News Releases

Nucor Reports Results for Second Quarter and First Half of 2011

CHARLOTTE, N.C., July 21, 2011 /PRNewswire via COMTEX/ --

Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $299.8 million, or $0.94 per diluted share, for the second quarter of 2011. By comparison, Nucor reported net earnings of $159.8 million, or $0.50 per diluted share, in the first quarter of 2011 and net earnings of $91.0 million, or $0.29 per diluted share, in the second quarter of 2010. These increases in profits of 88% and 229%, respectively, were achieved despite the rebalancing by our customers of supply chain inventories, the impact on the manufacturing/auto sector of the devastating Japanese earthquake/tsunami and the lost sales, production and shipments from the weather-related power outages and historic river flooding in North America.

In the first half of 2011, Nucor reported consolidated net earnings of $459.6 million, or $1.44 per diluted share, compared with consolidated net earnings of $122.0 million, or $0.38 per diluted share, in the first half of last year.

Nucor incurred a charge to value inventories using the last-in, first-out (LIFO) method of accounting of $32.0 million ($0.06 per diluted share) in the second quarter of 2011, compared with a charge of $31.0 million ($0.06 per diluted share) in the first quarter of 2011 and a charge of $67.0 million ($0.13 per diluted share) in the second quarter of 2010. The LIFO charge in the first half of 2011 was $63.0 million ($0.12 per diluted share), compared with a charge of $91.0 million ($0.18 per diluted share) in the first half of 2010.

Pre-operating and start-up costs of new facilities were $31.4 million in the second quarter of 2011 compared to $27.9 million in the first quarter of 2011 and $43.4 million in the second quarter of 2010. For the six-month period, pre-operating and start-up costs decreased from $93.9 million in 2010 to $59.3 million in 2011. In 2011, these costs related to several projects, primarily the galvanizing line in Decatur, Alabama and the Castrip facility in Blytheville, Arkansas. The decrease in pre-operating and start-up costs was due to the improved performance at the special bar quality ("SBQ") mill in Memphis, Tennessee and the wire rod products mill in Kingman, Arizona.

Nucor's consolidated net sales increased 6% to $5.11 billion in the second quarter of 2011 compared with $4.83 billion in the first quarter of 2011 and increased 22% compared with $4.20 billion in the second quarter of 2010. Average sales price per ton increased 13% from the first quarter of 2011 and increased 21% from the second quarter of 2010. Total tons shipped to outside customers were 5,598,000 tons in the second quarter of 2011, a decrease of 6% from the first quarter of 2011 and an increase of 1% over the second quarter of 2010. Total second quarter steel mill shipments increased 6% over the second quarter of 2010 and were down 6% from the first quarter of 2011. Second quarter downstream steel products shipments to outside customers increased 3% over the second quarter of 2010 and 12% over the first quarter of 2011.

In the first half of 2011, Nucor's consolidated net sales increased 27% to $9.94 billion, compared with $7.85 billion in last year's first half. Average sales price per ton increased 21% while total tons shipped to outside customers increased 5% over the first half of 2010.

The average scrap and scrap substitute cost per ton used in the second quarter of 2011 was $444, an increase of 5% over $424 in the first quarter of 2011 and an increase of 19% over $373 in the second quarter of 2010. The average scrap and scrap substitute cost per ton used in the first half of 2011 was $433, an increase of 26% over $345 in the first half of 2010.

Overall operating rates at our steel mills in the second quarter (71%) were down from the first quarter (80%) and were unchanged from last year's second quarter. Steel mill utilization increased from 72% in the first half of 2010 to 75% in the first half of 2011. Second quarter utilization rates were negatively impacted by downtime caused by weather-related events and resulting power outages.

Total energy costs increased approximately $3 per ton from the first quarter of 2011 primarily due to inefficiencies caused by lower operating rates. Total energy costs increased approximately $3 per ton from the second quarter of 2010 to the second quarter of 2011 and increased $1 per ton from the first half of 2010 to the first half of 2011 mainly as a result of higher energy unit costs.

Construction, primarily infrastructure, has begun on our 2,500,000-ton direct reduced iron ("DRI") facility in Louisiana. The management team is largely in place, and purchase contracts for most of the major equipment have been issued. The majority of the equipment will begin arriving in 2012, and we are on schedule for completion of construction and beginning of start-up in mid-2013.

Our liquidity position remains strong with $2.28 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 June, Nucor's board of directors declared a cash dividend of $0.3625 per share payable on August 11, 2011 to stockholders of record on June 30, 2011. This dividend is Nucor's 153rd consecutive quarterly cash dividend, a record we expect to continue.

As we expected, our profitability significantly improved from the first quarter to the second quarter, as price increases for steel mill products caught up with higher raw material costs. Demand in end markets such as automotive, heavy equipment, energy and general manufacturing continues to incrementally improve, benefiting special bar quality, sheet and plate products. However, new domestic supply in the sheet market and increases in imports of sheet steel have begun to put significant pressure on prices and margins. Unless the supply/demand/pricing dynamics reverse themselves, the sheet market will be the most challenging for the industry in the third quarter. Accordingly, we expect third quarter results to be lower than second quarter, but by how much remains to be seen. Those markets associated with residential and non-residential construction are not robust; however, they are stable and slowly improving. Despite the challenges throughout this downturn, our combined construction-related businesses (steel mills and downstream facilities) have remained strong profit contributors. We will provide quantitative earnings guidance later in the quarter.

