Exhibit 99.1
Press Release | 
|
January 24, 2011 | 7575 West Jefferson Boulevard |
| Fort Wayne, IN 46804-4131 |
| 260.459.3553 Phone |
| 260.969.3590 Fax |
| www.steeldynamics.com |
Steel Dynamics Reports 2010 Sales of $6.3 Billion and Net Income of $141 Million
FORT WAYNE, INDIANA, January 24, 2011 — Steel Dynamics, Inc. (NASDAQ-GS: STLD) today announced fourth quarter net income of $8 million, or $0.04 per diluted share, on net sales of $1.5 billion. Excluding impairment charges for the quarter, adjusted earnings per diluted share were $0.07. Comparatively, fourth quarter 2009 net income was $27 million, or $0.12 per diluted share, on net sales of $1.2 billion and third quarter 2010 net income was $19 million, or $0.09 per diluted share, on net sales of $1.6 billion. Full-year 2010 net income was $141 million, or $0.64 per diluted share, on net sales of $6.3 billion, in comparison to a net loss of $8 million, or $0.04 per diluted share, on net sales of $4.0 billion for 2009.
Fourth quarter earnings were reduced by a non-cash asset impairment charge of $13 million related to the company’s fabrication operations, or approximately $0.03 per diluted share. After making the previously announced acquisition of additional fabrication assets during the fourth quarter and determining the future use of existing fabrication facilities, the company determined that the carrying value of certain fixed assets at its idled South Carolina fabrication facility exceeded their fair value, necessitating an impairment charge.
“Our fourth quarter results, prior to the impairment charge, were within our December guidance range of $0.05 to $0.10 per diluted share,” said Keith Busse, Chairman and Chief Executive Officer. “The quarter ended on a much more positive note than it began, as our industry experienced generally increased demand resulting in sharply increased order entry and pricing for our operations. Early in the quarter our flat-rolled operations suffered from low volume and pricing; however, beginning in early November order entry increased, and was quickly followed by significant price increases related, in part, to increased scrap costs. Our long products operations also showed improvement in volume and pricing mid-quarter. During the fourth quarter, our steel operations achieved an operating income of $91 million, a 4 percent increase over third quarter results.
“Our ferrous metals recycling operations experienced higher margins as pricing increased, which more than offset lower volume during the quarter, resulting in improved sequential quarterly ferrous operating results. However, non-ferrous margins declined along with volume, most notably impacted by unrealized hedging losses associated with our copper inventories, causing weaker fourth quarter performance. This weaker performance in non-ferrous more than offset ferrous gains, resulting in operating income of $9 million for OmniSource in the fourth quarter, as compared to $22 million achieved in the third quarter,” Busse said.
Fourth quarter steel shipments were 1.3 million tons, 13 percent higher than the fourth quarter of 2009, but flat compared to the third quarter of 2010. The average external steel selling price for the fourth quarter decreased $29 per ton to $753 from the third quarter average of $782, and increased $67 per ton from the fourth quarter 2009 average of $686. The fourth quarter’s average ferrous scrap cost per ton charged was unchanged from the third quarter.
Annual 2010 steel shipments were 5.3 million tons, with an average external selling price of $774 per ton, in comparison to 2009 shipments of 4.0 million tons, with an average selling price of $662 per ton. In comparison to 2009, SDI’s average ferrous scrap cost per ton charged in 2010 increased $107 per ton.
OmniSource ferrous shipments in the fourth quarter were 1.2 million gross tons, 9 percent lower than the third quarter of 2010, but 15 percent higher than the fourth quarter of 2009. OmniSouce provided 45 percent of the ferrous scrap purchased by SDI’s steel mills during the fourth quarter. Fourth quarter non-ferrous shipments were 230 million pounds, 10 percent lower than the third quarter of 2010, but 13 percent higher than the fourth quarter of 2009.
