Nucor Reports Results for Fourth Quarter and Year Ending 2009

Jan 26, 2010, 09:00 ET from Nucor Corporation

CHARLOTTE, N.C., Jan. 26 /PRNewswire-FirstCall/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $58.9 million or $0.18 per diluted share, for the fourth quarter of 2009, an improvement over losses of $0.60, $0.43 and $0.10 per diluted share in the first, second and third quarters of 2009, respectively.  The results compare to a net income of $105.9 million or $0.34 per diluted share for the fourth quarter of 2008.

For the full year of 2009, Nucor reported a consolidated net loss of $293.6 million or $0.94 per diluted share, compared with net earnings of $1.83 billion or $5.98 per diluted share for 2008.

In the fourth quarter of 2009, Nucor's consolidated net sales decreased 6% to $2.94 billion compared with $3.12 billion in the third quarter of 2009 and decreased 29% compared with $4.15 billion in the fourth quarter of 2008.  Average sales price per ton increased 4% from the third quarter of 2009 and decreased 35% from the fourth quarter of 2008.  Total tons shipped to outside customers were 4,638,000 tons in the fourth quarter of 2009, a decrease of 9% from the third quarter of 2009 and an increase of 8% over last year's fourth quarter.

For the full year 2009, Nucor's consolidated net sales decreased 53% to $11.19 billion, compared with $23.66 billion for 2008.  Average sales price per ton decreased 32% while total tons shipped to outside customers decreased 30% from 2008 levels.

As discussed in our guidance, fourth quarter results were significantly impacted by reduced earnings in our downstream, long products and scrap businesses; however, the sheet mills benefited from the absence of high-cost pig iron inventories.  The average scrap and scrap substitute cost per ton used in the fourth quarter of 2009 was $276, a decrease of 8% compared with $299 in the third quarter and a decrease of 37% from $435 in the fourth quarter of 2008.   For the full year 2009, the average scrap and scrap substitute cost per ton used was $303, a decrease of 31% from $438 in 2008.

In the fourth quarter of 2009, Nucor recorded a credit to value inventories using the last-in, first-out (LIFO) method of accounting of $116.9 million, compared with a credit of $120 million in the third quarter of 2009 and a credit of $81.2 million in the fourth quarter of 2008.  For the full year 2009, the LIFO credit was $466.9 million, compared with a charge of $341.8 million in 2008.

Overall steel mill utilization decreased from 69% in the third quarter of 2009 to 58% in the fourth quarter of 2009, and increased from 48% in last year's fourth quarter.  Steel mill utilization rates decreased from 80% for the full year 2008 to 54% for the full year 2009.  The quarter over quarter decrease in utilization was due to fourth quarter seasonal issues that are separate of the general economic slowdown due to the holidays and year-end plant shutdowns by some of our customers.

Total energy costs in the fourth quarter of 2009 increased approximately $3 per ton from the third quarter of 2009 due to higher natural gas prices coupled with reduced productivity.  Total energy costs decreased approximately $5 per ton from the fourth quarter of 2008 to the fourth quarter of 2009.  For the full year 2009, total energy costs increased approximately $1 per ton from 2008.  

Pre-operating and start-up costs of new facilities decreased from $53.8 million in the fourth quarter of 2008 to $48.1 million in the fourth quarter of 2009 and increased from $128.6 million in 2008 to $160.0 million in 2009.  In 2009, these costs primarily related to the SBQ mill in Memphis, Tennessee, the Castrip® project in Blytheville, Arkansas, the proposed iron-making facility, and the galvanizing line in Decatur, Alabama.

Our liquidity position remains strong with $2.24 billion in cash and cash equivalents and short-term investments and an untapped $1.3 billion revolving credit facility that matures in November 2012.

In December, Nucor's board of directors increased the cash dividend 2.9% to $0.36 per share.  The dividend is payable on February 11, 2010 to stockholders of record on December 31, 2009 and is Nucor's 147th consecutive quarterly cash dividend.  Nucor continues a record of 37 consecutive years of increases to its regular dividend.    

Going forward, we believe that the most challenging markets for our products will be those associated with residential and non-residential construction, which continue to show little, if any, strength.  While we expect improvements of approximately 5% in steel mill shipments in the first quarter, we also expect significant increases in both sales prices and scrap costs.  As a result, we project a LIFO expense of about $25 million in the first quarter of 2010 compared to a LIFO credit of $116.9 million in the fourth quarter of 2009 and a credit of $105 million in the first quarter of 2009.  Actual first quarter earnings will be significantly impacted by these inventory valuation adjustments.  We will provide additional and more quantitative earnings guidance after the midpoint between our quarterly earnings releases.

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 joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; light gauge steel framing; 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" 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; (4) competitive pressure on sales and pricing, including pressure from imports and substitute materials; and (5) capital investments and their impact on our performance.  These and other factors are outlined in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's December 31, 2008 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 fourth quarter results on January 26, 2010 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,

2009

2008

Percentage Change

2009

2008

Percentage Change

Steel mills production

3,722   

3,062   

22%

13,998   

20,446   

-32%

Steel mills total shipments

3,917   

3,426   

14%

14,036   

20,932   

-33%

Sales tons to outside customers:

Steel mills

3,368   

2,900   

16%

12,075   

18,185   

-34%

Joist

70   

94   

-26%

264   

485   

-46%

Deck

78   

110   

-29%

310   

498   

-38%

Cold finished

87   

91   

-4%

330   

485   

-32%

Fabricated concrete

reinforcing steel

211   

286   

-26%

954   

955   

0%

Other

824   

813   

1%

3,643   

4,579   

-20%

4,638   

4,294   

8%

17,576   

25,187   

-30%

Unaudited figures are as follows:

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)

Quarter Ended December 31,

Year Ended December 31,

2009

2008

2009

2008

Net sales

$ 2,937,944 

$ 4,150,936 

$11,190,296 

$23,663,324 

Costs, expenses and other:

 Cost of products sold

2,716,824 

3,670,629 

11,035,903 

19,612,283 

 Marketing, administrative and

   other expenses

92,605 

145,343 

430,819 

750,984 

 Impairment of non-current assets

2,800 

105,183 

2,800 

105,183 

 Interest expense, net

35,705 

22,374 

134,752 

90,483 

2,847,934 

3,943,529 

11,604,274 

20,558,933 

Earnings (loss) before income taxes and

noncontrolling interests

90,010 

207,407 

(413,978)

3,104,391 

Provision for (benefit from) income taxes

3,583 

43,514 

(176,800)

959,480 

Net earnings (loss)

86,427 

163,893 

(237,178)

2,144,911 

Earnings attributable to noncontrolling interests

27,520 

58,001 

56,435 

313,921 

Net earnings (loss) attributable to Nucor stockholders

$      58,907 

$    105,892 

$   (293,613)

$  1,830,990 

Net earnings (loss) per share:

 Basic

$0.19 

$0.34 

($0.94)

$5.99 

 Diluted

$0.18 

$0.34 

($0.94)

$5.98 

Average shares outstanding:

 Basic

315,274 

314,135 

314,873 

304,525 

 Diluted

315,740 

314,247 

314,873 

305,006 

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands)

ASSETS

Dec. 31, 2009

Dec. 31, 2008

Current assets:

Cash and cash equivalents

$      2,016,981 

$      2,355,130 

Short-term investments

225,000 

Accounts receivable, net

1,116,035 

1,228,807 

Inventories

1,312,903 

2,408,157 

Other current assets

511,329 

405,392 

Total current assets

5,182,248 

6,397,486 

Property, plant and equipment, net

4,013,836 

4,131,861 

Goodwill

1,803,021 

1,732,045 

Other intangible assets, net

902,922 

946,545 

Other assets

669,877 

666,506 

Total assets

$    12,571,904 

$    13,874,443 

LIABILITIES

Current liabilities:

Short-term debt

$             1,748 

$             8,622 

Long-term debt due within one year

6,000 

180,400 

Accounts payable

707,038 

534,161 

Federal income taxes payable

199,044 

Salaries, wages and related accruals

154,997 

580,090 

Accrued expenses and other current liabilities

357,274 

351,875 

Total current liabilities

1,227,057 

1,854,192 

Long-term debt due after one year

3,080,200 

3,086,200 

Deferred credits and other liabilities

680,358 

677,370 

Total liabilities

4,987,615 

5,617,762 

EQUITY

Nucor stockholders' equity:

Common stock

149,877 

149,628 

Additional paid-in capital

1,675,777 

1,629,981 

Retained earnings

7,120,218 

7,860,629 

Accumulated other comprehensive loss,

    net of income taxes

(41,056)

(190,262)

Treasury stock

(1,514,290)

(1,520,772)

7,390,526 

7,929,204 

Noncontrolling interests

193,763 

327,477 

Total equity

7,584,289 

8,256,681 

Total liabilities and equity

$    12,571,904 

$    13,874,443 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

Year Ended December 31,

2009

2008

Operating activities:

Net earnings (loss)

$  (237,178)

$ 2,144,911 

Adjustments:

Depreciation

494,035 

479,484 

Amortization

72,388 

69,423 

Stock-based compensation

54,665 

49,873 

Deferred income taxes

88,546 

(293,476)

Impairment of non-current assets

2,800 

105,183 

Changes in assets and liabilities

(exclusive of acquisitions):

Accounts receivable

141,104 

855,572 

Inventories

1,117,600 

(364,280)

Accounts payable

170,229 

(861,334)

Federal income taxes

(422,116)

278,663 

Salaries, wages and related accruals

(419,800)

129,927 

Other

120,024 

(95,218)

Cash provided by operating activities

1,182,297 

2,498,728 

Investing activities:

Capital expenditures

(390,500)

(1,018,980)

Investment in and advances to affiliates

(63,563)

(720,713)

Disposition of plant and equipment

11,371 

17,180 

Acquisitions (net of cash acquired)

(32,720)

(1,826,030)

Purchases of investments

(261,389)

(289,423)

Proceeds from the sale of investments

36,389 

499,709 

Proceeds from currency derivative contracts

1,441,862 

Settlement of currency derivative contracts

(1,424,291)

Cash used in investing activities

(700,412)

(3,320,686)

Financing activities:

Net change in short-term debt

(6,908)

(149,837)

Repayment of long-term debt

(180,400)

Proceeds from issuance of long-term debt

989,715 

Debt issuance costs

(6,937)

Issuance of common stock

3,716 

1,996,690 

Excess tax benefits from stock-based compensation

(3,100)

10,600 

Distributions to noncontrolling interests

(190,233)

(275,075)

Cash dividends

(443,109)

(658,051)

Acquisition of treasury stock

(123,960)

Cash provided by (used in) financing activities

(820,034)

1,783,145 

Increase (decrease) in cash and cash equivalents

(338,149)

961,187 

Cash and cash equivalents - beginning of year

2,355,130 

1,393,943 

Cash and cash equivalents - end of year

$ 2,016,981 

$ 2,355,130 

SOURCE Nucor Corporation



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