CHARLOTTE, N.C., July 23, 2015 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $124.8 million, or $0.39 per diluted share, for the second quarter of 2015. By comparison, Nucor reported net earnings of $67.8 million, or $0.21 per diluted share, in the first quarter of 2015 and net earnings of $147.0 million, or $0.46 per diluted share, in the second quarter of 2014. Second quarter of 2015 diluted net earnings per share of $0.39 was above our guidance range of $0.20 to $0.25 per diluted share due to better than forecasted performance in the steel mills segment.
In the first half of 2015, Nucor reported consolidated net earnings of $192.6 million, or
$0.60 per diluted share, compared with consolidated net earnings of $258.1 million, or $0.80 per diluted share, in the first half of last year.
Earnings (loss) before income taxes and noncontrolling interests by segment were as follows for the second quarter and first six months of 2015 and 2014 (in thousands):
|
|
| Three Months (13 Weeks) Ended |
| Six Months (26 Weeks) Ended |
|
|
| July 4, 2015 |
| July 5, 2014 |
| July 4, 2015 |
| July 5, 2014 |
Earnings (loss) before income |
|
|
|
|
|
|
|
taxes and noncontrolling interests: |
|
|
|
|
|
|
|
| Steel mills |
| $ 198,500 |
| $ 368,138 |
| $ 415,628 |
| $ 685,935 |
| Steel products | 70,636 |
| 42,612 |
| 103,094 |
| 44,332 |
| Raw materials | (38,104) |
| (9,635) |
| (79,601) |
| (1,276) |
| Corporate/eliminations | (14,810) |
| (159,250) |
| (103,854) |
| (279,625) |
|
|
| $ 216,222 |
| $ 241,865 |
| $ 335,267 |
| $ 449,366 |
Nucor's results include a $95.5 million credit ($0.19 per diluted share) to value inventories using the last-in, first-out (LIFO) method of accounting in the second quarter of 2015, compared with a credit of $16.5 million ($0.03 per diluted share) recorded in the first quarter of 2015 and no charge in the second quarter of 2014. As a result, the LIFO credit in the first half of 2015 was $112.0 million ($0.22 per diluted share), compared with a
charge of $14.5 million ($0.03 per diluted share) in the first half of 2014. Also included in the second quarter of 2015 results was a $9.3 million ($0.03 per diluted share) benefit related to state tax credits.
Nucor's consolidated net sales decreased 1% to $4.36 billion in the second quarter of 2015 compared with $4.40 billion in the first quarter of 2015 and decreased 18% compared with $5.29 billion in the second quarter of 2014. Average sales price per ton decreased 8% from the first quarter of 2015 and decreased 13% from the second quarter of 2014. Total tons shipped to outside customers were 6,055,000 tons in the second quarter of 2015, a 7% increase over the first quarter of 2015 and a decrease of 5% from the second quarter of 2014. Total second quarter steel mill shipments increased 9% over the first quarter of 2015 and decreased 2% from the second quarter of 2014.
Second quarter downstream steel products shipments to outside customers increased 12% over the first quarter of 2015 and decreased 3% from the second quarter of 2014.
In the first half of 2015, Nucor's consolidated net sales decreased 16% to $8.76 billion, compared with $10.40 billion in last year's first half. Total tons shipped to outside customers decreased 7% from the first half of 2014, while average sales price per ton decreased 10%.
The average scrap and scrap substitute cost per ton used in the second quarter of 2015 was $271, a 16% decrease from $324 in the first quarter of 2015 and a decrease of 29% from $384 in the second quarter of 2014. The average scrap and scrap substitute cost per ton used in the first half of 2015 was $297, a decrease of 24% from $391 in the first half of 2014.
Overall operating rates at our steel mills increased to 73% in the
second quarter of 2015 as compared with 65% in the first quarter of 2015 and decreased from 79% in the second quarter of 2014. Steel mill utilization decreased to 69% in the first half of 2015 from 77% in the first half of 2014.
Total steel mill energy costs in the second quarter of 2015 decreased approximately $4 per ton compared with the first quarter of 2015 due to increased production volumes and lower unit costs for electricity and natural gas. Total steel mill energy costs in the second quarter of 2015 decreased approximately $4 per ton compared with the second quarter of 2014 due primarily to lower natural gas unit costs. Energy costs for the first half of 2015 decreased $1 per ton from the first half of 2014.
