PR Newswire | Apr 22, 2021 08:01AM EDT

04/22 07:00 CDT

Nucor Reports Record Quarterly Earnings for the First Quarter of 2021 CHARLOTTE, N.C., April 22, 2021

CHARLOTTE, N.C., April 22, 2021 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) today announced record quarterly consolidated net earnings of $942.4 million, or $3.10 per diluted share, for the first quarter of 2021. By comparison, Nucor reported consolidated net earnings of $398.8 million, or $1.30 per diluted share, for the fourth quarter of 2020 and $20.3 million, or $0.07 per diluted share, for the first quarter of 2020.

"The first quarter of 2021 was the most profitable quarter in our Company's history. We are clearly reaping the rewards from our prior investments and the more strategic approaches we are taking to our key end-use markets," said Leon Topalian, Nucor's President and Chief Executive Officer. "It is gratifying to see such strong performance across all of Nucor."

Mr. Topalian continued, "We expect earnings for the second quarter of 2021 to exceed our first quarter results, setting a new record for quarterly earnings. Most of the end-use markets we serve remain strong and inventories remain lean across supply chains. We believe the current favorable demand environment will continue through the rest of 2021. I want to thank our customers for allowing us the opportunity to earn your business and the more than 26,000 Nucor teammates whose dedication makes extraordinary results like these possible."

Selected Segment DataEarnings (loss) before income taxes and noncontrolling interests by segment for the first quarter of 2021 and 2020 were as follows (in thousands):

Three Months (13 Weeks) Ended

April 3, 2021 April 4, 2020

Steel mills $ 1,314,974 $ 156,506

Steel products 211,812 162,559

Raw materials 223,235 (7,911)

Corporate/eliminations (451,775) (164,857)

$ 1,298,246 $ 146,297

Financial ReviewNucor's consolidated net sales increased 33% to $7.02 billion in the first quarter of 2021 compared with $5.26 billion in the fourth quarter of 2020 and increased 25% compared with $5.62 billion in the first quarter of 2020. Average sales price per ton in the first quarter of 2021 increased 21% compared with the fourth quarter of 2020 and increased 25% compared with the first quarter of 2020. A total of 7,176,000 tons were shipped to outside customers in the first quarter of 2021, an 11% increase from the fourth quarter of 2020 and a slight decrease from the first quarter of 2020. Total steel mill shipments in the first quarter of 2021 increased 13% as compared to the fourth quarter of 2020 and increased 1% as compared to the first quarter of 2020. Steel mill shipments to internal customers represented 21% of total steel mill shipments in the first quarter of 2021, compared with 19% in the fourth quarter of 2020 and 20% in the first quarter of 2020. Downstream steel product shipments to outside customers in the first quarter of 2021 increased 4% from the fourth quarter of 2020 and decreased 4% from the first quarter of 2020.

The average scrap and scrap substitute cost per gross ton used in the first quarter of 2021 was $405, a 33% increase compared to $305 in the fourth quarter of 2020 and a 38% increase compared to $293 in the first quarter of 2020.

Pre-operating and start-up costs related to the Company's growth projects were approximately $19 million, or $0.05 per diluted share, in the first quarter of 2021, compared with approximately $28 million, or $0.07 per diluted share, in the fourth quarter of 2020 and approximately $29 million, or $0.07 per diluted share, in the first quarter of 2020.

Overall operating rates at the Company's steel mills increased to 95% in the first quarter of 2021 as compared to 87% in the fourth quarter of 2020 and 89% in the first quarter of 2020.

Included in the Company's fourth quarter of 2020 earnings were the following: non-cash impairment charges of $130.2 million, or $0.33 per diluted share; net benefits of $48.2 million, or $0.16 per diluted share, and $39.7 million, or $0.13 per diluted share, related to certain tax items; and a net benefit of $17.9 million, or $0.05 per diluted share, resulting from the transaction that concluded Nucor's investment in Duferdofin Nucor S.r.l. 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 previously held equity method investment in Duferdofin Nucor S.r.l.

Financial StrengthAt the end of the first quarter of 2021, we had $2.98 billion in cash and cash equivalents, short-term investments and restricted cash and cash equivalents on hand. The Company's $1.50 billion revolving credit facility remains undrawn and does not expire until April 2023. Nucor continues 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.

