Exhibit 99.1
PRESS RELEASE
FEBRUARY 5, 2002
[STEEL DYNAMICS LOGO]
6714 Pointe Inverness Way, Suite 200
Fort Wayne, IN 46804-7932
260.459.3553 Phone
260.969.3590 Fax
www.steeldynamics.com
STEEL DYNAMICS ANNOUNCES 4TH QUARTER & ANNUAL 2001 FINANCIAL RESULTS
Fort Wayne, Indiana, February 5, 2002 -- Today Steel Dynamics, Inc. (NASDAQ:
STLD) announced 2001 annual consolidated earnings of $4.5 million, or $0.10 per
diluted share. SDI's annual sales revenue was $607 million, on consolidated
shipments of 2.0 million tons during 2001, as compared with annual sales revenue
of $693 million, on shipments of 1.9 million tons during 2000. During the year,
capital expenditures were $91 million and start-up costs were $20 million, all
primarily related to our structural and rail manufacturing facility and our
steel scrap substitute facility.
"Market conditions within the U.S. steel industry made 2001 our most challenging
year," stated Keith Busse, president and chief executive officer. "Due to the
continued dumping of unfairly traded foreign steel into the U.S. market,
combined with the weakened U.S. economy, the industry experienced historically
low steel selling prices and tightened margins. Numerous American steel related
businesses filed for bankruptcy during the past several years, although SDI
remains one of a very small group of American steel manufacturers that achieved
profitability for the year, and we look forward to what we believe will be a
much improved 2002.
"We have already experienced significant strengthening in our order backlog.
After reaching a low-water mark in the fourth quarter, spot selling prices have
now rebounded. A $20 increase announced in December 2001, which took affect in
the first quarter 2002 has held, and we should benefit from additional price
increases throughout 2002."
In June of 2001 the Bush Administration initiated a Section 201 action, which
resulted in the U.S. International Trade Commission (ITC) ruling that the U.S.
steel industry had been seriously injured due to increased steel imports. In
March 2002, SDI hopes the Administration will take action to provide
comprehensive import relief, with expected positive effects for the U.S. steel
industry beginning in the second quarter. Separately, as a result of trade case
filings by SDI and other American steel companies, the ITC in 2001 found injury
by foreign countries importing hot-rolled and cold-rolled sheet. These
determinations have led to duties on future imports of hot roll products and are
expected to lead to duties on cold-rolled sheet as well. Steel Dynamics believes
the outcome of these cases will help to stabilize the steel marketplace by
reducing the volume of unfairly priced imported steel, thereby allowing domestic
market pricing to return to more profitable levels.
Busse concluded, "Steel Dynamics is one of the lowest cost steel producers in
existence today, with state-of-the-art production facilities and extraordinary
employee resources. We believe that we are one of the best-positioned companies
within our industry to most quickly realize the anticipated positive benefits
associated with an improving economy, positive trade case results, and a
potentially favorable Section 201 ruling,"
FOURTH QUARTER HIGHLIGHTS
In the fourth quarter 2001, SDI reported its first quarterly operating loss
since achieving profitability in 1996, recording a net loss of $3.9 million.
SDI's sales for the fourth quarter 2001 were $138 million, on consolidated
shipments of 465,000 tons, in comparison with sales of $152 million and
consolidated shipments of 459,000 tons during the same period in 2000.
SDI incurred a charge of $3.4 million related to the anticipated uncollectable
accounts receivable associated with the Metals USA bankruptcy during the fourth
quarter 2001, accounting for approximately $0.05 of our fourth quarter reported
loss per diluted share of $0.09. Capital expenditures of $39 million and
start-up costs of $3 million were primarily related to our structural and rail
manufacturing facility.
STRUCTURAL & RAIL MILL CONSTRUCTION
In late May of 2001, SDI commenced construction of its structural and rail
manufacturing facility, located in Whitley County, Indiana. Construction costs
have remained within our capital budget and construction is ahead of schedule.
We are expecting to begin test production of our structural products during the
second quarter of 2002 and to initiate rail production during the first quarter
of 2003. This facility offers SDI an opportunity to complement its flat-roll and
fabricated steel businesses with additional high-margin products, providing
increased cyclical earnings stability through further market diversification.
FINANCING MATTERS
On January 28, 2002, SDI and its Iron Dynamics subsidiary entered into a
settlement agreement with IDI's senior secured bank lenders to retire the
existing IDI bank debt of approximately $59 million, subject to satisfying
certain conditions. The agreement requires SDI to pay $15 million in cash on
February 1, 2002, to issue $22 million of Steel Dynamics' common stock in March
2002, and to make contingent future payments retiring the balance of the
obligation, if and to the extent that IDI resumes operations and generates
earnings, as defined in the agreement.
SDI is also actively pursuing a plan of refinancing of the Steel Dynamics'
senior secured and unsecured credit facilities and expects to have the
refinancing completed before the end of March 2002.
