CHARLOTTE, N.C., July 23, 2020 /PRNewswire/ -- Nucor Corporation
(NYSE: NUE) today announced consolidated net earnings of
$108.9 million, or $0.36 per diluted share, for the second quarter
of 2020. By comparison, Nucor reported consolidated net earnings of
$20.3 million, or $0.07 per diluted share, for the first quarter of
2020 and $386.5 million, or
$1.26 per diluted share, for the
second quarter of 2019.
Included in the first quarter of 2020 results were losses on
assets of $287.8 million, or
$0.92 per diluted share, related to
our equity method investment located in Italy, Duferdofin Nucor S.r.l.
In the first half of 2020, Nucor reported consolidated net
earnings of $129.2 million, or
$0.42 per diluted share, compared
with consolidated net earnings of $888.3
million, or $2.88 per diluted
share, in the first half of 2019.
"I want to thank my teammates for their dedication and
commitment to living our culture in the uncertain environment
created by the COVID-19 pandemic during the last few months. Our
team's reliability and resilience are being recognized and
appreciated by our customers," said Leon
Topalian, Nucor's President and Chief Executive Officer.
COVID-19 Update
The COVID-19 pandemic continues to
have a significant impact on most aspects of Americans' daily lives
and has created considerable economic uncertainty. We believe
Nucor is well positioned to navigate this environment given our
diverse product mix, advantaged cost position, flexible production
capability and financial strength. Our most important value
during this time remains the health and safety of our teammates,
their families and the communities where we operate.
Financial Strength
Nucor's enterprise-wide
efforts to conserve cash and support our teammates during the
COVID-19 pandemic, as described in our first quarter earnings
release and 10-Q, have been effective. We have continued to
generate very robust operating cash flow in challenging steel
market conditions.
We were pleased to be able to further enhance our financial
flexibility with the recent issuance of $500.0 million of 2.000% notes due 2025 and
$500.0 million of 2.700% notes due
2030.
At the end of the second quarter of 2020, we had $3.04 billion in cash and cash equivalents and
short-term investments on hand. Our $1.50
billion revolving credit facility remains undrawn and does
not expire until April 2023. We continue to have the
strongest credit rating in the North American steel sector
(Baa1/A-) with stable outlooks at both Moody's and Standard &
Poor's.
Selected Segment Data
Earnings (loss) before income
taxes and noncontrolling interests by segment for the second
quarter and first half of 2020 and 2019 were as follows (in
thousands):
|
|
Three Months (13
Weeks) Ended
|
|
|
Six Months (26
Weeks) Ended
|
|
|
|
July 4,
2020
|
|
|
June 29,
2019
|
|
|
July 4,
2020
|
|
|
June 29,
2019
|
|
Steel
mills
|
|
$
|
161,453
|
|
|
$
|
578,920
|
|
|
$
|
317,959
|
|
|
$
|
1,268,318
|
|
Steel
products
|
|
|
155,826
|
|
|
|
116,084
|
|
|
|
318,385
|
|
|
|
193,517
|
|
Raw
materials
|
|
|
(1,834)
|
|
|
|
21,709
|
|
|
|
(9,745)
|
|
|
|
74,932
|
|
Corporate/eliminations
|
|
|
(134,388)
|
|
|
|
(182,091)
|
|
|
|
(299,245)
|
|
|
|
(312,529)
|
|
|
|
$
|
181,057
|
|
|
$
|
534,622
|
|
|
$
|
327,354
|
|
|
$
|
1,224,238
|
|
Financial Review
Nucor's consolidated net sales
decreased 23% to $4.33 billion in the
second quarter of 2020 compared with $5.62
billion in the first quarter of 2020 and decreased 27%
compared with $5.90 billion in the
second quarter of 2019. Average sales price per ton in the second
quarter of 2020 increased 1% compared with the first quarter of
2020 and decreased 10% compared with the second quarter of 2019. A
total of 5,479,000 tons were shipped to outside customers in the
second quarter of 2020, a 24% decrease from the first quarter of
2020 and a 19% decrease from the second quarter of 2019. Total
steel mill shipments in the second quarter of 2020 decreased 27% as
compared to the first quarter of 2020 and decreased 18% as compared
to the second quarter of 2019. Steel mill shipments to internal
customers represented 21% of total steel mill shipments in the
second quarter of 2020, compared with 20% in the first quarter of
2020 and 19% in the second quarter of 2019. Downstream steel
product shipments to outside customers in the second quarter of
2020 decreased 12% from the first quarter of 2020 and decreased 7%
from the second quarter of 2019.