Annual 2010 OmniSource ferrous shipments were 5.2 million gross tons, 43 percent higher than shipments of 3.6 million gross tons in 2009. OmniSource provided 47 percent of ferrous scrap purchased by SDI’s steel mills during 2010. Non-ferrous shipments were 961 million pounds, 23 percent higher than shipments of 780 million pounds in 2009.
The company’s iron-nugget start-up facility in Minnesota, Mesabi Nugget, took a maintenance outage to replace refractory in the rotary hearth furnace during November, but shortly after the furnace reheat, the need for other equipment modifications arose. These changes have been made and operations resumed last week. Mesabi Nugget start-up losses negatively impacted the company’s fourth quarter pre-tax earnings by $13 million, or after-tax approximately $0.04 per diluted share, and reduced annual results by $42 million, or approximately $0.11 per diluted share.
“Although 2010 iron nugget production fell short of our initial estimates, we are pleased with the superior quality of the nugget being produced.” Busse said. “We are gaining valuable development experience in refining the commercial-scale production process. Through iron supplied from Mesabi Nugget and Iron Dynamics, our steel operations were able to avoid high-priced foreign pig iron markets during the year. As 2011 progresses, we remain very optimistic concerning Mesabi’s continued production ramp-up.
“Looking back to the year 2010, we are very pleased that our revenues and shipping volumes rebounded strongly and are proud to report our return to annual profitability,” Busse said. “Focusing on meeting customer expectations, our employees across the company turned in a very strong operational performance last year. Their efforts combined with SDI’s adaptive operations and diversified product offerings allowed us to gain market share in several key areas in 2010.
“Looking ahead to 2011, the outlook for the new year is favorable. With the expected slow but continual improvement in the U.S. economy, we could see increased volumes compared to 2010 for both our steel and metals recycling operations. Our current expectation is that steel consumption should grow in 2011 in the automotive, transportation, energy, industrial, and the agricultural and construction equipment sectors. Residential and non-residential construction activity is likely now at its bottom; thus, we expect to see continued soft to very moderate near-term growth in demand in this sector. These trends support an improved operating environment for all of our segments, but it is difficult to offer a view of the entire year. Given our current activity, we anticipate substantially improved first quarter 2011 earnings for all of our segments compared to fourth quarter results. We will provide qu antitative guidance for the first quarter later in March,” Busse concluded.
Fourth Quarter and Full-Year 2010 Operating Segment Information
The following highlights operating results for the fourth quarter and full year 2010 for each of SDI’s three primary operating segments. References to segment operating income and operating income per ton in the following paragraphs exclude profit-sharing costs and amortization related intangible assets.
Steel Operations. This segment includes five electric-arc-furnace (EAF) steel mills and related steel finishing and processing facilities, including The Techs. The company’s steel operations produce flat-rolled steel, structural steel, merchant bars, special-bar-quality steel, rail, and specialty shapes. Steel operations represented 60 percent and 61 percent of the company’s fourth quarter and annual 2010 external net sales, respectively.
Fourth quarter 2010 net sales for steel operations were $979 million on shipments of 1.3 million tons, compared to $790 million on shipments of 1.2 million tons during the same period in 2009 (including intra-company sales and shipments). The Structural and Rail Division increased annual 2010 shipments of rail to 55,000 tons, of which over 22,000 tons were shipped in the fourth quarter. The average external steel selling price for the fourth quarter increased $67 per ton from the fourth quarter 2009 average of $686. The fourth quarter’s average ferrous scrap cost per ton charged was $81 per ton higher than the fourth quarter of 2009. Fourth quarter operating income for the steel segment was $91 million, or $70 per ton shipped, compared to $88 million, or $68 per ton in the third quarter and $108 million, or $93 per ton in the fourth quarter of 2009.
Steel operations annual 2010 net sales were $4.0 billion on shipments of 5.3 million tons, compared to $2.6 billion on shipments of 4.0 million tons during 2009 (including intra-company sales and shipments). The annual 2010 average external selling price per ton was $774, an increase of $112 from 2009. The average scrap cost per ton in 2010 increased $107 from 2009. Annual 2010 operating income was $451 million, or $86 per ton shipped, compared to $208 million, or $52 per ton shipped in 2009.
