Nucor Reports Results For Fourth Quarter And Year Ended 2013

28 Jan, 2014, 09:00 ET from Nucor Corporation

CHARLOTTE, N.C., Jan. 28, 2014 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $488.0 million, or $1.52 per diluted share, for the full year 2013, compared with consolidated net earnings of $504.6 million, or $1.58 per diluted share, for the full year 2012.  Nucor reported consolidated net earnings of $170.5 million, or $0.53 per diluted share, for the fourth quarter of 2013. By comparison, Nucor reported net earnings of $147.6 million, or $0.46 per diluted share, in the third quarter of 2013 and net earnings of $136.9 million, or $0.43 per diluted share, in the fourth quarter of 2012. 

Nucor incurred a charge to value inventories using the last-in, first-out (LIFO) method of accounting of $17.4 million ($0.04 per diluted share) for both the full year of 2013 and the fourth quarter of 2013.  These charges are compared with a credit of $155.9 million ($0.31 per diluted share) for the full year 2012, a credit of $18.0 million ($0.03 per diluted share) in the third quarter of 2013 and a credit of $71.9 million ($0.14 per diluted share) recorded in the fourth quarter of 2012.  

The fourth quarter and full year 2013 results were impacted by an out-of-period non-cash gain of $21.3 million ($0.07 per diluted share) related to a correction to deferred tax balances.  Third quarter of 2013 results included a net $14.0 million ($0.03 per diluted share) partial write down of inventory and fixed asset balances associated with the collapse of a storage dome at Nucor Steel Louisiana in St. James Parish.  Fourth quarter of 2012 earnings were affected by non-cash inventory purchase accounting adjustments following the acquisition of Skyline Steel LLC in June of 2012 of $12.0 million ($0.02 per diluted share).  The full year 2012 Skyline purchase accounting charges were approximately $48.8 million ($0.10 per diluted share).  A $17.6 million ($0.04 per diluted share) loss on the sale of the assets of Nucor Wire Products Pennsylvania, Inc. was also incurred in 2012.

For the full year 2013, Nucor's consolidated net sales decreased 2% to $19.05 billion, compared with $19.43 billion for 2012.  Average sales price per ton decreased 5% from full year 2012.  Total tons shipped to outside customers were 23,730,000 tons, an increase of 3% from 2012 levels.

Nucor's consolidated net sales decreased 1% to $4.89 billion in the fourth quarter of 2013 compared with $4.94 billion in the third quarter of 2013 and increased 10% compared with $4.45 billion in the fourth quarter of 2012. Average sales price per ton increased 1% over the third quarter of 2013 and remained flat when compared with the fourth quarter of 2012. Total tons shipped to outside customers were 6,019,000 tons in the fourth quarter of 2013, a 2% decrease from the third quarter of 2013 and a 10% increase over the fourth quarter of 2012.  Total fourth quarter steel mill shipments decreased 3%  from  the  third  quarter  of  2013 and  increased  9%  over  the fourth quarter of  2012.  Fourth quarter downstream steel products shipments to outside customers decreased 6% from the third quarter of 2013 and increased 3% over the fourth quarter of 2012.

The average scrap and scrap substitute cost per ton used for the full year 2013 was $376, a decrease of 8% from $407 in 2012.  The average scrap and scrap substitute cost per ton used in the fourth quarter of 2013 was $377, an increase of 1% over $372 in both the third quarter of 2013 and the fourth quarter of 2012.

Overall operating rates at our steel mills were 74% for the full year 2013, which is consistent with 2012 and 2011.  Steel mill utilization rates in the fourth quarter (75%) were down from the third quarter (78%), but up from last year's fourth quarter (71%).

For the full year 2013, total energy costs decreased approximately $1 per ton from the prior year primarily due to the negative impact of natural gas hedge settlements on our overall natural gas costs in 2012.  In the fourth quarter of 2013, total energy costs decreased approximately $2 per ton from the third quarter of 2013 due primarily to lower electricity unit costs, and decreased approximately $3 per ton from the fourth quarter of 2012 primarily due to natural gas hedge settlement costs in the fourth quarter of last year.

Our liquidity position remains solid with $1.51 billion in cash and cash equivalents and short-term investments and an untapped $1.5 billion revolving credit facility that does not expire until August 2018.  In addition, cash flow from operations continues to be strong and was $1.1 billion for the year.