In the first half of 2020, Nucor's consolidated net sales of
$9.95 billion decreased 17% compared
with consolidated net sales of $11.99
billion reported in the first half of 2019. Total tons
shipped to outside customers in the first half of 2020 were
12,666,000, a decrease of 6% from the first half of 2019, while the
average sales price per ton in the first half of 2020 decreased 12%
from the first half of 2019.
The average scrap and scrap substitute cost per gross ton used
in the second quarter of 2020 was $284, a 3% decrease compared to $293 in the first quarter of 2020 and a 14%
decrease compared to $330 in the
second quarter of 2019. The average scrap and scrap substitute cost
per gross ton used in the first half of 2020 was $289, a 15% decrease compared to $341 in the first half of 2019.
Pre-operating and start-up costs related to the Company's growth
projects were approximately $22
million, or $0.06 per diluted
share, in the second quarter of 2020, compared with approximately
$29 million, or $0.07 per diluted share, in the first quarter of
2020 and approximately $20.5 million,
or $0.05 per diluted share, in the
second quarter of 2019.
In the first half of 2020, pre-operating and start-up costs
related to the Company's growth projects were approximately
$51 million, or $0.13 per diluted share, compared with
approximately $40.1 million, or
$0.10 per diluted share, in the first
half of 2019.
Overall operating rates at the Company's steel mills decreased
to 68% in the second quarter of 2020 as compared to 89% in the
first quarter of 2020 and 84% in the second quarter of 2019.
Operating rates in the first half of 2020 decreased to 79% as
compared to 85% in the first half of 2019.
Second Quarter of 2020 Analysis
Though overall market
conditions were challenged by the COVID-19 pandemic, demand in
nonresidential construction markets was resilient during the second
quarter of 2020. The profitability of the steel products segment in
the second quarter of 2020 decreased as compared to the first
quarter of 2020, but we consider the second quarter of 2020 to be
another strong quarter for this segment. The performance of our
steel mills segment in the second quarter of 2020 decreased
compared to the first quarter of 2020 (excluding the first quarter
of 2020 impairment charge), due to the impacts of the COVID-19
pandemic. Our sheet and plate mills were the most negatively
impacted of our facilities due to weak oil and gas market activity
and customer production disruptions. The performance of our raw
materials segment in the second quarter of 2020 marginally improved
compared to the first quarter of 2020 due to better than forecasted
June performance.
Third Quarter of 2020 Outlook
The ongoing COVID-19
pandemic continues to cause uncertainty in overall market
conditions as we enter the third quarter of 2020. At this point, we
believe earnings in the third quarter of 2020 will be similar to
the second quarter of 2020. We expect another strong quarter for
our downstream products segment due to the continued resiliency of
nonresidential construction markets. The steel mills segment's
performance in the third quarter of 2020 is expected to be similar
to the second quarter of 2020. Nonresidential construction market
conditions continue to benefit our bar and structural mills, but
market conditions for our sheet and plate mills remain challenged
and average selling prices remain depressed. The performance of our
raw materials segment in the third quarter of 2020 is expected to
decrease compared to the second quarter of 2020 due to depressed
pricing for raw materials.
Cash Dividend
On June 4,
2020, Nucor's board of directors declared a cash dividend of
$0.4025 per share. This cash dividend
is payable on August 11, 2020 to
stockholders of record as of June 30,
2020 and is Nucor's 189th consecutive quarterly
cash dividend.
Earnings Conference Call
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 23, 2020 at 2:00 p.m.
eastern time. The conference call will be available over the
Internet at www.nucor.com, under Investors.
About Nucor
Nucor and its affiliates are
manufacturers of steel and steel products, with operating
facilities in the United States,
Canada and Mexico. Products produced include: carbon and
alloy steel -- in bars, beams, sheet and plate; hollow structural
section tubing; electrical conduit; steel piling; steel joists and
joist girders; steel deck; fabricated concrete reinforcing steel;
cold finished steel; precision castings; 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 hot briquetted iron / direct
reduced iron; supplies ferro-alloys; and processes ferrous and
nonferrous scrap. Nucor is North
America's largest recycler.
