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Nucor Reports Results For Second Quarter And First Half Of 2014

July 24, 2014

CHARLOTTE, N.C., July 24, 2014 /PRNewswire/ — Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $147.0 million, or $0.46 per diluted share, for the second quarter of 2014. By comparison, Nucor reported net earnings of $111.0 million, or $0.35 per diluted share, in the first quarter of 2014 and net earnings of $85.1 million, or $0.27 per diluted share, in the second quarter of 2013. Second quarter of 2014 diluted net earnings per share of $0.46 was above our guidance range of $0.35 to $0.40 per diluted share due to better than forecasted performance in the steel mills segment.

In the first half of 2014, Nucor reported consolidated net earnings of $258.1 million, or $0.80 per diluted share, compared with consolidated net earnings of $169.9 million, or $0.53 per diluted share, in the first half of last year.

Nucor’s results include no charge to value inventories using the last-in, first-out (LIFO) method of accounting in the second quarter of 2014, compared with a charge of $14.5 million ($0.03 per diluted share) recorded in the first quarter of 2014 and no charge in the second quarter of 2013. As a result, the LIFO charge in the first half of 2014 was $14.5 million ($0.03 per diluted share), compared with a charge of $18.0 million ($0.03 per diluted share) in the first half of 2013. The second quarter of 2014 included $20.3 million ($0.04 per diluted share) of higher employee stock-based compensation expense than the first quarter of 2014 and was comparable to the second quarter of 2013 due to the timing of annual grants that are typically authorized in June of each year. Included in the first quarter of 2014 earnings was a $12.8 million ($0.04 per diluted share) charge primarily related to tax legislation changes in the state of New York. Also included in first quarter results was a $9.0 million charge ($0.02 per diluted share) related to the disposal of assets within the steel mills segment.

Nucor’s consolidated net sales increased 4% to $5.29 billion in the second quarter of 2014 compared with $5.11 billion in the first quarter of 2014 and increased 13% compared with $4.67 billion in the second quarter of 2013. Average sales price per ton increased 1% over the first quarter of 2014 and increased 4% over the second quarter of 2013. Total tons shipped to outside customers were 6,370,000 tons in the second quarter of 2014, a 3% increase over the first quarter of 2014 and an increase of 9% over the second quarter of 2013. Total second quarter steel mill shipments increased 1% over the first quarter of 2014 and 9% over the second quarter of 2013. Second quarter downstream steel products shipments to outside customers increased 17% over the first quarter of 2014 and increased 11% over the second quarter of 2013.

In the first half of 2014, Nucor’s consolidated net sales increased 13% to $10.40 billion, compared with $9.22 billion in last year’s first half. Total tons shipped to outside customers increased 9% from the first half of 2013, while average sales price per ton increased 4%.

The average scrap and scrap substitute cost per ton used in the second quarter of 2014 was $384, a 4% decrease from $398 in the first quarter of 2014 and an increase of 2% over $377 in the second quarter of 2013. The average scrap and scrap substitute cost per ton used in the first half of 2014 was $391, an increase of 3% over $378 in the first half of 2013.

Overall operating rates at our steel mills increased to 79% in the second quarter of 2014 as compared with 75% in the first quarter of 2014 and 73% in the second quarter of 2013. Steel mill utilization increased to 77% in the first half of 2014 from 73% in the first half of 2013.

Total steel mill energy costs in the second quarter of 2014 decreased approximately $3 per ton compared with the first quarter of 2014 and increased $1 per ton over the second quarter of 2013. Energy costs for the first half of 2014 increased $3 per ton over the first half of 2013 due to increased natural gas and electricity unit costs.

Our liquidity position remains strong with $1.17 billion in cash and cash equivalents and short-term investments and an untapped $1.5 billion revolving credit facility that does not expire until August 2018.

