This excerpt taken from the STLD 8-K filed Jul 27, 2009.
Steel Dynamics Reports Second Quarter 2009 Results
FORT WAYNE, INDIANA, July 22, 2009 Steel Dynamics, Inc. (NASDAQ-GS: STLD) today announced a loss of $0.08 per diluted share for the second quarter of 2009. This was a narrower loss than was expected in mid-June due to a change in the companys estimated annual income tax rate, which reduced the second quarter net loss by $0.02 per diluted share. Net losses for the second quarter of 2009 were $16 million, compared to a net loss of $88 million, or $0.48 per diluted share, in the first quarter of 2009 and net income of $210 million, or $1.05 per diluted share, in the second quarter of 2008.
During June 2009, the company issued 31,050,000 shares of its common stock at a public offering price of $13.50 and issued $287.5 million of 5.125% convertible notes due 2014. Net proceeds of slightly more than $675 million were used to repay a term loan of $552 million and for other general purposes. During this time frame, the company also amended its senior secured credit agreement, obtaining greater financial covenant flexibility through 2010. There was no net impact to the second quarters loss per diluted share due to these transactions, as the weighted average increase in outstanding shares was offset by certain related transaction expenses of approximately $3.5 million.
Net sales for the second quarter of 2009 were $792 million, 3 percent lower than net sales of $815 million in the first quarter 2009. Compared to the second quarter of 2008, net sales were down 67 percent due to much lower volume and lower selling values for steel and recycled metals. Steel shipments for the second quarter were 886,000 tons, 45 percent below second quarter 2008 shipments of 1.6 million tons. SDIs average steel selling price for the second quarter of 2009 declined $126 per ton, to $594 from $720 per ton in the first quarter. Average scrap cost per net ton charged decreased $79 compared to the first quarter. In metals recycling, OmniSources ferrous metals shipments were 840,000 tons, down 44 percent from the second quarter of 2008, and nonferrous shipments were 170 million pounds, down 33 percent.
In the second quarter, the companys steel operations produced operating income of $36 million, with overall capacity utilization improving to approximately 50 percent, despite continued low operating rates at the long-products divisions, said Keith Busse, Chairman and CEO. The Structural and Rail Division operated at about 25 percent of current capacity. In spite of this depressed operating environment, the division achieved an operating profit for the quarter.
We are very pleased to report that OmniSource generated operating income for the quarter, with May and June results offsetting April losses. The increase in demand for ferrous and nonferrous materials, coupled with stronger material flows and a reduced cost structure, position OmniSource to continue to improve performance in the second half of 2009. We believe OmniSource will be profitable for the full year.
New Millennium Building Systems, our joist-and-deck fabricating operation, continues to face stiff headwinds as the non-residential building construction market remains very weak. This resulted in basically breakeven operations for the quarter. Joist-and-decking shipments of 35,000 tons were off 53 percent from the year-ago quarter.
During the second quarter, we experienced a slight improvement in business conditions. Order entry picked up at the Flat Roll Division and at The Techs in early May and has continued to be strong, resulting in improved backlogs. It remains unclear whether this increase in business activity will persist, or will be short-lived, as we continue to see conflicting signs in the economy. While our flat-roll steel businesses are currently operating near capacity, we have seen only marginal improvement in long products. We have yet to see signs of improvement in the construction markets.
Based on our assumptions that flat-roll demand will remain steady in the near term, recycled metals will continue to recover, and demand for long products will remain sluggish, we currently expect third quarter diluted earnings per share to be in the range of $0.10 to $0.20 for the third quarter. We will provide an update to this guidance in early September.
Steel Dynamics remains poised to ramp up quickly to meet renewed demand for steel products when it occurs. Our employees demonstrated this responsiveness in June as our flat-roll and metals recycling operations quickly ramped up output in response to increased demand. I would like to salute all of our employees for their positive attitudes, as many continue to receive smaller paychecks due to shorter workweeks and lower production bonuses. They, as in the past, continue to do an excellent job in controlling costs as we all recognize the realities of the current business environment, Busse said.
