (288 | ) | 7,376 | | (2,730 | ) | 2,410 | |
| | | | | | | | | | | |
Net income (loss) attributable to Steel Dynamics, Inc. | | $ | 18,741 | | $ | 69,018 | | $ | 132,917 | | $ | (34,835 | ) | $ | 49,207 | |
| | | | | | | | | | | |
Basic earnings (loss) per share attributable to Steel Dynamics, Inc. stockholders | | $ | .09 | | $ | .32 | | $ | .61 | | $ | (.18 | ) | $ | .23 | |
| | | | | | | | | | | |
Weighted average common shares outstanding | | 216,881 | | 215,218 | | 216,600 | | 195,689 | | 216,635 | |
| | | | | | | | | | | |
Diluted earnings (loss) per share attributable to Steel Dynamics, Inc. stockholders, including the effect of assumed conversions when dilutive | | $ | .09 | | $ | .30 | | $ | .60 | | $ | (.18 | ) | $ | .22 | |
| | | | | | | | | | | |
Weighted average common shares and equivalents outstanding | | 234,543 | | 234,080 | | 234,601 | | 195,689 | | 234,600 | |
| | | | | | | | | | | |
Dividends declared per share | | $ | .075 | | $ | .075 | | $ | .225 | | $ | .25 | | $ | .075 | |
Steel Dynamics, Inc.
UNAUDITED SUPPLEMENTAL OPERATING INFORMATION
(dollars in thousands)
| | Three Months Ended | | Nine Months Ended | | First | | Second | |
| | September 30, | | September 30, | | Quarter | | Quarter | |
| | 2010 | | 2009 | | 2010 | | 2009 | | 2010 | | 2010 | |
Steel Operations* | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Shipments (net tons) | | | | | | | | | | | | | |
Flat Roll Division | | 621,543 | | 656,512 | | 1,993,662 | | 1,415,195 | | 749,258 | | 622,861 | |
Structural and Rail Division | | 156,940 | | 134,390 | | 471,541 | | 360,421 | | 155,349 | | 159,252 | |
Engineered Bar Products Division | | 153,279 | | 80,428 | | 407,140 | | 215,092 | | 125,059 | | 128,802 | |
Roanoke Bar Division | | 145,168 | | 97,895 | | 363,747 | | 263,617 | | 109,186 | | 109,393 | |
Steel of West Virginia | | 66,610 | | 57,539 | | 172,735 | | 155,622 | | 53,405 | | 52,720 | |
The Techs | | 166,858 | | 220,383 | | 569,363 | | 466,032 | | 210,545 | | 191,960 | |
Combined | | 1,310,398 | | 1,247,147 | | 3,978,188 | | 2,875,979 | | 1,402,802 | | 1,264,988 | |
Intra-segment | | (17,673 | ) | (24,223 | ) | (50,019 | ) | (47,582 | ) | (11,087 | ) | (21,259 | ) |
| | 1,292,725 | | 1,222,924 | | 3,928,169 | | 2,828,397 | | 1,391,715 | | 1,243,729 | |
Intra-company | | (65,186 | ) | (60,173 | ) | (201,659 | ) | (136,416 | ) | (70,866 | ) | (65,607 | ) |
External | | 1,227,539 | | 1,162,751 | | 3,726,510 | | 2,691,981 | | 1,320,849 | | 1,178,122 | |
| | | | | | | | | | | | | |
Production, excluding The Techs (net tons) | | 1,167,584 | | 1,112,145 | | 3,506,125 | | 2,565,932 | | 1,191,138 | | 1,147,403 | |
| | | | | | | | | | | | | |
Net sales | | | | | | | | | | | | | |
Combined | | $ | 1,010,916 | | $ | 782,169 | | $ | 3,061,942 | | $ | 1,843,818 | | $ | 1,018,548 | | $ | 1,032,478 | |
Intra-segment | | (10,530 | ) | (10,984 | ) | (29,131 | ) | (22,814 | ) | (6,052 | ) | (12,549 | ) |
| | 1,000,386 | | 771,185 | | 3,032,811 | | 1,821,004 | | 1,012,496 | | 1,019,929 | |
Intra-company | | (40,715 | ) | (28,095 | ) | (123,936 | ) | (65,979 | ) | (39,929 | ) | (43,292 | ) |
External | | $ | 959,671 | | $ | 743,090 | | $ | 2,908,875 | | $ | 1,755,025 | | $ | 972,567 | | $ | 976,637 | |