In June, Nucor’s board of directors declared a cash dividend of $0.37 per share payable on August 11, 2014 to stockholders of record on June 30, 2014. This dividend is Nucor’s 165(th) consecutive quarterly cash dividend, a record we expect to continue.

Second quarter of 2014 earnings increased compared with the first quarter of 2014 due in large part to improved performance by the steel mills segment, particularly at our sheet and bar mills. Sheet steel profitability improved because of higher sales volumes and margin improvement due to continued strong demand and supply disruptions at some of our competitors. Our bar mills also benefited from higher sales volumes and margin improvement. Nucor-Yamato Steel underwent a planned three week outage in the second quarter which contributed to decreased volumes for structural steel. The improved results of the steel mills segment were achieved despite imports being at levels not seen since 2006. Our fabricated construction products businesses (rebar fabrication, joist and decking and pre-engineered metal buildings) returned to solid profitability in the second quarter of 2014, reflecting improving conditions in the nonresidential construction markets.

The performance of our raw materials segment decreased in the second quarter of 2014 compared with the first quarter of 2014 due to an operating loss at our new direct reduced iron (DRI) plant in St. James Parish, Louisiana, which was consistent with our guidance. The Louisiana DRI plant underwent a three week outage in the second quarter to implement adjustments that will improve yield and conversion costs. The Louisiana DRI plant has continued to exceed our volume expectations while producing excellent quality DRI units. Also within the raw materials segment, The David J. Joseph Company experienced decreased profitability in the second quarter of 2014 compared to the first quarter of 2014 due to lower scrap selling prices.

We currently expect to see a stronger improvement in earnings for the third quarter of 2014. Although non-residential construction markets remain at historically low levels, they are improving at a moderate pace. We therefore expect further increased operating profits in our downstream products businesses. Steel mill profitability is also expected to improve in the third quarter of 2014 as our Nucor-Yamato Steel division has no planned outage and sheet and plate margins continue to benefit from positive pricing trends. We also expect improvement in the performance of the Louisiana DRI facility in the third quarter, with profitable performance anticipated by the end of the year.

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 piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; 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 discussed in Nucor’s regulatory filings with the Securities and Exchange Commission, including those in Nucor’s December 31, 2013 Annual Report on Form 10-K, Item 1A. Risk Factors. 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 24, 2014 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 5, 2014                  June 29, 2013                   Percentage       July 5, 2014                  June 29, 2013          Percentage

                                                                                                                         Change                                                                Change
                                                                                                                         ------                                                                ------

    Steel mills production                                                  5,324                             4,892               9%                        10,518                   9,710              8%

    Steel mills total shipments                                             5,477                             5,025               9%                        10,909                  10,100              8%

    Sales tons to outside customers:

                                     Steel mills                               4,646                             4,274               9%                         9,246                   8,608              7%

                                     Joist                                        97                                91               7%                           189                     162             17%

                                     Deck                                        101                                83              22%                           188                     152             24%

                                     Cold finished                               133                               124               7%                           271                     246             10%

                                     Fabricated concrete

                                     reinforcing steel                           321                               280              15%                           560                     508             10%

                                     Other                                     1,072                               987               9%                         2,105                   1,869             13%

                                                                             6,370                             5,839               9%                        12,559                  11,545              9%
                                                                             =====                             =====                                         ======                  ======

                                                         CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
                                                          --------------------------------------------------------

                                                                   (In thousands, except per share data)

                                                    Three Months (13 Weeks) Ended                           Six Months (26 Weeks) Ended
                                                   -----------------------------                           ---------------------------

                                                           July 5, 2014                                           June 29, 2013               July 5, 2014             June 29, 2013
                                                           ------------                                           -------------               ------------             -------------

    Net sales                                                              $5,291,075                                              $4,665,588              $10,399,519               $9,216,360
                                                                           ----------                                              ----------              -----------               ----------

    Costs, expenses and other:

      Cost of products sold                                                 4,875,208                                               4,352,463                9,606,450                8,600,019

