UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported) January 29, 2015 (January 28, 2015)
STEEL DYNAMICS, INC.
(Exact name of registrant as specified in its charter)
Indiana (State or other jurisdiction of incorporation) |
|
0-21719 (Commission File Number) |
|
35-1929476 (IRS Employer Identification No.) |
7575 West Jefferson Blvd, Fort Wayne, Indiana 46804
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code: 260-969-3500
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On January 28, 2015, Steel Dynamics, Inc. issued a press release titled Steel Dynamics Reports 2014 Fourth Quarter and Full-Year Results (the Release). A copy of the Release is attached hereto as Exhibit 99.1.
The information contained in Exhibit 99.1 is furnished under this Item 2.02 and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing thereunder or under the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in any such filing.
Item 2.06. Material Impairments
As a result of the fact that the operating performance of the companys Minnesota Operations reached a steady state in the fourth quarter 2014, indicating a consistency in the operations production capability, processes and cost structure, including the ability to utilize certain lower-cost raw materials, the company, as indicated in its December 17, 2014 guidance, undertook an assessment of the recoverability of the carrying value of its Minnesota Operations fixed assets. Given the companys current outlook regarding future costs and product pricing, the company concluded that the carrying value of these fixed assets was no longer fully recoverable, when compared to their estimated remaining future undiscounted cash flows.
Accordingly, as noted in the foregoing press release, Steel Dynamics announced that it recorded a fourth quarter pre-tax, non-cash fixed asset impairment charge of $260 million, related to its Minnesota Operations, which, after giving effect to the companys joint venture ownership percentage, resulted in an impact of $213 million on its consolidated results, with an after-tax impact of $133 million.
The company does not expect that any portion of the impairment charge will result in future cash expenditures, or that it will otherwise impact the companys liquidity, cash flows, or compliance with its debt covenants.
Item 7.01. Regulation FD Disclosure
On January 28, 2015, Steel Dynamics, Inc. issued a press release announcing, among other things, that it recorded an impairment charge both described therein and in Item 2.06 of this report. A copy of that press release is attached hereto as Exhibit 99.1.
The information contained in Exhibit 99.1 is furnished under this Item 7.01 and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing thereunder or under the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in any such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibit is furnished with this report:
Exhibit Number |
|
Description |
|
|
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99.1 |
|
A press release dated January 28, 2015, titled Steel Dynamics Reports 2014 Fourth Quarter and Full-Year Results. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereto duly authorized.
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STEEL DYNAMICS, INC. |
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|
|
|
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/s/Theresa E. Wagler |
Date: January 29, 2015 |
By: |
Theresa E. Wagler |
|
Title: |
Chief Financial Officer |
Exhibit 99.1
Press Release January 28, 2015
|
Fort Wayne, IN 46804 |
Steel Dynamics Reports 2014 Fourth Quarter and Full-Year Results
· Fourth Quarter 2014 Records
· Steel shipments of 2.3 million tons
· Steel fabrication operating income of $22 million
· Full-Year 2014 Records
· Consolidated revenues of $8.8 billion
· Liquidity of $1.6 billion
· Steel shipments of 7.4 million tons, with individual records from Butler Flat Roll, Columbus Flat Roll, Engineered Bar Products, and Structural and Rail Divisions
· Steel fabrication shipments of 481,000 tons
· Steel fabrication operating income of $52 million
FORT WAYNE, INDIANA, January 28, 2015 / PRNewswire / Steel Dynamics, Inc. (NASDAQ/GS: STLD) today announced 2014 fourth quarter and full-year results. Excluding non-cash fixed asset impairment charges related to the companys Minnesota Operations of $0.55 per diluted share, and post-acquisition purchase accounting and lower of cost or market inventory adjustments of $0.04 per diluted share, the companys adjusted fourth quarter 2014 net income was $97 million, or $0.40 per diluted share, on net sales of $2.5 billion. Including these charges, the company reported a fourth quarter 2014 net loss of $45 million, or $0.19 per diluted share.
The operating performance of the companys Minnesota operations was steady in the fourth quarter 2014, indicating a consistency of production capability and the ability to utilize lower-cost raw materials. Based on the associated information, as indicated in the companys December 17, 2014 guidance, the company assessed the carrying value of the operations fixed assets during the fourth quarter, and determined that the future estimated cash flows did not support the values in place. Therefore, the company recorded a pre-tax, non-cash asset impairment charge of $260 million, and based on the companys joint venture ownership percentage, reduced consolidated results by $213 million.
Comparatively, prior year fourth quarter net income was $55 million, or $0.24 per diluted share, on net sales of $1.9 billion, and sequential third quarter 2014 net income was $91 million, or $0.38 per diluted share, which included the reduction of approximately $0.09 per diluted share related to acquisition costs, financing fees, and the effect of purchase accounting adjustments for the Columbus acquisition that occurred mid-September 2014.