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), the company’s 81%-owned Mesabi Nugget facility (which produces iron nuggets for mini-mill steelmaking), and expenses related to Mesabi Mining (a wholly owned iron mining unit that is awaiting approval of mining permits prior to commencement of operations). The segment represented 35 percent of both the company’s fourth quarter and annual 2010 external net sales.
Fourth quarter net sales and operating losses for the segment were $770 million and $4 million, respectively, as compared to $522 million and $3 million, respectively, for the fourth quarter of 2009 (including intra-company sales). Annual net sales and operating income for the segment were $3.2 billion and $53 million, respectively, as compared to $1.7 billion and $35 million, respectively, for 2009 (including intra-company sales).
OmniSource fourth quarter 2010 ferrous shipments were 1.2 million tons and non-ferrous shipments were 230 million pounds, compared to ferrous shipments of 1.1 million tons and non-ferrous shipments of 203 million pounds for the same period of 2009 (including intra-company shipments). Forty-two percent of OmniSource’s ferrous scrap shipments were to SDI’s steel mills, for both the fourth quarter and the full year 2010. During the fourth quarter, OmniSource supplied 522,000 tons of ferrous scrap to SDI’s steel operations, or approximately 45 percent of the tonnage of ferrous scrap purchased by the mills. Fourth quarter operating income for OmniSource was $9 million, compared to $4 million in the fourth quarter of 2009.
OmniSource annual 2010 ferrous shipments were 5.2 billion tons and non-ferrous shipments were 961 million pounds, compared to ferrous shipments of 3.6 billion tons and non-ferrous shipments of 780 million pounds during 2009 (including intra-company shipments). During 2010, OmniSource supplied 2.2 million tons of ferrous scrap to SDI’s steel operations, or approximately 47 percent of the tonnage of ferrous scrap purchased by the mills. Annual 2010 operating income for OmniSource was $99 million, compared to $57 million in 2009.
Steel Fabrication Operations. Steel fabrication operations includes New Millennium Building Systems, which fabricates steel joists, trusses, and decking used in the construction of non-residential buildings. Fabrication operations represented 4 percent and 3 percent of the company’s fourth quarter and annual 2010 external net sales, respectively.
Fourth quarter 2010 net sales were $57 million with operating losses of $500,000, excluding the impairment charge of $13 million. Comparatively, fourth quarter 2009 net sales were $27 million with operating losses of $6 million. Fourth quarter shipments were 50,000 tons, 5 percent higher than the third quarter of 2010 and 65 percent higher than the fourth quarter of 2009 shipments of 30,000 tons.
Annual 2010 net sales were $177 million on shipments of 164,000 tons, compared to net sales of $158 million on shipments of 145,000 tons for 2009. Annual 2010 operating losses were $12 million (excluding the $13 million impairment charge), compared to operating losses of $6 million for 2009.
Forward-Looking Statements
This press release contains some predictive statements about future events, including statements related to conditions in the steel and scrap metal markets, Steel Dynamics’ revenues, costs, future earnings, and the operation of new or existing facilities or technologies. 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 a prolonged or deepening recession on industrial demand; conditions in such steel consuming sectors as the automotive, consumer appliance or construction industries; the impact of domestic or foreign import price competition; difficulties in integrating or in realizing anticipated values from acquired businesses; risks and uncertainties involving new products or new technologies; changes in the availability or cost of steel scrap or scrap 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 more 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, we caution you that these statements speak only as of the date hereof.
