NUCOR REPORTS RECORD RESULTS FOR FIRST QUARTER OF 2008
CHARLOTTE, NORTH CAROLINA, April 17, 2008 - Nucor Corporation (NYSE: NUE) announced today record first quarter net earnings for the fifth consecutive year. Consolidated net earnings for the first quarter of 2008 were $409.8 million, an increase of 8% compared to the first quarter of 2007 net earnings of $381.0 million and an increase of 12% from the fourth quarter of 2007 net earnings of $364.8 million. Diluted earnings per share increased 12% to $1.41 from $1.26 in the first quarter of 2007 and in the fourth quarter of 2007. The increase in earnings per share from the first quarter of 2007 is partially due to the reduced number of shares outstanding as a result of stock repurchases made in 2007.
Nucor’s consolidated net sales increased 32% to a record $4.97 billion compared with $3.77 billion in the first quarter of 2007 due to a 15% increase in average steel sales price per ton, an 11% increase in average steel products sales price per ton, and a significant increase in steel products shipments attributable to acquisitions made in 2007. The increase in sales is also due to the February 29, 2008 acquisition of the stock of SHV North America Corporation, which owns 100% of The David J. Joseph Company (“DJJ”) and its affiliates, for a cash purchase price of approximately $1.4 billion. DJJ, which now operates as a wholly owned subsidiary of Nucor Corporation, has been the broker of ferrous scrap to Nucor since 1969.
Consolidated net sales increased 13% over the fourth quarter of 2007 primarily due to an 8% increase in average steel sales price per ton and the acquisition of DJJ.
The average scrap and scrap substitute cost per ton used increased 29% from $259 in the first quarter of 2007 to $333 in the first quarter of 2008 and increased 17% from $285 in the fourth quarter of 2007.
Total energy costs increased approximately $4 per ton from the first quarter of 2007 to the first quarter of 2008 and increased approximately $3 per ton from the fourth quarter of 2007.
Nucor incurred a charge to value inventories using the last-in, first-out (LIFO) method of accounting of $69.0 million in the first quarter of 2008, compared with a charge of $24.5 million in the first quarter of 2007 and a charge of $92.3 million in the fourth quarter of 2007.
In the steel mills segment, steel production increased 4% to 5,831,000 tons in the first quarter of 2008, compared with 5,585,000 tons produced in the first quarter of 2007, and increased 4% over the 5,586,000 tons produced in the fourth quarter of 2007.
Total steel shipments increased 5% to 5,951,000 tons in the first quarter of 2008, compared with 5,660,000 tons in last year’s first quarter, and increased 5% over the 5,684,000 total tons shipped in the fourth quarter. Steel shipments to outside customers of 5,203,000 tons in the first quarter of 2008 remained flat compared with 5,229,000 tons in the first quarter of 2007, and increased 2% over the 5,078,000 tons shipped in the fourth quarter of 2007.
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Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211
Phone 704-366-7000 Fax 704-362-4208 www.nucor.com
 | News Release |
NUCOR REPORTS RECORD RESULTS FOR FIRST QUARTER OF 2008 (Continued)
In the steel products segment, steel joist production during the first quarter was 132,000 tons, compared with 121,000 tons in the first quarter of 2007, an increase of 9%. Steel deck sales increased 9% from 106,000 tons in the first quarter of 2007 to 116,000 tons in this year’s first quarter. Cold finished steel sales increased 51% to 136,000 tons, compared with 90,000 tons in the first quarter of 2007. Sales of fabricated concrete reinforcing steel increased from 40,000 tons in the month of March 2007 (when Nucor acquired Harris Steel Group Inc.) to 179,000 tons in the first quarter of 2008.
Subsequent to the first quarter Nucor completed two acquisitions, utilizing DJJ as a platform for continued growth in the scrap processing industry. In April 2008, a wholly owned subsidiary of Nucor acquired substantially all the assets of Metal Recycling Services Inc. (“MRS”). Based in Monroe, North Carolina, MRS operates a full-service processing facility and two feeder yards and expects to process 220,000 tons annually. MRS will become part of DJJ and will operate under the Metal Recycling Services, LLC name.
Also in April 2008, DJJ acquired substantially all the assets of Galamba Metals Group. Galamba operated 16 full-service scrap processing facilities in Kansas, Missouri and Arkansas and processed over 500,000 tons annually. DJJ will operate the Galamba Metals Group facilities under the Advantage Metals Recycling, LLC name.
Nucor expects to soon conclude a 50/50 joint venture with the Duferco Group (Lugano, Switzerland) for the production of beams in Italy and the distribution of beams in Europe and North Africa. The joint venture will encompass the Duferco Group’s Duferdofin subsidiary and associated distribution companies.
Starting with the May 9, 2008 dividend payment, Nucor is increasing the base quarterly cash dividend rate from $0.30 to $0.32 per share. In addition to the $0.32 per share base dividend amount, the board of directors approved the payment of a supplemental dividend of $0.20 per share, for a total dividend of $0.52 per share. Nucor has increased its regular base cash dividend every year since Nucor began paying dividends 35 years ago.
