Nucor (NUE) 22 Oct 192019 Q3 Earnings call transcript

Company Profile

Participants

John Ferriola	Chairman and Chief Executive Officer
Leon Topalian	President and Chief Operating Officer
James Frias	Chief Financial Officer, Treasurer & Executive Vice President
D. Chad Utermark	Executive Vice President Fabricated Construction Products
MaryEmily Slate	Executive Vice President Plate, Structural and Tubular Products
David Sumoski	Executive Vice President Merchant and Rebar Products
Martin Englert	Jefferies
Matthew Korn	Goldman Sachs
Chris Terry	Deutsche Bank
Seth Rosenfeld	Exane BNP
Timna Tanners	Bank of America Merrill Lynch
Phil Gibbs	KeyBanc Capital Markets

Call transcript

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Operator

Good day, everyone. And welcome to the Nucor Corporation Third Quarter of 2019 Earnings Call.

As a reminder, today's call is being recorded. Later, we will conduct a question-and-answer session and instructions will come at that time.

Certain statements made during the conference call will be forward-looking statements that involve risks and uncertainties. current believe, are variations forward-looking intended are on expect, and such statements, we that based expressions information similar to management's words anticipate available. of and words which is The currently and expectations identify those

XX-K are will forward-looking in Although events and assumptions, on there that affect uncertainties subsequently the statements risks their found accuracy. and relating on can Nucor based latest Nucor's which reasonable these no may XX-Qs, be be are Nucor's SEC's believes the assurance about website. to they not future filed More information available and

The result Nucor forward-looking in does of events or new call -- update conference and any as assume either speak to information, obligation future only statements made not them otherwise. date a of as this as this either

For go I and to Nucor John like Ferriola, the Officer turn sir. and ahead, introductions, Corporation. Mr. to of call Chief Executive over Chairman Please opening remarks would

John Ferriola

for Fabricated Materials; responsible Raw Bar Feldman, Thank for Chief Utermark, our responsible responsible for Products; Good Nucor's are Ray afternoon. Sheet us and call our earnings also Chief Products; members Topalian, responsible Chad Hall, Craig President Operating on for Frias, Rebar interest today, executive products. and Nucor. and your call Jim Officer; of for team for our Slate, the for Merchant Ladd Officer; Products; Plate, for Sumoski, Other quarter third Tubular Leon Dave in including Financial you responsible responsible Napolitan, Products; MaryEmily for Bar joining Engineered Construction Structural and and

end at of retirement my announced Last month, I effective Nucor, the this year. from

as we talent succeed has fronts. selected of succeeded during make future leaders my to Board Topalian had that a I plan management One Directors of to Nucor's succession I'm component leadership Identifying Company's has of the is Leon robust a know the certain success. our both place. that been in next right me deep priorities as CEO. key have of we a time delighted CEO bench Nucor and on my

an XX-year steel throughout President, was our served Illinois, his Leon proven facilities: Prior Nucor's at leadership, structural our corporate and and to as two himself Since mill to be senior he Kankakee, has joining General Manager mill. Nucor. our exceptional has Plate Executive mills. Vice responsible XXXX, leader structural for bar career Nucor-Yamato at steel Leon

executive is support I'm continued Leon of that the towards industry, all second our leadership Board Nucor will that mates, way. same know, With our also none and I'm success. team to in the I that feel of leadership guide team and have an our confident team we confident the Leon and

a Before provide quarter I words on about to want few third results, I comments our say safety.

organization performance. that mates for constant entire of One the time as has working during accomplishments I safely. proudest my way thank CEO, your to of focus improved all our our want safety is my my team on

performance. having of are for years ever best We safety our one

many. which Let's keep incidents to zero we too is as Nucor will at facility. goal, always injury move our that focus closer every one Any be

buildings, at one-half market, third shipments, rebar execution in We performance The divisions. by continued mates spending and which strong of remains as the fabrication continued construction a improved our metal our in results. Company's conditions healthy and excellent quarter as joist non-residential accounts from our onto team our in our Now typically levels. construction Overall stable well non-residential saw reflects performance divisions, approximately piling, performance deck market. for

that our low. industry conditions the plate sheet and inventories resulted rally, data center customers. continued third in remain inventory After has quarter. market a indicates summer softened supply the Excess by throughout brief in chain destocking Service

OEM head addition, into year the we as In buying end. our cautious about become customers have

meet to service center our start restocking do gets both underway. we believe XXXX However, OEM will demand that as and customers

North into as creating such the the the agreement out unresolved status Looking for the some elections, further of more issues USMCA pending XXXX trade current are America year, and market. in next uncertainty

into that and to our the we future, Nucor's While it's in business far fundamentals great continue difficult confidence steel have long-term to predict markets strategy.