Conference Call and Webcast
On Monday, January 24, 2011, at 11:00 a.m. Eastern time, Steel Dynamics will host a conference call in which management will discuss fourth quarter and 2010 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
(in thousands, except per share data)
| | Three Months Ended | | Year Ended | | Three Months
Ended | |
| | December 31, | | December 31, | | September 30, | |
| | 2010 | | 2009 | | 2010 | | 2009 | | 2010 | |
| | (unaudited) | | (unaudited) | | (unaudited) | | | | (unaudited) | |
| | | | | | | | | | | |
Net sales | | $ | 1,528,134 | | $ | 1,179,802 | | $ | 6,300,887 | | $ | 3,958,806 | | $ | 1,584,164 | |
Costs of goods sold | | 1,394,466 | | 1,025,629 | | 5,625,221 | | 3,559,730 | | 1,444,632 | |
Gross profit | | 133,668 | | 154,173 | | 675,666 | | 399,076 | | 139,532 | |
| | | | | | | | | | | |
Selling, general and administrative expenses | | 59,250 | | 61,002 | | 227,046 | | 223,013 | | 54,679 | |
Profit sharing | | 3,643 | | 2,570 | | 25,476 | | 2,980 | | 4,562 | |
Amortization of intangibles | | 11,149 | | 12,199 | | 45,586 | | 53,552 | | 11,291 | |
Impairment charges | | 12,805 | | — | | 12,805 | | — | | — | |
Operating income | | 46,821 | | 78,402 | | 364,753 | | 119,531 | | 69,000 | |
| | | | | | | | | | | |
Interest expense, net of capitalized interest | | 44,980 | | 33,546 | | 170,229 | | 141,360 | | 44,286 | |
Other income, net | | (6,118 | ) | (1,463 | ) | (18,935 | ) | (3,592 | ) | (6,215 | ) |
Income (loss) before income taxes | | 7,959 | | 46,319 | | 213,459 | | (18,237 | ) | 30,929 | |
| | | | | | | | | | | |
Income taxes (benefit) | | 3,901 | | 19,773 | | 83,860 | | (7,218 | ) | 15,574 | |
Net income (loss) | | 4,058 | | 26,546 | | 129,599 | | (11,019 | ) | 15,355 | |
Net loss (income) attributable to noncontrolling interests | | 3,734 | | (105 | ) | 11,110 | | (2,835 | ) | 3,386 | |
| | | | | | | | | | | |
Net income (loss) attributable to Steel Dynamics, Inc. | | $ | 7,792 | | $ | 26,651 | | $ | 140,709 | | $ | (8,184 | ) | $ | 18,741 | |
Basic earnings (loss) per share attributable to Steel Dynamics, Inc. stockholders | | $ | .04 | | $ | .12 | | $ | .65 | | $ | (.04 | ) | $ | .09 | |
| | | | | | | | | | | |
Weighted average common shares outstanding | | 217,239 | | 215,749 | | 216,760 | | 200,704 | | 216,881 | |
| | | | | | | | | | | |
Diluted earnings (loss) per share attributable to Steel Dynamics, Inc. stockholders, including the effect of assumed conversions when dilutive (Note 1) | | $ | .04 | | $ | .12 | | $ | .64 | | $ | (.04 | ) | $ | .09 | |
| | | | | | | | | | | |
Weighted average common shares and equivalents outstanding (Note 1) | | 218,686 | | 234,194 | | 234,717 | | 200,704 | | 234,543 | |
| | | | | | | | | | | |
Dividends declared per share | | $ | .075 | | $ | .075 | | $ | .30 | | $ | .325 | | $ | .075 | |
(Note 1) Excludes the impact of the 4% convertible subordinated notes from net income (numerator) and share equivalents outstanding (denominator) for the three months ended December 31, 2010 and year ended December 31, 2009, as the impact to diluted earnings per share is anti-dilutive. There was no dilutive impact of stock options for the year ended December 31, 2009.
Steel Dynamics, Inc.