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," "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 outlined in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's December 31, 2010 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 second quarter results on July 21, 2011 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 2, 2011


July 3, 2010


Percentage Change


July 2, 2011


July 3, 2010


Percentage Change

Steel mills production


4,667


4,648


-


9,886


9,360


6%

Steel mills total shipments


4,864


4,597


6%


10,064


9,303


8%















Sales tons to outside customers:














Steel mills


4,052


3,922


3%


8,470


7,988


6%


Joist


70


72


-3%


137


131


5%


Deck


79


81


-2%


151


149


1%


Cold finished


129


117


10%


263


228


15%


Fabricated concrete














reinforcing steel


275


266


3%


496


460


8%


Other


993


1,097


-9%


2,059


2,096


-2%




5,598


5,555


1%


11,576


11,052


5%

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)










Three Months (13 Weeks) Ended


Six Months (26 Weeks) Ended










July 2, 2011


July 3, 2010


July 2, 2011


July 3, 2010









Net sales

$ 5,107,809


$ 4,195,966


$ 9,941,743


$ 7,850,808









Costs, expenses and other:








Cost of products sold

4,441,591


3,887,929


8,837,116


7,329,976

Marketing, administrative and other expenses

147,014


107,770


272,392


200,364

Equity in losses (income) of








unconsolidated affiliates

(1,267)


7,372


2,943


25,749

Interest expense, net

43,184


37,322


85,750


75,110


4,630,522


4,040,393


9,198,201


7,631,199

Earnings before income taxes and








noncontrolling interests

477,287


155,573


743,542


219,609

Provision for income taxes

155,709


49,355


240,842


72,197

Net earnings

321,578


106,218


502,700


147,412

Earnings attributable to








noncontrolling interests

21,805


15,226


43,086


25,456

Net earnings attributable to








Nucor stockholders

$ 299,773


$ 90,992


$ 459,614


$ 121,956









Net earnings per share:








Basic

$0.94


$0.29


$1.45


$0.38

Diluted

$0.94


$0.29


$1.44


$0.38









Average shares outstanding:








Basic

316,811


315,849


316,702


315,653

Diluted

317,022


316,472


316,948


316,349

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands)














July 2, 2011


Dec. 31, 2010

ASSETS






Current assets:






Cash and cash equivalents


$ 1,189,544


$ 1,325,406


Short-term investments


1,092,684


1,153,623


Accounts receivable, net


1,837,175


1,439,828


Inventories, net


2,222,167


1,557,574


Other current assets


374,925


384,744











Total current assets


6,716,495


5,861,175









Property, plant and equipment, net


3,804,574


3,852,118









Restricted cash


576,557


598,482









Goodwill



1,845,948


1,836,294









Other intangible assets, net


826,789


856,125









Other assets


963,186


917,716











Total assets


$ 14,733,549


$ 13,921,910









LIABILITIES





Current liabilities:






Short-term debt


$ 14,673


$ 13,328


Accounts payable


1,143,536


896,703


Federal income taxes payable


85,396


-


Salaries, wages and related accruals


294,583


207,168


Accrued expenses and other current liabilities


464,497


387,239











Total current liabilities


2,002,685


1,504,438









Long-term debt due after one year


4,280,200


4,280,200









Deferred credits and other liabilities


775,273


806,578











Total liabilities


7,058,158


6,591,216









EQUITY






Nucor stockholders' equity:






Common stock


150,405


150,181


Additional paid-in capital


1,735,300


1,711,518


Retained earnings


7,024,830


6,795,988


Accumulated other comprehensive income (loss),







net of income taxes


60,422


(27,776)


Treasury stock


(1,506,009)


(1,509,841)



Total Nucor stockholders' equity


7,464,948


7,120,070









Noncontrolling interests


210,443


210,624











Total equity


7,675,391


7,330,694











Total liabilities and equity


$ 14,733,549


$ 13,921,910

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)
















Six Months (26 Weeks) Ended
















July 2, 2011


July 3, 2010










Operating activities:







Net earnings



$ 502,700


$ 147,412


Adjustments:








Depreciation



256,059


255,262



Amortization



34,680


35,855



Stock-based compensation

31,531


25,246



Deferred income taxes


(22,885)


4,178



Equity in losses of unconsolidated affiliates

2,943


25,749



Changes in assets and liabilities (exclusive of acquisitions):







Accounts receivable


(392,950)


(290,542)




Inventories


(661,337)


(628,941)




Accounts payable


245,572


178,286




Federal income taxes


136,985


(19,886)




Salaries, wages and related accruals

90,366


72,791




Other



69,058


(99,169)










Cash provided by (used in) operating activities

292,722


(293,759)










Investing activities:







Capital expenditures


(212,893)


(163,219)


Investment in and advances to affiliates

(49,839)


(402,391)


Repayment of advances to affiliates

-


48,885


Disposition of plant and equipment

18,409


15,522


Acquisitions (net of cash acquired)

-


(63,722)


Purchases of investments


(141,461)


(240,495)


Proceeds from the sale of investments

202,400


125,000


Changes in restricted cash


21,949


-










Cash used in investing activities


(161,435)


(680,420)










Financing activities:







Net change in short-term debt


1,357


852


Repayment of long-term debt


-


(6,000)


Issuance of common stock


3,206


1,777


Excess tax benefits from stock-based compensation

(200)


(2,200)


Distributions to noncontrolling interests

(43,272)


(10,511)


Cash dividends



(230,561)


(228,465)










Cash used in financing activities


(269,470)


(244,547)










Effect of exchange rate changes on cash

2,321


3,249










Decrease in cash and cash equivalents

(135,862)


(1,215,477)










Cash and cash equivalents - beginning of year

1,325,406


2,016,981










Cash and cash equivalents - end of six months

$ 1,189,544


$ 801,504

SOURCE Nucor Corporation