Our liquidity position remains strong with $1.69 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. Cash provided by operating activities in the first half of 2015 was robust at $1.20 billion compared to $443.3 million in the first half of 2014.
In June, Nucor's board of directors declared a cash dividend of $0.3725 per share payable on August 11, 2015 to stockholders of record on June 30, 2015. This dividend is Nucor's 169th consecutive quarterly cash dividend, a record we expect to continue.
The performance of the steel mills segment in the second quarter of 2015 decreased from the first quarter of 2015. Pricing has begun to stabilize, but we experienced some margin erosion as the steel mills worked through higher cost scrap, work-in-process and finished goods inventories. Pricing remains under pressure from exceptionally high levels of imports. Imports accounted for an estimated 32% of the finished steel market in
the first six months of 2015, compared with an estimated 27% in the first six months of 2014. The biggest factors driving these exceptionally high levels of imports are the trade-distorting practices of some foreign governments. We are pleased with recently passed legislation that strengthens our trade laws and provides the steel industry with more effective tools to fight back against unfair trade. While these trade law changes alone will not address the serious challenges facing the U.S. steel industry due to systemic steel overcapacity overseas, they do strengthen our hand against illegal trade practices.
The operating performance of the downstream products segment has improved in the second quarter of 2015 as compared to the second quarter of 2014 and the first quarter of 2015 due to the continuing gradual improvement in nonresidential construction markets. The increased
operating performance of the downstream products segment in the second quarter of 2015 compared to the first quarter of 2015 also benefited from typical seasonality in nonresidential construction markets as weather conditions improved.
The performance of the raw materials segment improved from the first quarter of 2015. Nucor Steel Louisiana had an operating loss of approximately $20 million ($0.04 per diluted share), which included a $10.0 million ($0.02 per diluted share) payment received related to warranty claims associated with the repair of the process gas heater. This performance is improved compared to the first quarter of 2015 operating loss of approximately $44 million ($0.09 per diluted share). Nucor Steel Louisiana's second quarter operating loss reflects the impact of working through higher cost iron ore inventory that was purchased in 2014. The ramp-up in
production at the Louisiana direct reduced iron (DRI) facility has gone extremely well, with the facility producing DRI at world class quality levels. Nucor Steel Louisiana produced approximately 540,000 tons of DRI in the second quarter of 2015. The raw materials segment also benefited from the improved performance of our scrap processing business in the second quarter of 2015 as compared to the first quarter of 2015. Partially offsetting these improvements was the decreased performance of our DRI facility in Trinidad, due to a 20-day planned outage that occurred in the second quarter of 2015.
Earnings in the third quarter of 2015 are expected to be improved compared to the second quarter of 2015 mainly due to improved performance of the steel mills segment. The steel mills segment will benefit from a lower average cost of inventories to begin the third quarter. The strongest end
markets continue to be automotive and construction. We expect improved performance in the downstream products segment in the third quarter of 2015 as compared to the second quarter of 2015 due to the continuing gradual improvement in nonresidential construction markets. The performance of the raw materials segment in the third quarter of 2015 is expected to be comparable to the second quarter of 2015.
