Nucor Reports Results for Fourth Quarter and Year Ended 2010

CHARLOTTE, N.C., Jan. 27, 2011 /PRNewswire via COMTEX/ --

Nucor Corporation (NYSE: NUE) announced today a consolidated net loss of $11.4 million or $0.04 per diluted share, for the fourth quarter of 2010. By comparison, Nucor reported net earnings of $23.5 million, or $0.07 per diluted share, in the third quarter of 2010 and net earnings of $58.9 million, or $0.18 per diluted share, in the fourth quarter of 2009.

For the full year of 2010, Nucor reported consolidated net earnings of $134.1 million, or $0.42 per diluted share, compared with a net loss of $293.6 million or $0.94 per diluted share for 2009.

Fourth quarter results were reduced by a charge of $10.0 million ($0.02 per diluted share) for closure costs associated with the decision made in December by the HIsmelt(R) joint venture partners to permanently close the site in Kwinana, Western Australia, and terminate the joint venture. In addition to the closure costs, Nucor incurred approximately $9.1 million of expense for the HIsmelt facility during 2010.

Nucor recorded a charge to value inventories using the last-in, first-out (LIFO) method of accounting of $23.0 million in the fourth quarter of 2010 ($0.04 per diluted share), compared with a charge of $50.0 million in the third quarter of 2010 ($0.10 per diluted share) and a credit of $116.9 million in the fourth quarter of 2009 ($0.21 per diluted share). For the full year 2010, the LIFO charge was $164.0 million ($0.32 per diluted share), compared with a credit of $466.9 million in 2009 ($0.88 per diluted share).

Fourth quarter results were also reduced by pre-operating and start-up costs of new facilities of $39.0 million compared to charges of $48.1 million in the fourth quarter of 2009. Full-year pre-operating and start-up costs increased from $160.0 million in 2009 to $174.8 million in 2010. In 2010, these costs primarily related to the special bar quality ("SBQ") mill in Memphis, Tennessee, and the galvanizing line in Decatur, Alabama.

In the fourth quarter of 2010, Nucor's consolidated net sales decreased 7% to $3.85 billion compared with $4.14 billion in the third quarter of 2010 and increased 31% compared with $2.94 billion in the fourth quarter of 2009. Average sales price per ton decreased 2% from the third quarter of 2010 and increased 14% from the fourth quarter of 2009. Total tons shipped to outside customers were 5,334,000 tons in the fourth quarter of 2010, a decrease of 5% from the third quarter of 2010 and an increase of 15% over last year's fourth quarter. Fourth quarter downstream steel products shipments to outside customers increased 12% over the fourth quarter of 2009 and decreased 12% from the third quarter of 2010. The decrease in shipments from the third quarter of 2010 was due to seasonal issues experienced during the fourth quarter.

For the full year 2010, Nucor's consolidated net sales increased 42% to $15.84 billion, compared with $11.19 billion for 2009. Average sales price per ton increased 13% while total tons shipped to outside customers increased 25% from 2009 levels.

The average scrap and scrap substitute cost per ton used in the fourth quarter of 2010 was $359, an increase of 1% over $354 in the third quarter and an increase of 30% over $276 in the fourth quarter of 2009. For the full year 2010, the average scrap and scrap substitute cost per ton used was $351, an increase of 16% over $303 in 2009.

Overall operating rates at our steel mills were 68% in the fourth quarter of 2010, which remained unchanged from the third quarter of 2010 and increased from 58% in last year's fourth quarter. Steel mill utilization rates increased from 54% for the full year 2009 to 70% for the full year 2010.

In the fourth quarter of 2010, total energy costs decreased approximately $2 per ton from the third quarter of 2010 and $1 per ton from the fourth quarter of 2009 primarily due to lower natural gas unit costs. For the full year 2010, total energy costs decreased approximately $3 per ton from the prior year.

