NUCOR CORPORATION CHARLOTTE, N.C., April 21, 2016 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $70.8 million, or $0.22 per diluted share, for the first quarter of 2016. By comparison, Nucor reported net earnings of $67.8 million, or $0.21 per diluted share, for the first quarter of 2015 and adjusted net earnings of $144.7 million, or $0.45 per diluted share, for the fourth quarter of 2015. Fourth quarter of 2015 adjusted net earnings excludes a $153.0 million ($0.47 per diluted share) impairment charge related to our Duferdofin Nucor S.r.l. joint venture and an $84.1 million ($0.17 per diluted share) impairment charge on assets related to a blast furnace project that will not be utilized in the future. Including these impairment charges, Nucor's net loss for the fourth quarter of 2015 was $62.0 million, or $0.19 per diluted share.
Earnings (loss) before income taxes and noncontrolling interests by segment were as follows for the first quarter of 2016 and 2015 (in thousands):
Three Months (13 Weeks)
Ended
-----------------------
April 2, 2016 April 4, 2015
------------- -------------
Steel mills $279,835 $217,128
Steel products 42,367 32,458
Raw materials (63,372) (41,497)
Corporate/eliminations (117,304) (89,044)
$141,526 $119,045
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Nucor's first quarter of 2016 results include a charge of $27.5 million ($0.05 per diluted share) to value inventories using the last-in, first-out (LIFO) method of accounting. The charge is compared with a credit of $16.5 million ($0.03 per diluted share) in the first quarter of 2015 and a credit of $217.8 million ($0.41 per diluted share) in the fourth quarter of 2015. The LIFO charge taken in the first quarter of 2016 was above our quantitative guidance of $15.0 million ($0.03 per diluted share) as recent increases in scrap prices affected our estimate of expected inventory values at the end of 2016. Also included in the first quarter of 2016 earnings are out-of-period non-cash gains totaling $13.4 million ($0.04 per diluted share) related to a noncontrolling interest adjustment and to tax adjustments.
Nucor's consolidated net sales decreased 16% to $3.72 billion in the first quarter of 2016 from $4.40 billion in the first quarter of 2015 and increased 7% compared with $3.46 billion in the fourth quarter of 2015. Average sales price per ton in the first quarter of 2016 decreased 23% from the first quarter of 2015 and decreased 11% from the fourth quarter of 2015. Total tons shipped to outside customers were 6,148,000 tons in the first quarter of 2016, a 9% increase from the first quarter of 2015 and a 20% increase from the fourth quarter of 2015. Total first quarter steel mill shipments increased 16% from the first quarter of 2015 and increased 27% from the fourth quarter of 2015. First quarter downstream steel products shipments to outside customers decreased 1% from the first quarter of 2015 and decreased 6% from the fourth quarter of 2015.
The average scrap and scrap substitute cost per ton used during the first quarter of 2016 was $193, a decrease of 40% from $324 in the first quarter of 2015 and a decrease of 12% compared to $219 in the fourth quarter of 2015.
Overall operating rates at our steel mills increased to 74% in the first quarter of 2016 as compared to 65% in the first quarter of 2015 and 63% in the fourth quarter of 2015.
Total steel mill energy costs in the first quarter of 2016 decreased approximately $7 per ton compared to the first quarter of 2015 and decreased approximately $2 per ton compared to the fourth quarter of 2015. The decrease from the first quarter of 2015 was due to significantly lower electricity and natural gas unit costs and improved productivity from higher steel production volumes. The decrease from the fourth quarter of 2015 was due to improved productivity from higher steel production volumes and lower natural gas unit costs.
Our liquidity position remains strong with $2.33 billion in cash and cash equivalents and short-term investments. Subsequent to the end of the first quarter, we amended and extended our undrawn $1.5 billion line of credit to mature in April 2021.
In February, Nucor's board of directors declared a cash dividend of $0.375 per share payable on May 11, 2016 to stockholders of record on March 31, 2016. This dividend is Nucor's 172nd consecutive quarterly cash dividend, a record we expect to continue.
As expected, operating performance at the steel mills segment for the first quarter of 2016 increased compared to the fourth quarter of 2015. First quarter performance benefited from a lower average cost of inventory at the beginning of the quarter and improved market conditions. Positive market factors included a small decline in import volumes and more balanced inventory levels at service center customers. Energy, heavy equipment and agricultural markets remain weak. The automotive markets remain strong.
Imports continue to impact the U.S. steel industry. Several important trade cases are in progress, and the Department of Commerce has announced preliminary duties. We are confident that once all the facts are known, final determinations by the Department of Commerce will fully address all dumping and subsidies associated with these cases.
The performance of our downstream products segment decreased from the fourth quarter of 2015 due to typical first quarter seasonality in nonresidential construction markets, but increased compared to the first quarter of 2015. We expect nonresidential construction activity to outpace 2015 levels for the balance of the year.
The performance of the raw materials segment improved from the fourth quarter of 2015 primarily due to improved performance at our scrap processing businesses. Nucor Steel Louisiana completed a planned maintenance outage in the fourth quarter of 2015, and the facility did not immediately resume operations until late January due to market conditions. The profitability of both of our direct reduced iron (DRI) facilities has been negatively impacted by the depressed levels of pricing for alternative raw materials.
We expect earnings in the second quarter of 2016 to be significantly improved from the first quarter of 2016. Performance of the steel mills segment is expected to improve in the second quarter of 2016 as compared to the first quarter of 2016 as recently announced price increases for many of our products are being accepted in the market. This improved performance by the steel mills segment in the second quarter of 2016 will be tempered by rising scrap prices. We expect increased profitability for our downstream products segment in the second quarter of 2016 as compared to the first quarter of 2016 due to seasonal factors as improving weather conditions benefit nonresidential construction markets. The performance of the raw materials segment is expected to improve in the second quarter of 2016 as compared to the first quarter of 2016 due to improved pricing at both our scrap processing businesses and DRI facilities.