| | | | | | | | | | | | | |
Operating income before amortization of intangibles | | $ | 87,880 | | $ | 129,072 | | $ | 359,626 | | $ | 100,710 | | $ | 137,669 | | $ | 134,077 | |
Amortization of intangibles | | (2,679 | ) | (2,932 | ) | (8,541 | ) | (9,311 | ) | (2,931 | ) | (2,931 | ) |
Operating income | | $ | 85,201 | | $ | 126,140 | | $ | 351,085 | | $ | 91,399 | | $ | 134,738 | | $ | 131,146 | |
| | | | | | | | | | | | | |
Metals Recycling and Ferrous Resources** | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
OmniSource | | | | | | | | | | | | | |
Ferrous metals shipments (gross tons) | | | | | | | | | | | | | |
Combined | | 1,361,696 | | 1,155,196 | | 3,942,135 | | 2,557,043 | | 1,230,075 | | 1,350,364 | |
Intra-company | | (556,222 | ) | (514,143 | ) | (1,638,878 | ) | (985,372 | ) | (519,306 | ) | (563,350 | ) |
External | | 805,474 | | 641,053 | | 2,303,257 | | 1,571,671 | | 710,769 | | 787,014 | |
| | | | | | | | | | | | | |
Non-ferrous metals shipments (thousands of pounds) | | | | | | | | | | | | | |
Combined | | 256,514 | | 217,068 | | 731,407 | | 577,246 | | 238,245 | | 236,648 | |
Intra-company | | (1,784 | ) | — | | (5,924 | ) | — | | (2,194 | ) | (1,946 | ) |
External | | 254,730 | | 217,068 | | 725,483 | | 577,246 | | 236,051 | | 234,702 | |
| | | | | | | | | | | | | |
Mesabi Nugget shipments (metric tons) | | 24,553 | | — | | 49,210 | | — | | 7,179 | | 17,478 | |
| | | | | | | | | | | | | |
Iron Dynamics shipments (metric tons) | | | | | | | | | | | | | |
Liquid pig iron | | 45,046 | | 49,901 | | 130,667 | | 127,573 | | 46,428 | | 39,193 | |
Hot briquetted iron | | 11,774 | | 4,080 | | 38,503 | | 23,865 | | 11,372 | | 15,357 | |
Other | | 248 | | 33 | | 1,514 | | 670 | | 698 | | 568 | |
Intra-company | | 57,068 | | 54,014 | | 170,684 | | 152,108 | | 58,498 | | 55,118 | |
| | | | | | | | | | | | | |
Net sales | | | | | | | | | | | | | |
Combined | | $ | 804,680 | | $ | 555,233 | | $ | 2,409,350 | | $ | 1,160,579 | | $ | 756,303 | | $ | 848,367 | |
Intra-company | | (245,809 | ) | (171,351 | ) | (728,491 | ) | (298,593 | ) | (224,240 | ) | (258,442 | ) |
External | | $ | 558,871 | | $ | 383,882 | | $ | 1,680,859 | | $ | 861,986 | | $ | 532,063 | | $ | 589,925 | |
| | | | | | | | | | | | | |
Operating income before amortization of intangibles | | $ | 9,379 | | $ | 46,157 | | $ | 57,056 | | $ | 37,763 | | $ | 32,436 | | $ | 15,241 | |
Amortization of intangibles | | (8,302 | ) | (8,752 | ) | (24,906 | ) | (31,062 | ) | (8,302 | ) | (8,302 | ) |
Operating income | | $ | 1,077 | | $ | 37,405 | | $ | 32,150 | | $ | 6,701 | | $ | 24,134 | | $ | 6,939 | |
| | | | | | | | | | | | | |
Steel Fabrication*** | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Shipments (net tons) | | | | | | | | | | | | | |
Combined | | 47,308 | | 34,546 | | 114,880 | | 115,193 | | 25,678 | | 41,894 | |
Intra-company | | (599 | ) | (457 | ) | (621 | ) | (682 | ) | (19 | ) | (3 | ) |
External | | 46,709 | | 34,089 | | 114,259 | | 114,511 | | 25,659 | | 41,891 | |
| | | | | | | | | | | | | |
Net sales | | | | | | | | | | | | | |
Combined | | $ | 53,920 | | $ | 32,930 | | $ | 120,185 | | $ | 130,763 | | $ | 23,998 | | $ | 42,267 | |