me investments for remind fourth our are our Finally, that make. to of And products you advantage said that we times, by us let give more will have taking all opportunities. up starting several of produce continued in more specific to we success have us asking position the projects customers us growth many capability these the of quarter that market the

a We expect steel as they position Nucor's leader. market further will enhance

call the on to comments an provide turn Leon? and to our I'm growth now over initiatives. to update Leon going of several

Leon Topalian

like with up make John. hallmark opportunity made I a to members begin I and lead proud forward A team have culture, am Nucor, by nearly premier years. traditions XX,XXX to steel I'd have the how to and company. amazing for honored continuing products to continue Thanks, steel who company that our family. this the to the last of be look our saying XX the success begins will which Nucor the has

have. me continue years becoming drew personally in value the safest the in take of ago is it Our Nucor's of and to tirelessly most important inspires it quest the the company will our is steel culture very company our XX most team culture to And important world. and responsibility work safety. Taking I this me daily. we care

I Since warm our are deeply new among online. they future engaged team bringing our obvious, the as That been our In who especially announcement, I with members growth it's our excitement been received. divisions visiting in evident talking and about reception humbled just mission I've are Nucor's team, the have as by is projects am. of and have excited many

say, dedication, Let commitment most me our you and your work, value, thank hard losing of for sight never just safety. important

new flexibility configuration, key an Nucor with cold cold to Hickman's we're like our projects a Hickman At Arkansas, on specialty its improve on would The online. you and yield mill dual to performance I mill's increase new update our mill can of from this the team some just feature now with us in bringing range provide mill broader Steel strength mill. the continues production a efficiently advanced high flexibility change products. minutes. us America. North efficient to allows is offer a This of other future no our carbon mill very six There of and like reduction the from value-added four-high to for competition steels in is separates a

market. of Nucor of Nucor's their the facility hot-rolled the extremely new capacity, XX coated is is in with underserved XX-inch line Steel galvanizing North hot-band line Midwest heavy-gauge XXX,XXX September America. Gallatin's team coils widest share to galvanizing annual first galvanizing grow Gallatin's on Gallatin positioned well tons galvanizing

reduce commissioning the and line in was mill region. These investments is energy production. of reheat alloy new a to furnace Marion install quench will currently team low-cost and efficient year, combined At producer up completed installed last year in temper August a rolling more as costs. next in also our mill, with Early Marion Marion, Ohio the Marion the will rebar equipment position ramping

Other projects on year the micro building Kankakee's track end Steel. for JFE mill new we're Nucor rolling galvanizing line the with the in our start-up mill, in rebar of include, MBQ Sedalia, Mexico by Steel Missouri and

highly simply market confident are we target As before, market defined win profitable we we that These share. compete bigger. are and projects said not where to adding capacity get will opportunities we have

geographic achieved is Nucor serve project We to customers value-added adding our We more product capacity. unrivaled is industry-leading responding our Nucor with their feedback to unmatched with provide markets. new than strengths increasing from are customers their doing that regarding needs, also growth on properties, capabilities products. and superior value. unique and breadth, on-time are implementing product particularly quality. product to builds product delivery Every competitive we our for

investments, same Nucor's past numerous With through we strategy has long-term earnings these decades. are market power. This successfully is increasing Nucor five executed over the cycles the

will Jim a Frias turn financial our Jim? to over the I call for review time, this of results. At

James Frias

from range These products systems. Thanks, earnings quarter sheet our Leon. steel mills several better-than-expected third $X.XX as of businesses, joist, metal benefiting buildings business also our realign a as per on fixed bar exceeded that to capacity from building joist these commercial our is share. reduced noting both and execution. business due in most diluted are is Nucor of notably performance deck pace worth of $X.XX that excellent well at $X.XX to benefiting It's are and Both reported and steel and steel metal our costs. from for buildings results XXXX. business restructuring lower groups record a deck and of business year The and guidance prices XXXX

quarter. pricing from mills shipments margins. experienced than quarter. declining in Earnings of the increase lower Nucor's steel the third remains customer the shipments to plate the internal customers from a steel our second in as comparable were XX% mills channels the XX% competitive destocking second products the pressure, quarter. were second our continued shipments strength to third segment steel greatest mills market Sheet the mills to of quarter company. an key quarter, in Total strategy due third quarter to Steel downstream and total metal in represented

our remain conditions and from second positive. segment improved ago construction this market the compared products Earnings year quarter to the of quarter. to third steel Non-residential year

weather-related appear have both earlier businesses to the Our year construction seasonally in and benefited from disruptions from recovery the stronger months.