We continue to perform at the top of our industry, both financially and operationally, said Chief Executive Officer, Mark Millett. We achieved record annual revenues, and excluding the previously mentioned charges, our annual 2014 consolidated net income improved 70 percent and operating income increased 58 percent. We also achieved record 2014 shipments in steel, even before recording the results from our recent Columbus steel mill acquisition. The Butler Flat Roll, Columbus Flat Roll, Structural and Rail and Engineered Bar Products Divisions all attained individual annual shipping records. However, as expected, the fourth quarter 2014 steel shipments declined sequentially due to typical seasonal declines and the continuation of elevated import levels. While underlying steel demand from automotive, manufacturing and construction markets remained sound, overall average pricing weakened to a greater degree than raw material prices.
Of particular note, our fabrication operations achieved record annual shipments with increased volumes of 31 percent, reaching 481,000 tons. Annual operating income improved to $52 million, well over seven times
2013 results. The teams performance was top-of-class. They leveraged the improving nonresidential construction market, achieving improved metal spread and meaningfully higher volume, driven by overall market growth and increased market share. Despite a seasonal fourth quarter shipment decline, pricing improved, margins expanded and operating income increased over traditionally stronger third quarter results. This is evidence of the continued recovery in construction demand, stated Millett.
For the companys metals recycling operations, annual 2014 operating income decreased 31 percent to $44 million, as the decrease in ferrous metal spread more than offset the increase in overall shipments. The ongoing overcapacity of recycled shredding locations throughout the United States, particularly in the Southeast, continues to constrain profitability and remains a broad industry challenge.
Fourth Quarter Review
Seasonal trends and elevated steel imports negatively impacted shipments across the companys operating platforms. Excluding Columbus purchase accounting adjustments, operating income for the companys steel operations increased 4 percent to $224 million, based on increased shipments. Increased flat roll shipments from both Butler and Columbus, more than offset the declines in the companys long product divisions. Steel metal spread contracted in the fourth quarter primarily as a function of decreased selling values from additional import pressure and seasonally lower demand. The average product selling price for the companys steel operations decreased $34 to $806 per ton. The average ferrous scrap cost per ton melted decreased $10 to $346 per ton.
Fourth quarter operating income attributable to the companys sheet products increased 29 percent when compared to the sequential quarter, as a result of the Columbus acquisition. Operating income from long products decreased 21 percent, as structural steel and bar pricing declined in the quarter. The production utilization rate for the companys steel operations was 84 percent in the fourth quarter 2014, compared to 90 percent in the prior quarter.
Fourth quarter operating income from the companys metals recycling operations decreased to $3 million, compared to $13 million for the third quarter 2014. Overall shipments and ferrous metal spread decreased, as a result of weaker scrap exports, which increased domestic scrap supply.
The companys fabrication operations continued its strong performance. Operating income increased 11 percent, to $22 million, as a result of overall market growth and increased market share. Higher average selling values more than offset a five percent seasonal decrease in sequential shipments. Order inquiries and bookings for our fabrication operations remain strong, confirming the positive trend in the nonresidential construction market.
During the fourth quarter, the company amended, restated and expanded its senior secured revolving credit facility and entered into a new term loan facility. The company expanded its revolving credit facility from $1.1 billion to $1.2 billion and renewed it for another five year period, and also entered into a new five year $250 million term loan facility. Subject to certain conditions, the company also has the ability to increase the combined facility size by a minimum of an additional $750 million. We are pleased with this transaction and the continued strong support from our financial institutions, stated Theresa Wagler, Chief Financial Officer. The combination of the new facilities, plus our strong cash flow generation in the fourth quarter and throughout 2014, has resulted in record liquidity levels, further enhancing the strength and flexibility of our capital structure to not only support our current operations, but to readily promote growth.
Full-Year Review
Annual 2014 net income was $157 million, or $0.67 per diluted share. Excluding charges related to fixed asset impairment, purchase accounting, acquisition-related expenses, and lower of cost or market adjustments, the company had adjusted net income of $323 million, or $1.35 per diluted share. When compared to prior year results, annual 2014 shipments and average product pricing increased across all of
the companys operating platforms. Consolidated net sales increased 19 percent to $8.8 billion, attaining a new annual record. On an adjusted basis, excluding the previously mentioned charges, consolidated 2014 operating income would have improved 58 percent to $612 million, primarily as a result of year-over-year improvement in steel shipments and metal spread. The average annual 2014 selling price for the companys steel operations increased $34 to $827 per ton, compared to 2013. The average annual 2014 ferrous cost per ton melted increased $7 to $360 per ton, compared to prior year.