Intra-company | | (198 | ) | (620 | ) | (236 | ) | (1,198 | ) | (37 | ) | (1 | ) |
External | | $ | 53,722 | | $ | 32,310 | | $ | 119,949 | | $ | 129,565 | | $ | 23,961 | | $ | 42,266 | |
| | | | | | | | | | | | | |
Operating income (loss) before amortization of intangibles | | $ | (494 | ) | $ | (3,197 | ) | $ | (11,745 | ) | $ | 75 | | $ | (6,549 | ) | $ | (4,702 | ) |
Amortization of intangibles | | — | | (31 | ) | (42 | ) | (227 | ) | (31 | ) | (11 | ) |
Operating income (loss) | | $ | (494 | ) | $ | (3,228 | ) | $ | (11,787 | ) | $ | (152 | ) | $ | (6,580 | ) | $ | (4,713 | ) |
* | | Steel Operations include the company’s five steelmaking divisions and The Techs three galvanizing plants. |
** | | Metals Recycling and Ferrous Resources Operations include OmniSource; Iron Dynamics (all shipments are internal); and Mesabi Nugget (all shipments, which began in 2010, have been internal). |
*** | | Steel Fabrication Operations include the company’s joist and deck fabrication operations. |
Steel Dynamics, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands)
| | September 30,
2010 | | December 31,
2009 | |
| | (unaudited) | | | |
Assets | | | | | |
Current assets | | | | | |
Cash and equivalents | | $ | 270,118 | | $ | 9,008 | |
Accounts receivable, net | | 654,945 | | 426,592 | |
Inventories | | 1,008,309 | | 852,831 | |
Deferred income taxes | | 24,786 | | 21,492 | |
Income taxes receivable | | 30,413 | | 137,024 | |
Other current assets | | 21,451 | | 9,856 | |
Total current assets | | 2,010,022 | | 1,456,803 | |
| | | | | |
Property, plant and equipment, net | | 2,214,105 | | 2,254,050 | |
| | | | | |
Restricted cash | | 20,570 | | 12,595 | |
| | | | | |
Intangible assets, net | | 500,021 | | 533,510 | |
| | | | | |
Goodwill | | 753,355 | | 758,259 | |
| | | | | |
Other assets | | 112,386 | | 114,655 | |
Total assets | | $ | 5,610,459 | | $ | 5,129,872 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
Current liabilities | | | | | |
Accounts payable | | $ | 366,331 | | $ | 262,285 | |
Income taxes payable | | 5,431 | | 5,664 | |
Accrued expenses | | 193,919 | | 156,570 | |
Accrued profit sharing | | 21,333 | | 2,860 | |
Senior secured revolving credit facility, due 2012 | | — | | 167,000 | |
Current maturities of long-term debt | | 8,438 | | 1,182 | |
Total current liabilities | | 595,452 | | 595,561 | |
| | | | | |
Long-term debt | | | | | |
7 3/8% senior notes, due 2012 | | 700,000 | | 700,000 | |
5.125% convertible senior notes, due 2014 | | 287,500 | | 287,500 | |
6 ¾% senior notes, due 2015 | | 500,000 | | 500,000 | |
7 ¾% senior notes, due 2016 | | 500,000 | | 500,000 | |
7 5/8% senior notes, due 2020 | | 350,000 | | — | |
Other long-term debt | | 71,938 | | 67,072 | |
Total long-term debt | | 2,409,438 | | 2,054,572 | |
| | | | | |
Deferred income taxes | | 439,748 | | 416,468 | |
| | | | | |
Other liabilities | | 62,145 | | 60,006 | |
| | | | | |
Commitments and contingencies | | | | | |
| | | | | |
Stockholders’ equity | | | | | |
Common stock | | 632 | | 629 | |
Treasury stock, at cost | | (727,624 | ) | (730,857 | ) |
Additional paid-in capital | | 988,972 | | 972,985 | |
Retained earnings | | 1,829,659 | | 1,745,511 | |
Total Steel Dynamics, Inc. stockholders’ equity | | 2,091,639 | | 1,988,268 | |
