NUCOR CORPORATION CHARLOTTE, N.C., July 24, 2014 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $147.0 million, or $0.46 per diluted share, for the second quarter of 2014. By comparison, Nucor reported net earnings of $111.0 million, or $0.35 per diluted share, in the first quarter of 2014 and net earnings of $85.1 million, or $0.27 per diluted share, in the second quarter of 2013. Second quarter of 2014 diluted net earnings per share of $0.46 was above our guidance range of $0.35 to $0.40 per diluted share due to better than forecasted performance in the steel mills segment.
In the first half of 2014, Nucor reported consolidated net earnings of $258.1 million, or $0.80 per diluted share, compared with consolidated net earnings of $169.9 million, or $0.53 per diluted share, in the first half of last year.
Nucor's results include no charge to value inventories using the last-in, first-out (LIFO) method of accounting in the second quarter of 2014, compared with a charge of $14.5 million ($0.03 per diluted share) recorded in the first quarter of 2014 and no charge in the second quarter of 2013. As a result, the LIFO charge in the first half of 2014 was $14.5 million ($0.03 per diluted share), compared with a charge of $18.0 million ($0.03 per diluted share) in the first half of 2013. The second quarter of 2014 included $20.3 million ($0.04 per diluted share) of higher employee stock-based compensation expense than the first quarter of 2014 and was comparable to the second quarter of 2013 due to the timing of annual grants that are typically authorized in June of each year. Included in the first quarter of 2014 earnings was a $12.8 million ($0.04 per diluted share) charge primarily related to tax legislation changes in the state of New York. Also included in first quarter results was a $9.0 million charge ($0.02 per diluted share) related to the disposal of assets within the steel mills segment.
Nucor's consolidated net sales increased 4% to $5.29 billion in the second quarter of 2014 compared with $5.11 billion in the first quarter of 2014 and increased 13% compared with $4.67 billion in the second quarter of 2013. Average sales price per ton increased 1% over the first quarter of 2014 and increased 4% over the second quarter of 2013. Total tons shipped to outside customers were 6,370,000 tons in the second quarter of 2014, a 3% increase over the first quarter of 2014 and an increase of 9% over the second quarter of 2013. Total second quarter steel mill shipments increased 1% over the first quarter of 2014 and 9% over the second quarter of 2013. Second quarter downstream steel products shipments to outside customers increased 17% over the first quarter of 2014 and increased 11% over the second quarter of 2013.
In the first half of 2014, Nucor's consolidated net sales increased 13% to $10.40 billion, compared with $9.22 billion in last year's first half. Total tons shipped to outside customers increased 9% from the first half of 2013, while average sales price per ton increased 4%.
The average scrap and scrap substitute cost per ton used in the second quarter of 2014 was $384, a 4% decrease from $398 in the first quarter of 2014 and an increase of 2% over $377 in the second quarter of 2013. The average scrap and scrap substitute cost per ton used in the first half of 2014 was $391, an increase of 3% over $378 in the first half of 2013.
Overall operating rates at our steel mills increased to 79% in the second quarter of 2014 as compared with 75% in the first quarter of 2014 and 73% in the second quarter of 2013. Steel mill utilization increased to 77% in the first half of 2014 from 73% in the first half of 2013.
Total steel mill energy costs in the second quarter of 2014 decreased approximately $3 per ton compared with the first quarter of 2014 and increased $1 per ton over the second quarter of 2013. Energy costs for the first half of 2014 increased $3 per ton over the first half of 2013 due to increased natural gas and electricity unit costs.
Our liquidity position remains strong with $1.17 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.
In June, Nucor's board of directors declared a cash dividend of $0.37 per share payable on August 11, 2014 to stockholders of record on June 30, 2014. This dividend is Nucor's 165(th) consecutive quarterly cash dividend, a record we expect to continue.
