Nucor Reports Stronger Results for First Quarter of 2011

CHARLOTTE, N.C., April 21, 2011 /PRNewswire via COMTEX/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $159.8 million, or $0.50 per diluted share, for the first quarter of 2011, an increase of 416% over earnings of $31.0 million, or $0.10 per diluted share, in the first quarter of 2010. Nucor reported a net loss of $11.4 million, or $0.04 per diluted share, in the fourth quarter of 2010. Diluted earnings per share of $0.50 for the first quarter are greater than our guidance range of $0.30 to $0.35 per share due to March earnings in the steel mills segment exceeding expectations.

Nucor incurred a charge to value inventories using the last-in, first-out (LIFO) method of accounting of $31.0 million ($0.06 per diluted share) in the first quarter of 2011, compared with a charge of $24.0 million ($0.05 per diluted share) in the first quarter of 2010 and a charge of $23.0 million ($0.04 per diluted share) in the fourth quarter of 2010.

Pre-operating and start-up costs of new facilities were $27.9 million in the first quarter, compared with $50.5 million in the first quarter of 2010 and $39.0 million in the fourth quarter of 2010. In 2011, these costs related to several projects, the largest of which was the galvanizing line in Decatur, Alabama. 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 32% to $4.83 billion compared with $3.65 billion in the first quarter of 2010 due to a 22% increase in average sales price per ton and a 9% increase in total tons shipped to outside customers. Consolidated net sales increased 25% compared with $3.85 billion in the fourth quarter of 2010 due to a 12% increase in both total tons shipped to outside customers and in average sales price per ton.

The average scrap and scrap substitute cost per ton used during the first quarter of 2011 was $424, an increase of 33% compared to $318 in the first quarter of 2010 and an increase of 18% over $359 in the fourth quarter of 2010.

Overall operating rates at our steel mills increased to approximately 80% in the first quarter of 2011, compared to 73% in the first quarter of 2010 and 68% in the fourth quarter of 2010. As a result of this increased utilization, total energy costs decreased approximately $1 per ton from the first quarter of 2010. Total energy costs per ton were unchanged from the fourth quarter of 2010.

In January, Nucor received an air quality permit from the Louisiana Department of Environmental Quality for the direct reduced iron ("DRI") making facility that will be located in St. James Parish, Louisiana. The permit allows for the construction and operation of two plants with a combined annual DRI production of 5,500,000 tons. Nucor broke ground on a 2,500,000-ton DRI facility in March. In addition to a second DRI facility, future plans for the Louisiana site may include a coke plant, blast furnace, pellet plant and steel mill.

Our liquidity position remains strong with $2.3 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 addition, we have $576.5 million in restricted cash related to proceeds received from the November 2010 issuance of Gulf Opportunity Zone Bonds that will be used to partially fund the capital costs associated with the DRI facility in Louisiana.

In February, Nucor's board declared a cash dividend of $0.3625 per share payable on May 11, 2011 to stockholders of record on March 31, 2011. This dividend is Nucor's 152nd consecutive quarterly cash dividend, a record we expect to continue.

Profitability improved significantly as we progressed through the quarter, as utilization rates increased and as price increases for steel mill products caught up with higher raw material costs. Although we are seeing some signs of market weakness that may impact results near the end of the second quarter, we expect second quarter results to be an improvement over the first quarter. We continue to see slow, steady improvement in real demand in certain end markets. This is most evident in products sold to the manufacturing/industrial sector, including special bar quality products, sheet and plate. We are keeping a watchful eye on imports as any measurable increase in import levels will be a threat to current market stability, particularly in the sheet markets. The most challenging markets for our products continue to be those associated with residential and non-residential construction. 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 first quarter results on April 21, 2011 at 2:00 p.m. eastern time. The conference call will be available over the Internet at http://www.nucor.com/, under Investor Relations.