Noncontrolling interests | | 12,037 | | 14,997 | |
Total stockholders’ equity | | 2,103,676 | | 2,003,265 | |
Total liabilities and stockholders’ equity | | $ | 5,610,459 | | $ | 5,129,872 | |
Steel Dynamics, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
| | Three Months Ended | | Nine Months Ended | |
| | September 30, | | September 30, | |
| | 2010 | | 2009 | | 2010 | | 2009 | |
| | | | | | | | | |
Operating activities: | | | | | | | | | |
Net income (loss) | | $ | 15,355 | | $ | 68,730 | | $ | 125,541 | | $ | (37,565 | ) |
| | | | | | | | | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | | | |
Depreciation and amortization | | 57,278 | | 51,915 | | 168,948 | | 166,643 | |
Equity-based compensation | | 3,626 | | 2,887 | | 9,724 | | 14,779 | |
Deferred income taxes | | 2,735 | | 8,341 | | 21,620 | | 21,833 | |
Changes in certain assets and liabilities: | | | | | | | | | |
Accounts receivable | | (26,820 | ) | (117,442 | ) | (228,537 | ) | 18,354 | |
Inventories | | 9,715 | | (96,062 | ) | (155,356 | ) | 192,331 | |
Accounts payable | | (12,446 | ) | 130,610 | | 83,064 | | 82,763 | |
Income taxes receivable/payable | | 8,829 | | 2,432 | | 106,378 | | 1,027 | |
Other working capital | | 31,148 | | 85,271 | | 50,131 | | (37,122 | ) |
Net cash provided by operating activities | | 89,420 | | 136,682 | | 181,513 | | 423,043 | |
| | | | | | | | | |
Investing activities: | | | | | | | | | |
Purchases of property, plant and equipment | | (24,224 | ) | (95,662 | ) | (95,868 | ) | (243,166 | ) |
Investment in direct financing lease | | — | | (27,967 | ) | — | | (27,967 | ) |
Other investing activities | | 936 | | (2,857 | ) | 2,417 | | (13,370 | ) |
Net cash used in investing activities | | (23,288 | ) | (126,486 | ) | (93,451 | ) | (284,503 | ) |
| | | | | | | | | |
Financing activities: | | | | | | | | | |
Issuance of current and long-term debt | | 25,428 | | 240,586 | | 571,980 | | 949,330 | |
Repayment of current and long-term debt | | (146 | ) | (251,219 | ) | (355,952 | ) | (1,451,666 | ) |
Debt issuance costs | | — | | (221 | ) | (6,707 | ) | (13,972 | ) |
Issuance of common stock (net of expenses) and proceeds from exercise of stock options, including related tax effect | | 1,566 | | 6,645 | | 8,004 | | 417,134 | |
Contribution from noncontrolling investors | | 1,805 | | — | | 4,416 | | 5,000 | |
Dividends paid | | (16,260 | ) | (16,110 | ) | (48,693 | ) | (52,505 | ) |
Net cash provided by (used in) financing activities | | 12,393 | | (20,319 | ) | 173,048 | | (146,679 | ) |
| | | | | | | | | |
Increase (decrease) in cash and equivalents | | 78,525 | | (10,123 | ) | 261,110 | | (8,139 | ) |
Cash and equivalents at beginning of period | | 191,593 | | 18,217 | | 9,008 | | 16,233 | |
| | | | | | | | | |
Cash and equivalents at end of period | | $ | 270,118 | | $ | 8,094 | | $ | 270,118 | | $ | 8,094 | |
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Supplemental disclosure information: | | | | | | | | | |
Cash paid for interest | | $ | 15,016 | | $ | 3,849 | | $ | 90,778 | | $ | 83,282 | |
Cash paid (received) for federal and state income taxes, net | | $ | (12 | ) | $ | 228 | | $ | (55,019 | ) | $ | (53,546 | ) |