In December, Nucor's board of directors declared a cash dividend of $0.37 per share payable on February 11, 2014 to stockholders of record on December 31, 2013.  This dividend is Nucor's 163rd consecutive quarterly cash dividend, and it marks 41 consecutive years of an increased base dividend.

As expected, our fourth quarter 2013 operating performance in the steel mills segment was similar to the third quarter of 2013.  Sheet steel profitability has continued to improve despite a four week planned outage at our sheet steel mill in Berkeley County, South Carolina to accommodate major equipment upgrades related to our wide and light product expansion.  Those upgrades were completed in the fourth quarter.  The increased sheet steel performance in the second half of 2013 is due to a series of pricing increases that began late in the second quarter that were supported by competitor supply disruptions and slightly improved demand.  Improvements in sheet steel, however, were offset by decreased performance at our bar and structural steel mills.  Lower operating performance at the bar and structural mills is mainly due to extended planned outages during the fourth quarter while key components of some of our major capital projects were installed at our SBQ mill in Norfolk, Nebraska and our structural mill in Blytheville, Arkansas.  Profitability in the raw materials segment in the fourth quarter was negatively impacted by increased start-up costs at our new direct reduced iron (DRI) plant in Louisiana and additional costs incurred as a result of the storage dome collapse in September.  The Louisiana DRI facility began production late in December.

We currently expect that first quarter of 2014 earnings, excluding the impact of the fourth quarter out of period tax adjustment, will be similar to the fourth quarter of 2013 levels.  We anticipate that our operating performance will benefit from having no major extended planned outages at our steel mills during the first quarter and from having decreased start-up costs at our Louisiana DRI facility.  These improvements will be largely offset by seasonally weaker performance in our fabricated construction products businesses, which we believe will be even further exacerbated by unusually poor weather.  

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 piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating and expanded metal; and wire and wire mesh. Nucor, through The David J. Joseph Company, 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.  The words "believe," "expect," "project," "will," "should," "could" and similar expressions are intended to identify those forward-looking statements.  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; and (4) competitive pressure on sales and pricing, including competition from imports and substitute materials.  These and other factors are discussed in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's December 31, 2012 Annual Report on Form 10-K, Item 1A. Risk Factors.  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 fourth quarter results on January 28, 2014 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 Ended December 31, 

 Year Ended December 31, 

2013

2012

Percentage Change

2013

2012

Percentage Change

Steel mills production

4,988

4,726

6%

19,900

19,865

-

Steel mills total shipments

5,191

4,762

9%

20,650

20,242

2%

Sales tons to outside customers:

Steel mills

4,485

4,121

9%

17,733

17,473

1%

Joist

94

74

27%

342

291

18%

Deck

92

87

6%

334

308

8%

Cold finished

115

104

11%

474

492

-4%

Fabricated concrete

reinforcing steel

252

265

-5%

1,065

1,180

-10%

Other

981

827

19%

3,782

3,348

13%

6,019

5,478

10%

23,730

23,092

3%

  

 

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)

Quarter Ended December 31,

Year Ended December 31,

2013

2012

2013

2012

Net sales

$ 4,894,750

$ 4,451,274

$ 19,052,046

$ 19,429,273

Costs, expenses and other:

  Cost of products sold

4,509,009

4,066,926

17,641,421

17,915,735

  Marketing, administrative and other expenses

117,403

120,861

481,904

454,900

  Equity in (earnings) losses of

unconsolidated affiliates

(6,632)

4,230

(9,297)

13,323

  Impairment of non-current assets

-

-

-

30,000

  Interest expense, net

37,709

39,347

146,895

162,375

4,657,489

4,231,364

18,260,923

18,576,333

Earnings before income taxes and

noncontrolling interests

237,261

219,910

791,123

852,940

Provision for income taxes

46,845

59,655

205,594

259,814

Net earnings

190,416

160,255

585,529

593,126

Earnings attributable to

noncontrolling interests

19,922

23,347

97,504

88,507

Net earnings attributable to 

Nucor stockholders

$    170,494

$    136,908

$      488,025

$      504,619

Net earnings per share:

  Basic

$0.53

$0.43

$1.52

$1.58

  Diluted

$0.53

$0.43

$1.52

$1.58

Average shares outstanding:

  Basic

319,361

318,553

319,077

318,172

  Diluted

319,652

318,613

319,266

318,240

 

 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) 

 (In thousands) 