In June Steel Dynamics relocated their corporate offices to a building obtained through the acquisition of OmniSource, and at which OmniSource continues to also maintain its central offices. Telephone and email contact information for Steel Dynamics corporate office employees remains unchanged.
This excerpt taken from the STLD 8-K filed Apr 23, 2009.
Steel Dynamics Reports First Quarter 2009 Results
FORT WAYNE, INDIANA, April 22, 2009 Steel Dynamics, Inc. (NASDAQ-GS: STLD) today announced a first quarter 2009 loss of $88 million, or $0.48 per diluted share, compared to net income of $143 million in the first quarter of 2008. Net sales for the quarter were $815 million, 57 percent lower than the first quarter of 2008. Compared to the fourth quarter of 2008, net sales were down 33 percent from $1.2 billion.
The most significant component of our first quarter loss was a non-cash adjustment to raw-materials inventory values due principally to lower selling values for flat rolled steel. A charge of $83 million, or $0.27 per diluted share, related to both flat-roll and long-products steel operations, exceeded an earlier estimate of $70 million as a result of the continued weakening in steel prices during March. The company also recorded an additional amortization charge of approximately $5 million, related to the final valuation of the Recycle South acquisition. Excluding these adjustments, the first quarter loss would have been approximately $0.19 per diluted share, within the range forecast in March.
The first quarter was obviously not a strong quarter for any of our operating units, said Keith Busse, Chairman and CEO, During the first quarter our steel mills operated at 46 percent of capacity, ferrous metals recycling at about 42 percent of processing capacity, and fabricating operations at about 45 percent. Unfortunately, we have still not seen clear signs of increasing demand, as our orders remain relatively steady month-to-month at these reduced rates.
Our employees, who are now earning less because of shorter workweeks and lower production bonuses, have done an excellent job of controlling costs as we all recognize the realities of the current business environment. We continue to focus on actions to reduce costs, including options to delay capital spending and related expenses.
The valuation adjustments to our scrap inventory at the end of the first quarter, principally at the Flat Roll Division, to current market prices positions us for improved profit margins for flat-roll steel shipments in the second quarter. On the long products side, profit margins remain healthy, but could contract somewhat in the second quarter because of lower selling values. In all of our operations, the key challenge in the coming quarters will be to increase throughput.
The first quarters operating loss, inclusive of the $83-million inventory adjustment, was predominantly in steel operations. Without the inventory valuation adjustment, steel operations would have shown an operating profit of approximately $17 million, or $22 per ton shipped. The major factors impacting the quarters operational results were the continued deterioration in steel shipping volumes and the consumption of scrap valued at levels much higher than current market prices. First quarter steel shipments of 743,000 tons were 54 percent lower than first quarter 2008 shipments of 1.6 million tons, and were 21 percent lower than fourth quarter 2008 shipments of 942,000 tons. In addition, our average steel selling price declined $193 per ton, down to $720 in the first quarter from $913 in the fourth quarter of 2008.
In metals recycling, ferrous volumes continued to decline while nonferrous rebounded slightly. Ferrous shipments were 730,000 net tons, down 48 percent from the first quarter of 2008, and down 19 percent from the fourth quarter of 2008. Nonferrous shipments of 190 million pounds were down 20 percent compared to the first quarter of 2008, but they increased 7 percent from 177 million pounds in the fourth quarter of 2008.
During the first quarter, the company continued to increase its available liquidity largely through reductions in working capital and by cash generated from operations. Correspondingly, this allowed us to reduce outstanding debt obligations by $136 million. At March 31, 2009, the company had available funds of over $625 million. In light of the current economic environment, the company continuously monitors its capital investment plans, including those projects currently in process, and if necessary, will delay these projects to retain sufficient availability of cash resources.
Second quarter results should improve from the first quarter, ranging from a small profit to a small loss, Busse said. As clarity for the quarter improves, we expect to provide quantitative guidance. In the second half of 2009, we should be profitable, inclusive of and factoring in lackluster demand throughout the year.
As we have stated in the past, Steel Dynamics is poised to ramp up quickly as the economy recovers to meet renewed demand for our steel products and recycled metals, and we are poised to resume the companys profitable growth.