UNAUDITED SUPPLEMENTAL OPERATING INFORMATION
(dollars in thousands)
| | Three Months Ended | | Year Ended | | First | | Second | | Third | |
| | December 31, | | December 31, | | Quarter | | Quarter | | Quarter | |
| | 2010 | | 2009 | | 2010 | | 2009 | | 2010 | | 2010 | | 2010 | |
Steel Operations* | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Shipments (net tons) | | | | | | | | | | | | | | | |
Flat Roll Division | | 649,019 | | 645,679 | | 2,642,681 | | 2,060,874 | | 749,258 | | 622,861 | | 621,543 | |
Structural and Rail Division | | 158,683 | | 116,695 | | 630,224 | | 477,116 | | 155,349 | | 159,252 | | 156,940 | |
Engineered Bar Products Division | | 161,220 | | 88,524 | | 568,360 | | 303,616 | | 125,059 | | 128,802 | | 153,279 | |
Roanoke Bar Division | | 140,866 | | 93,212 | | 504,613 | | 356,829 | | 109,186 | | 109,393 | | 145,168 | |
Steel of West Virginia | | 61,727 | | 47,118 | | 234,462 | | 202,740 | | 53,405 | | 52,720 | | 66,610 | |
The Techs | | 146,149 | | 178,580 | | 715,512 | | 644,612 | | 210,545 | | 191,960 | | 166,858 | |
Combined | | 1,317,664 | | 1,169,808 | | 5,295,852 | | 4,045,787 | | 1,402,802 | | 1,264,988 | | 1,310,398 | |
Intra-segment | | (19,686 | ) | (7,431 | ) | (69,705 | ) | (55,013 | ) | (11,087 | ) | (21,259 | ) | (17,673 | ) |
| | 1,297,978 | | 1,162,377 | | 5,226,147 | | 3,990,774 | | 1,391,715 | | 1,243,729 | | 1,292,725 | |
Intra-company | | (74,355 | ) | (60,236 | ) | (276,014 | ) | (196,652 | ) | (70,866 | ) | (65,607 | ) | (65,186 | ) |
External | | 1,223,623 | | 1,102,141 | | 4,950,133 | | 3,794,122 | | 1,320,849 | | 1,178,122 | | 1,227,539 | |
Production, excluding The Techs (net tons) | | 1,189,012 | | 996,834 | | 4,695,137 | | 3,547,201 | | 1,191,138 | | 1,147,403 | | 1,167,584 | |
| | | | | | | | | | | | | | | |
Net sales | | | | | | | | | | | | | | | |
Combined | | $ | 978,707 | | $ | 789,960 | | $ | 4,040,649 | | $ | 2,633,778 | | $ | 1,018,548 | | $ | 1,032,478 | | $ | 1,010,916 | |
Intra-segment | | (11,879 | ) | (3,995 | ) | (41,010 | ) | (26,809 | ) | (6,052 | ) | (12,549 | ) | (10,530 | ) |
| | 966,828 | | 785,965 | | 3,999,639 | | 2,606,969 | | 1,012,496 | | 1,019,929 | | 1,000,386 | |
Intra-company | | (45,773 | ) | (29,887 | ) | (169,709 | ) | (95,866 | ) | (39,929 | ) | (43,292 | ) | (40,715 | ) |
External | | $ | 921,055 | | $ | 756,078 | | $ | 3,829,930 | | $ | 2,511,103 | | $ | 972,567 | | $ | 976,637 | | $ | 959,671 | |
| | | | | | | | | | | | | | | |
Operating income before amortization of intangibles | | $ | 91,389 | | $ | 107,757 | | $ | 451,015 | | $ | 208,467 | | $ | 137,669 | | $ | 134,077 | | $ | 87,880 | |
Amortization of intangibles | | (2,679 | ) | (2,931 | ) | (11,220 | ) | (12,242 | ) | (2,931 | ) | (2,931 | ) | (2,679 | ) |
Operating income | | $ | 88,710 | | $ | 104,826 | | $ | 439,795 | | $ | 196,225 | | $ | 134,738 | | $ | 131,146 | | $ | 85,201 | |
| | | | | | | | | | | | | | | |
Metals Recycling and Ferrous Resources** | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