Commitment to Returning Capital to StockholdersDuring the first quarter of 2021, Nucor repurchased approximately 5.4 million shares of its common stock at an average price of $56.11 per share. As of April 3, 2021, Nucor had approximately 299,242,000 shares outstanding and approximately $857.5 million remaining for repurchases under its existing authorized share repurchase program. This share repurchase authorization is discretionary and has no scheduled expiration date.

On February 23, 2021, Nucor's board of directors declared a cash dividend of $0.405 per share. This cash dividend is payable on May 11, 2021 to stockholders of record as of March 31, 2021 and is Nucor's 192nd consecutive quarterly cash dividend.

First Quarter of 2021 AnalysisAll three Nucor segments generated strong results in the first quarter of 2021, resulting in the highest quarterly earnings in Nucor history. The steel mills segment benefitted from strong demand and higher average selling prices. Our sheet, bar, plate and structural mills had increased profitability in the first quarter of 2021 as compared to the fourth quarter of 2020, with the largest increase by our sheet mills. The steel products segment had another strong quarter as profitability increased from fourth quarter of 2020. The raw materials segment profitability increased dramatically compared to the fourth quarter of 2020 due to increased selling prices for raw materials.

Second Quarter of 2021 OutlookWe expect earnings in the second quarter of 2021 to be the highest quarterly earnings in Nucor history, surpassing the record set in the first quarter of 2021. The primary drivers for the expected increase in earnings in the second quarter of 2021 as compared to the first quarter of 2021 are improved pricing and margins in the steel mills segment. The segment's largest increases in performance are expected at our sheet and plate mills. The steel products segment is expected to have another strong quarter in the second quarter of 2021 that will be comparable to the first quarter of 2021. The profitability of the raw materials segment is expected to decrease in the second quarter of 2021 as compared to the first quarter of 2021 due to rising raw materials input costs.

Earnings Conference CallYou are invited to listen to the live broadcast of Nucor's conference call during which management will discuss Nucor's first quarter results on April 22, 2021 at 2:00 p.m. Eastern Time. The conference call will be available over the Internet at www.nucor.com, under Investors.

About NucorNucor 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 StatementsCertain 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 market steel prices and changes in the supply and cost of raw materials, including pig iron, iron ore and scrap steel; (4) the availability and cost of electricity and natural gas, which could negatively affect our cost of steel production or result in a delay or cancellation of existing or future drilling within our natural gas drilling programs; (5) critical equipment failures and business interruptions; (6) 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; (7) impairment in the recorded value of inventory, equity investments, fixed assets, goodwill or other long-lived assets; (8) uncertainties surrounding the global economy, including excess world capacity for steel production; (9) fluctuations in currency conversion rates; (10) significant changes in laws or government regulations affecting environmental compliance, including legislation and regulations that result in greater regulation of greenhouse gas emissions that could increase our energy costs, capital expenditures and operating costs or cause one or more of our permits to be revoked or make it more difficult to obtain permit modifications; (11) the cyclical nature of the steel industry; (12) capital investments and their impact on our performance; (13) our safety performance; and (14) 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, 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

April 3, 2021 April 4, 2020 Percent Change

Steel mills total shipments:

Sheet 2,927 2,874 2%

Bars 2,319 2,242 3%

Structural 623 684 -9%

Plate 596 610 -2%

Other 79 88 -10%

6,544 6,498 1%

Sales tons to outside customers:

Steel mills 5,190 5,182 -

Joist 172 131 31%

Deck 135 125 8%

Cold finished 132 126 5%

Rebar fabrication products 282 311 -9%

Piling 136 180 -24%

Tubular products 250 287 -13%

Other steel products 100 99 1%

Raw materials 779 746 4%

7,176 7,187 -

Condensed Consolidated Statements of Earnings (Unaudited)

(In thousands, except per share data)

Three Months (13 Weeks) Ended

April 3, 2021 April 4, 2020

Net sales $ 7,017,140 $ 5,624,337

Costs, expenses and other:

Cost of products sold 5,394,703 4,995,069

Marketing, administrative and other expenses 291,124 153,392

Equity in (earnings) losses of unconsolidated (13,239) 823affiliates

Losses on assets 6,662 287,846

Interest expense, net 39,644 40,910

5,718,894 5,478,040

Earnings before income taxes and noncontrolling 1,298,246 146,297interests

Provision for income taxes 310,732 91,918

Net earnings 987,514 54,379

Earnings attributable to noncontrolling 45,082 34,048interests

Net earnings attributable to Nucor stockholders $ 942,432 $ 20,331

Net earnings per share:

