FORT WAYNE, INDIANA, July 21, 2003 — Today Steel Dynamics, Inc. (NASDAQ:STLD)
announced second quarter earnings of $5.4 million, or $.11 per diluted
share, compared to earnings of $17.7 million, or earnings per diluted
share of $.37 in the second quarter of 2002. Net sales for the second
quarter of 2003 were $219 million, compared to $214 million in the
second quarter of 2002.
Compared to the year-ago quarter, SDI’s lower second quarter 2003
earnings resulted primarily from higher scrap costs coupled with the
lower selling prices associated with a softer steel marketplace. SDI’s
average consolidated selling price per ton declined to $335 per ton,
compared to $340 per ton in the second quarter of 2002 and $363 per ton
in the first quarter of 2003. Lower prices resulted primarily from
weaker pricing in flat-rolled products, as the average price per ton of
structural products increased $18 per ton from the first to the second
quarter. Second quarter scrap prices increased $8 per ton, compared to
the first quarter of 2003, but were $25 per ton higher than in the
second quarter of 2002.
SDI’s second quarter consolidated shipments were 653,000 tons, 4
percent higher than the 628,000 tons shipped in the second quarter of
2002, and about one percent higher than the first quarter’s 648,000
tons. Production at SDI’s steel operations was 720,000 tons, compared to
600,000 tons in the second quarter of 2002 and 685,000 tons in the
first quarter of 2003. Finished goods inventories increased moderately,
primarily in flat-rolled products.
“We are satisfied with the quarter’s results in light of soft market
conditions,” said Keith Busse, president and chief executive officer.
“Comparing the second quarter to the first quarter of 2003, the
combination of weaker flat-rolled steel prices and modestly higher
steel-scrap prices resulted in lower earnings, much in line with our
April prediction. Nonetheless, I am pleased with our continued strong
operating results. We believe the company’s operating profit of $29 per
ton shipped is notable, considering our Structural and Rail Division is
still in the midst of its start-up and is producing at only about 50
percent of its capacity. This new division’s operating losses are
moderating and it is likely that it will turn cash-positive by year-end.
“In the second quarter, the Structural and Rail Division increased
its beam shipments by more than 40 percent from the first quarter and
continued commissioning new products. Installation of equipment for the
manufacture of rail sections was completed and initial production trials
are expected to take place in July. We are excited about the progress
that has been made by the Columbia City team in their first twelve
months of manufacturing and selling structural products,” Busse said.
“The Butler Flat Roll Division continued to perform very well.
First-half volume basically matched the first half of 2002, which means
Butler has maintained a strong order book in spite of a more competitive
environment. During the quarter, the company concluded its export
shipments to China, and no additional orders are in hand,” Busse said.
“The Division’s newly acquired Jeffersonville, Indiana, galvanizing
facility has begun production, which will allow us to diversify our
cold-rolled, galvanized steel production to include lighter gauges,
thereby gaining entry into a variety of new construction materials
markets. In addition, Butler’s new paint line is expected to begin
production tests in the third quarter, and painted products are expected
to begin shipping in the fourth quarter.”
Work is proceeding well at SDI’s new Bar Products Division in
Pittsboro, Indiana, toward a planned start-up early in 2004. An
environmental permit that is required before mill modifications and
improvements can be made is now under review by the Indiana Department
of Environmental Management (IDEM). Barring any unforeseen
complications, the new air permit could be in place by the end of the
third quarter. Construction is set to begin as soon as the permit is
approved and work will continue into 2004. With the added manufacturing
capabilities, the mill’s portfolio of products will be expanded to
include merchant shapes, such as angles, channels, flats, and rebar.
Special-bar-quality (SBQ) steels should represent 50 percent of the
expanded mill’s capacity, which is expected to reach 500,000 to 600,000
tons per year.
Business is improving at New Millennium Building Systems, LLC, which
has recently experienced increased demand and orders for its building
products. New Millennium is expected to be profitable in the second half
of this year. Now a wholly owned subsidiary, New Millennium supplies
girders, trusses and decking to the steel building construction
marketplace.
Download Unaudited Financial Statements (RTF file)
Conference Call Webcast Available on SDI Web Site
A conference call in which Steel Dynamics’ management will discuss
the company’s second quarter 2003 results and the business outlook is
scheduled for 11:00 a.m. EDT (10:00 a.m. Central) on July 22, 2003.
You are invited to listen in to the live broadcast of the conference
call over the Internet, accessible from Steel Dynamics’ Web site home
page. A audio replay of the Webcast will be available from the SDI Web
site until August 1, 2004.
The Webcast, as well as other information about Steel Dynamics, can be found at: www.steeldynamics.com
Forward Looking Statements
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