Nucor Reports Results For Third Quarter And First Nine Months Of 2012

CHARLOTTE, N.C., Oct. 18, 2012 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $110.3 million, or $0.35 per diluted share, for the third quarter of 2012.  By comparison, Nucor reported net earnings of $112.3 million, or $0.35 per diluted share, in the second quarter of 2012 and net earnings of $181.5 million, or $0.57 per diluted share, in the third quarter of 2011.  Third quarter of 2012 results include non-cash inventory related purchase accounting charges of approximately $28.2 million ($0.06 per diluted share) associated with our acquisition of Skyline Steel LLC ("Skyline"), which occurred late in the second quarter of 2012.  Third quarter of 2012 results were also negatively impacted by a loss on the sale of the assets of Nucor Wire Products Pennsylvania, Inc. of $17.6 million ($0.04 per diluted share). 

In the first nine months of 2012, Nucor reported consolidated net earnings of $367.7 million, or $1.15 per diluted share, compared with consolidated net earnings of $641.1 million, or $2.02 per diluted share, in the first nine months of last year. The year-to-date of impact of Skyline inventory related purchase accounting adjustments was $36.8 million ($.08 per diluted share).  We expect such charges to be much lower in the fourth quarter. 

Nucor recorded a credit to value inventories using the last-in, first-out (LIFO) method of accounting of $84.0 million ($0.16 per diluted share) in the third quarter of 2012, compared with a credit of $14.5 million ($0.03 per diluted share) in the second quarter of 2012 and a charge of $28.0 million ($0.05 per diluted share) in the third quarter of 2011.  The LIFO credit in the first nine months of 2012 was $84.0 million ($0.16 per diluted share) compared with a charge of $91.0 million ($0.17 per diluted share) in the first nine months of 2011. 

Nucor's consolidated net sales decreased 6% to $4.80 billion in the third quarter of 2012 compared with $5.10 billion in the second quarter of 2012 and decreased 9% compared with $5.25 billion in the third quarter of 2011. Average sales price per ton decreased 3% from the second quarter of 2012 and decreased 8% from the third quarter of 2011. Total tons shipped to outside customers were 5,768,000 tons in the third quarter of 2012, a 3% decrease from the second quarter of 2012 and a slight decrease from the third quarter of 2011.  Total third quarter steel mill shipments were  down  3%  from  the  second  quarter of  2012 and decreased 2%  from  the  third  quarter  of  2011.  Third quarter downstream steel products shipments to outside customers increased 1% over the second quarter of 2012 and 4% over the third quarter of 2011.

In the first nine months of 2012, Nucor's consolidated net sales decreased 1% to $14.98 billion, compared with $15.19 billion in last year's first nine months. Total tons shipped to outside customers increased 1% over the first nine months of 2011, while average sales price per ton decreased 3%.

The average scrap and scrap substitute cost per ton used in the third quarter of 2012 was $380, a decrease of 11% from $427 in the second quarter of 2012 and a decrease of 15% from $449 in the third quarter of 2011. The average scrap and scrap substitute cost per ton used in the first nine months of 2012 was $418, a decrease of 5% from $439 in the first nine months of 2011.

Overall operating rates at our steel mills in the third quarter (71%) were down from the second quarter (76%) and from last year's third quarter (74%).  Year-to-date steel mill utilization was flat (75%) compared with the prior year period.  

Total energy costs increased approximately $5 per ton over the second quarter of 2012 primarily due to higher electricity and natural gas unit costs.  Energy costs decreased approximately $2 per ton from the third quarter of 2011 and decreased $3 per ton from the first nine months of 2011 primarily due to lower natural gas unit costs.

Construction is going well on our 2,500,000-ton DRI facility in Louisiana. The majority of the equipment will arrive in 2012, and we are on schedule for completion of construction and beginning of start-up in mid-2013.

Our liquidity position remains strong with $2.54 billion in cash and cash equivalents, short-term investments, and restricted cash and investments.  Our $1.5 billion revolving credit facility that matures in December 2016 remains unused.