Basic $ 3.10 $ 0.07

Diluted $ 3.10 $ 0.07

Average shares outstanding:

Basic 301,846 302,909

Diluted 302,518 302,932

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands)

April 3, 2021 Dec. 31, 2020

ASSETS

Current assets:

Cash and cash equivalents $ 2,460,723 $ 2,639,671

Short-term investments 402,595 408,004

Accounts receivable, net 2,828,964 2,298,850

Inventories, net 4,360,122 3,569,089

Other current assets 356,727 573,048

Total current assets 10,409,131 9,488,662

Property, plant and equipment, net 7,031,688 6,899,110

Restricted cash and cash equivalents 115,266 115,258

Goodwill 2,235,183 2,229,672

Other intangible assets, net 647,479 668,021

Other assets 733,661 724,671

Total assets $ 21,172,408 $ 20,125,394

LIABILITIES

Current liabilities:

Short-term debt $ 56,299 $ 57,906

Current portion of long-term debt and finance 10,644 10,885lease obligations

Accounts payable 1,662,832 1,432,159

Salaries, wages and related accruals 527,412 462,727

Accrued expenses and other current liabilities 713,259 664,183

Total current liabilities 2,970,446 2,627,860

Long-term debt and finance lease obligations due 5,273,036 5,271,789after one year

Deferred credits and other liabilities 1,067,203 993,884

Total liabilities 9,310,685 8,893,533

EQUITY

Nucor stockholders' equity:

Common stock 152,061 152,061

Additional paid-in capital 2,160,909 2,121,288

Retained earnings 12,163,626 11,343,852

Accumulated other comprehensive loss, (103,560) (118,861) net of income taxes

Treasury stock (2,925,796) (2,709,675)

Total Nucor stockholders' equity 11,447,240 10,788,665

Noncontrolling interests 414,483 443,196

Total equity 11,861,723 11,231,861

Total liabilities and equity $ 21,172,408 $ 20,125,394

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

Three Months (13 Weeks) Ended

April 3, 2021 April 4, 2020

Operating activities:

Net earnings $ 987,514 $ 54,379

Adjustments:

Depreciation 179,820 175,767

Amortization 21,130 21,508

Stock-based compensation 19,859 10,017

Deferred income taxes 62,705 15,557

Distributions from affiliates 180 2,000

Equity in losses (earnings) of unconsolidated (13,239) 823affiliates

Losses on assets 6,662 287,846

Changes in assets and liabilities (exclusive ofacquisitions and dispositions):

Accounts receivable (524,570) (124,036)

Inventories (795,940) (41,993)

Accounts payable 225,333 (28,033)

Federal income taxes 200,888 55,987

Salaries, wages and related accruals 69,780 (216,736)

Other operating activities 90,289 (11,880)

Cash provided by operating activities 530,411 201,206

Investing activities:

Capital expenditures (313,510) (416,557)

Investment in and advances to affiliates (118) (3,152)

Divestiture of affiliates - -

Disposition of plant and equipment 5,735 10,256

Acquisitions (net of cash acquired) 300 -

Purchase of investments (214,427) (24,746)

Proceeds from the sale of investments 219,777 178,787

Other investing activities 249 535

Cash used in investing activities (301,994) (254,877)

Financing activities:

Net change in short-term debt (1,607) (9,183)

Proceeds from long-term debt, net of discount - 32,000

Proceeds from issuance of common stock 107,524 -

Repayment of long-term debt - (47,000)

Payment of tax withholdings on certain (14,521) (209)stock-based compensation

Distributions to noncontrolling interests (73,795) (39,493)

Cash dividends (123,901) (122,940)

Acquisition of treasury stock (301,859) (39,499)

Other financing activities (2,505) (2,290)

Cash used in financing activities (410,664) (228,614)

Effect of exchange rate changes on cash 3,307 (7,163)

Decrease in cash and cash equivalents and (178,940) (289,448)restricted cash and cash equivalents

Cash and cash equivalents and restricted cash 2,754,929 1,534,605and cash equivalents - beginning of year

Cash and cash equivalents and restricted cash $ 2,575,989 $ 1,245,157and cash equivalents - end of three months

Non-cash investing activity:

Change in accrued plant and equipment purchases $ 4,461 $ 17,756

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SOURCE Nucor Corporation