Outlook
As we enter 2015, we remain optimistic that the broader U.S. economy will continue to improve, said Millett. However, we are facing a challenging first quarter. The instability of global growth and continued decline in global oil prices weigh on general sentiment. The combination of high import levels and a seasonally slow December resulted in higher levels of customer inventories, and consequently has resulted in decreased selling values. We believe this overhang can be resolved during the first quarter of 2015. The U.S. economy continues to improve, and there continues to be strength in several key steel-consuming end markets, including automotive, manufacturing and nonresidential construction. The non-service sector portion of U.S. GDP will continue to strengthen, and is capable of growing at a higher rate than overall U.S. GDP, which is a positive for steel consumption in 2015 and the out years.
The recent acquisition of the Columbus Flat Roll Division broadened our geographic reach and accelerated our product diversification. In addition, our organic growth projects in SBQ and rail also bring product diversification and growth opportunities in the coming years. Our focus on our customers, coupled with our market diversification and low-cost operating platforms support our ability to maintain our best-in-class performance. We believe we are poised to capitalize on meaningful growth opportunities, both near-term and in the future, that will benefit employees, customers and shareholders, concluded Millett.
Summary Fourth Quarter Operating Segment Information
The following tables highlight operating results for each of the companys primary operating platforms. References to operating income in the following paragraphs exclude profit-sharing expenses and amortization pertaining to intangible assets. Dollar amounts are in thousands, excluding per ton data.
Steel Operations
This segment includes six electric-arc-furnace steel mills and related steel finishing and processing facilities, with the results of the Columbus Flat Roll Division included from the date of acquisition on September 16, 2014. The companys steel operations produce flat roll, structural, merchant bars, engineered special-bar-quality bars, rebar, rail, and specialty shapes steels.
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Fourth Quarter |
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Full Year |
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Sequential |
| |||||||||
|
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2014 |
|
2013 |
|
2014 |
|
2013 |
|
3Q 2014 |
| |||||
Total Sales |
|
$ |
1,843,864 |
|
$ |
1,222,907 |
|
$ |
5,968,904 |
|
$ |
4,768,004 |
|
$ |
1,564,112 |
|
External Sales |
|
1,707,829 |
|
1,146,701 |
|
5,541,743 |
|
4,461,457 |
|
1,451,211 |
| |||||
Operating Income |
|
212,267 |
|
155,107 |
|
680,210 |
|
513,227 |
|
202,084 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total Shipments (tons) |
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2,329,825 |
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1,542,289 |
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7,358,366 |
|
6,119,884 |
|
1,900,043 |
| |||||
External Shipments (tons) |
|
2,119,236 |
|
1,423,953 |
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6,704,714 |
|
5,628,632 |
|
1,728,023 |
| |||||
Production (tons) |
|
2,263,540 |
|
1,588,392 |
|
7,376,657 |
|
6,266,507 |
|
1,885,299 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Average External Sales Price Per Ton |
|
$ |
806 |
|
$ |
805 |
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$ |
827 |
|
$ |
793 |
|
$ |
840 |
|
Average Ferrous Scrap Cost Per Ton |
|
$ |
346 |
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$ |
356 |
|
$ |
360 |
|
$ |
353 |
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$ |
356 |
|
Metals Recycling and Ferrous Resources Operations
This segment includes the companys metals recycling and iron resources operations.
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Fourth Quarter |
|
Full Year |
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Sequential |
| |||||||||
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
3Q 2014 |
| |||||
Metals Recycling & Ferrous Resources |
|
|
|
|
|
|
|
|
|
|
| |||||
Total Sales |
|
$ |
972,759 |
|
$ |
907,668 |
|
$ |
4,091,725 |
|
$ |
3,663,486 |
|
$ |
1,111,300 |
|
External Sales |
|
593,582 |
|
572,840 |
|
2,486,969 |
|
2,384,841 |
|
672,397 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating Loss |
|
(17,547 |
) |
(13,020 |
) |
(30,843 |
) |
(30,835 |
) |
(798 |
) | |||||
Impairment Charges |
|
(260,000 |
) |
|
|
(260,000 |
) |
|
|
|
| |||||
|
|
(277,547 |
) |
(13,020 |
) |
(290,843 |
) |
(30,835 |
) |
(798 |
) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Unrealized Hedging Gain (Loss), Net |
|
635 |
|
(2,626 |
) |
5,327 |
|
(4,943 |
) |
3,125 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Metals Recycling Standalone |
|
|
|
|
|
|
|
|
|
|
| |||||
Total Sales |
|
$ |
813,478 |
|
$ |
797,034 |
|
$ |
3,539,206 |
|
$ |
3,274,866 |
|
$ |
953,483 |
|
External Sales |
|
525,546 |
|
535,549 |
|
2,226,827 |
|
2,277,550 |
|
597,648 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating Income |
|
2,933 |
|
11,677 |
|
43,901 |
|
63,582 |
|
13,021 |
| |||||
Unrealized Hedging Gain (Loss), Net |
|
1,151 |
|
(1,707 |
) |
4,174 |
|
(3,990 |
) |
2,664 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Ferrous Shipments (gross tons) |
|
1,325,337 |
|
1,356,258 |
|
5,566,238 |
|
5,505,995 |
|
1,453,671 |
| |||||
% Shipments to SDI Steel Mills |
|
48 |
% |
47 |
% |
48 |
% |
44 |
% |
46 |
% | |||||
Nonferrous Shipments (pounds 000s) |
|
289,124 |
|
254,876 |
|
1,173,771 |
|
1,052,494 |
|
325,436 |
|
Steel Fabrication Operations
Steel fabrication operations include New Millennium Building Systems, which fabricates steel joists, trusses, and decking used in the construction of nonresidential buildings.