In September, Nucor's board of directors declared a cash dividend of $0.365 per share payable on November 9, 2012 to stockholders of record on September 28, 2012.  This dividend is Nucor's 158th consecutive quarterly cash dividend, a record we expect to continue.

Our third quarter results reflect a continuing trend of reduced operating profits at our steel mills, most significantly in sheet and plate.  Lower steel mill margins are primarily the result of very high import levels, which began rising in 2011.  According to U.S. Census Bureau reports, 2012 steel products imports are on pace to reach 27.7 million short tons in 2012.  This represents an increase of 21% from 2011 imports of 22.8 million tons and is 43% higher than 2010 import levels of 19.3 million tons.  In addition, U.S. sheet steel markets have been negatively impacted by new domestic supply that began ramping up production in 2011.

We currently expect to see some further reduction in earnings exclusive of one-time charges for the fourth quarter of 2012.  In addition to high import levels and excess domestic sheet supply, slowing economic growth both domestically and globally is expected to be a negative factor through the end of the year.  Volatility in scrap prices, together with a combination of political and economic uncertainty in global markets, is impacting steel buyer confidence and therefore supply-chain stocking levels.  The strongest end markets continue to be manufactured goods including automotive, energy and heavy equipment.  The construction market continues to be very challenging.

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 outlined in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's December 31, 2011 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 third quarter results on October 18, 2012 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 


 Nine Months (39 Weeks) Ended 




Sept. 29, 2012


Oct. 1, 2011


Percentage Change


Sept. 29, 2012


Oct. 1, 2011


Percentage Change

Steel mills production


4,819


4,910


-2%


15,139


14,796


2%

Steel mills total shipments


5,043


5,128


-2%


15,480


15,192


2%















Sales tons to outside customers:












Steel mills


4,144


4,194


-1%


12,832


12,664


1%


Joist


78


82


-5%


217


219


-1%


Deck


80


83


-4%


221


234


-6%


Cold finished


118


118


-


388


381


2%


Fabricated concrete














reinforcing steel


343


312


10%


915


808


13%


Other


1,005


996


1%


3,041


3,055


-




5,768


5,785


-


17,614


17,361


1%

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)










  Three Months (13 Weeks) Ended  


  Nine Months (39 Weeks) Ended  










Sept. 29, 2012


Oct. 1, 2011


Sept. 29, 2012


Oct. 1, 2011









Net sales

$    4,801,206


$    5,252,144


$  14,977,999


$  15,193,887









Costs, expenses and other:








  Cost of products sold

4,452,473


4,794,014


13,848,809


13,662,572

  Marketing, administrative and other expenses

114,392


108,532


334,039


349,482

  Equity in losses of








unconsolidated affiliates

2,261


11,247


9,093


14,190

  Impairment of non-current assets

-


13,943


30,000


13,943

  Interest expense, net

40,305


40,193


123,028


125,943


4,609,431


4,967,929


14,344,969


14,166,130

Earnings before income taxes and








noncontrolling interests

191,775


284,215


633,030


1,027,757

Provision for income taxes

61,883


84,104


200,159


324,946

Net earnings

129,892


200,111


432,871


702,811

Earnings attributable to








noncontrolling interests

19,584


18,593


65,160


61,679

Net earnings attributable to 








Nucor stockholders

$       110,308


$       181,518


$       367,711


$       641,132









Net earnings per share:








  Basic

$0.35


$0.57


$1.15


$2.02

  Diluted

$0.35


$0.57


$1.15


$2.02









Average shares outstanding:








  Basic

318,463


317,194


318,042


316,866

  Diluted

318,520


317,287


318,113


317,061

 

 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) 

 (In thousands) 














Sept. 29, 2012


Dec. 31, 2011

 ASSETS 






 Current assets: 






