NUCOR REPORTS RESULTS FOR SECOND QUARTER AND FIRST HALF OF 2009
CHARLOTTE, NORTH CAROLINA, July 23, 2009 – Nucor Corporation (NYSE: NUE) announced today a consolidated net loss of $133.3 million, or $0.43 per diluted share, for the second quarter of 2009, compared to a net loss of $189.6 million, or $0.60 per diluted share, in the first quarter of 2009, an improvement of 30%. The results compare to net income of $580.8 million, or $1.94 per diluted share, in the second quarter of 2008.
In the first half of 2009, Nucor reported a consolidated net loss of $323.0 million, or $1.03 per diluted share, compared with net earnings of $990.5 million, or $3.36 per diluted share, in the first half of last year.
In the second quarter of 2009, Nucor’s consolidated net sales decreased 7% to $2.48 billion compared with $2.65 billion in the first quarter of 2009 and decreased 65% compared with $7.09 billion in the second quarter of 2008. Average sales price per ton decreased 16% from the first quarter of 2009 and decreased 34% from the second quarter of 2008. Total tons shipped to outside customers were 4,116,000 tons in the second quarter of 2009, an increase of 11% over the first quarter of 2009 and a decrease of 47% from the second quarter of 2008.
In the first half of 2009, Nucor’s consolidated net sales decreased 57% to $5.13 billion, compared with $12.06 billion in last year’s first half. Average sales price per ton decreased 23% while total tons shipped to outside customers decreased 45% from the first half of 2008.
The average scrap and scrap substitute cost per ton used in the second quarter of 2009 was $312, a decrease of 6% compared with $333 in the first quarter of 2009 and a decrease of 32% from $456 in the second quarter of 2008. The average scrap and scrap substitute cost per ton used in the first half of 2009 was $322, a decrease of 19% from $396 in the first half of 2008.
Nucor recorded a credit to value inventories using the last-in, first-out (LIFO) method of accounting of $125.0 million in the second quarter of 2009, compared with a credit of $105.0 million in the first quarter of 2009 and a charge of $214.0 million in the second quarter of 2008. The LIFO credit in the first half of 2009 was $230.0 million, compared with a charge of $283.0 million in the first half of 2008.
Overall steel mill utilization increased slightly from 45% in the first quarter of 2009 to 46% in the second quarter of 2009, and decreased from 95% in last year’s second quarter. Utilization rates decreased from 94% in the first half of 2008 to 46% in the first half of 2009. Monthly steel mill utilization rates increased each month during the second quarter, improving from 38% in April to 54% in June. This improvement reversed the first quarter trend in which utilization rates decreased each month.
Total energy costs decreased approximately $4 per ton from the first quarter of 2009 due to decreased energy costs driven by lower natural gas prices combined with the slight increase in overall utilization. Total energy costs increased approximately $5 per ton from the second quarter of 2008 to the second quarter of 2009 and increased $8 per ton from the first half of 2008 to the first half of 2009 as a result of decreased utilization during the period.
Page 1 of 6
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 SECOND QUARTER AND FIRST HALF OF 2009 (Continued)
As expected and as discussed in our guidance, second quarter results include a substantially greater burden than the first quarter from the accelerated consumption of high-cost pig iron inventories at our sheet mills. This impact was partially offset by the strong focus on overall cost reductions by all members of the Nucor team. We expect the overhang from the high-cost pig iron will continue to impact our results through the third quarter. If we continue to see improvement in order entry and operating rates, our raw material destocking process would be accelerated with a corresponding improvement in earnings.
At The David J. Joseph Company (“DJJ”), total volumes in the second quarter (both scrap processing and brokerage) were approximately 50% of the prior year; however, in both cases, the volumes improved each month of the quarter and show a strong start to the third quarter. In our downstream businesses, conditions continue to be challenging and recovery is expected to lag Nucor’s other businesses. All of Nucor’s team members continue to capitalize on Nucor’s position of strength arising from our balance sheet, low-cost and highly flexible production capabilities, unrivaled product diversification and, most importantly, Nucor’s extremely productive and innovative work force.