due our further our compared DRI margin materials the iron from operations. second at quarter compression raw direct to to segment reduced Results decreased or

facility continue is DRI its in until Louisiana to planned September, early our mid-November. addition, began expected that and In outage

second compared strategic start-up quarter XXXX of quarter of roughly projects, and ago $XX pre-operating in third results the and included with $XX million Our to $XX the in approximately million quarter. costs year million related approximately investment

management billion, of during First reflecting a declining receivable, pricing benefit inventory million working the approximately capital was first payables environment. a year-ago $X.X from billion continues months structure, highly cash $XXX in period. $X.X XXXX cost up accounts operations Nucor XXXX, variable provided approximately nine steel to for about source from of of its nine consistent months from the and were

months totaled the expenditures first nine through million of Capital XXXX. $XXX

million. timing decrease this expected XXXX spending change approximately This $X.X forecast year prior from during full first billion. now is over billion, the reflects year. of shareholders our Cash balance the the a Our capital outlays of $X.X far of to $XXX XX% net of returned budget income for million of stock our growth. repurchases months while long-term returned totaled and in our we Thus XXXX, also shareholders, totaled profitable $XXX dividends We to paid have of investing $XXX nine XXXX million.

was with XX% and short-term investments. to of capital With Nucor's ended We at in of the debt quarter cash the billion gross ratio our debt the total third condition billion, $X.X end approximately quarter. financial $X.X strong. outstanding remains

facility $X.X mature undrawn Our credit revolving and XXXX. billion until not does remains unsecured April

maturity XXXX million. for next approximately in is Our $XXX material debt

fourth to Now the outlook. quarter Nucor's the than third the to of in turning are expected XXXX earnings lower quarter. be

and markets non-residential sector manufacturing broadly has While stable activity healthy, remain slowed construction down.

believe slightly We expected in end to the of margin to realized of Louisiana steel as quarter at prices third segment the is bottomed. third to impact of The the the decrease continuing steel materials decrease prices due decline year-end quarter, as fourth DRI to of segment quarter compared the the in earnings our further throughout shipments. will the is lower expect due products raw to steel raw further mid-November, quarter third seasonality. in expected from to the performance our steel be quarter businesses. until the mills We outage which to have fourth our impact profitability the The well pressure plant's due segment normal materials of

Thank you call interest in John. will the company. for to now over I back your turn our

John Ferriola

Thanks, Jim.

Crawfordsville in-slab they the ago, comments. Before of electric the steel we furnace. Congratulations suppliers celebration, arc customers, of our to in team the friends decades steel take all for including steel joining XXX past I again revolutionized officials, for let other using Crawfordsville. and Three Indiana few people XX joined the me a have years to and privilege Steel the team produce first team family. us mates, making recently questions, accomplished the the over industry, team XX becoming had celebrate operation an Nucor to sheet American local your years. make

to our press not enforcement. With trade US this shrinking and we we enforcement. take for imports At and sensible supply progress share policy, Nucor, continue and legislation, of domestic effective to for the regulation demand, will cost will a regard competitiveness trade thanks to market-oriented the to granted, of continue industry steel

the will year. remain sector it this approve domestic of USMCA also manufacturing meaningful a Congress see NAFTA the that and as benefit particular. that modernization will the in economy hopeful We We US

would happy We be questions. take now Operator? your to

Operator

first with Martin will Thank Instructions] take Jefferies. We from our question [Operator Englert you.

Martin Englert

Good afternoon, Hi. everyone.

John Ferriola

afternoon. Good

Martin Englert

to you efficiency there, business, strong quarter. expect Downstream wanted see more And can steel fairly on as this as results the fabrication profitable. to an moving also were how you compared there forward? I see well construction products and ago is was if those provide look it a year if just the how the update initiatives, backlogs rebar to non-resi

John Ferriola

changes building have operations start team we've be me I'm comments we've that those the and operations. in team to always Let on proud in job great really our model the said made a Vulcraft has and needed in that with adjusted. in of the systems our that that model working done business mates some that we

We And I'm always positive operations. today. more we experience new to are Chad, want do tomorrow anything very doing to models the those more said seeing results. making are that we can we the Is adjustments see want better you or than will gain and we to do with to confident that add as we're more go that? improvements continue better, in to we we get always that there

D. Chad Utermark

John. Yeah. Thanks,

Just a comments. couple of

and led are manufacturing quarter of into projects backlogs our are year-over-year. joist see deck, them by first metal use slightly These XXXX. improved warehouse So and end commercial and markets we sustainable and the rebar fabrication buildings

So look we product about into the overall, XXXX. downstream groups as performance our forward excited we’re of very yes, head and

John Ferriola

you add to do Leon, want some?