Nucor and its 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) competitive pressure on sales and pricing, including competition from imports and substitute materials; (2) 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; (3) market demand for steel products; and (4) energy costs and availability. These and other factors are discussed in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's fiscal 2014 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 second quarter results on July 23, 2015 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 |
| Six Months (26 Weeks) Ended |
|
|
| July 4, 2015 |
| July 5, 2014 |
| Percentage
Change |
| July 4, 2015 |
| July 5, 2014 |
| Percentage
Change |
Steel mills production |
| 5,196 |
| 5,324 |
| -2% |
| 9,954 |
| 10,518 |
| -5% |
Steel mills total shipments |
| 5,348 |
| 5,477 |
| -2% |
| 10,235 |
| 10,909 |
| -6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales tons to outside customers: |
|
|
|
|
|
|
|
|
|
|
|
|
| Steel mills |
| 4,578 |
| 4,646 |
| -1% |
| 8,743 |
| 9,246 |
| -5% |
| Joist |
| 97 |
| 97 |
| 0% |
| 186 |
| 189 |
| -2% |
| Deck |
| 92 |
| 101 |
| -9% |
| 174 |
| 188 |
| -7% |
| Cold finished |
| 117 |
| 133 |
| -12% |
| 247 |
| 271 |
| -9% |
| Fabricated concrete |
|
|
|
|
|
|
|
|
|
|
|
|
| reinforcing steel |
| 324 |
| 321 |
| 1% |
| 586 |
| 560 |
| 5% |
| Other |
| 847 |
| 1,072 |
| -21% |
| 1,754 |
| 2,105 |
| -17% |
|
|
| 6,055 |
| 6,370 |
| -5% |
| 11,690 |
| 12,559 |
| -7% |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) |
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
| Three Months (13 Weeks) Ended |
| Six Months (26 Weeks) Ended |
|
|
|
|
|
|
|
|
| July 4, 2015 |
| July 5, 2014 |
| July 4, 2015 |
| July 5, 2014 |
|
|
|
|
|
|
|
|
Net sales | $ 4,357,609 |
| $ 5,291,075 |
| $ 8,757,049 |
| $ 10,399,519 |
|
|
|
|
|
|
|
|
Costs, expenses and other: |
|
|
|
|
|
|
|
Cost of products sold | 3,971,303 |
| 4,875,208 |
| 8,082,461 |
| 9,606,450 |
Marketing, administrative and other expenses | 128,592 |
| 132,813 |
| 253,153 |
| 266,247 |
Equity in earnings of |
|
|
|
|
|
|
|
unconsolidated affiliates | (694) |
| (3,202) |
| (435) |
| (7,676) |
Interest expense, net | 42,186 |
| 44,391 |
| 86,603 |
| 85,132 |
| 4,141,387 |
| 5,049,210 |
| 8,421,782 |
| 9,950,153 |
Earnings before income taxes and |
|
|
|
|
|
|
|
noncontrolling interests | 216,222 |
| 241,865 |
| 335,267 |
| 449,366 |
Provision for income taxes | 56,878 |
| 74,930 |
| 91,631 |
| 152,735 |
Net earnings | 159,344 |
| 166,935 |
| 243,636 |
| 296,631 |
Earnings attributable to |
|
|
|
|
|
|
|
noncontrolling interests | 34,589 |
| 19,894 |
| 51,081 |
| 38,559 |
Net earnings attributable to |
|
|
|
|
|
|
|
Nucor stockholders | $ 124,755 |
| $ 147,041 |
| $ 192,555 |
| $ 258,072 |
|
|
|
|
|
|
|
|
Net earnings per share: |
|
|
|
|
|
|
|
Basic | $0.39 |
| $0.46 |
| $0.60 |
| $0.80 |
Diluted | $0.39 |
| $0.46 |
| $0.60 |
| $0.80 |
|
|
|
|
|
|
|
|
Average shares outstanding: |
|
|
|
|
|
|
|
Basic | 320,506 |
| 319,693 |
| 320,409 |
| 319,597 |
Diluted | 320,708 |
| 319,981 |
| 320,594 |
| 319,872 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
| July 4, 2015 |
| Dec. 31, 2014 |
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
| Cash and cash equivalents |
| $ 1,576,496 |
| $ 1,024,144 |
| Short-term investments |
| 112,236 |
| 100,000 |
| Accounts receivable, net |
| 1,791,523 |
| 2,068,298 |
| Inventories, net |
| 2,267,394 |
| 2,745,032 |
| Other current assets |
| 407,088 |
| 504,414 |
|
|
|
|
|
|
|
|
|
| Total current assets |
| 6,154,737 |
| 6,441,888 |
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
| 5,120,870 |
| 5,287,639 |
|
|
|
|
|
|
|
|
Goodwill |
|
| 2,046,098 |
| 2,068,664 |
|
|
|
|
|
|
|
|
Other intangible assets, net |
| 819,050 |
| 862,093 |
|
|
|
|
|
|
|
|
Other assets |
| 927,422 |
| 955,643 |
|
|
|
|
|
|
|
|
|
| Total assets |
| $ 15,068,177 |
| $ 15,615,927 |
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current liabilities: |
|
|
|
|
| Short-term debt |
| $ 42,664 |
| $ 207,476 |
| Long-term debt due within one year |
| 8,300 |
| 16,335 |