In November, Nucor issued $600 million in Gulf Zone Opportunity Bonds that will partially fund the capital costs associated with our direct reduced iron making facility in St. James Parish, Louisiana. The net proceeds received from the issuance of these bonds are included in restricted cash. In addition to restricted cash, our liquidity position remains strong with $2.48 billion in cash and cash equivalents and short-term investments and an untapped $1.3 billion revolving credit facility.

In December, Nucor's board of directors increased the cash dividend to $0.3625 per share. The dividend is payable on February 11, 2011 to stockholders of record on December 31, 2010 and is Nucor's 151st consecutive quarterly cash dividend. Nucor continues a record of 38 consecutive years of increases to its regular dividend.

Utilization rates, which improved throughout the fourth quarter, have continued to improve in January and we expect the trend to continue as we progress through the first quarter. In addition, recent price increases for all steel mill products are expected to have a positive impact on earnings as we return to profitability in the first quarter. This positive trend in earnings is expected to continue as we head into the second quarter. We are therefore cautiously optimistic regarding first half volume, pricing and profitability. On the negative side, it appears that we will continue to experience volatile raw material costs during the first quarter. We believe end markets are experiencing some real demand improvement that will continue throughout 2011. However, the improvement in operating rates that we will see in the first quarter of 2011 will be the result of a combination of both improving demand and steel buyers reacting to increasing raw material and steel prices. It remains to be seen how much of this improvement is due to real demand. The most challenging markets for our products continue to be those associated with residential and non-residential construction. We will provide additional and more quantitative earnings guidance after the midpoint between our quarterly earnings releases.

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; (4) competitive pressure on sales and pricing, including competition from imports and substitute materials; and (5) capital investments and their impact on our performance. These and other factors are outlined in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's December 31, 2009 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 fourth quarter results on January 27, 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)


















Quarter Ended December 31,


Year Ended December 31,




2010


2009


Percentage
Change


2010


2009


Percentage
Change

Steel mills production


4,472


3,722


20%


18,258


13,998


30%

Steel mills total shipments


4,568


3,917


17%


18,573


14,036


32%















Sales tons to outside customers:














Steel mills


3,840


3,368


14%


15,821


12,075


31%


Joist


74


70


6%


276


264


5%


Deck


76


78


-3%


306


310


-1%


Cold finished


111


87


28%


462


330


40%


Fabricated concrete














reinforcing steel


230


211


9%


981


954


3%


Other


1,003


824


22%


4,173


3,643


15%




5,334


4,638


15%


22,019


17,576


25%

Unaudited figures are as follows:

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)






Quarter Ended December 31,


Year Ended December 31,










2010


2009


2010


2009









Net sales

$3,853,750


$2,937,944


$15,844,627


$11,190,296









Costs, expenses and other:








Cost of products sold

3,721,207


2,716,824


15,000,962


11,035,903

Marketing, administrative and other expenses

102,145


79,695


391,375


348,478

Equity in losses of unconsolidated affiliates

601


12,910


32,082


82,341

Impairment of non-current assets

-


2,800


-


2,800

Interest expense, net

40,297


35,705


153,093


134,752


3,864,250


2,847,934


15,577,512


11,604,274

Earnings (loss) before income taxes and








noncontrolling interests

(10,500)


90,010


267,115


(413,978)

Provision for (benefit from) income taxes

(19,387)


3,583


60,792


(176,800)

Net earnings (loss)

8,887


86,427


206,323


(237,178)

Earnings attributable to








noncontrolling interests

20,246


27,520


72,231


56,435

Net earnings (loss) attributable to








Nucor stockholders

$(11,359)


$58,907


$134,092


$(293,613)









Net earnings (loss) per share:








Basic

($0.04)


$0.19


$0.42


($0.94)

Diluted

($0.04)


$0.18


$0.42


($0.94)









Average shares outstanding:








Basic

316,329


315,274


315,962


314,873

Diluted

316,329


315,740


316,510


314,873

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands)