|
|
Fourth Quarter |
|
Full Year |
|
Sequential |
| |||||||||
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
3Q 2014 |
| |||||
Total Sales |
|
$ |
191,059 |
|
$ |
121,853 |
|
$ |
631,808 |
|
$ |
439,655 |
|
$ |
190,036 |
|
Operating Income (Loss) |
|
21,704 |
|
(122 |
) |
51,894 |
|
7,003 |
|
19,474 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total Shipments (tons) |
|
136,917 |
|
101,132 |
|
480,509 |
|
366,676 |
|
143,737 |
| |||||
Average Sales Price Per Ton |
|
$ |
1,395 |
|
$ |
1,205 |
|
$ |
1,315 |
|
$ |
1,199 |
|
$ |
1,322 |
|
About Steel Dynamics, Inc.
Steel Dynamics, Inc. is one of the largest domestic steel producers and metals recyclers in the United States based on estimated annual steelmaking and metals recycling capability, with annual sales of $8.8 billion in 2014, over 7,700 employees, and manufacturing facilities primarily located throughout the United States (including six steel mills, eight steel processing facilities, two iron production facilities, over 90 metals recycling locations and six steel fabrication plants).
Forward-Looking Statement
This press release contains some predictive statements about future events, including statements related to conditions in the steel and metallic scrap markets, Steel Dynamics revenues, costs of purchased materials, future profitability and earnings, and the operation of new or existing facilities. These statements are intended to be made as forward-looking, subject to many risks and uncertainties, within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These statements speak only as of this date and are based upon information and assumptions, which we consider reasonable as of this date, concerning our businesses and the environments in which they operate. Such predictive statements are not guarantees of future performance, and we undertake no duty to update or revise any such statements. Some factors that could cause such forward-looking statements to turn out differently than anticipated include: (1) the effects of uncertain economic conditions; (2) cyclical and changing industrial demand; (3) changes in conditions in any of the steel or scrap-consuming sectors of the economy which affect demand for our products, including the strength of the nonresidential and residential construction, automotive, appliance, pipe and tube, and other steel-consuming industries; (4) fluctuations in the cost of key raw materials (including steel scrap, iron units, and energy costs) and our ability to pass-on any cost increases; (5) the impact of domestic and foreign import price competition; (6) unanticipated difficulties in integrating or starting up new or acquired businesses; (7) risks and uncertainties involving product and/or technology development; and (8) occurrences of unexpected plant outages or equipment failures.
More specifically, we refer you to SDIs more detailed explanation of these and other factors and risks that may cause such predictive statements to turn out differently, as set forth in our most recent Annual Report on Form 10-K, in our quarterly reports on Form 10-Q or in other reports which we from time to time file with the Securities and Exchange Commission. These are available publicly on the SEC website, www.sec.gov, and on the Steel Dynamics website, www.steeldynamics.com.
Conference Call and Webcast
On Thursday, January 29, 2015, at 10:00 a.m. Eastern Time, Steel Dynamics will host a conference call with investors and analysts to discuss the companys fourth quarter and full-year 2014 operating and financial results. We invite you to listen to the live webcast of the conference call accessible from our website (http://www.steeldynamics.com), or via telephone (the conference call number may also be obtained on our website). A replay of the discussion will be available on our website until 11:59 p.m. Eastern Time on February 3, 2015. A podcast/MP3 file of the event will also be available and can be downloaded from our website.