Forward-Looking Statements
Certain statements
contained in this news release are "forward-looking statements"
that involve risks and uncertainties. The words "anticipate,"
"believe," "expect," "project," "may," "will," "should," "could"
and similar expressions are intended to identify those
forward-looking statements. These forward-looking statements
reflect the Company's best judgment based on current information,
and although we base these statements on circumstances that we
believe to be reasonable when made, there can be no assurance that
future events will not affect the accuracy of such forward-looking
information. As such, the forward-looking statements are not
guarantees of future performance, and actual results may vary
materially from the projected results and expectations discussed in
this news release. 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 pressure from
imports and substitute materials; (2) U.S. and foreign trade
policies affecting steel imports or exports; (3) the sensitivity of
the results of our operations to prevailing steel prices and
changes in the supply and cost of raw materials, including pig
iron, iron ore and scrap steel; (4) market demand for steel
products, which, in the case of many of our products, is driven by
the level of nonresidential construction activity in the United States, as well as prevailing
domestic prices for oil and gas; (5) energy costs and availability;
and (6) the impact of the COVID-19 pandemic. These and other
factors are discussed in Nucor's regulatory filings with the
Securities and Exchange Commission, including those in "Item 1A.
Risk Factors" of Nucor's Annual Report on Form 10-K for the year
ended December 31, 2019 and in "Item
1A. Risk Factors" of Nucor's Quarterly Report on
Form 10-Q for the quarter ended April 4, 2020. 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, except as may be required by applicable law.
Tonnage
Data
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months (13
Weeks) Ended
|
|
Six Months (26
Weeks) Ended
|
|
|
July 4,
2020
|
|
June 29,
2019
|
|
Percent
Change
|
|
July 4,
2020
|
|
June 29,
2019
|
|
Percent
Change
|
Steel mills total
shipments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheet
|
|
2,002
|
|
2,612
|
|
-23%
|
|
4,876
|
|
5,256
|
|
-7%
|
Bars
|
|
1,731
|
|
2,020
|
|
-14%
|
|
3,973
|
|
4,021
|
|
-1%
|
Structural
|
|
517
|
|
556
|
|
-7%
|
|
1,201
|
|
1,120
|
|
7%
|
Plate
|
|
438
|
|
529
|
|
-17%
|
|
1,048
|
|
1,135
|
|
-8%
|
Other
|
|
81
|
|
83
|
|
-2%
|
|
169
|
|
257
|
|
-34%
|
|
|
4,769
|
|
5,800
|
|
-18%
|
|
11,267
|
|
11,789
|
|
-4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales tons to
outside customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
mills
|
|
3,758
|
|
4,682
|
|
-20%
|
|
8,940
|
|
9,454
|
|
-5%
|
Joist
|
|
122
|
|
116
|
|
5%
|
|
253
|
|
226
|
|
12%
|
Deck
|
|
111
|
|
116
|
|
-4%
|
|
236
|
|
222
|
|
6%
|
Cold
finished
|
|
75
|
|
131
|
|
-43%
|
|
201
|
|
274
|
|
-27%
|
Fabricated concrete
reinforcing steel
|
|
309
|
|
328
|
|
-6%
|
|
620
|
|
587
|
|
6%
|
Piling
|
|
156
|
|
164
|
|
-5%
|
|
336
|
|
302
|
|
11%
|
Tubular
products
|
|
249
|
|
245
|
|
2%
|
|
536
|
|
508
|
|
6%
|
Other steel
products
|
|
87
|
|
97
|
|
-10%
|
|
186
|
|
196
|
|
-5%
|
Raw
materials
|
|
612
|
|
845
|
|
-28%
|
|
1,358
|
|
1,722
|
|
-21%
|
|
|
5,479
|
|
6,724
|
|
-19%
|
|
12,666
|
|
13,491
|
|
-6%
|
Condensed
Consolidated Statements of Earnings (Unaudited)
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months (13