      Marketing, administrative and other expenses                            132,813                                                 123,150                  266,247                  239,375

      Equity in earnings of

    unconsolidated affiliates                                                 (3,202)                                                (1,585)                 (7,676)                   (413)

      Interest expense, net                                                    44,391                                                  39,228                   85,132                   71,719
                                                                               ------                                                  ------                   ------                   ------

                                                                            5,049,210                                               4,513,256                9,950,153                8,910,700
                                                                            ---------                                               ---------                ---------                ---------

    Earnings before income taxes and

    noncontrolling interests                                                  241,865                                                 152,332                  449,366                  305,660

    Provision for income taxes                                                 74,930                                                  46,062                  152,735                   88,662
                                                                               ------                                                  ------                  -------                   ------

    Net earnings                                                              166,935                                                 106,270                  296,631                  216,998

    Earnings attributable to

    noncontrolling interests                                                   19,894                                                  21,125                   38,559                   47,064
                                                                               ------                                                  ------                   ------                   ------

    Net earnings attributable to

    Nucor stockholders                                                       $147,041                                                 $85,145                 $258,072                 $169,934
                                                                             ========                                                 =======                 ========                 ========

    Net earnings per share:

      Basic                                                                     $0.46                                                   $0.27                    $0.80                    $0.53

      Diluted                                                                   $0.46                                                   $0.27                    $0.80                    $0.53

    Average shares outstanding:

      Basic                                                                   319,693                                                 318,903                  319,597                  318,796

      Diluted                                                                 319,981                                                 319,023                  319,872                  318,934

                                                   CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
                                                   ------------------------------------------------

                                                                    (In thousands)

                                                                                             July 5, 2014                     Dec. 31, 2013
                                                                                             ------------                     -------------

     ASSETS

     Current assets:

                              Cash and cash
                               equivalents                          $1,067,561                                     $1,483,252

                              Short-term
                               investments                             100,000                                         28,191

                              Accounts receivable,
                               net                                   2,071,439                                      1,810,987

                              Inventories, net                       2,738,658                                      2,605,609

                              Other current assets                     517,132                                        482,007

                              Total current
                               assets                                6,494,790                                      6,410,046

     Property, plant and equipment, net                                                                4,971,813                         4,917,024

     Goodwill                                                                                           1,971,452                         1,973,608

     Other intangible assets, net                                                                        842,445                           874,154

     Other assets                                                                                      1,030,388                         1,028,451
                                                                                                       ---------                         ---------

                              Total assets                         $15,310,888                                    $15,203,283
                                                                   ===========                                    ===========

     LIABILITIES

     Current liabilities:

                              Short-term debt                          $42,414                                        $29,202

                              Long-term debt due
                               within one year                          11,300                                          3,300

                              Accounts payable                       1,124,077                                      1,117,078

                              Salaries, wages and
                               related accruals                        276,660                                        282,860

                              Accrued expenses and
                               other current
                               liabilities                             562,775                                        527,776

                              Total current
                               liabilities                           2,017,226                                      1,960,216

     Long-term debt due after one year                                                                 4,368,900                         4,376,900

     Deferred credits and other liabilities                                                              978,749                           955,889
                                                                                                         -------                           -------

                              Total
                               liabilities                           7,364,875                                      7,293,005
                                                                     ---------                                      ---------

     EQUITY

     Nucor stockholders' equity:

                              Common stock                             151,172                                        151,010

                              Additional paid-in
                               capital                               1,867,948                                      1,843,353

                              Retained earnings                      7,160,952                                      7,140,440

                              Accumulated other
                               comprehensive
                               (loss) income,

                              net of income
                               taxes                                   (3,952)                                         9,080

                              Treasury stock                       (1,495,298)                                    (1,498,114)

                              Total Nucor
                               stockholders'
                               equity                                7,680,822                                      7,645,769