Leon Topalian

agree just to and Chad's rebar strong I I’d continue we're fabrication we waste just - add channel. through backlogs within reduce Yes, I’d moving with tell our non-resi in on inventory are you comments the the one in backlogs, thing and that -

Frias James - A

sure. Yes, this did question rebar quarter the fab fab, this was make about in profitability for rebar in in we money

John Ferriola

from And do mates that to business of as in team seen is our the decisions. to that like thank maybe those mates all success support in we've resulted add are easy up, not team like operations changes to These got operations of I’d the you making we've those made that in say our this. and what to we've just all these

willingness work, to thank So come. hard a thank for to you you your all the marketplace for changing to and adjust more

Martin Englert

what nice you bottomed, and steel you're did today's view perhaps market? the seeing highlight also near-term can factors release, scrap have that of results Okay. current discuss market steel that prices there the on within and prices you believe support in Again, you your suggest

John Ferriola

we Speaking drive products specifics, in general things. a in pricing across couple of do our has all products, things The feel into bottomed. our that of that that of terms getting are the without many

neighborhood, anticipate see the that scrap will we and you scrap next will We starting think we about Number $XX one, the that year. right, up are market in to the that, continue $XX trend that maybe go improve. month, pricing somewhere throughout

the the Our best guess on to $XX of year scrap pricing right end is the year. up now by $XX for

in other start over belief and the see driving hot-band. more roll particularly always we improved weeks, I would energy, thing And have at and fairly strong. that that's several say bookings, the look been Cold to our is sheet area, that in particularly and has the we last our galvanizing our bookings when

in the year. as those was but seen hot-band haven't this really challenge We of much decline for two a a part you of products, know, first

year, beginning We this When market past, tough inventories of in about the things this MSCI - I year, levels and look same this low we down seen the many, we've And lowest many fairly are they inventories, compared to year, years. see that -- last at significantly. the steel of see this these at are to all conditions during that We’ve time contributed talked last mean, ending. this the challenging them destocking they down year. that time they have at last weather overstocking we in year, year, incredibly

that Leon, want think I are So that make well comments see the to One point will all increase as we would the forward. these say more go do driving things as we volumes you pricing we is, something? as that that

Leon Topalian

are year-over-year. XX% numbers, XX% to MSCI John the pointed Martin, roughly Well, down out, as Sure.

the that which XX% compared occurred it's in over that so you at down range, compared And to XXXX almost to to point. the look XXXX peak, if

to So year-over-year, points. XX% we're again, all approximately XX% across of our

next being enter quarter, as the enter particularly much and we we that begin sheet, the to the quarter. stronger as we first usually look a quarter that in Additionally, anticipate we year as we is and forward

John Ferriola

as businesses. of our another see products. the our across steel said, we better many new in year as New see all going into in pointed So conditions next Year, anticipate over our the business year. downstream We we downstream products, I turn our year Ted going records of We into had strong getting with think we business we out, improving

Martin Englert

very on environment. much results difficult Thanks a in that and color congratulations all for Okay. the detail on

John Ferriola

Thank you.

Operator

We Instructions] [Operator will our question Matthew take from Goldman next Korn Sachs. with

Hunter Alley

is if can be And shipments, your both This and Hunter is other the products we're discuss to for included the We buckets? those that reason reporting. split of Hi. are the Alley Korn. materials product Matthew in on you you going [indiscernible] what wondering in you raw discuss noticed steel in what for reporting

John Ferriola

split quest faster other other the from investors in detail was bucket? to for the more in buildings what's the bucket. Metal is bucket the of and more Skyline… breakdown other the to decision up bucket, response just The is in and other in Is information

Leon Topalian

Cold finished.

John Ferriola

finished. Yes, cold

a in and there different So businesses broken the largest took is the few other buckets. out. We businesses

John Ferriola

came request into discussion it also calls some some the could believe I have investors of these by an offline well. as been -

Hunter Alley

Great. Nucor? you there's then very markets on year, both and tubular has okay. been stronger, the much. noticed you shipments driving been while have we discuss And in trends anything and that - if our weaker seeing specific any Thank you're that plate Okay, can structural at changes over

John Ferriola

this been I’ll of about structural of prohibited make to then a stocking last Slate the over -- a earlier, last some it, in half course challenged heavy saw last Structural we've as we'll year. of particularly that and doubt year, start we stocking and overstocking this it the Well, tubular. of pretty about the year with been and consuming a from on lot comments at has up now. maybe lot a turn going of are talk and mentioned some through No conditions MaryEmily of destocking period construction beginning result it I heavily was of year, centers to weather service business

I up bottom coming a little would seeing of an we comment that pick we bit. we're to expect now and end the think is to that stocking, that destocking that

We also year. positive benefit looking steel also next of structural to positive from some preliminary final and some determinations to expect we determinations determinations, on we see commerce by forward recent had part are very some early the fabricated

to on we feel, going and So those where do things driving tubular? want we were comment Emily, some the to are of are better. that things And why were get

MaryEmily Slate

products, On normal also though and this has activity that, has start bad not and it But levels in bringing the fabricator been that fourth with inventory, lowest group buying the seen to we've product pretty been more OEM and some inventories Absolutely. here tubular people We patterns quarter. year, their feel lower levels. stable. has we'll destocking of experienced

very a things better. expect get activity little we So successful getting. been that we've project is There out to in really some good bit there also

