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

Oct 18, 2012, 09:00 ET from Nucor Corporation

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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