We expect second quarter earnings to be in the range of $1.55 to $1.60 per diluted share. We expect continued strength in our sheet, plate, beam and bar businesses due to the solid global demand for steel. In our overall downstream businesses we expect conditions to continue to be good, particularly for rebar fabrication, cold finish bars, steel grating, and wire rod and mesh products. We believe our upstream raw material businesses will be accretive in the second quarter. DJJ’s net earnings for the one month that they were owned by Nucor were offset by the purchase accounting adjustments in the period.
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Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211
Phone 704-366-7000 Fax 704-362-4208 www.nucor.com
| News Release |
NUCOR REPORTS RECORD RESULTS FOR FIRST QUARTER OF 2008 (Continued)
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 joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; light gauge steel framing; steel grating and expanded metal; and wire and wire mesh. Nucor, through DJJ, also brokers ferrous and nonferrous metals, pig iron and HRI/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. 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; (4) competitive pressure on sales and pricing, including pressure from imports and substitute materials; and (5) capital investments and their impact on our performance. These and other factors are outlined in Nucor’s regulatory filings with the Securities and Exchange Commission, including those in Nucor’s December 31, 2007 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 first quarter results on April 17, 2008 at 2:00 p.m. eastern time. The conference call will be available over the Internet at www.nucor.com, under Investor Relations.
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Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211
Phone 704-366-7000 Fax 704-362-4208 www.nucor.com
| News Release |
NUCOR REPORTS RECORD RESULTS FOR FIRST QUARTER OF 2008 (Continued)
Unaudited figures are as follows:
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) |
(In thousands, except per share data) |
| | | Three Months (13 Weeks) Ended | |
| | | | | | |
| | | March 29, 2008 | | March 31, 2007 | |
| | | | | | |
NET SALES | | $ | 4,974,269 | | $ | 3,768,885 | |
| | | | | | | | |
COSTS, EXPENSES AND OTHER: | | | | | | | |
Cost of products sold | | | 4,071,592 | | | 2,991,598 | |
Marketing, administrative and other expenses | | | 169,714 | | | 136,210 | |
Interest expense (income), net | | | 18,345 | | | (9,162 | ) |
Minority interests | | | 91,771 | | | 60,572 | |
| | | | 4,351,422 | | | 3,179,218 | |
| | | | | | | | |
EARNINGS BEFORE INCOME TAXES | | | 622,847 | | | 589,667 | |
Provision for income taxes | | | 213,093 | | | 208,638 | |
NET EARNINGS | | $ | 409,754 | | $ | 381,029 | |
| | | | | | | | |
NET EARNINGS PER SHARE: | | | | | | | |
Basic | | $ | 1.42 | | $ | 1.27 | |
Diluted | | $ | 1.41 | | $ | 1.26 | |
| | | | | | | | |
AVERAGE SHARES OUTSTANDING: | | | | | | | |
Basic | | | 288,208 | | | 301,034 | |
Diluted | | | 290,201 | | | 303,482 | |
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Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211
Phone 704-366-7000 Fax 704-362-4208 www.nucor.com
| News Release |
NUCOR REPORTS RECORD RESULTS FOR FIRST QUARTER OF 2008 (Continued)
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
(In thousands) |
| | | March 29, 2008 | | Dec. 31, 2007 | |
Assets | | | | | | | |
CURRENT ASSETS: | | | | | | | |
Cash and cash equivalents | | $ | 733,995 | | $ | 1,393,943 | |
Short-term investments | | | - | | | 182,450 | |
Accounts receivable, net | | | 1,965,002 | | | 1,611,844 | |
Inventories | | | 1,877,371 | | | 1,601,600 | |
Other current assets | | | 298,274 | | | 283,412 | |
| | | | | | | | |
Total current assets | | | 4,874,642 | | | 5,073,249 | |
| | | | | | | | |
PROPERTY, PLANT AND EQUIPMENT, NET | | | 3,631,792 | | | 3,232,998 | |
| | | | | | | | |
GOODWILL | | | 1,698,168 | | | 847,887 | |
| | | | | | | | |
OTHER INTANGIBLE ASSETS, NET | | | 894,617 | | | 469,936 | |
| | | | | | | | |
OTHER ASSETS | | | 241,302 | | | 202,052 | |
| | | | | | | | |
TOTAL ASSETS | | $ | 11,340,521 | | $ | 9,826,122 | |
| | | | | | | | |
Liabilities and stockholders' equity | | | | | | | |
CURRENT LIABILITIES: | | | | | | | |
