NUCOR REPORTS RESULTS FOR FIRST QUARTER OF 2009
CHARLOTTE, NORTH CAROLINA, April 23, 2009 – Nucor Corporation (NYSE: NUE) announced today a consolidated net loss of $189.6 million, or $0.60 per diluted share, for the first quarter of 2009. By comparison, Nucor earned $409.8 million, or $1.41 per diluted share, in the first quarter of 2008 and earned $105.9 million, or $0.34 per diluted share, in the fourth quarter of 2008.
Nucor’s consolidated net sales decreased 47% to $2.65 billion compared with $4.97 billion in the first quarter of 2008 due to a 43% decrease in total tons shipped to outside customers and a 7% decrease in average sales price per ton. Consolidated net sales decreased 36% compared with $4.15 billion in the fourth quarter of 2008 due to a 14% decrease in total tons shipped to outside customers and a 26% decrease in average sales price per ton.
The average scrap and scrap substitute cost per ton used remained flat at $333 in the first quarters of 2008 and 2009 and decreased 23% from $435 in the fourth quarter of 2008.
Nucor incurred a credit to value inventories using the last-in, first-out (LIFO) method of accounting of $105 million in the first quarter of 2009, compared with a charge of $69 million in the first quarter of 2008 and a credit of $81 million in the fourth quarter of 2008. Nucor also incurred a charge of about $60 million in the first quarter of 2009 to write down inventories to the lower of cost or market.
The steel mill utilization rate has decreased to approximately 45% in the first quarter from 92% in last year’s first quarter and 48% in the fourth quarter. As a result of this decreased utilization, total energy costs increased approximately $11 per ton from the first quarter of 2008 to the first quarter of 2009 and increased approximately $5 per ton from the fourth quarter of 2008.
The dramatically lower production rates of our mills have further slowed the rate at which our sheet mills are consuming higher cost iron units, in particular pig iron inventories, which were purchased prior to the collapse in both the economy and scrap/pig iron pricing in last year’s fourth quarter. We expect that the impact from higher cost scrap will disappear during the second quarter. If these current production rates continue, the overhang from the high cost pig iron will, however, continue to impact our results through the third quarter. Pig iron consumption was increased midway through the first quarter. This increased consumption rate is expected to result in approximately $80 million higher raw material costs at our sheet mills for the second quarter. Any significant improvement in order entry and operating rates will speed up our raw material destocking process with a corresponding improvement in earnings.
Our liquidity position remains strong with $1.9 billion in cash and cash equivalents and an untapped $1.3 billion revolving credit facility that matures in November 2012. We have maintained this strong liquidity position despite a $175 million debt maturity in January, and payments in the first quarter of approximately $305 million for profit sharing and extraordinary bonuses related to our 2008 record performance.
In February, Nucor’s board declared a cash dividend of $0.35 per share payable on May 12, 2009 to stockholders of record on March 31, 2009. This dividend is Nucor’s one-hundred forty-fourth consecutive quarterly cash dividend, a record we expect to continue.
Page 1 of 5
| |
Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211 Phone 704-366-7000 Fax 704-362-4208 www.nucor.com |
NUCOR REPORTS RESULTS FOR FIRST QUARTER OF 2009 (Continued)
As we have progressed from September 2008 to March 2009, we have seen business and market conditions worsen each succeeding month. Entering the second quarter of 2009, both the U.S. economy and steel market conditions have continued to deteriorate, and we expect a second quarter loss greater than the first quarter as a result. Continued low operating rates, lower pricing and the consumption of high cost pig iron inventories for the full quarter at our sheet mills will negatively impact earnings. Our second quarter guidance will only be qualitative at this time. We will update our guidance midway between the first and second quarter earnings releases.