So, bright we future. will look to a

James Frias

maintain supply leadership customers and the able and in a us our And XX because temper with asked we've and position, market our that most one a expand John, serve is, that beams, of I'd like construction trends needs profitable being we've products our utilization XX offerings the and reported, to to seen you market leader our XX you the while you've and profitable about share that are our in range, grade the been to very they're one in it's groups in continue to of Hunter, and other add I for. one -- things needs while this point beams quench we've would position customers' -- asking of our rates the beams, as market and been

Hunter Alley

the color. helpful. That's all very additional Thank for you

John Ferriola

Welcome.

Operator

Bank. We’ll our from next Terry Chris question Deutsche take with

Chris Terry

in All Couple of Jim. retirement. questions from side. John, my the best, Hi,

the your didn't for on noticed on buyback. firstly quarter, Just do the you capital anything

wonder just at you've bit I appreciate you met commented little on payout XX% provide got you if I already a more a think minimum and So XX%. color you've could I that. ratio that

surprised the capital in the when bit held buyback back you've But Thanks. was little on no just a a timing bit quarter? there that little

James Frias

returning our Yes, pipeline. of We've we to allocation. do long-term business, Mindset of how to course the very investors of that in as course, capital projects strategic we that as question. want capital got well process a growth invest with think our have our number and begins in a thanks invest we about idea for intentional in for

months some in you of in as behind And balance in temporarily to kind cash and the cash that's capital going little capital sheet. a terms process. catch having of the need projects pretty resulted those over projects, of the up that lot That's -- are in that quickly more to next we're to going the noted, of to so us on fund nine six we're cash a of some spending that

depth minimum XX% that last as With And our capital we ratio begin we capital that want have low, want late like strong investors, about of a to have idea supports times think rating. then we that our more when earnings in return we separate returning we return we also to too did debt investment a that will liquidity. this becomes that, credit and from maintain year grade when of debt-to-capital we with ratio to of to view we a

prices have to year. but XXXX, has of the And going the us so more capital going end use depends tune going steel do next reverse, forecast to benefited need we'll of If working year, the because of to cash capital roughly in it billion it's year. this - and we're reverse cash working $X.X our into of scrap on some possible, we're prices before

will acceleration definitely capital spending. We an see in

being cash we're thoughtful to year. So we through next cash we be expect stand just where where with about but not the today,

Chris Terry

the against for I on in you on color little profitability in some an bit number that forecast a terms one-offs steel that just that. Can the the the mills the that about in of and obviously quite would quarter. a has what for of be. eliminations, the the talk impact just number? that difficulty what corporate we And lower Thanks it's bit than appreciate Okay. expected Thanks.

James Frias

not admin asking, but and questions, of dramatically it's one SG&A you're also related. lower. Yes, I'm is answer marketing, going to two sort

Incentive in about this the line. year, And both last places compensation. is that's other line marketing, less. both about less is reflected [ph] than $XX piece the So quarter million and elims admin incentive affecting in million $XXX year the that's compensation year-to-date, the and it's

that's aside below money. what we The level is and employees Vice -- set that because we're for just biggest So the piece sharing less of making of President. profit

then And year elimination a the the additionally, of have an we profit in million. was of benefit $XX quarter last third about this about million, $XX was year expense

steel and inter-company inventory. fall, margins can as revalue eliminations. We we that So sometimes get from a benefit

benefit we last was benefit got the that So quarter this and a is in Year-to-date, $XX the about about year. million expense million. year, third $XXX

and that's incentive been affecting two severe Those So, the pretty a affecting biggest biggest the change elims as well. factor is factors the in SG&A. comp swing are the

Chris Terry

Thanks color terms maybe think for normally just me And spoken about, most I I end the of maybe from specifically? in but sector could last give just markets, just markets, just auto of you on they're that. wondered end Thanks. one And where your on the the them, you you've if XX comment tracking?

John Ferriola

economy. feel of for in serve them, the markets right with the us about of out feels growing I first. either to we and second start will or about that XX% statement, And two-thirds XX% question a there that general somewhere as around the just stable are that the conditions given we

almost day automotive, edged about the I XX - [ph]. around market has automotive down forecasting heard XX.X the question somewhere other XX.X Your certainly, just [ph],

and from to a important numbers that XX.X, down important share XX.X, good I bit the pretty us we is still little So those certain, are but last to of thing for that it's think for year pie. bigger smaller note take continue a --

up look compared the sent this you tonnage we this XX% last automotive year. year as into automotive constant last to year, year compared we're business that the to at into If about

where continue shrinking, piece about pie bigger pie. So we continue to to feel although a is that of market we are get we We grow automotive. real smaller and in share our the good

more and that going confident at into for year continue are markets. we even projecting XXXX and we tonnage XXXX to those grow next are We look we'll

Chris Terry

very Thanks much.