Our liquidity position remains strong with $2.20 billion in cash and cash equivalents and short-term investments and an untapped $1.3 billion revolving credit facility that matures in November 2012.
In June, Nucor’s board of directors declared a cash dividend of $0.35 per share payable on August 11, 2009 to stockholders of record on June 30, 2009. This dividend is Nucor’s one-hundred forty-fifth consecutive quarterly cash dividend, a record we expect to continue.
The third quarter outlook suggests that, in spite of the continued strong negative impact of finishing up our high-cost pig iron inventories, we should see further earnings improvement in the quarter; however, the uncertainty in our economy is still very high. Currently we are concerned that the marginal uptick in orders is not representative of an increase in “real” demand but more a result of both inventory adjustments and concern over rising prices. We will again provide quantitative guidance after the midpoint between our quarterly 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 the largest recycler in North America.
Page 2 of 6
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 SECOND QUARTER AND FIRST HALF OF 2009 (Continued)
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 second quarter results on July 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) |
| | | Three Months (13 Weeks) Ended | | | Six Months (26 Weeks) Ended | |
| | | July 4, 2009 | | | June 28, 2008 | | | Percentage Change | | | July 4, 2009 | | | June 28, 2008 | | | Percentage Change | |
| Steel Mills: | | | | | | | | | | | | | | | | | | |
| Production | | | 2,964 | | | | 6,043 | | | | -51% | | | | 5,843 | | | | 11,874 | | | | -51% | |
| Total shipments | | | 2,999 | | | | 6,117 | | | | -51% | | | | 5,807 | | | | 12,068 | | | | -52% | |
| Outside shipments | | | 2,569 | | | | 5,394 | | | | -52% | | | | 5,002 | | | | 10,597 | | | | -53% | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Steel Products: | | | | | | | | | | | | | | | | | | | | | | | | |
| Joist production | | | 65 | | | | 140 | | | | -54% | | | | 125 | | | | 272 | | | | -54% | |
| Deck sales | | | 73 | | | | 139 | | | | -47% | | | | 148 | | | | 255 | | | | -42% | |
| Cold finished sales | | | 76 | | | | 143 | | | | -47% | | | | 156 | | | | 279 | | | | -44% | |
| Fabricated concrete | | | | | | | | | | | | | | | | | | | | | | | | |
| reinforcing steel sales | | | 255 | | | | 232 | | | | 10% | | | | 463 | | | | 411 | | | | 13% | |
Page 3 of 6
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 SECOND QUARTER AND FIRST HALF 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 | | | Six Months (26 Weeks) Ended | |
| | | July 4, 2009 | | | June 28, 2008 | | | July 4, 2009 | | | June 28, 2008 | |
| | | | | | | | | | | | | |
| NET SALES | | $ | 2,478,028 | | | $ | 7,090,599 | | | $ | 5,132,347 | | | $ | 12,064,868 | |
| | | | | | | | | | | | | | | | | |
| Costs, expenses and other: | | | | | | | | | | | | | | | | |
| Cost of products sold | | | 2,539,904 | | | | 5,879,655 | | | | 5,318,228 | | | | 9,951,247 | |
| Marketing, administrative and | | | | | | | | | | | | | | | | |
| other expenses | | | 106,925 | | | | 220,172 | | | | 232,301 | | | | 389,886 | |
| Interest expense, net | | | 31,957 | | | | 26,734 | | | | 64,322 | | | | 45,079 | |
| | | | 2,678,786 | | | | 6,126,561 | | | | 5,614,851 | | | | 10,386,212 | |
| | | | | | | | | | | | | | | | | |