OmniSource | | | | | | | | | | | | | | | |
Ferrous metals shipments (gross tons) | | | | | | | | | | | | | | | |
Combined | | 1,237,677 | | 1,074,060 | | 5,179,812 | | 3,631,102 | | 1,230,075 | | 1,350,364 | | 1,361,696 | |
Intra-company | | (522,267 | ) | (449,230 | ) | (2,161,145 | ) | (1,434,602 | ) | (519,306 | ) | (563,350 | ) | (556,222 | ) |
External | | 715,410 | | 624,830 | | 3,018,667 | | 2,196,500 | | 710,769 | | 787,014 | | 805,474 | |
| | | | | | | | | | | | | | | |
Non-ferrous metals shipments (thousands of pounds) | | | | | | | | | | | | | | | |
Combined | | 229,881 | | 202,838 | | 961,288 | | 780,084 | | 238,245 | | 236,648 | | 256,514 | |
Intra-company | | (2,962 | ) | — | | (8,886 | ) | — | | (2,194 | ) | (1,946 | ) | (1,784 | ) |
External | | 226,919 | | 202,838 | | 952,402 | | 780,084 | | 236,051 | | 234,702 | | 254,730 | |
| | | | | | | | | | | | | | | |
Mesabi Nugget shipments (metric tons) | | 18,275 | | — | | 67,485 | | — | | 7,179 | | 17,478 | | 24,553 | |
| | | | | | | | | | | | | | | |
Iron Dynamics shipments (metric tons) | | | | | | | | | | | | | | | |
Liquid pig iron | | 46,881 | | 36,289 | | 177,548 | | 163,862 | | 46,428 | | 39,193 | | 45,046 | |
Hot briquetted iron | | 6,862 | | 12,825 | | 45,365 | | 36,689 | | 11,372 | | 15,357 | | 11,774 | |
Other | | 1,118 | | 675 | | 2,632 | | 1,346 | | 698 | | 568 | | 248 | |
Intra-company | | 54,861 | | 49,789 | | 225,545 | | 201,897 | | 58,498 | | 55,118 | | 57,068 | |
| | | | | | | | | | | | | | | |
Net sales | | | | | | | | | | | | | | | |
Combined | | $ | 769,682 | | $ | 521,554 | | $ | 3,179,032 | | $ | 1,682,133 | | $ | 756,303 | | $ | 848,367 | | $ | 804,680 | |
Intra-company | | (235,153 | ) | (143,386 | ) | (963,644 | ) | (441,979 | ) | (224,240 | ) | (258,442 | ) | (245,809 | ) |
External | | $ | 534,529 | | $ | 378,168 | | $ | 2,215,388 | | $ | 1,240,154 | | $ | 532,063 | | $ | 589,925 | | $ | 558,871 | |
| | | | | | | | | | | | | | | |
Operating income (loss) before amortization of intangibles | | $ | (4,363 | ) | $ | (2,545 | ) | $ | 52,693 | | $ | 35,218 | | $ | 32,436 | | $ | 15,241 | | $ | 9,379 | |
Amortization of intangibles | | (8,101 | ) | (8,865 | ) | (33,007 | ) | (39,927 | ) | (8,302 | ) | (8,302 | ) | (8,302 | ) |
Operating income (loss) | | $ | (12,464 | ) | $ | (11,410 | ) | $ | 19,686 | | $ | (4,709 | ) | $ | 24,134 | | $ | 6,939 | | $ | 1,077 | |
| | | | | | | | | | | | | | | |
Steel Fabrication*** | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Shipments (net tons) | | | | | | | | | | | | | | | |
Combined | | 49,551 | | 30,066 | | 164,431 | | 145,259 | | 25,678 | | 41,894 | | 47,308 | |
Intra-company | | (205 | ) | (200 | ) | (826 | ) | (882 | ) | (19 | ) | (3 | ) | (599 | ) |
External | | 49,346 | | 29,866 | | 163,605 | | 144,377 | | 25,659 | | 41,891 | | 46,709 | |
| | | | | | | | | | | | | | | |
Net sales | | | | | | | | | | | | | | | |
Combined | | $ | 57,193 | | $ | 27,245 | | $ | 177,378 | | $ | 158,008 | | $ | 23,998 | | $ | 42,267 | | $ | 53,920 | |