     Noncontrolling interests                                                                            265,191                           264,509
                                                                                                         -------                           -------

                              Total equity                           7,946,013                                      7,910,278
                                                                     ---------                                      ---------

                              Total
                               liabilities
                               and equity                          $15,310,888                                    $15,203,283
                                                                   ===========                                    ===========
                                                       CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                                                       ----------------------------------------------------------

                                                                             (In thousands)

                                                                                                          Six Months (26 Weeks) Ended
                                                                                                          ---------------------------

                                                                                                                 July 5, 2014                        June 29, 2013
                                                                                                                 ------------                        -------------

    Operating activities:

                         Net earnings                                                       $296,631                                        $216,998

                         Adjustments:

                         Depreciation                                                        326,429                                         258,390

                         Amortization                                                         36,265                                          37,575

                          Stock-based
                          compensation                                33,752                   34,043

                          Deferred income
                          taxes                                                  (5,121)                                         12,304

                          Distributions from
                          affiliates                                  11,504                    7,708

                          Equity in earnings
                          of unconsolidated
                          affiliates                                 (7,676)                   (413)

                         Loss on assets                                            9,046                                               -

                          Changes in assets
                          and liabilities
                          (exclusive of

                              acquisitions and
                               dispositions):

                                                    Accounts
                                                    receivable                             (249,196)                                        (70,785)

                                                   Inventories                             (130,463)                                          36,087

                                                    Accounts
                                                    payable                                   90,460                                        (44,724)

                                                    Federal
                                                    income taxes                              14,100                                           3,709

                                                    Salaries, wages
                                                    and related
                                                    accruals                     (1,672)                                       (35,332)

                                                   Other                                                                         19,270                              29,414
                                                                                                                                 ------                              ------

    Cash provided by operating activities                                                                                  443,329                             484,974
                                                                                                                           -------                             -------

    Investing activities:

                         Capital expenditures                                  (446,798)                                       (621,306)

                          Investment in and
                          advances to affiliates                    (68,491)                (43,485)

                          Repayment of advances to
                          affiliates                                  15,000                   30,500

                          Disposition of plant and
                          equipment                                   12,858                   10,145

                          Acquisitions (net of
                          cash acquired)                            (38,466)                       -

                          Purchases of
                          investments                                          (100,000)                                        (19,390)

                          Proceeds from the sale
                          of investments                              27,529                   73,428

                          Proceeds from the sale
                          of restricted
                          investments                                      -                 148,725

                          Changes in restricted
                          cash                                                                   -                                         55,355

    Cash used in investing activities                                                                                    (598,368)                          (366,028)
                                                                                                                          --------                            --------

    Financing activities:

                          Net change in short-
                          term debt                                               13,212                                           1,796

                          Repayment of long-
                          term debt                                                              -                                      (250,000)

                          Excess tax benefits from
                          stock-based
                          compensation                                 2,700                    1,700

                          Distributions to
                          noncontrolling
                          interests                                 (37,877)                (57,266)

                         Cash dividends                                                    (237,369)                                       (235,280)

                          Other financing
                          activities                                             (1,123)                                            109

    Cash used in financing activities                                                                                    (260,457)                          (538,941)
                                                                                                                          --------                            --------

    Effect of exchange rate changes on cash                                                                                  (195)                            (2,400)
                                                                                                                              ----                              ------

    Decrease in cash and cash equivalents                                                                                (415,691)                          (422,395)

    Cash and cash equivalents - beginning of year                                                                        1,483,252                           1,052,862
                                                                                                                         ---------                           ---------

    Cash and cash equivalents - end of six months                                                                       $1,067,561                            $630,467
                                                                                                                        ==========                            ========

    Non-cash investing activity:

                          Change in accrued plant
                          and equipment purchases                  $(96,023)               $(20,537)
                                                                 =========

SOURCE Nucor Corporation


Source: PR Newswire



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