Dec. 31, 2013

Dec. 31, 2012

 ASSETS 

 Current assets: 

 Cash and cash equivalents 

$   1,483,252

$   1,052,862

 Short-term investments 

28,191

104,167

 Accounts receivable, net 

1,810,987

1,707,317

 Inventories, net 

2,605,609

2,323,641

 Other current assets 

482,007

473,377

 Total current assets 

6,410,046

5,661,364

 Property, plant and equipment, net 

4,917,024

4,283,056

 Restricted cash and investments 

-

275,163

 Goodwill 

1,973,608

2,004,538

 Other intangible assets, net 

874,154

959,240

 Other assets 

1,028,451

968,698

 Total assets 

$ 15,203,283

$ 14,152,059

 LIABILITIES 

 Current liabilities: 

 Short-term debt 

$        29,202

$       29,912

 Long-term debt due within one year 

3,300

250,000

 Accounts payable 

1,117,078

1,046,713

 Salaries, wages and related accruals 

282,860

279,898

 Accrued expenses and other current liabilities 

527,776

423,045

 Total current liabilities 

1,960,216

2,029,568

 Long-term debt due after one year 

4,376,900

3,380,200

 Deferred credits and other liabilities 

955,889

856,917

 Total liabilities 

7,293,005

6,266,685

 EQUITY 

 Nucor stockholders' equity: 

 Common stock 

151,010

150,805

 Additional paid-in capital 

1,843,353

1,811,459

 Retained earnings 

7,140,440

7,124,523

 Accumulated other comprehensive income, 

 net of income taxes 

9,080

56,761

 Treasury stock 

(1,498,114)

(1,501,977)

 Total Nucor stockholders' equity 

7,645,769

7,641,571

 Noncontrolling interests 

264,509

243,803

 Total equity 

7,910,278

7,885,374

 Total liabilities and equity 

$ 15,203,283

$ 14,152,059

 

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 

 (In thousands) 

Year Ended December 31,

2013

2012

Operating activities:

Net earnings 

$      585,529

$      593,126

Adjustments:

Depreciation

535,852

534,010

Amortization

74,356

73,011

Stock-based compensation

47,450

50,733

Deferred income taxes

56,564

(25,274)

Distributions from affiliates

8,708

-

Equity in (earnings) losses of unconsolidated affiliates

(9,297)

13,323

Impairment of non-current assets

-

30,000

Loss on assets

14,000

17,563

Changes in assets and liabilities (exclusive of

     acquisitions and dispositions):

Accounts receivable

(103,649)

148,113

Inventories

(298,074)

(65,655)

Accounts payable

39,489

(111,496)

Federal income taxes

77,950

(28,022)

Salaries, wages and related accruals

7,155

(60,363)

Other

41,916

31,316

Cash provided by operating activities

1,077,949

1,200,385

Investing activities:

Capital expenditures

(1,196,952)

(947,608)

Investment in and advances to affiliates

(85,053)

(180,472)

Repayment of advances to affiliates

54,500

65,446

Disposition of plant and equipment

34,097

51,063

Acquisitions (net of cash acquired)

-

(760,833)

Purchases of investments

(19,349)

(409,403)

Proceeds from the sale of investments

92,761

1,667,142

Proceeds from the sale of restricted investments

148,725

359,295

Changes in restricted cash

126,438

(48,625)

Other investing activities

4,863

-

Cash used in investing activities

(839,970)

(203,995)

Financing activities:

Net change in short-term debt

(671)

27,945

Proceeds from long-term debt, net of discount

999,100

-

Repayment of long-term debt

(250,000)

(650,000)

Bond issuance costs

(7,625)

-

Issuance of common stock

-

10,515

Excess tax benefits from stock-based compensation

2,955

4,700

Distributions to noncontrolling interests

(76,798)

(74,848)

Cash dividends

(471,028)

(466,361)

Other financing activities

111

1,172

Cash provided by (used in) financing activities 

196,044

(1,146,877)

Effect of exchange rate changes on cash

(3,633)

2,704

Increase (decrease) in cash and cash equivalents

430,390

(147,783)

Cash and cash equivalents - beginning of year

1,052,862

1,200,645

Cash and cash equivalents - end of year

$   1,483,252

$   1,052,862

Non-cash investing activity:

Change in accrued plant and equipment purchases

$        33,467

$        71,726

SOURCE Nucor Corporation



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