| Earnings (loss) before income taxes | | | | | | | | | | | | | |
| and noncontrolling interests | | | (200,758 | ) | | | 964,038 | | | | (482,504 | ) | | | 1,678,656 | |
| Provision for (benefit from) income taxes | | | (72,989 | ) | | | 295,348 | | | | (164,210 | ) | | | 508,441 | |
| Net earnings (loss) | | | (127,769 | ) | | | 668,690 | | | | (318,294 | ) | | | 1,170,215 | |
| Earnings attributable to | | | | | | | | | | | | | | | | |
| noncontrolling interests | | | 5,568 | | | | 87,936 | | | | 4,688 | | | | 179,707 | |
| Net earnings (loss) attributable to | | | | | | | | | | | | | | | | |
| Nucor stockholders | | $ | (133,337 | ) | | $ | 580,754 | | | $ | (322,982 | ) | | $ | 990,508 | |
| | | | | | | | | | | | | | | | | |
| NET EARNINGS PER SHARE: | | | | | | | | | | | | | | | | |
| Basic | | $ | (0.43 | ) | | $ | 1.94 | | | $ | (1.03 | ) | | $ | 3.37 | |
| Diluted | | $ | (0.43 | ) | | $ | 1.94 | | | $ | (1.03 | ) | | $ | 3.36 | |
| | | | | | | | | | | | | | | | | |
| AVERAGE SHARES OUTSTANDING: | | | | | | | | | | | | | |
| Basic | | | 314,752 | | | | 298,262 | | | | 314,532 | | | | 293,291 | |
| Diluted | | | 314,752 | | | | 298,668 | | | | 314,532 | | | | 294,051 | |
Page 4 of 6
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 SECOND QUARTER AND FIRST HALF OF 2009 (Continued)
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
| (In thousands) |
| | | July 4, 2009 | | | December 31, 2008 | |
| ASSETS | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 2,060,203 | | | $ | 2,355,130 | |
| Short-term investments | | | 136,389 | | | | - | |
| Accounts receivable, net | | | 960,226 | | | | 1,228,807 | |
| Inventories | | | 1,268,200 | | | | 2,408,157 | |
| Other current assets | | | 502,810 | | | | 405,392 | |
| | | | | | | | | |
| Total current assets | | | 4,927,828 | | | | 6,397,486 | |
| | | | | | | | | |
| Property, plant and equipment, net | | | 4,117,542 | | | | 4,131,861 | |
| | | | | | | | | |
| Goodwill | | | 1,776,207 | | | | 1,732,045 | |
| | | | | | | | | |
| Other intangible assets, net | | | 922,340 | | | | 946,545 | |
| | | | | | | | | |
| Other assets | | | 667,130 | | | | 666,506 | |
| | | | | | | | | |
| Total assets | | $ | 12,411,047 | | | $ | 13,874,443 | |
| | | | | | | | | |
| LIABILITIES | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Short-term debt | | $ | 5,942 | | | $ | 8,622 | |
| Long-term debt due within one year | | | 5,400 | | | | 180,400 | |
| Accounts payable | | | 413,347 | | | | 534,161 | |
| Federal income taxes payable | | | - | | | | 199,044 | |
| Salaries, wages and related accruals | | | 181,006 | | | | 580,090 | |
| Accrued expenses and other current liabilities | | | 343,492 | | | | 351,875 | |
| | | | | | | | | |
| Total current liabilities | | | 949,187 | | | | 1,854,192 | |
| | | | | | | | | |
| Long-term debt due after one year | | | 3,086,200 | | | | 3,086,200 | |
| | | | | | | | | |
| Deferred credits and other liabilities | | | 671,416 | | | | 677,370 | |
| | | | | | | | | |
| Total liabilities | | | 4,706,803 | | | | 5,617,762 | |
| | | | | | | | | |
| EQUITY | | | | | | | | |
| Nucor stockholders' equity: | | | | | | | | |
| Common stock | | | 149,810 | | | | 149,628 | |
| Additional paid-in capital | | | 1,655,252 | | | | 1,629,981 | |
| Retained earnings | | | 7,316,054 | | | | 7,860,629 | |
| Accumulated other comprehensive loss, | | | | | | | | |