Dec. 31, 2010


Dec. 31, 2009

ASSETS




Current assets:





Cash and cash equivalents

$ 1,325,406


$ 2,016,981


Short-term investments

1,153,623


225,000


Accounts receivable, net

1,439,828


1,116,035


Inventories, net

1,557,574


1,312,903


Other current assets

384,744


511,329









Total current assets

5,861,175


5,182,248







Property, plant and equipment, net

3,852,118


4,013,836







Restricted cash

598,482


-







Goodwill

1,836,294


1,803,021







Other intangible assets, net

856,125


902,922







Other assets

917,716


669,877









Total assets

$ 13,921,910


$ 12,571,904







LIABILITIES




Current liabilities:





Short-term debt

$ 13,328


$ 1,748


Long-term debt due within one year

-


6,000


Accounts payable

896,703


707,038


Salaries, wages and related accruals

207,168


154,997


Accrued expenses and other current liabilities

387,239


357,274









Total current liabilities

1,504,438


1,227,057







Long-term debt due after one year

4,280,200


3,080,200







Deferred credits and other liabilities

806,578


680,358









Total liabilities

6,591,216


4,987,615







EQUITY




Nucor stockholders' equity:





Common stock

150,181


149,877


Additional paid-in capital

1,711,518


1,675,777


Retained earnings

6,795,988


7,120,218


Accumulated other comprehensive loss,






net of income taxes

(27,776)


(41,056)


Treasury stock

(1,509,841)


(1,514,290)



Total Nucor stockholders' equity

7,120,070


7,390,526







Noncontrolling interests

210,624


193,763









Total equity

7,330,694


7,584,289









Total liabilities and equity

$ 13,921,910


$ 12,571,904

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)












Year Ended December 31,












2010


2009








Operating activities:





Net earnings (loss)

$ 206,323


$ (237,178)


Adjustments:






Depreciation

512,147


494,035



Amortization

70,455


72,388



Stock-based compensation

43,041


54,665


Deferred income taxes

138,262


88,546



Equity in losses of unconsolidated affiliates

32,082


82,341



Impairment of non-current assets

-


2,800



Changes in assets and liabilities (exclusive of acquisitions):







Accounts receivable

(310,188)


141,104




Inventories

(231,913)


1,117,600




Accounts payable

186,417


170,229




Federal income taxes

180,821


(422,116)




Salaries, wages and related accruals

56,641


(419,800)




Other

(10,684)


28,580








Cash provided by operating activities

873,404


1,173,194








Investing activities:





Capital expenditures

(345,294)


(390,500)


Investment in and advances to affiliates

(434,006)


(63,563)


Repayment of advances to affiliates

83,885


-


Disposition of plant and equipment

24,944


11,371


Acquisitions (net of cash acquired)

(64,788)


(32,720)


Purchases of investments

(1,323,264)


(261,389)


Proceeds from the sale of investments

394,640


36,389


Changes in restricted cash

(598,482)


-








Cash used in investing activities

(2,262,365)


(700,412)








Financing activities:





Net change in short-term debt

11,561


(6,908)


Repayment of long-term debt

(6,000)


(180,400)


Proceeds from issuance of long-term debt, net of discount

1,198,992


-


Debt issuance costs

(4,050)


-


Issuance of common stock

4,687


3,716


Excess tax benefits from stock-based compensation

(700)


(3,100)


Distributions to noncontrolling interests

(55,380)


(190,233)


Cash dividends

(457,282)


(443,109)








Cash provided by (used in) financing activities

691,828


(820,034)








Effect of exchange rate changes on cash

5,558


9,103








Decrease in cash and cash equivalents

(691,575)


(338,149)








Cash and cash equivalents - beginning of year

2,016,981


2,355,130








Cash and cash equivalents - end of year

$ 1,325,406


$ 2,016,981

SOURCE Nucor Corporation