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 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. 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, 2008 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 23, 2009 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)
| | | Quarter (13 weeks) Ended | |
| | | April 4, 2009 | | | March 29, 2008 | | | Percentage Change | |
| Steel Mills: | | | | | | | | | |
| Production | | | 2,879 | | | | 5,831 | | | | -51 | % |
| Total shipments | | | 2,808 | | | | 5,951 | | | | -53 | % |
| Outside shipments | | | 2,433 | | | | 5,203 | | | | -53 | % |
| | | | | | | | | | | | | |
| Steel Products: | | | | | | | | | | | | |
| Joist production | | | 60 | | | | 132 | | | | -55 | % |
| Deck sales | | | 75 | | | | 116 | | | | -35 | % |
| Cold finish sales | | | 80 | | | | 136 | | | | -41 | % |
| Fabricated concrete | | | | | | | | | | | | |
| reinforcing steel sales | | | 208 | | | | 179 | | | | 16 | % |
Page 2 of 5
| |
Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211 Phone 704-366-7000 Fax 704-362-4208 www.nucor.com |
NUCOR REPORTS RESULTS FOR FIRST QUARTER OF 2009 (Continued)
Unaudited figures are as follows:
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands, except per share data)
| | | Three Months (13 Weeks) Ended | |
| | | April 4, 2009 | | | March 29, 2008 | |
| | | | | | | |
| Net sales | | $ | 2,654,319 | | | $ | 4,974,269 | |
| | | | | | | | | |
| Costs, expenses and other: | | | | | | | | |
| Cost of products sold | | | 2,778,324 | | | | 4,071,592 | |
| Marketing, administrative and other expenses | | | 125,376 | | | | 169,714 | |
| Interest expense, net | | | 32,365 | | | | 18,345 | |
| | | | 2,936,065 | | | | 4,259,651 | |
| Earnings (loss) before income taxes and noncontrolling interests | | | (281,746 | ) | | | 714,618 | |
| Provision for (benefit from) income taxes | | | (91,221 | ) | | | 213,093 | |
| Net earnings (loss) | | | (190,525 | ) | | | 501,525 | |
| Earnings (loss) attributable to noncontrolling interests | | | (880 | ) | | | 91,771 | |
| Net earnings (loss) attributable to Nucor stockholders | | $ | (189,645 | ) | | $ | 409,754 | |
| | | | | | | | | |
| Net earnings per share: | | | | | | | | |
| Basic | | $ | (0.60 | ) | | $ | 1.42 | |
| Diluted | | $ | (0.60 | ) | | $ | 1.41 | |
| | | | | | | | | |
| Average shares outstanding: | | | | | | | | |
| Basic | | | 314,319 | | | | 288,208 | |
| Diluted | | | 314,319 | | | | 289,305 | |
Page 3 of 5| |
Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211 Phone 704-366-7000 Fax 704-362-4208 www.nucor.com |
NUCOR REPORTS RESULTS FOR FIRST QUARTER OF 2009 (Continued)
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
| | | April 4, 2009 | | | Dec. 31, 2008 | |
| ASSETS | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 1,900,079 | | | $ | 2,355,130 | |
| Accounts receivable, net | | | 933,763 | | | | 1,228,807 | |
| Inventories | | | 1,883,956 | | | | 2,408,157 | |
| Other current assets | | | 472,046 | | | | 405,392 | |
| | | | | | | | | |
| Total current assets | | | 5,189,844 | | | | 6,397,486 | |
| | | | | | | | | |
| Property, plant and equipment, net | | | 4,126,427 | | | | 4,131,861 | |
| | | | | | | | | |
| Goodwill | | | 1,728,442 | | | | 1,732,045 | |
| | | | | | | | | |
| Other intangible assets, net | | | 925,986 | | | | 946,545 | |
| | | | | | | | | |
| Other assets | | | 615,775 | | | | 666,506 | |
| | | | | | | | | |
| Total assets | | $ | 12,586,474 | | | $ | 13,874,443 | |
| | | | | | | | | |
| LIABILITIES | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Short-term debt | | $ | 6,299 | | | $ | 8,622 | |
| Long-term debt due within one year | | | 5,400 | | | | 180,400 | |
| Accounts payable | | | 406,218 | | | | 534,161 | |
| Federal income taxes payable | | | - | | | | 199,044 | |
| Salaries, wages and related accruals | | | 168,729 | | | | 580,090 | |
| Accrued expenses and other current liabilities | | | 353,527 | | | | 351,875 | |