TONNAGE DATA

(in thousands)










Three Months (13 Weeks) Ended



April 2, 2011


April 3, 2010


Percentage
Change

Steel mills production

5,219


4,712


11%

Steel mills total shipments

5,200


4,706


10%








Sales tons to outside customers:







Steel mills

4,418


4,066


9%


Joist

67


59


14%


Deck

72


68


6%


Cold finished

134


111


21%


Fabricated concrete







reinforcing steel

221


194


14%


Other

1,066


999


7%



5,978


5,497


9%

Unaudited figures are as follows:

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)






Three Months (13 Weeks) Ended






April 2, 2011


April 3, 2010





Net sales

$ 4,833,934


$ 3,654,842





Costs, expenses and other:




Cost of products sold

4,395,525


3,442,047

Marketing, administrative and other expenses

125,378


92,594

Equity in losses of unconsolidated affiliates

4,210


18,377

Interest expense, net

42,566


37,788


4,567,679


3,590,806

Earnings before income taxes and




noncontrolling interests

266,255


64,036

Provision for income taxes

85,133


22,842

Net earnings

181,122


41,194

Earnings attributable to




noncontrolling interests

21,281


10,230

Net earnings attributable to




Nucor stockholders

$ 159,841


$ 30,964





Net earnings per share:




Basic

$0.50


$0.10

Diluted

$0.50


$0.10





Average shares outstanding:




Basic

316,595


315,461

Diluted

316,874


316,228

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands)












April 2, 2011


Dec. 31, 2010

ASSETS





Current assets:





Cash and cash equivalents

$ 1,152,944


$ 1,325,406


Short-term investments

1,143,073


1,153,623


Accounts receivable, net

1,704,789


1,439,828


Inventories, net

1,959,170


1,557,574


Other current assets

335,634


384,744










Total current assets

6,295,610


5,861,175








Property, plant and equipment, net

3,831,613


3,852,118








Restricted cash

576,546


598,482








Goodwill


1,847,994


1,836,294








Other intangible assets, net

844,994


856,125








Other assets

947,689


917,716










Total assets

$ 14,344,446


$ 13,921,910








LIABILITIES




Current liabilities:





Short-term debt

$ 16,965


$ 13,328


Accounts payable

1,114,256


896,703


Federal income taxes payable

24,489


-


Salaries, wages and related accruals

222,085


207,168


Accrued expenses and other current liabilities

409,831


387,239










Total current liabilities

1,787,626


1,504,438








Long-term debt due after one year

4,280,200


4,280,200








Deferred credits and other liabilities

823,029


806,578










Total liabilities

6,890,855


6,591,216








EQUITY





Nucor stockholders' equity:





Common stock

150,240


150,181


Additional paid-in capital

1,723,060


1,711,518


Retained earnings

6,840,502


6,795,988


Accumulated other comprehensive income (loss),






net of income taxes

44,319


(27,776)


Treasury stock

(1,506,747)


(1,509,841)



Total Nucor stockholders' equity

7,251,374


7,120,070








Noncontrolling interests

202,217


210,624










Total equity

7,453,591


7,330,694










Total liabilities and equity

$ 14,344,446


$ 13,921,910

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)












Three Months (13 Weeks) Ended












April 2, 2011


April 3, 2010








Operating activities:





Net earnings

$ 181,122


$ 41,194


Adjustments:






Depreciation

127,229


127,883



Amortization

17,437


18,221



Stock-based compensation

9,508


10,396



Deferred income taxes

4,311


2,443



Equity in losses of unconsolidated affiliates

4,210


18,377



Changes in assets and liabilities (exclusive of acquisitions):







Accounts receivable

(259,773)


(179,297)




Inventories

(397,537)


(303,001)




Accounts payable

216,308


232,877




Federal income taxes

76,060


17,566




Salaries, wages and related accruals

17,421


35,747




Other

51,199


(25,443)








Cash provided by (used in) operating activities

47,495


(3,037)








Investing activities:





Capital expenditures

(96,036)


(54,216)


Investment in and advances to affiliates

(24,475)


(80,461)


Repayment of advances to affiliates

-


48,884


Disposition of plant and equipment

3,985


3,046


Acquisitions (net of cash acquired)

-


(55,694)


Purchases of investments

(140,454)


(240,495)


Proceeds from the sale of investments

151,005


125,000


Changes in restricted cash

21,949


-








Cash used in investing activities

(84,026)


(253,936)








Financing activities:





Net change in short-term debt (exclusive of acquisitions)

3,594


7,312


Issuance of common stock

2,658


1,462


Excess tax benefits from stock-based compensation

(300)


500


Distributions to noncontrolling interests

(29,694)


(294)


Cash dividends

(115,233)


(114,193)








Cash used in financing activities

(138,975)


(105,213)








Effect of exchange rate changes on cash

3,044


4,794








Decrease in cash and cash equivalents

(172,462)


(357,392)








Cash and cash equivalents - beginning of year

1,325,406


2,016,981








Cash and cash equivalents - end of three months

$ 1,152,944


$ 1,659,589

SOURCE Nucor Corporation