Contact: Marlene Owen, Director Investor Relations +1.260.969.3500
Steel Dynamics, Inc.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except per share data)
|
|
Three Months Ended |
|
Year Ended |
|
Three |
| |||||||||
|
|
December 31, |
|
December 31, |
|
September 30, |
| |||||||||
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
2014 |
| |||||
Net sales |
|
$ |
2,517,093 |
|
$ |
1,864,150 |
|
$ |
8,755,952 |
|
$ |
7,372,924 |
|
$ |
2,339,016 |
|
Costs of goods sold |
|
2,225,469 |
|
1,666,154 |
|
7,789,741 |
|
6,653,780 |
|
2,050,504 |
| |||||
Gross profit |
|
291,624 |
|
197,996 |
|
966,211 |
|
719,144 |
|
288,512 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Selling, general and administrative expenses |
|
92,469 |
|
74,606 |
|
316,214 |
|
272,777 |
|
80,240 |
| |||||
Profit sharing |
|
13,397 |
|
7,873 |
|
42,126 |
|
27,764 |
|
12,865 |
| |||||
Amortization of intangible assets |
|
6,918 |
|
7,695 |
|
27,551 |
|
31,770 |
|
6,764 |
| |||||
Impairment charges |
|
260,000 |
|
|
|
260,000 |
|
308 |
|
|
| |||||
Operating income (loss) |
|
(81,160 |
) |
107,822 |
|
320,320 |
|
386,525 |
|
188,643 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Interest expense, net of capitalized interest |
|
44,740 |
|
30,664 |
|
137,263 |
|
127,728 |
|
31,904 |
| |||||
Other expense (income), net |
|
(1,433 |
) |
111 |
|
18,254 |
|
(4,033 |
) |
22,072 |
| |||||
Income (loss) before income taxes |
|
(124,467 |
) |
77,047 |
|
164,803 |
|
262,830 |
|
134,667 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Income taxes |
|
(28,421 |
) |
29,146 |
|
73,153 |
|
99,314 |
|
47,010 |
| |||||
Net income (loss) |
|
(96,046 |
) |
47,901 |
|
91,650 |
|
163,516 |
|
87,657 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net loss attributable to noncontrolling interests |
|
51,015 |
|
6,754 |
|
65,374 |
|
25,798 |
|
3,516 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net income (loss) attributable to Steel Dynamics, Inc. |
|
$ |
(45,031 |
) |
$ |
54,655 |
|
$ |
157,024 |
|
$ |
189,314 |
|
$ |
91,173 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic earnings (loss) per share attributable to Steel Dynamics, Inc. stockholders |
|
$ |
(0.19 |
) |
$ |
0.25 |
|
$ |
0.68 |
|
$ |
0.86 |
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Weighted average common shares outstanding |
|
240,870 |
|
222,273 |
|
232,547 |
|
220,916 |
|
240,087 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Diluted earnings (loss) per share attributable to Steel Dynamics, Inc. stockholders, including the effect of assumed conversions when dilutive |
|
$ |
(0.19 |
) |
$ |
0.24 |
|
$ |
0.67 |
|
$ |
0.83 |
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Weighted average common shares and equivalents outstanding (Note 1) |
|
240,870 |
|
240,493 |
|
242,078 |
|
238,996 |
|
242,244 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Dividends declared per share |
|
$ |
0.115 |
|
$ |
0.110 |
|
$ |
0.460 |
|
$ |
0.440 |
|
$ |
0.115 |
|
(Note 1) Excludes the impact of stock options, deferred stock units, and restricted stock units on share equivalents outstanding for the three months ended December 31, 2014 because the impact on diluted loss per share is anti-dilutive.
Steel Dynamics, Inc.
UNAUDITED SUPPLEMENTAL OPERATING INFORMATION
(dollars in thousands)
|
|
Three Months Ended |
|
Year Ended |
|
Three Months Ended |
| ||||||||||||||||
|
|
December 31, |
|
December 31, |
|
March 31, |
|
June 30, |
|
September 30, |
| ||||||||||||
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
2014 |
|
2014 |
|
2014 |
| ||||||||
Steel Operations* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total |
|
$ |
1,843,864 |
|
$ |
1,222,907 |
|
$ |
5,968,904 |
|
$ |
4,768,004 |
|
$ |
1,189,933 |
|
$ |
1,370,995 |
|
$ |
1,564,112 |
| |
Intra-company |
|
(136,035 |
) |
(76,206 |
) |
(427,161 |
) |
(306,547 |
) |
(72,334 |
) |
(105,891 |
) |
(112,901 |
) | ||||||||
External |
|
$ |
1,707,829 |
|
$ |
1,146,701 |
|