Operator

We’ll take BNP. with our from Seth question next Rosenfeld Exane

Seth Rosenfeld

on of other months. afternoon. seen BNP. the several Rosenfeld Good bar in Seth Exane we've be last The much over prices bar spreads A and a market. rebar product metal couple Obviously, from decline please sheet, holding better significant up products, and see comment questions the XXXX? appear for to on from is a more what a broader and a demand how bit you already driving this but into outperformance the going commented long sustainable demand You bit relative that can products perspective? about side you supply long for is

you year? right you. one There capacity of then down are nearing their domestic new within increased shutting Do one the that other your is or market what's Thank as some stomach the of micro competitors separately, or higher that coming the rebar be demand will can EAF. think And cost pie ramp mills in up to this balance pushed out in weeks on your rebar two you mills, thought beginning region now? been news recent

John Ferriola

products. your our me performing flat the about Well, question margins and long let first better other talking than products with some of rolled start our metal

There with sheet our our talk than demand but about products when in in our with of issue we destocking less So, a our on bit clearly plate products you have more. products, not an rebar did issue less better. the was is significantly merchant, long on of long a particularly products rebar, or we more little a

in our merchant that to and last A rebar and has of data products long demand our strong. relatively flat a products was on go construction strong, level loaded lot our go lot had construction the been into downstream products obviously businesses. of into And loan So inventories year.

particular downstream have [ph] in lot been that systems strong. building Vulcraft a going mentioned is Jim his steel they As and products comments of in internally, operations our we're XX% about of long into our in shipping Harris products

all those lead of of into that. So kind

with infrastructure of and an long that. help to having about talk will talking us that, said certainly, with when Now all build about structural, we products continue

continue We to needed on administration will bill. they encourage going get badly to the something that this infrastructure country, in

bit that's a about the long So, products. little

the we or mills or your terms areas on where about your building, micro demand we're -- in of supply-demand the the feel very ratio Now regionally in still the comment that. past question on good like talked going to mills. micro regional We've nature in of comment or the competitors about shutting the of not that. anything our any down about these about We're and

those low We an believe give micro advantage The mills right in got the scrap availability really make to Those the with that are of great heart mills close Dave, We've to extremely the going cost we're things very marketplace. and design that something? the highly are of the add of for successful. you the this two are supply close material marketplace. us raw mills. provide to the for structure, feel things to will we efficient the want that

David Sumoski

Yeah. would down, shedding If it's some competition the rebar. comment the of would on we that's an correct product market, you, the exiting not MBQ we

Seth Rosenfeld

Okay. All you much. Thank right. very

John Ferriola

you. Thank Yes.

Operator

We’ll Timna America next from question Lynch. Merrill with Tanners Bank of take our

Timna Tanners

Hi, good afternoon. Yeah.

John Ferriola

afternoon. Good

Timna Tanners

last well on I it. John's conference so want think call, years. your the candor this your over you thanks chapter next may We be wish and for I all to appreciate

John Ferriola

Thank you, Timna.

Timna Tanners

just Yes, even would last about be sir. you're conference half. the heavily I CapEx a it in until because change, the second call, wanted saying bit little to ask up weighted more

pushing year? but you it's CapEx more say that does into next something So changed and timing, this you're I know mean

CapEx if more and the year conditions little sluggish, projects? Can of thoughts into somewhat give a you you the some could rethink us remained next and Thanks.

James Frias

Yes.

capital a on money an in variables and go and forecast installation spending thing. until when begins effects So is getting there lot is there's going there's is and there's the CapEx quotation project there a us engineering process, help are to to of a and products times design process, equipment delivered with into happen we permitting, lot lead rely weather divisions

count things can't or it. product CapEx to a until pay delivered, as site, we So it and actually it's the for whether are service

and accomplish what So expect some things hope happen to large, start to by year, we but with still this days to we've behind committed it terms we in of facilities.

this we probably that little CapEx more for we we We're that dates And next yes, the to year. money our side. will on a some plan than spend spending commitment spend bit year, concerned start-up are

XXXX, in But, we're carryover partly would in XXXX. the be to expect because going from come for out we'll I than what you budget and notably give it actually of a So spend higher to XXXX. January,

John Ferriola

Timna, empathic want not any react. make part upon strategic okay? We We're I market. in I we're on cyclical marketplace. the in be in Listen, second that We don't of a the to a our comment about changes don't the to do this, want plan change question, based changes about reacting business. really to

anything, we opposite on of fact, In to that's if our what would philosophy. always will say, just focus company more invest growing the downturns, the and during our we you been tend

come higher-lows. when in invest into talk We to and about having upturn downturns, the back the higher-highs stronger

this, there So with I change react. really be at We nothing to about time. want the market the has don't clear do dynamics in this to

Our long-term. strategic our the initiatives. impact not plan is in do strategic market built for don't Short-term changes We the react.