Intra-company | | (87 | ) | (311 | ) | (323 | ) | (1,509 | ) | (37 | ) | (1 | ) | (198 | ) |
External | | $ | 57,106 | | $ | 26,934 | | $ | 177,055 | | $ | 156,499 | | $ | 23,961 | | $ | 42,266 | | $ | 53,722 | |
| | | | | | | | | | | | | | | |
Operating income (loss) before amortization of intangibles | | $ | (13,269 | ) | $ | (6,173 | ) | $ | (25,014 | ) | $ | (6,098 | ) | $ | (6,549 | ) | $ | (4,702 | ) | $ | (494 | ) |
Amortization of intangibles | | — | | (31 | ) | (42 | ) | (258 | ) | (31 | ) | (11 | ) | — | |
Operating income (loss) | | $ | (13,269 | ) | $ | (6,204 | ) | $ | (25,056 | ) | $ | (6,356 | ) | $ | (6,580 | ) | $ | (4,713 | ) | $ | (494 | ) |
* | | 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)
| | December 31,
2010 | | December 31,
2009 | |
| | (unaudited) | | | |
Assets | | | | | |
Current assets | | | | | |
Cash and equivalents | | $ | 186,513 | | $ | 9,008 | |
Accounts receivable, net | | 622,189 | | 426,592 | |
Inventories | | 1,114,063 | | 852,831 | |
Deferred income taxes | | 20,684 | | 21,492 | |
Income taxes receivable | | 37,311 | | 137,024 | |
Other current assets | | 19,243 | | 9,856 | |
Total current assets | | 2,000,003 | | 1,456,803 | |
| | | | | |
Property, plant and equipment, net | | 2,213,333 | | 2,254,050 | |
| | | | | |
Restricted cash | | 23,132 | | 12,595 | |
| | | | | |
Intangible assets, net | | 489,240 | | 533,510 | |
| | | | | |
Goodwill | | 751,675 | | 758,259 | |
| | | | | |
Other assets | | 112,551 | | 114,655 | |
Total assets | | $ | 5,589,934 | | $ | 5,129,872 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
Current liabilities | | | | | |
Accounts payable | | $ | 348,601 | | $ | 262,285 | |
Income taxes payable | | 5,227 | | 5,664 | |
Accrued expenses | | 175,041 | | 156,570 | |
Accrued profit sharing | | 23,524 | | 2,860 | |
Senior secured revolving credit facility, due 2012 | | — | | 167,000 | |
Current maturities of long-term debt | | 8,924 | | 1,182 | |
Total current liabilities | | 561,317 | | 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 3/4% senior notes, due 2015 | | 500,000 | | 500,000 | |
7 3/4% senior notes, due 2016 | | 500,000 | | 500,000 | |
7 5/8% senior notes, due 2020 | | 350,000 | | — | |
Other long-term debt | | 40,397 | | 67,072 | |
Total long-term debt | | 2,377,897 | | 2,054,572 | |
| | | | | |
Deferred income taxes | | 457,432 | | 416,468 | |
| | | | | |
Other liabilities | | 62,159 | | 60,006 | |
| | | | | |
Commitments and contingencies | | | | | |
| | | | | |
Stockholders’ equity | | | | | |
Common stock | | 633 | | 629 | |
Treasury stock, at cost | | (727,624 | ) | (730,857 | ) |
Additional paid-in capital | | 998,728 | | 972,985 | |
Retained earnings | | 1,821,133 | | 1,745,511 | |
Total Steel Dynamics, Inc. stockholders’ equity | | 2,092,870 | | 1,988,268 | |
Noncontrolling interests | | 38,259 | | 14,997 | |
Total stockholders’ equity | | 2,131,129 | | 2,003,265 | |
Total liabilities and stockholders’ equity | | $ | 5,589,934 | | $ | 5,129,872 | |
Steel Dynamics, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| | Three Months Ended | | Year Ended | |