| | | | | | | | | |
| Total current liabilities | | | 940,173 | | | | 1,854,192 | |
| | | | | | | | | |
| Long-term debt due after one year | | | 3,086,200 | | | | 3,086,200 | |
| | | | | | | | | |
| Deferred credits and other liabilities | | | 695,613 | | | | 677,370 | |
| | | | | | | | | |
| Total liabilities | | | 4,721,986 | | | | 5,617,762 | |
| | | | | | | | | |
| EQUITY | | | | | | | | |
| Nucor stockholders' equity: | | | | | | | | |
| Common stock | | | 149,654 | | | | 149,628 | |
| Additional paid-in capital | | | 1,641,678 | | | | 1,629,981 | |
| Retained earnings | | | 7,560,360 | | | | 7,860,629 | |
| Accumulated other comprehensive loss, | | | | | | | | |
| net of income taxes | | | (249,055 | ) | | | (190,262 | ) |
| Treasury stock | | | (1,515,387 | ) | | | (1,520,772 | ) |
| | | | 7,587,250 | | | | 7,929,204 | |
| Noncontrolling interests | | | 277,238 | | | | 327,477 | |
| | | | | | | | | |
| Total equity | | | 7,864,488 | | | | 8,256,681 | |
| | | | | | | | | |
| Total liabilities and equity | | $ | 12,586,474 | | | $ | 13,874,443 | |
Page 4 of 5| |
Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211 Phone 704-366-7000 Fax 704-362-4208 www.nucor.com |
NUCOR REPORTS RESULTS FOR FIRST QUARTER OF 2009 (Continued)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
| | | Three Months (13 Weeks) Ended | |
| | | April 4, 2009 | | | March 29, 2008 | |
| | | | | | | |
| Operating activities: | | | | | | |
| Net earnings (loss) | | $ | (190,525 | ) | | $ | 501,525 | |
| Adjustments: | | | | | | | | |
| Depreciation | | | 119,699 | | | | 109,662 | |
| Amortization | | | 18,142 | | | | 13,411 | |
| Stock-based compensation | | | 10,225 | | | | 9,635 | |
| Deferred income taxes | | | (51,693 | ) | | | (8,663 | ) |
| Settlement of derivative hedges | | | (13,355 | ) | | | (283 | ) |
| Changes in assets and liabilities (exclusive of acquisitions): | | | | | | | | |
| Accounts receivable | | | 292,398 | | | | 33,005 | |
| Inventories | | | 522,744 | | | | 8,014 | |
| Accounts payable | | | (127,657 | ) | | | 16,245 | |
| Federal income taxes | | | (204,553 | ) | | | 189,411 | |
| Salaries, wages and related accruals | | | (404,173 | ) | | | (162,496 | ) |
| Other | | | 42,742 | | | | (41,987 | ) |
| | | | | | | | | |
| Cash provided by operating activities | | | 13,994 | | | | 667,479 | |
| | | | | | | | | |
| Investing activities: | | | | | | | | |
| Capital expenditures | | | (125,966 | ) | | | (226,238 | ) |
| Investment in affiliates | | | (8,468 | ) | | | (17,118 | ) |
| Disposition of plant and equipment | | | 2,234 | | | | 1,250 | |
| Acquisitions (net of cash acquired) | | | - | | | | (1,402,179 | ) |
| Purchases of investments | | | - | | | | (209,605 | ) |
| Proceeds from the sale of investments | | | - | | | | 392,055 | |
| | | | | | | | | |
| Cash used in investing activities | | | (132,200 | ) | | | (1,461,835 | ) |
| | | | | | | | | |
| Financing activities: | | | | | | | | |
| Net change in short-term debt | | | (2,320 | ) | | | (10,501 | ) |
| Proceeds from issuance of long-term debt | | | - | | | | 400,000 | |
| Repayment of long-term debt | | | (175,000 | ) | | | - | |
| Issuance of common stock | | | 1,028 | | | | 6,158 | |
| Excess tax benefits from stock-based compensation | | | (700 | ) | | | 7,300 | |
| Distributions to noncontrolling interests | | | (49,339 | ) | | | (91,993 | ) |
| Cash dividends | | | (110,514 | ) | | | (176,556 | ) |
| | | | | | | | | |
| Cash provided by (used in) financing activities | | | (336,845 | ) | | | 134,408 | |
| | | | | | | | | |
| Decrease in cash and cash equivalents | | | (455,051 | ) | | | (659,948 | ) |
| | | | | | | | | |
| Cash and cash equivalents - beginning of year | | | 2,355,130 | | | | 1,393,943 | |
| | | | | | | | | |
| Cash and cash equivalents - end of three months | | $ | 1,900,079 | | | $ | 733,995 | |
Page 5 of 5| |
Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211 Phone 704-366-7000 Fax 704-362-4208 www.nucor.com |