$ |
5,541,743 |
|
$ |
4,461,457 |
|
$ |
1,117,599 |
|
$ |
1,265,104 |
|
$ |
1,451,211 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income before amortization of intangibles |
|
$ |
212,267 |
|
$ |
155,107 |
|
$ |
680,210 |
|
$ |
513,227 |
|
$ |
107,776 |
|
$ |
158,083 |
|
$ |
202,084 |
| |
Amortization of intangibles |
|
(2,368 |
) |
(2,133 |
) |
(8,603 |
) |
(8,843 |
) |
(2,133 |
) |
(2,134 |
) |
(1,968 |
) | ||||||||
Operating income (Note 1) |
|
$ |
209,899 |
|
$ |
152,974 |
|
$ |
671,607 |
|
$ |
504,384 |
|
$ |
105,643 |
|
$ |
155,949 |
|
$ |
200,116 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Shipments (tons) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Butler Flat Roll Division |
|
759,059 |
|
738,998 |
|
2,917,259 |
|
2,904,149 |
|
641,520 |
|
778,220 |
|
738,460 |
| ||||||||
Columbus Flat Roll Division |
|
698,907 |
|
|
|
873,661 |
|
|
|
|
|
|
|
174,754 |
| ||||||||
The Techs |
|
163,570 |
|
162,541 |
|
714,158 |
|
669,608 |
|
153,237 |
|
191,934 |
|
205,417 |
| ||||||||
Structural and Rail Division |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Structural |
|
266,149 |
|
259,884 |
|
1,103,213 |
|
972,798 |
|
248,380 |
|
282,681 |
|
306,003 |
| ||||||||
Rail |
|
64,190 |
|
35,043 |
|
221,722 |
|
205,808 |
|
43,936 |
|
53,699 |
|
59,897 |
| ||||||||
Engineered Bar Products Division |
|
172,769 |
|
123,865 |
|
646,731 |
|
488,393 |
|
144,303 |
|
152,768 |
|
176,891 |
| ||||||||
Roanoke Bar Division |
|
131,613 |
|
150,986 |
|
572,373 |
|
569,260 |
|
143,782 |
|
143,583 |
|
153,395 |
| ||||||||
Steel of West Virginia |
|
73,568 |
|
70,972 |
|
309,249 |
|
309,868 |
|
75,574 |
|
74,881 |
|
85,226 |
| ||||||||
Total |
|
2,329,825 |
|
1,542,289 |
|
7,358,366 |
|
6,119,884 |
|
1,450,732 |
|
1,677,766 |
|
1,900,043 |
| ||||||||
Intra-company |
|
(210,589 |
) |
(118,336 |
) |
(653,652 |
) |
(491,252 |
) |
(112,159 |
) |
(158,884 |
) |
(172,020 |
) | ||||||||
External |
|
2,119,236 |
|
1,423,953 |
|
6,704,714 |
|
5,628,632 |
|
1,338,573 |
|
1,518,882 |
|
1,728,023 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Steel Operations Production (tons) |
|
2,263,540 |
|
1,588,392 |
|
7,376,657 |
|
6,266,507 |
|
1,519,566 |
|
1,708,252 |
|
1,885,299 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Metals Recycling and Ferrous Resources Operations** |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total |
|
$ |
972,759 |
|
$ |
907,668 |
|
$ |
4,091,725 |
|
$ |
3,663,486 |
|
$ |
993,505 |
|
$ |
1,014,161 |
|
$ |
1,111,300 |
| |
Intra-company |
|
(379,177 |
) |
(334,828 |
) |
(1,604,756 |
) |
(1,278,645 |
) |
(417,731 |
) |
(368,945 |
) |
(438,903 |
) | ||||||||
External |
|
$ |
593,582 |
|
$ |
572,840 |
|
$ |
2,486,969 |
|
$ |
2,384,841 |
|
$ |
575,774 |
|
$ |
645,216 |
|
$ |
672,397 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating loss before amortization of intangibles |
|
$ |
(17,547 |
) |
$ |
(13,020 |
) |
$ |
(30,843 |
) |
$ |
(30,835 |
) |
$ |
(10,981 |
) |
$ |
(1,517 |
) |
$ |
(798 |
) | |
Impairment Charges |
|
(260,000 |
) |
|
|
(260,000 |
) |
|
|
|
|
|
|
|
| ||||||||
Amortization of intangibles |
|
(4,281 |
) |
(5,238 |
) |
(17,887 |
) |
(21,633 |
) |
(4,538 |
) |
(4,536 |
) |
(4,532 |
) | ||||||||
Operating loss (Note 1) |
|
$ |
(281,828 |
) |
$ |
(18,258 |
) |
$ |
(308,730 |
) |
$ |
(52,468 |
) |
$ |
(15,519 |
) |
$ |
(6,053 |
) |
$ |
(5,330 |
) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Metals Recycling |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Ferrous metals shipments (gross tons) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total |
|
1,325,337 |
|
1,356,258 |
|
5,566,238 |
|
5,505,995 |
|
1,364,533 |
|
1,422,697 |
|
1,453,671 |
| ||||||||
Intra-company |
|
(631,505 |
) |
(638,333 |
) |
(2,673,777 |
) |
(2,422,736 |
) |
(714,981 |
) |
(653,651 |
) |
(673,640 |
) | ||||||||
External |
|
693,832 |
|
717,925 |
|
2,892,461 |
|
3,083,259 |
|
649,552 |
|
769,046 |
|