James Frias

so the and I'd to and other got just markets everything industry in today, and investments understand [indiscernible] we to North and where really in with serve and every we proposition steel that's our our them our by briefly the leader not than would thing shift the competitive a be market, where is, we need point are agree us I we just not making provide we John, for America long-term the value to today. add, if customers Timna to the very be sure, I'm industry in where John's listen but differentiated they

John Ferriola

build our we that but just have that and last minute, company And we record a had the in during recession, the invest if grow would XXXX. we on Timna, year certainly seen not for didn't

have we the those record the during that. to work years we'll downturns it's us continue So that do and do allow that to

Timna Tanners

taking I But not struck strategic I your Okay. so chord. Fair view. enough. guess a

So your given still the I just but kind look are and the shock if at of of down. kind I in just pretty market across I'm volumes at volumes, we continue mean, in significantly and recent view year-over-year looking change products, board, trends, trends strategic when you conditions, commercially don't the long volume

for it, Just XXXX XXXX, fair? level a a understand but drop things structural explain you just reasons in upward on it to improve, annualized is from from help dramatic basis, wondering, even seasonally bar such been that an can plate has and even shift anything because there I could us to get high be

a a rebound So maybe just there commercial to shift about is that think if do these I it? shift-less or volume you've market, reason soft there made is wondering how can we a in

John Ferriola

based I We market the a industry. our clear not. be in made has the lot no of about most that the we've have talked it none change at strategy about conditions to No, the decision on focused center breaks, all. service We've commercial want upon or our shipping destocking discussions sales to and that. through stocking gone and

but this some downstream the businesses, of the mind inventories on even plate and on the overstocking their that of our up up, sites products, want know a we XXXX, downstream location. talk in specifically, at their of customers, I some are absolutely of any issue products also name all at large storage products, saw the you our customers, across end of and in for fact in we equipment the are flat plant and to bear the about But their inventories of don't them manufacturing dealers some that

we think issue So stocking look and not you reflect would feel is by X% they down demand that have Certainly, very about that. and at think destocking. pure still or an have We volumes if it's - of solid the primarily demand, strongly, X%. primarily we

are that. more in significant They

booking of through, destocking still stocking that levels. we through at get believe will looking way we we'll to levels an this inventory was more and So, work normalized issue to that back we continue strongly and shipping more and and normalized come our

Timna Tanners

you. Thank Okay.

John Ferriola

you. Thank

Operator

from KeyBanc Phil next our with question take will Capital We Markets. Gibbs

Phil Gibbs

Good afternoon. Hey.

John Ferriola

afternoon. Good

Phil Gibbs

you if I wondering was okay. Okay. can me, hear just

taking at or are to curious mill productivity your rebar in Leon Marion, upgrade was think was that place? impeded if an In terms all your mill, investment output rolling I know specifically discussing of that, those at the that upgrades I it

John Ferriola

short off while efficiency over to turn the making Let improve to provide to productivity quality continuing okay. time of to and to at mills, modifications Dave me done and kick to answer same it quality the job has it, the but and customers. those our it I'll or outstanding team our an at add Leon is The no, products to our

that point it can run safety a an to to that team, record thanking would make you're making safety while you're mill this again during we to perspective. be other mill, modifying I and it, challenging and continuing The existing improvements had rebuild from whenever the a like those great

project did without on-time, accidents. done team The major and most any outstanding importantly, an getting on-budget job the on

I So, want add, that. Anything to for you that thank Dave? you

David Sumoski

I just that it want you outage from to the add safely. a on top safely, guys of did disrupt outage customer that, at did XX-day and for did they we thanks and to the anything standpoint, not team Marion

and you thank that. appreciate I So,

Phil Gibbs

and seeing the more lot they out are numerous, mind, be of A you're maybe material your that now, and on raw a Great. I headwinds in now appreciate right are structural. which question segment. that seem to right headwinds these transitory which curious of

to expect come as negative. the just wonder see then making DRI as and magnitude the negative the us in didn't quarter sub-question, were the And those getting certainly they I investments? and We more third conclusion then that remind a as investments of you're to maybe results a of

John Ferriola

So there. a bunch of questions

Okay.

me wrap And this wrap Let we -- believe We the like backwards up we we and work November excuse we are schedule on at our way on me, on time. my to plan, end we will believe budget. and, the I'll up scheduled XX. start Louisiana look with point, are projects on that