STEEL DYNAMICS, INC., BASED IN FORT WAYNE, INDIANA, PRODUCES A BROAD RANGE OF
FLAT-ROLLED STEEL PRODUCTS, INCLUDING LIGHT-GAUGE, MICRO-ALLOYED AND
HIGH-STRENGTH STEELS AT ITS MINI-MILL IN BUTLER, INDIANA. PRODUCTS INCLUDE
HOT-BAND, COLD-ROLLED AND COATED STEEL SHEET.
CONFERENCE CALL WEBCAST:
A conference call in which Steel Dynamics' management will discuss 2001 fourth
quarter and annual results is scheduled for 11:00am Eastern Time on February 5,
2002. You are invited to listen to a live broadcast of the conference call over
the Internet, accessible from Steel Dynamics' home page at
http://www.steeldynamics.com. A replay of the webcast will be available on the
company's home page for thirty days after the call.
Contact: Fred Warner, Investor Relations, 260.969.3564 phone and 260.969.3590
fax
FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS PREDICTIVE STATEMENTS ABOUT FUTURE EVENTS, INCLUDING
STATEMENTS RELATED TO CONDITIONS IN THE STEEL MARKETPLACE, FUTURE GROWTH OF
STEEL DYNAMICS' REVENUES AND PROFITABILITY, THE CONSTRUCTION AND OPERATION OF
NEW OR EXISTING FACILITIES, AND THE OPERATION AND FUTURE RESULTS OF SDI'S
RELATED BUSINESSES. THESE STATEMENTS ARE INTENDED TO BE MADE AS
"FORWARD-LOOKING" 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.
WE REFER YOU TO OUR DETAILED EXPLANATION OF THE MANY FACTORS AND RISKS THAT MAY
CAUSE SUCH PREDICTIVE STATEMENTS TO TURN OUT DIFFERENTLY, AS SET FORTH IN THE
MOST RECENT STEEL DYNAMICS' ANNUAL REPORT ON FORM 10-K AND IN OTHER REPORTS
WHICH WE FROM TIME TO TIME FILE WITH THE SECURITIES AND EXCHANGE COMMISSION,
AVAILABLE PUBLICLY ON THE SEC'S WEB SITE AT www.sec.gov
STEEL DYNAMICS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
QUARTER ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31
------------------------- -------------------------
2001 2000 2001 2000
--------- --------- --------- ---------
NET SALES ...................................... $ 138,452 $ 152,449 $ 606,984 $ 692,623
COST AND EXPENSES:
Cost of goods sold ........................ 127,376 125,455 522,927 533,914
Selling, general, & administrative expenses 13,450 12,341 58,249 53,306
--------- --------- --------- ---------
OPERATING INCOME (LOSS) ........................ (2,374) 14,653 25,808 105,403
Interest expense ............................... 4,271 4,877 18,480 20,199
Other (income) expense, net .................... (235) (188) (15) 719
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES .............. (6,410) 9,964 7,343 84,485
Income taxes ................................... (2,468) 2,860 2,827 30,690
--------- --------- --------- ---------
NET INCOME (LOSS) .............................. $ (3,942) $ 7,104 $ 4,516 $ 53,795
========= ========= ========= =========
BASIC:
NET INCOME (LOSS) PER SHARE .................... $ (0.09) $ 0.16 $ 0.10 $ 1.15
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING .. 45,742 45,506 45,655 46,822
========= ========= ========= =========
DILUTED:
NET INCOME (LOSS) PER SHARE .................... $ (0.09) $ 0.16 $ 0.10 $ 1.15
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING .. 45,886 45,627 45,853 46,974
========= ========= ========= =========
STEEL DYNAMICS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
DECEMBER 31
-----------------------------
2001 2000
----------- -----------
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and short-term investments ...................... $ 78,241 $ 10,184
Accounts receivable .................................. 81,879 102,986
Inventories .......................................... 118,368 106,745
Deferred taxes ....................................... 23,741 12,854
Other current assets ................................. 7,464 9,844
----------- -----------
TOTAL CURRENT ASSETS ........................... 309,693 242,613
PROPERTY, PLANT, AND EQUIPMENT, NET ....................... 852,061 807,322
RESTRICTED CASH ........................................... 3,030 3,465
OTHER ASSETS .............................................. 12,804 13,674
----------- -----------
TOTAL ASSETS ................................... $ 1,177,588 $ 1,067,074
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ..................................... $ 37,329 $ 27,988
Accrued interest ..................................... 4,052 5,364
Accrued expenses ..................................... 26,815 26,302
Current portion of long-term debt .................... 68,020 17,044
Debt expected to be refinanced long-term ............. 490,000 --
----------- -----------
TOTAL CURRENT LIABILITIES ...................... 626,216 76,698
LONG-TERM DEBT ............................................ 63,891 515,476
DEFERRED TAXES ............................................ 62,765 52,027
MINORITY INTEREST ......................................... 4,769 4,089
STOCKHOLDERS' EQUITY:
Common stock ......................................... 495 493
Treasury stock, at cost .............................. (46,526) (46,526)
Additional paid-in capital ........................... 337,733 335,732
Retained earnings .................................... 133,601 129,085
Other accumulated comprehensive loss ................. (5,356) --
----------- -----------
TOTAL STOCKHOLDERS' EQUITY ..................... 419,947 418,784
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..... $ 1,177,588 $ 1,067,074
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