Weeks) Ended
|
|
|
Six Months (26
Weeks) Ended
|
|
|
|
July 4,
2020
|
|
|
June 29,
2019
|
|
|
July 4,
2020
|
|
|
June 29,
2019
|
|
Net
sales
|
|
$
|
4,327,306
|
|
|
$
|
5,895,986
|
|
|
$
|
9,951,643
|
|
|
$
|
11,992,610
|
|
Costs, expenses
and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
|
|
3,949,347
|
|
|
|
5,120,492
|
|
|
|
8,944,416
|
|
|
|
10,321,224
|
|
Marketing,
administrative and other expenses
|
|
|
142,017
|
|
|
|
208,980
|
|
|
|
295,409
|
|
|
|
389,719
|
|
Equity in losses
(earnings) of unconsolidated affiliates
|
|
|
14,078
|
|
|
|
(1,138)
|
|
|
|
14,901
|
|
|
|
(4,044)
|
|
Losses on
assets
|
|
|
5,000
|
|
|
|
-
|
|
|
|
292,846
|
|
|
|
-
|
|
Interest expense,
net
|
|
|
35,807
|
|
|
|
33,030
|
|
|
|
76,717
|
|
|
|
61,473
|
|
|
|
|
4,146,249
|
|
|
|
5,361,364
|
|
|
|
9,624,289
|
|
|
|
10,768,372
|
|
Earnings before
income taxes and noncontrolling interests
|
|
|
181,057
|
|
|
|
534,622
|
|
|
|
327,354
|
|
|
|
1,224,238
|
|
Provision for
income taxes
|
|
|
47,904
|
|
|
|
122,345
|
|
|
|
139,822
|
|
|
|
281,168
|
|
Net
earnings
|
|
|
133,153
|
|
|
|
412,277
|
|
|
|
187,532
|
|
|
|
943,070
|
|
Earnings
attributable to noncontrolling interests
|
|
|
24,272
|
|
|
|
25,794
|
|
|
|
58,320
|
|
|
|
54,781
|
|
Net earnings
attributable to Nucor stockholders
|
|
$
|
108,881
|
|
|
$
|
386,483
|
|
|
$
|
129,212
|
|
|
$
|
888,289
|
|
Net earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.36
|
|
|
$
|
1.26
|
|
|
$
|
0.42
|
|
|
$
|
2.89
|
|
Diluted
|
|
$
|
0.36
|
|
|
$
|
1.26
|
|
|
$
|
0.42
|
|
|
$
|
2.88
|
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
302,921
|
|
|
|
305,461
|
|
|
|
302,915
|
|
|
|
306,017
|
|
Diluted
|
|
|
302,933
|
|
|
|
305,952
|
|
|
|
302,932
|
|
|
|
306,559
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
July 4,
2020
|
|
|
Dec. 31,
2019
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,789,189
|
|
|
$
|
1,534,605
|
|
Short-term
investments
|
|
|
247,473
|
|
|
|
300,040
|
|
Accounts
receivable, net
|
|
|
1,888,929
|
|
|
|
2,160,102
|
|
Inventories,
net
|
|
|
3,373,258
|
|
|
|
3,842,095
|
|
Other current
assets
|
|
|
336,115
|
|
|
|
389,528
|
|
Total current
assets
|
|
|
8,634,964
|
|
|
|
8,226,370
|
|
Property, plant
and equipment, net
|
|
|
6,556,451
|
|
|
|
6,178,555
|
|
Goodwill
|
|
|
2,190,144
|
|
|
|
2,201,063
|
|
Other intangible
assets, net
|
|
|
698,437
|
|
|
|
742,186
|
|
Other
assets
|
|
|
685,969
|
|
|
|
996,492
|
|
Total
assets
|
|
$
|
18,765,965
|
|
|
$
|
18,344,666
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Short-term
debt
|
|
$
|
64,652
|
|
|
$
|
62,444
|
|
Current portion of
long-term debt and finance lease obligations
|
|
|
29,521
|
|
|
|
29,264
|
|
Accounts
payable
|
|
|
902,071
|
|
|
|
1,201,698
|
|
Salaries, wages and
related accruals
|
|
|
359,160
|
|
|
|
510,844
|
|
Accrued expenses
and other current liabilities
|
|
|
609,634
|
|
|
|
659,524
|
|
Total current
liabilities
|
|
|
1,965,038
|
|
|
|
2,463,774
|
|
Long-term debt and
finance lease obligations due after one year
|
|
|
5,279,103
|
|
|
|
4,291,301
|
|
Deferred credits
and other liabilities
|
|
|
898,339
|
|
|
|
798,415
|
|
Total
liabilities
|
|
|
8,142,480
|
|
|
|
7,553,490
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Nucor
stockholders' equity:
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
152,061
|
|
|
|
152,061
|
|
Additional paid-in
capital
|
|
|
2,106,907
|
|
|
|
2,107,646
|
|
Retained
earnings
|
|
|
10,998,533
|
|
|
|
11,115,056
|
|
Accumulated other
comprehensive loss,
net of income taxes