| | December 31, | | December 31, | |
| | 2010 | | 2009 | | 2010 | | 2009 | |
| | (unaudited) | | (unaudited) | | (unaudited) | | | |
| | | | | | | | | |
Operating activities: | | | | | | | | | |
Net income (loss) | | $ | 4,058 | | $ | 26,546 | | $ | 129,599 | | $ | (11,019 | ) |
| | | | | | | | | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | | | | | | | | | |
Depreciation and amortization | | 55,750 | | 54,783 | | 224,698 | | 221,426 | |
Impairment charges | | 12,805 | | — | | 12,805 | | — | |
Equity-based compensation | | 4,964 | | 2,810 | | 14,688 | | 17,589 | |
Deferred income taxes | | 24,477 | | 70,763 | | 46,097 | | 92,596 | |
Changes in certain assets and liabilities: | | | | | | | | | |
Accounts receivable | | 31,981 | | 53,805 | | (196,556 | ) | 72,159 | |
Inventories | | (105,754 | ) | (17,148 | ) | (261,110 | ) | 175,183 | |
Accounts payable | | (11,895 | ) | (91,623 | ) | 71,169 | | (8,860 | ) |
Income taxes receivable/payable | | (7,102 | ) | 584 | | 99,276 | | 1,611 | |
Other working capital | | (21,490 | ) | (78,007 | ) | 28,641 | | (115,129 | ) |
Net cash provided by (used in) operating activities | | (12,206 | ) | 22,513 | | 169,307 | | 445,556 | |
| | | | | | | | | |
Investing activities: | | | | | | | | | |
Purchases of property, plant and equipment | | (37,526 | ) | (86,886 | ) | (133,394 | ) | (330,052 | ) |
Investment in direct financing lease | | — | | — | | — | | (27,967 | ) |
Other investing activities | | (18,101 | ) | (2,556 | ) | (15,684 | ) | (15,926 | ) |
Net cash used in investing activities | | (55,627 | ) | (89,442 | ) | (149,078 | ) | (373,945 | ) |
| | | | | | | | | |
Financing activities: | | | | | | | | | |
Issuance of current and long-term debt | | — | | 319,105 | | 556,553 | | 1,268,435 | |
Repayment of current and long-term debt | | (6,438 | ) | (238,891 | ) | (346,963 | ) | (1,690,557 | ) |
Debt issuance costs | | — | | — | | (6,707 | ) | (13,972 | ) |
Issuance of common stock (net of expenses) and proceeds from exercise of stock options, including related tax effect | | 6,010 | | 3,796 | | 14,014 | | 420,930 | |
Contribution from noncontrolling investors | | 932 | | — | | 5,348 | | 5,000 | |
Dividends paid | | (16,276 | ) | (16,167 | ) | (64,969 | ) | (68,672 | ) |
Net cash provided by (used in) financing activities | | (15,772 | ) | 67,843 | | 157,276 | | (78,836 | ) |
| | | | | | | | | |
Increase (decrease) in cash and equivalents | | (83,605 | ) | 914 | | 177,505 | | (7,225 | ) |
Cash and equivalents at beginning of period | | 270,118 | | 8,094 | | 9,008 | | 16,233 | |
| | | | | | | | | |
Cash and equivalents at end of period | | $ | 186,513 | | $ | 9,008 | | $ | 186,513 | | $ | 9,008 | |
| | | | | | | | | |
Supplemental disclosure information: | | | | | | | | | |
Cash paid for interest | | $ | 71,604 | | $ | 72,881 | | $ | 162,382 | | $ | 156,163 | |
Cash paid (received) for federal and state income taxes, net | | $ | (11,278 | ) | $ | (5,851 | ) | $ | (66,297 | ) | $ | (59,397 | ) |