| Accounts payable |
| 820,557 |
| 993,872 |
| Salaries, wages and related accruals |
| 270,506 |
| 352,488 |
| Accrued expenses and other current liabilities |
| 548,050 |
| 527,605 |
|
|
|
|
|
|
|
|
|
| Total current liabilities |
| 1,690,077 |
| 2,097,776 |
|
|
|
|
|
|
|
|
Long-term debt due after one year |
| 4,360,600 |
| 4,360,600 |
|
|
|
|
|
|
|
|
Deferred credits and other liabilities |
| 1,042,415 |
| 1,082,433 |
|
|
|
|
|
|
|
|
|
| Total liabilities |
| 7,093,092 |
| 7,540,809 |
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
Nucor stockholders' equity: |
|
|
|
|
| Common stock |
| 151,423 |
| 151,237 |
| Additional paid-in capital |
| 1,907,049 |
| 1,883,356 |
| Retained earnings |
| 7,331,006 |
| 7,378,214 |
| Accumulated other comprehensive loss, |
|
|
|
|
|
| net of income taxes |
| (236,708) |
| (145,708) |
| Treasury stock |
| (1,492,067) |
| (1,494,629) |
|
| Total Nucor stockholders' equity |
| 7,660,703 |
| 7,772,470 |
|
|
|
|
|
|
|
|
Noncontrolling interests |
| 314,382 |
| 302,648 |
|
|
|
|
|
|
|
|
|
| Total equity |
| 7,975,085 |
| 8,075,118 |
|
|
|
|
|
|
|
|
|
| Total liabilities and equity |
| $ 15,068,177 |
| $ 15,615,927 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months (26 Weeks) Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| July 4, 2015 |
| July 5, 2014 |
|
|
|
|
|
|
|
|
|
Operating activities: |
|
|
|
|
|
| Net earnings |
|
| $ 243,636 |
| $ 296,631 |
| Adjustments: |
|
|
|
|
|
|
| Depreciation |
|
| 314,521 |
| 326,429 |
|
| Amortization |
|
| 36,895 |
| 36,265 |
|
| Stock-based compensation | 33,947 |
| 33,752 |
|
| Deferred income taxes |
| (35,383) |
| (5,121) |
|
| Distributions from affiliates | 12,142 |
| 11,504 |
|
| Equity in earnings of unconsolidated affiliates | (435) |
| (7,676) |
|
| Loss on assets |
| - |
| 9,046 |
|
| Changes in assets and liabilities (exclusive of |
|
|
|
|
| acquisitions and dispositions): |
|
|
|
|
|
| Accounts receivable |
| 254,343 |
| (249,196) |
|
|
| Inventories |
| 472,104 |
| (130,463) |
|
|
| Accounts payable |
| (159,872) |
| 90,460 |
|
|
| Federal income taxes |
| 128,391 |
| 14,100 |
|
|
| Salaries, wages and related accruals | (77,214) |
| (1,672) |
|
|
| Other |
|
| (28,371) |
| 19,270 |
|
|
|
|
|
|
|
|
|
Cash provided by operating activities | 1,194,704 |
| 443,329 |
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
| Capital expenditures |
| (175,253) |
| (446,798) |
| Investment in and advances to affiliates | (23,750) |
| (68,491) |
| Repayment of advances to affiliates | - |
| 15,000 |
| Disposition of plant and equipment | 17,932 |
| 12,858 |
| Acquisitions (net of cash acquired) | (253) |
| (38,466) |
| Purchases of investments |
| (111,927) |
| (100,000) |
| Proceeds from the sale of investments | 100,000 |
| 27,529 |
| Other investing activities |
| 1,870 |
| - |
|
|
|
|
|
|
|
|
|
Cash used in investing activities |
| (191,381) |
| (598,368) |
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
| Net change in short-term debt |
| (164,466) |
| 13,212 |
| Repayment of long-term debt |
| (8,000) |
| - |
| Issuance of common stock |
| 423 |
| - |
| Excess tax benefits from stock-based compensation | 1,200 |
| 2,700 |
| Distributions to noncontrolling interests | (39,347) |
| (37,877) |
| Cash dividends |
|
| (239,476) |
| (237,369) |
| Other financing activities |
| (1,081) |
| (1,123) |
|
|
|
|
|
|
|
|
|
Cash used in financing activities |
| (450,747) |
| (260,457) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash | (224) |
| (195) |
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents | 552,352 |
| (415,691) |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - beginning of year | 1,024,144 |
| 1,483,252 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - end of six months | $ 1,576,496 |
| $ 1,067,561 |
|
|
|
|
|
|
|
|
|
Non-cash investing activity: |
|
|
|
|
| Change in accrued plant and equipment purchases | $ (12,644) |
| $ (96,023) |
CONTACT: For Investor/Analyst Inquiries: Gregg Lucas, 704-972-1841, For Media Inquiries: Katherine Miller, 704-353-9015