Louisiana. are things at pretty So good looking

manage reminder, a materials with of feeding as ones. and the the two major there in two that storage One well. three the handling out, we to the and a placed raw altogether was is have major Just attacking think we're the things major also going -- and in how the vessel. productivity furnace we that's the that We into aligning on to feeding of gone operation that's impact we particularly

replacing heater in. we major deal design basically that of a the have problems have great we confidence And gas might numerous we of recall, gas the and had with with as you course, process met a heater entire process

not of these called X,XXX for changes operation, cost it's productivity, our reduce a increase to in reason. Project All would the that

of reason up we able that of wanted that, able do to out we X,XXX of in believe The terms that X.X we metric result par we of hours when -- year, to next hours X,XXX with million operation, me being the last operation. hours accomplish which year. be do, production to tons rephrase of about let it tons be on will put which that operation would we'll and to X.X have under Trinidad get if operation of We just did facility, that metric

total remember of cost project So, the was what that I don't the was combined…

David Sumoski

million. roughly It $XXX was

John Ferriola

Roughly $XXX million.

David Sumoski

will main you Phil, will middle we the yard mid-November. the next now, of changes question, was up the these the other right the timing be come the as refractory in guess two asked finalized year. regard I of then The done projects with And And ore to weeks three projects. PGA be next and

James Frias

from will in in the comments we're what's timing things in on investments of taking to Phil, and the temporary, questions the quarter. done some these cost a these going your investments, fourth terms we're third what's be cost that to related on after of costs get penalty permanent. Obviously, pre-operating these startup a benefit quarter

business at margins. pig prices that's margins iron, squeeze puts down we a ore to low for part ourselves part the business are a prices -- our for the enough, if to in low DRI price go iron don't in sell have iron and are But the - compressed we of business both scrap in and when of DRI are the the cycle it

of and businesses, So business, feels cycle the that's of right get they it to all a a and need like it now, our better. cyclical like set bottom

John Ferriola

pig amount scrap and is pig And iron. news/bad about level, remember, news we means a we it it level that of a low when out, good tremendous amount it’s kind This material is, is a and kind scrap of is of at consume a a as thing means What hedge. talk tremendous business raw at low Jim of struggling. our pointed a iron

news/bad help it's of particularly of the and build and to kind XXXX. when operation it's good to put a being on talked that saw kind So scrap, hedging we it it particularly built to -- and a markets about news situation, was we movement put really upward cap in good we in a meant accomplished accomplish during happen XXXX what of prime this, scrap

Phil Gibbs

much. very Thanks

Operator

or any John, at to closing turn And Mr. for there this I appears would additional conference remarks. the further you back it are like no questions to time.

John Ferriola

Thank you, Kathy.

I'd Before to moments take end thank company. in we your few to interest a for call, our today's you like

to CEO, I It's have you successes. Nucor's always talking For audience. truly these the past have Thank all pleasure and calls participating as as I in seven a years enjoyed you. an enjoy been about

valuable all with I entrusting for pleasure Nucor our the with your entrusting give to team appreciation business with to serve appreciate been capital our to of decades a want Nucor. also to to your us three investors you for truly with mates and offer you work customers together We It's to my my my us. business. during

of teams. successful themselves with my often I advice, surround mates, the speaking give, following great I people always team And give

If the need have team including to the I have have in to at today. people me Nucor, on your always been want around right be positions successful, on team. this right to right call you the you the fortunate people

connect evolution achieve accomplishments, They built over of a last our have profitable market, as safety; to to A Nucor's we ensure that that upon strategic intensely we with strong our with; while years the mills, our come. rebar drivers partnerships on penetration have very record more to have building worked excellence digital is greater of market the execution rollout our strong draw on as new will to we bench commercial five leadership the a of am into which team of significantly the a customers. with of I focused tools our decade, of automotive and proud powerful channels customers; serve expanded well and a me including company growth, talent deep number of, better to micro for and

to to the to a mates company. build to team, a that they call into team I executive the safer we been more Leon be exciting When for Leon day proud I've continue I of all XXXX during is is work successes hard want do achieve the and profitable for join Nucor to my tenure asked know Nucor. team hard a I and knew bringing they him for every that future have will Nucor going these leader Charlotte. done to I our our known and the strong to for years thank mate. work each year have and another to

next. into role me Leon be great leader has to around team company the I’ve our him And met an excited him steps. and and ensure well to the he into watched I tell the he you challenges where see head let for takes that continues Leon future. preparing Nucor which industry how something, the I'm know on, that now the will team

I At today always an Nucor, never believe opportunity tomorrow. good is are capable are we a as leave we that as we to better. to be be very all There going you in hands.

than of that us. years are confident are best Nucor's We ahead still ever

you day. again for is Have what day and nothing thank in mates, you Please great team my Thank you Thank never nothing. to again, for our interest safely. your do for you forget, it a for there particularly Nucor company. important safety, doing every more than absolutely

Operator

Thank And that presentation. for your concludes participation. you today's

You now disconnect. may

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