 Cash and cash equivalents 


$    1,693,197


$    1,200,645


 Short-term investments 


430,266


1,362,641


 Accounts receivable, net 


1,799,305


1,710,773


 Inventories, net 


2,217,374


1,987,257


 Other current assets 


481,931


446,765











 Total current assets 


6,622,073


6,708,081









 Property, plant and equipment, net 


4,106,238


3,755,604









 Restricted cash and investments 


414,203


585,833









 Goodwill 



2,008,461


1,830,661









 Other intangible assets, net 


980,348


784,640









 Other assets 


865,924


905,531











 Total assets 


$  14,997,247


$  14,570,350









 LIABILITIES 





 Current liabilities: 






 Short-term debt 


$         30,865


$          1,826


 Long-term debt due within one year 


900,000


650,000


 Accounts payable 


1,186,665


958,645


 Salaries, wages and related accruals 


286,780


333,341


 Accrued expenses and other current liabilities 


482,717


452,247











 Total current liabilities 


2,887,027


2,396,059









 Long-term debt due after one year 


3,380,200


3,630,200









 Deferred credits and other liabilities 


866,446


837,511











 Total liabilities 


7,133,673


6,863,770









 EQUITY 






 Nucor stockholders' equity: 






 Common stock 


150,798


150,496


 Additional paid-in capital 


1,804,156


1,756,534


 Retained earnings 


7,129,236


7,111,566


 Accumulated other comprehensive income (loss), 







 net of income taxes 


51,313


(38,177)


 Treasury stock 


(1,502,159)


(1,505,534)



 Total Nucor stockholders' equity 


7,633,344


7,474,885









 Noncontrolling interests 


230,230


231,695











 Total equity 


7,863,574


7,706,580











 Total liabilities and equity 


$  14,997,247


$  14,570,350

 

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 

 (In thousands) 
















Nine Months (39 Weeks) Ended
















Sept. 29, 2012


Oct. 1, 2011

Operating activities:







Net earnings 



$         432,871


$         702,811


Adjustments:








Depreciation



394,690


391,847



Amortization



53,518


51,675



Stock-based compensation

42,858


40,323



Deferred income taxes


(42,548)


40,855



Equity in losses of unconsolidated affiliates

9,093


14,190



Impairment of non-current assets

30,000


13,943



Loss on sale of facility


17,563


-



Changes in assets and liabilities (exclusive of acquisitions):







Accounts receivable


62,787


(401,237)




Inventories


41,662


(634,048)




Accounts payable


21,668


290,885




Federal income taxes


11,248


2,217




Salaries, wages and related accruals

(52,561)


141,407




Other



101,835


28,616










Cash provided by operating activities

1,124,684


683,484










Investing activities:







Capital expenditures


(613,777)


(328,592)


Investment in and advances to affiliates

(66,423)


(76,678)


Repayment of advances to affiliates

32,500


15,000


Disposition of plant and equipment

42,574


22,155


Acquisitions (net of cash acquired)

(763,657)


-


Purchases of investments


(409,403)


(614,982)


Proceeds from the sale of investments

1,341,913


456,055


Purchases of restricted investments

-


(564,994)


Proceeds from the sale of restricted investments

209,930


18,299


Changes in restricted cash


(38,301)


538,644










Cash used in investing activities


(264,644)


(535,093)










Financing activities:







Net change in short-term debt


28,983


(5,646)


Issuance of common stock


10,515


6,957


Excess tax benefits from stock-based compensation

4,377


700


Distributions to noncontrolling interests

(66,562)


(55,855)


Cash dividends



(349,538)


(346,005)


Other financing activities


962


30,000










Cash used in financing activities 


(371,263)


(369,849)










Effect of exchange rate changes on cash

3,775


(2,511)










Increase (decrease) in cash and cash equivalents

492,552


(223,969)










Cash and cash equivalents - beginning of year

1,200,645


1,325,406










Cash and cash equivalents - end of nine months

$      1,693,197


$      1,101,437










Non-cash investing activity:






Accrued property and equipment purchases

$           77,764


$          (10,340)










SOURCE Nucor Corporation



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