Short-term debt | | $ | 12,367 | | $ | 22,868 | |
Long-term debt due within one year | | | 175,000 | | | - | |
Accounts payable | | | 1,345,322 | | | 691,668 | |
Federal income taxes payable | | | 131,151 | | | - | |
Salaries, wages and related accruals | | | 284,611 | | | 436,352 | |
Accrued expenses and other current liabilities | | | 421,194 | | | 431,148 | |
| | | | | | | | |
Total current liabilities | | | 2,369,645 | | | 1,582,036 | |
| | | | | | | | |
LONG-TERM DEBT DUE AFTER ONE YEAR | | | 2,491,600 | | | 2,250,300 | |
| | | | | | | | |
DEFERRED CREDITS AND OTHER LIABILITIES | | | 766,401 | | | 593,423 | |
| | | | | | | | |
MINORITY INTERESTS | | | 287,181 | | | 287,446 | |
| | | | | | | | |
STOCKHOLDERS' EQUITY: | | | | | | | |
Common stock | | | 149,430 | | | 149,302 | |
Additional paid-in capital | | | 280,981 | | | 256,406 | |
Retained earnings | | | 6,880,580 | | | 6,621,646 | |
Accumulated other comprehensive income, | | | | | | | |
net of income taxes | | | 186,496 | | | 163,362 | |
| | | | 7,497,487 | | | 7,190,716 | |
Treasury stock | | | (2,071,793 | ) | | (2,077,799 | ) |
| | | | | | | | |
Total stockholders' equity | | | 5,425,694 | | | 5,112,917 | |
| | | | | | | | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 11,340,521 | | $ | 9,826,122 | |
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Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211
Phone 704-366-7000 Fax 704-362-4208 www.nucor.com
| News Release |
NUCOR REPORTS RECORD RESULTS FOR FIRST QUARTER OF 2008 (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
(In thousands) |
| | | Three Months (13 Weeks) Ended | |
| | | | | | |
| | | March 29, 2008 | | March 31, 2007 | |
| | | | | | |
Operating activities: | | | | | | | |
Net earnings | | $ | 409,754 | | $ | 381,029 | |
Adjustments: | | | | | | | |
Depreciation | | | 109,662 | | | 98,402 | |
Amortization | | | 13,411 | | | 2,005 | |
Stock-based compensation | | | 9,635 | | | 7,649 | |
Deferred income taxes | | | (8,663 | ) | | (16,946 | ) |
Minority interests | | | 91,769 | | | 60,572 | |
Settlement of cash flow hedges | | | (283 | ) | | (1,584 | ) |
Changes in assets and liabilities (exclusive of acquisitions): | | | | | | | |
Accounts receivable | | | 33,005 | | | (122,598 | ) |
Inventories | | | 8,014 | | | (5,314 | ) |
Accounts payable | | | 16,245 | | | 220,207 | |
Federal income taxes | | | 189,411 | | | 204,993 | |
Salaries, wages and related accruals | | | (162,496 | ) | | (232,499 | ) |
Other | | | (41,985 | ) | | (30,406 | ) |
| | | | | | | | |
Cash provided by operating activities | | | 667,479 | | | 565,510 | |
| | | | | | | | |
Investing activities: | | | | | | | |
Capital expenditures | | | (226,238 | ) | | (91,349 | ) |
Sale of interest in affiliate | | | - | | | 29,500 | |
Investment in affiliates | | | (17,118 | ) | | (8,761 | ) |
Disposition of plant and equipment | | | 1,250 | | | 178 | |
Acquisitions (net of cash acquired) | | | (1,402,179 | ) | | (1,060,080 | ) |
Purchases of investments | | | (209,605 | ) | | (74,265 | ) |
Proceeds from the sale of investments | | | 392,055 | | | 997,433 | |
Proceeds from currency derivative contracts | | | - | | | 517,241 | |
Settlement of currency derivative contracts | | | - | | | (511,394 | ) |
| | | | | | | | |
Cash used in investing activities | | | (1,461,835 | ) | | (201,497 | ) |
| | | | | | | | |
Financing activities: | | | | | | | |
Net change in short-term debt | | | (10,501 | ) | | 6,096 | |
Proceeds from issuance of long-term debt | | | 400,000 | | | - | |
Issuance of common stock | | | 6,158 | | | 6,601 | |
Excess tax benefits from stock-based compensation | | | 7,300 | | | 6,000 | |
Distributions to minority interests | | | (91,993 | ) | | (105,600 | ) |
Cash dividends | | | (176,556 | ) | | (181,155 | ) |
| | | | | | | | |
Cash provided by (used in) financing activities | | | 134,408 | | | (268,058 | ) |
| | | | | | | | |
Increase (decrease) in cash and cash equivalents | | | (659,948 | ) | | 95,955 | |
| | | | | | | | |
Cash and cash equivalents - beginning of year | | | 1,393,943 | | | 785,651 | |
| | | | | | | | |
Cash and cash equivalents - end of three months | | $ | 733,995 | | $ | 881,606 | |
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Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211
Phone 704-366-7000 Fax 704-362-4208 www.nucor.com