Second quarter of 2014 earnings increased compared with the first quarter of 2014 due in large part to improved performance by the steel mills segment, particularly at our sheet and bar mills. Sheet steel profitability improved because of higher sales volumes and margin improvement due to continued strong demand and supply disruptions at some of our competitors. Our bar mills also benefited from higher sales volumes and margin improvement. Nucor-Yamato Steel underwent a planned three week outage in the second quarter which contributed to decreased volumes for structural steel. The improved results of the steel mills segment were achieved despite imports being at levels not seen since 2006. Our fabricated construction products businesses (rebar fabrication, joist and decking and pre-engineered metal buildings) returned to solid profitability in the second quarter of 2014, reflecting improving conditions in the nonresidential construction markets.
The performance of our raw materials segment decreased in the second quarter of 2014 compared with the first quarter of 2014 due to an operating loss at our new direct reduced iron (DRI) plant in St. James Parish, Louisiana, which was consistent with our guidance. The Louisiana DRI plant underwent a three week outage in the second quarter to implement adjustments that will improve yield and conversion costs. The Louisiana DRI plant has continued to exceed our volume expectations while producing excellent quality DRI units. Also within the raw materials segment, The David J. Joseph Company experienced decreased profitability in the second quarter of 2014 compared to the first quarter of 2014 due to lower scrap selling prices.
We currently expect to see a stronger improvement in earnings for the third quarter of 2014. Although non-residential construction markets remain at historically low levels, they are improving at a moderate pace. We therefore expect further increased operating profits in our downstream products businesses. Steel mill profitability is also expected to improve in the third quarter of 2014 as our Nucor-Yamato Steel division has no planned outage and sheet and plate margins continue to benefit from positive pricing trends. We also expect improvement in the performance of the Louisiana DRI facility in the third quarter, with profitable performance anticipated by the end of the year.
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 discussed in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's December 31, 2013 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 24, 2014 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 5, 2014 June 29, 2013 Percentage July 5, 2014 June 29, 2013 Percentage
Change Change
------ ------
Steel mills production 5,324 4,892 9% 10,518 9,710 8%
Steel mills total shipments 5,477 5,025 9% 10,909 10,100 8%
Sales tons to outside customers:
Steel mills 4,646 4,274 9% 9,246 8,608 7%
Joist 97 91 7% 189 162 17%
Deck 101 83 22% 188 152 24%
Cold finished 133 124 7% 271 246 10%
Fabricated concrete
reinforcing steel 321 280 15% 560 508 10%
Other 1,072 987 9% 2,105 1,869 13%
6,370 5,839 9% 12,559 11,545 9%
===== ===== ====== ======
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
--------------------------------------------------------
(In thousands, except per share data)
Three Months (13 Weeks) Ended Six Months (26 Weeks) Ended
----------------------------- ---------------------------
July 5, 2014 June 29, 2013 July 5, 2014 June 29, 2013
------------ ------------- ------------ -------------
Net sales $5,291,075 $4,665,588 $10,399,519 $9,216,360
---------- ---------- ----------- ----------
Costs, expenses and other:
Cost of products sold 4,875,208 4,352,463 9,606,450 8,600,019
Marketing, administrative and other expenses 132,813 123,150 266,247 239,375
Equity in earnings of
unconsolidated affiliates (3,202) (1,585) (7,676) (413)
Interest expense, net 44,391 39,228 85,132 71,719
------ ------ ------ ------
5,049,210 4,513,256 9,950,153 8,910,700
--------- --------- --------- ---------
Earnings before income taxes and
noncontrolling interests 241,865 152,332 449,366 305,660
Provision for income taxes 74,930 46,062 152,735 88,662
------ ------ ------- ------
Net earnings 166,935 106,270 296,631 216,998
Earnings attributable to
noncontrolling interests 19,894 21,125 38,559 47,064