| net of income taxes | | | (151,203 | ) | | | (190,262 | ) |
| Treasury stock | | | (1,514,695 | ) | | | (1,520,772 | ) |
| | | | 7,455,218 | | | | 7,929,204 | |
| Noncontrolling interests | | | 249,026 | | | | 327,477 | |
| | | | | | | | | |
| Total equity | | | 7,704,244 | | | | 8,256,681 | |
| | | | | | | | | |
| Total liabilities and equity | | $ | 12,411,047 | | | $ | 13,874,443 | |
Page 5 of 6
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 SECOND QUARTER AND FIRST HALF OF 2009 (Continued)
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
| (In thousands) |
| | | Six Months (26 Weeks) Ended | |
| | | July 4, 2009 | | | June 28, 2008 | |
| Operating activities: | | | | | | |
| Net earnings (loss) | | $ | (318,294 | ) | | $ | 1,170,215 | |
| Adjustments: | | | | | | | | |
| Depreciation | | | 242,475 | | | | 231,232 | |
| Amortization | | | 36,001 | | | | 32,066 | |
| Stock-based compensation | | | 31,660 | | | | 31,148 | |
| Deferred income taxes | | | (31,659 | ) | | | (66,881 | ) |
| Changes in assets and liabilities (exclusive of acquisitions): | | | | | | | | |
| Accounts receivable | | | 278,055 | | | | (591,318 | ) |
| Inventories | | | 1,147,421 | | | | (570,570 | ) |
| Accounts payable | | | (121,847 | ) | | | 494,549 | |
| Federal income taxes | | | (285,735 | ) | | | 123,517 | |
| Salaries, wages and related expenses | | | (392,276 | ) | | | (14,505 | ) |
| Other | | | 51,323 | | | | (11,214 | ) |
| | | | | | | | | |
| Cash provided by operating activities | | | 637,124 | | | | 828,239 | |
| | | | | | | | | |
| Investing activities: | | | | | | | | |
| Capital expenditures | | | (240,428 | ) | | | (501,669 | ) |
| Investment in and advances to affiliates | | | (57,904 | ) | | | (27,903 | ) |
| Disposition of plant and equipment | | | 8,610 | | | | 6,551 | |
| Acquisitions (net of cash acquired) | | | (24,714 | ) | | | (1,591,817 | ) |
| Purchases of investments | | | (136,389 | ) | | | (209,605 | ) |
| Proceeds from the sale of investments | | | - | | | | 392,055 | |
| Proceeds from currency derivative contracts | | | - | | | | 1,441,862 | |
| Settlement of currency derivative contracts | | | - | | | | (1,424,292 | ) |
| | | | | | | | | |
| Cash used in investing activities | | | (450,825 | ) | | | (1,914,818 | ) |
| | | | | | | | | |
| Financing activities: | | | | | | | | |
| Net change in short-term debt | | | (2,694 | ) | | | (21,429 | ) |
| Proceeds from the issuance of long-term debt | | | - | | | | 989,715 | |
| Repayment of long-term debt | | | (175,000 | ) | | | - | |
| Issuance of common stock | | | 1,518 | | | | 1,994,565 | |
| Bond issuance costs | | | - | | | | (6,937 | ) |
| Excess tax benefits from stock-based compensation | | | (700 | ) | | | 9,200 | |
| Distributions to noncontrolling interests | | | (83,223 | ) | | | (153,218 | ) |
| Cash dividends | | | (221,127 | ) | | | (327,380 | ) |
| | | | | | | | | |
| Cash provided by (used in) financing activities | | | (481,226 | ) | | | 2,484,516 | |
| | | | | | | | | |
| Increase (decrease) in cash and cash equivalents | | | (294,927 | ) | | | 1,397,937 | |
| | | | | | | | | |
| Cash and cash equivalents - beginning of year | | | 2,355,130 | | | | 1,393,943 | |
| | | | | | | | | |
| Cash and cash equivalents - end of six months | | $ | 2,060,203 | | | $ | 2,791,880 | |
Page 6 of 6
Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211
Phone 704-366-7000 Fax 704-362-4208 www.nucor.com