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 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 2015 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 first quarter results on April 21, 2016 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
-----------------------------
April 2, 2016 April 4, 2015 Percentage
Change
------
Steel mills production 5,390 4,758 13%
Steel mills total shipments 5,647 4,887 16%
Sales tons to outside customers:
Steel mills 4,899 4,165 18%
Joist 98 89 10%
Deck 101 82 23%
Cold finished 119 130 -8%
Fabricated concrete
reinforcing steel 242 262 -8%
Other 689 907 -24%
6,148 5,635 9%
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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
--------------------------------------------------------
(In thousands, except per share data)
Three Months (13 Weeks)
Ended
-------------------------
April 2, 2016 April 4, 2015
------------- -------------
Net sales $3,715,576 $4,399,440
---------- ----------
Costs, expenses and other:
Cost of products sold 3,428,628 4,111,158
Marketing, administrative
and other expenses 109,745 124,561
Equity in (earnings) losses
of unconsolidated
affiliates (9,245) 259
Interest expense, net 44,922 44,417
------ ------
3,574,050 4,280,395
--------- ---------
Earnings before income taxes and
noncontrolling interests 141,526 119,045
Provision for income taxes 37,065 34,753
------ ------
Net earnings 104,461 84,292
Earnings attributable to
noncontrolling interests 33,707 16,492
------ ------
Net earnings attributable to
Nucor stockholders $70,754 $67,800
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Net earnings per share:
Basic $0.22 $0.21
Diluted $0.22 $0.21
Average shares outstanding:
Basic 319,240 320,315
Diluted 319,294 320,483
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
------------------------------------------------
(In thousands)
April 2, 2016 Dec. 31, 2015
------------- -------------
ASSETS
Current assets:
Cash and cash
equivalents $2,278,488 $1,939,469
Short-term
investments 50,000 100,000
Accounts receivable,
net 1,493,892 1,383,823
Inventories, net 2,007,879 2,145,444
Other current assets 175,890 185,644
Total current
assets 6,006,149 5,754,380
Property, plant and equipment, net 4,813,565 4,891,153
Goodwill 2,025,380 2,011,278
Other intangible assets, net 756,724 770,672
Other assets 793,286 799,461
------- -------
Total assets $14,395,104 $14,226,944
=========== ===========
LIABILITIES
Current liabilities:
Short-term debt $36,655 $51,315
Accounts payable 758,703 566,527
Salaries, wages and
related accruals 237,107 289,004
Accrued expenses and
other current
liabilities 517,665 478,327
Total current
liabilities 1,550,130 1,385,173
Long-term debt due after one year 4,337,875 4,337,145
Deferred credits and other liabilities 729,027 718,613
------- -------
Total
liabilities 6,617,032 6,440,931
--------- ---------
EQUITY
Nucor stockholders' equity:
Common stock 151,426 151,426
Additional paid-in
capital 1,925,255 1,918,970
Retained earnings 7,206,570 7,255,972
Accumulated other
comprehensive loss,
net of income
taxes (296,164) (351,362)
Treasury stock (1,560,619) (1,558,128)
Total Nucor
stockholders'
equity 7,426,468 7,416,878
Noncontrolling interests 351,604 369,135
------- -------
Total equity 7,778,072 7,786,013
--------- ---------
Total
liabilities
and equity $14,395,104 $14,226,944
=========== ===========
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
----------------------------------------------------------
(In thousands)
Three Months (13 Weeks) Ended
-----------------------------
April 2, 2016 April 4, 2015
------------- -------------
Operating activities:
Net earnings $104,461 $84,292
Adjustments:
Depreciation 152,249 157,934
Amortization 18,112 18,655
Stock-based
compensation 7,300 6,453
Deferred income
taxes 5,529 (10,173)
Distributions from
affiliates 36,015 -
Equity in (earnings)
losses of
unconsolidated
affiliates (9,245) 259
Changes in assets and
liabilities (exclusive
of acquisitions and
dispositions):
Accounts
receivable (104,252) 343,497
Inventories 142,516 330,842
Accounts payable 197,350 (237,847)
Federal income
taxes 23,273 39,397
Salaries, wages and
related accruals (49,453) (122,226)
Other operating
activities 27,004 (47,389)
------ -------
Cash provided by operating activities 550,859 563,694
------- -------
Investing activities:
Capital expenditures (80,697) (77,523)
Investment in and advances
to affiliates (6,098) (20,776)
Disposition of plant and
equipment 5,309 2,604
Acquisitions (net of
cash acquired) (1,386) -
Purchases of investments (50,000) (111,927)
Proceeds from the sale
of investments 100,000 100,000
Other investing
activities 792 1,870
Cash used in investing activities (32,080) (105,752)
------- --------
Financing activities:
Net change in short-
term debt (14,671) (180,239)
Issuance of common stock - 423
Excess tax benefits from
stock-based compensation 353 200
Distributions to
noncontrolling interests (49,853) (24,981)
Cash dividends (120,153) (119,712)
Acquisition of treasury
stock (5,173) -
Other financing
activities (559) (536)
Cash used in financing activities (190,056) (324,845)
-------- --------
Effect of exchange rate changes on cash 10,296 (3,304)
------ ------
Increase in cash and cash equivalents 339,019 129,793
Cash and cash equivalents - beginning of year 1,939,469 1,024,144
--------- ---------
Cash and cash equivalents - end of three months $2,278,488 $1,153,937
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Non-cash investing activity:
Change in accrued plant and
equipment purchases $(4,949) $(7,812)
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SOURCE Nucor Corporation