------ ------ ------ ------
Net earnings attributable to
Nucor stockholders $147,041 $85,145 $258,072 $169,934
======== ======= ======== ========
Net earnings per share:
Basic $0.46 $0.27 $0.80 $0.53
Diluted $0.46 $0.27 $0.80 $0.53
Average shares outstanding:
Basic 319,693 318,903 319,597 318,796
Diluted 319,981 319,023 319,872 318,934
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
------------------------------------------------
(In thousands)
July 5, 2014 Dec. 31, 2013
------------ -------------
ASSETS
Current assets:
Cash and cash
equivalents $1,067,561 $1,483,252
Short-term
investments 100,000 28,191
Accounts receivable,
net 2,071,439 1,810,987
Inventories, net 2,738,658 2,605,609
Other current assets 517,132 482,007
Total current
assets 6,494,790 6,410,046
Property, plant and equipment, net 4,971,813 4,917,024
Goodwill 1,971,452 1,973,608
Other intangible assets, net 842,445 874,154
Other assets 1,030,388 1,028,451
--------- ---------
Total assets $15,310,888 $15,203,283
=========== ===========
LIABILITIES
Current liabilities:
Short-term debt $42,414 $29,202
Long-term debt due
within one year 11,300 3,300
Accounts payable 1,124,077 1,117,078
Salaries, wages and
related accruals 276,660 282,860
Accrued expenses and
other current
liabilities 562,775 527,776
Total current
liabilities 2,017,226 1,960,216
Long-term debt due after one year 4,368,900 4,376,900
Deferred credits and other liabilities 978,749 955,889
------- -------
Total
liabilities 7,364,875 7,293,005
--------- ---------
EQUITY
Nucor stockholders' equity:
Common stock 151,172 151,010
Additional paid-in
capital 1,867,948 1,843,353
Retained earnings 7,160,952 7,140,440
Accumulated other
comprehensive
(loss) income,
net of income
taxes (3,952) 9,080
Treasury stock (1,495,298) (1,498,114)
Total Nucor
stockholders'
equity 7,680,822 7,645,769
Noncontrolling interests 265,191 264,509
------- -------
Total equity 7,946,013 7,910,278
--------- ---------
Total
liabilities
and equity $15,310,888 $15,203,283
=========== ===========
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
----------------------------------------------------------
(In thousands)
Six Months (26 Weeks) Ended
---------------------------
July 5, 2014 June 29, 2013
------------ -------------
Operating activities:
Net earnings $296,631 $216,998
Adjustments:
Depreciation 326,429 258,390
Amortization 36,265 37,575
Stock-based
compensation 33,752 34,043
Deferred income
taxes (5,121) 12,304
Distributions from
affiliates 11,504 7,708
Equity in earnings
of unconsolidated
affiliates (7,676) (413)
Loss on assets 9,046 -
Changes in assets
and liabilities
(exclusive of
acquisitions and
dispositions):
Accounts
receivable (249,196) (70,785)
Inventories (130,463) 36,087
Accounts
payable 90,460 (44,724)
Federal
income taxes 14,100 3,709
Salaries, wages
and related
accruals (1,672) (35,332)
Other 19,270 29,414
------ ------
Cash provided by operating activities 443,329 484,974
------- -------
Investing activities:
Capital expenditures (446,798) (621,306)
Investment in and
advances to affiliates (68,491) (43,485)
Repayment of advances to
affiliates 15,000 30,500
Disposition of plant and
equipment 12,858 10,145
Acquisitions (net of
cash acquired) (38,466) -
Purchases of
investments (100,000) (19,390)
Proceeds from the sale
of investments 27,529 73,428
Proceeds from the sale
of restricted
investments - 148,725
Changes in restricted
cash - 55,355
Cash used in investing activities (598,368) (366,028)
-------- --------
Financing activities:
Net change in short-
term debt 13,212 1,796
Repayment of long-
term debt - (250,000)
Excess tax benefits from
stock-based
compensation 2,700 1,700
Distributions to
noncontrolling
interests (37,877) (57,266)
Cash dividends (237,369) (235,280)
Other financing
activities (1,123) 109
Cash used in financing activities (260,457) (538,941)
-------- --------
Effect of exchange rate changes on cash (195) (2,400)
---- ------
Decrease in cash and cash equivalents (415,691) (422,395)
Cash and cash equivalents - beginning of year 1,483,252 1,052,862
--------- ---------
Cash and cash equivalents - end of six months $1,067,561 $630,467
========== ========
Non-cash investing activity:
Change in accrued plant
and equipment purchases $(96,023) $(20,537)
=========
SOURCE Nucor Corporation