|
|
|
(340,836)
|
|
|
|
(302,966)
|
|
Treasury
stock
|
|
|
(2,721,845)
|
|
|
|
(2,713,931)
|
|
Total Nucor
stockholders' equity
|
|
|
10,194,820
|
|
|
|
10,357,866
|
|
Noncontrolling
interests
|
|
|
428,665
|
|
|
|
433,310
|
|
Total
equity
|
|
|
10,623,485
|
|
|
|
10,791,176
|
|
Total liabilities
and equity
|
|
$
|
18,765,965
|
|
|
$
|
18,344,666
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months (26
Weeks) Ended
|
|
|
|
July 4,
2020
|
|
|
June 29,
2019
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
187,532
|
|
|
$
|
943,070
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
349,691
|
|
|
|
321,979
|
|
Amortization
|
|
|
42,165
|
|
|
|
42,748
|
|
Stock-based
compensation
|
|
|
39,101
|
|
|
|
61,260
|
|
Deferred income
taxes
|
|
|
90,515
|
|
|
|
57,052
|
|
Distributions from
affiliates
|
|
|
2,000
|
|
|
|
27,405
|
|
Equity in losses
(earnings) of unconsolidated affiliates
|
|
|
14,901
|
|
|
|
(4,044)
|
|
Losses on
assets
|
|
|
292,846
|
|
|
|
-
|
|
Changes in assets
and liabilities (exclusive of acquisitions and
dispositions):
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
264,424
|
|
|
|
112,015
|
|
Inventories
|
|
|
464,004
|
|
|
|
281,119
|
|
Accounts
payable
|
|
|
(272,910)
|
|
|
|
(248,671)
|
|
Federal income
taxes
|
|
|
26,145
|
|
|
|
(122,358)
|
|
Salaries, wages and
related accruals
|
|
|
(142,388)
|
|
|
|
(220,946)
|
|
Other operating
activities
|
|
|
(8,058)
|
|
|
|
(62,774)
|
|
Cash provided by
operating activities
|
|
|
1,349,968
|
|
|
|
1,187,855
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(777,317)
|
|
|
|
(649,947)
|
|
Investment in and
advances to affiliates
|
|
|
(9,756)
|
|
|
|
(11,170)
|
|
Divestiture of
affiliates
|
|
|
-
|
|
|
|
67,591
|
|
Disposition of
plant and equipment
|
|
|
17,652
|
|
|
|
18,396
|
|
Acquisitions (net
of cash acquired)
|
|
|
794
|
|
|
|
(9,495)
|
|
Purchase of
investments
|
|
|
(222,500)
|
|
|
|
(50,000)
|
|
Proceeds from the
sale of investments
|
|
|
275,067
|
|
|
|
-
|
|
Other investing
activities
|
|
|
1,132
|
|
|
|
2,176
|
|
Cash used in
investing activities
|
|
|
(714,928)
|
|
|
|
(632,449)
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Net change in
short-term debt
|
|
|
2,208
|
|
|
|
2,217
|
|
Proceeds from
long-term debt, net of discount
|
|
|
1,074,995
|
|
|
|
-
|
|
Repayment of
long-term debt
|
|
|
(77,150)
|
|
|
|
-
|
|
Bond issuance
related costs
|
|
|
(6,250)
|
|
|
|
-
|
|
Issuance of common
stock
|
|
|
-
|
|
|
|
5,892
|
|
Payment of tax
withholdings on certain stock-based compensation
|
|
|
(17,263)
|
|
|
|
(15,446)
|
|
Distributions to
noncontrolling interests
|
|
|
(62,965)
|
|
|
|
(67,380)
|
|
Cash
dividends
|
|
|
(245,619)
|
|
|
|
(246,474)
|
|
Acquisition of
treasury stock
|
|
|
(39,499)
|
|
|
|
(197,511)
|
|
Other financing
activities
|
|
|
(4,645)
|
|
|
|
(4,346)
|
|
Cash provided by
(used in) financing activities
|
|
|
623,812
|
|
|
|
(523,048)
|
|
Effect of exchange
rate changes on cash
|
|
|
(4,268)
|
|
|
|
548
|
|
Increase in cash
and cash equivalents
|
|
|
1,254,584
|
|
|
|
32,906
|
|
Cash and cash
equivalents - beginning of year
|
|
|
1,534,605
|
|
|
|
1,398,886
|
|
Cash and cash
equivalents - end of six months
|
|
$
|
2,789,189
|
|
|
$
|
1,431,792
|
|
Non-cash investing
activity:
|
|
|
|
|
|
|
|
|
Change in accrued
plant and equipment purchases
|
|
$
|
(25,897)
|
|
|
$
|
39,862
|
|
View original
content:http://www.prnewswire.com/news-releases/nucor-reports-results-for-second-quarter-of-2020-301098542.html
SOURCE Nucor Corporation