780,031 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Nonferrous metals shipments (thousands of pounds) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total |
|
289,124 |
|
254,876 |
|
1,173,771 |
|
1,052,494 |
|
270,978 |
|
288,233 |
|
325,436 |
| ||||||||
Intra-company |
|
(20,248 |
) |
(3,738 |
) |
(89,078 |
) |
(18,450 |
) |
(19,390 |
) |
(17,962 |
) |
(31,478 |
) | ||||||||
External |
|
268,876 |
|
251,138 |
|
1,084,693 |
|
1,034,044 |
|
251,588 |
|
270,271 |
|
293,958 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Mesabi Nugget shipments (metric tons) - Intra-company |
|
96,445 |
|
59,460 |
|
243,810 |
|
215,833 |
|
37,488 |
|
32,542 |
|
77,335 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Iron Dynamics (metric tons) - Intra-company |
|
67,086 |
|
57,659 |
|
250,071 |
|
255,303 |
|
57,122 |
|
64,756 |
|
61,107 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Steel Fabrication Operations*** |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total |
|
$ |
191,059 |
|
$ |
121,853 |
|
$ |
631,808 |
|
$ |
439,655 |
|
$ |
115,861 |
|
$ |
134,852 |
|
$ |
190,036 |
| |
Intra-company |
|
(15 |
) |
(125 |
) |
(58 |
) |
(1,401 |
) |
|
|
|
|
(43 |
) | ||||||||
External |
|
$ |
191,044 |
|
$ |
121,728 |
|
$ |
631,750 |
|
$ |
438,254 |
|
$ |
115,861 |
|
$ |
134,852 |
|
$ |
189,993 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income (loss) (Note 1) |
|
$ |
21,704 |
|
$ |
(122 |
) |
$ |
51,894 |
|
$ |
7,003 |
|
$ |
3,126 |
|
$ |
7,590 |
|
$ |
19,474 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Shipments (tons) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total |
|
136,917 |
|
101,132 |
|
480,509 |
|
366,676 |
|
94,667 |
|
105,188 |
|
143,737 |
| ||||||||
Intra-company |
|
(11 |
) |
(98 |
) |
(39 |
) |
(1,030 |
) |
|
|
|
|
(28 |
) | ||||||||
External |
|
136,906 |
|
101,034 |
|
480,470 |
|
365,646 |
|
94,667 |
|
105,188 |
|
143,709 |
| ||||||||
* Steel Operations include the companys six steelmaking divisions and The Techs three galvanizing plants. Columbus results are included since the September 16, 2014 acquisition date.
** Metals Recycling and Ferrous Resources Operations include OmniSource; Iron Dynamics (all shipments are internal); and Minnesota Operations (all shipments have been internal).
*** Steel Fabrication Operations include the companys joist and deck fabrication operations.
(Note 1) Segment operating income (loss) excludes profit sharing expense.
Steel Dynamics, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands)
|
|
December 31, |
|
December 31, |
| ||
|
|
2014 |
|
2013 |
| ||
|
|
(unaudited) |
|
|
| ||
Assets |
|
|
|
|
| ||
Current assets |
|
|
|
|
| ||
Cash and equivalents |
|
$ |
361,363 |
|
$ |
395,156 |
|
Accounts receivable, net |
|
902,825 |
|
720,600 |
| ||
Inventories |
|
1,618,419 |
|
1,314,747 |
| ||
Deferred income taxes |
|
35,503 |
|
17,964 |
| ||
Other current assets |
|
55,655 |
|
25,167 |
| ||
Total current Assets |
|
2,973,765 |
|
2,473,634 |
| ||
|
|
|
|
|
| ||
Property, plant and equipment, net |
|
3,123,906 |
|
2,226,134 |
| ||
|
|
|
|
|
| ||
Restricted cash |
|
19,312 |
|
23,827 |
| ||
|
|
|
|
|
| ||
Intangible assets, net |
|
370,669 |
|
386,159 |
| ||
|
|
|
|
|
| ||
Goodwill |
|
745,158 |
|
731,996 |
| ||
|
|
|
|
|
| ||
Other assets |
|
78,217 |
|
91,256 |
| ||
Total assets |
|
$ |
7,311,027 |
|
$ |
5,933,006 |
|
|
|
|
|
|
| ||
Liabilities and Equity |
|
|
|
|
| ||
Current Liabilities |
|
|
|
|
| ||
Accounts payable |
|
$ |
511,056 |
|
$ |
414,932 |
|
Income taxes payable |
|
6,086 |
|
4,023 |
| ||
Accrued expenses |
|
286,980 |
|
214,679 |
| ||
Current maturities of long-term debt |
|
46,460 |
|
341,544 |
| ||
Total current liabilities |
|
850,582 |
|
975,178 |
| ||
|
|
|
|
|
| ||
Long-term debt |
|
|
|
|
| ||
Senior term loan |
|
237,500 |
|
220,000 |
| ||
Senior notes |
|
2,700,000 |
|
1,500,000 |
| ||
Other long-term debt |
|
40,206 |
|
46,045 |
| ||
Total long-term debt |
|
2,977,706 |
|
1,766,045 |
| ||
|
|
|
|
|
| ||
Deferred income taxes |
|
542,033 |
|
556,038 |
| ||
Other liabilities |
|
18,839 |
|
23,376 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies |
|
|
|
|
| ||
|
|
|
|
|
| ||
Redeemable noncontrolling interests |
|
126,340 |
|
116,514 |
| ||
|
|
|
|
|
| ||
Equity |
|
|
|
|
| ||
Common stock |
|
635 |
|
645 |
| ||
Treasury stock, at cost |
|
(398,898 |
) |
(718,529 |
) | ||
Additional paid-in capital |
|
1,083,435 |
|
1,085,694 |
| ||
Retained earnings |
|
2,227,843 |
|
2,179,513 |
| ||
Total Steel Dynamics, Inc. equity |
|
2,913,015 |
|
2,547,323 |
| ||
Noncontrolling interests |
|
(117,488 |
) |
(51,468 |
) | ||
Total equity |
|
2,795,527 |
|
2,495,855 |
| ||
Total liabilities and equity |
|
$ |
7,311,027 |
|
$ |
5,933,006 |
|
Steel Dynamics, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
|
|
Three Months Ended |
|
Twelve Months Ended |
| ||||||||
|
|
December 31, |
|
December 31, |
| ||||||||
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating activities: |
|
|
|
|
|
|
|
|
| ||||
Net income (loss) |
|
$ |
(96,046 |
) |
$ |
47,901 |
|
$ |
91,650 |
|
$ |
163,516 |
|
|
|
|
|
|
|
|
|
|
| ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
|
81,359 |
|
58,839 |
|
263,325 |
|
230,928 |
| ||||
Impairment charges |
|
260,000 |
|
|
|
260,000 |
|
308 |
| ||||
Equity-based compensation |
|
(1,556 |
) |
5,892 |
|
14,016 |
|
15,504 |
| ||||
Deferred income taxes |
|
(17,254 |
) |
(871 |
) |
(25,042 |
) |
30,737 |
| ||||
Changes in certain assets and liabilities: |
|
|
|
|
|
|
|
|
| ||||
Accounts receivable |
|
155,500 |
|
52,273 |
|
(2,191 |
) |
(78,237 |
) | ||||
Inventories |
|
47,642 |
|
(118,385 |
) |
68,730 |
|
(108,025 |
) | ||||
Accounts payable |
|
(104,257 |
) |
(12,278 |
) |
(76,141 |
) |
40,141 |
| ||||
Income taxes receivable/payable |
|
(44,577 |
) |
(2,522 |
) |
(22,086 |
) |
(12,494 |
) | ||||
Other assets and liabilities |
|
38,770 |
|
35,635 |
|
45,311 |
|
29,797 |
| ||||
Net cash provided by operating activities |
|
319,581 |
|
66,484 |
|
617,572 |
|
312,175 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Investing activities: |
|
|
|
|
|
|
|
|
| ||||
Purchase of property, plant and equipment |
|
(28,879 |
) |
(40,099 |
) |
(111,785 |
) |
(186,843 |
) | ||||
Acquisition of business, net of cash acquired |
|
(21,986 |
) |
|
|
(1,669,449 |
) |
|
| ||||
Other investing activities |
|
(190 |
) |
(1,643 |
) |
33,967 |
|
33,998 |
| ||||
Net cash used in investing activities |
|
(51,055 |
) |
(41,742 |
) |
(1,747,267 |
) |
(152,845 |
) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Financing activities: |
|
|
|
|
|
|
|
|
| ||||
Issuance of current and long-term debt |
|
320,201 |
|
5,146 |
|
1,822,096 |
|
423,965 |
| ||||
Repayment of current and long-term debt |
|
(364,387 |
) |
(5,878 |
) |
(635,578 |
) |
(517,978 |
) | ||||
Debt issuance costs |
|
(4,199 |
) |
(3 |
) |
(22,219 |
) |
(6,195 |
) | ||||
Exercise of stock options proceeds, including related tax impact |
|
9,312 |
|
18,992 |
|
32,309 |
|
37,508 |
| ||||
Contributions from noncontrolling investors, net |
|
(39 |
) |
6,449 |
|
4,673 |
|
17,421 |
| ||||
Dividends paid |
|
(27,642 |
) |
(24,348 |
) |
(105,379 |
) |
(94,812 |
) | ||||
Net cash provided by (used in) financing activities |
|
(66,754 |
) |
358 |
|
1,095,902 |
|
(140,091 |
) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Increase (decrease) in cash and equivalents |
|
201,772 |
|
25,100 |
|
(33,793 |
) |
19,239 |
| ||||
Cash and equivalents at beginning of period |
|
159,591 |
|
370,056 |
|
395,156 |
|
375,917 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cash and equivalents at end of period |
|
$ |
361,363 |
|
$ |
395,156 |
|
$ |
361,363 |
|
$ |
395,156 |
|
|
|
|
|
|
|
|
|
|
| ||||
Supplemental disclosure information: |
|
|
|
|
|
|
|
|
| ||||
Cash paid for interest |
|
$ |
13,787 |
|
$ |
22,109 |
|
$ |
114,310 |
|
$ |
129,499 |
|
Cash paid for federal and state income taxes, net |
|
$ |
34,103 |
|
$ |
30,889 |
|
$ |
120,521 |
|
$ |
72,436 |
|