FORT WAYNE, INDIANA, April 16, 2002—Today Steel Dynamics, Inc. (NASDAQ: STLD)
announced first quarter consolidated earnings of $4.4 million, or $0.10
per diluted share. SDI’s net sales were $167 million on total shipments
of 562,000 tons for the quarter ended March 31, 2002, as compared to
net sales of $154 million and total shipments of 482,000 tons during the
same period of 2001. As previously announced, SDI refinanced its senior
credit facilities during the first quarter. Extinguishing this debt
resulted in a write-off of approximately $3.2 million of previously
capitalized financing costs and other related expenses. The effect of
this write off on earnings for the first quarter was about $.04 per
diluted share.
During the month of March 2002, SDI’s flat-roll mill at Butler,
Indiana, achieved a record hot-band production level of 203,500 tons.
Total production for the quarter was 579,800 tons, also a record,
compared to 503,000 tons in the first quarter of 2001. First quarter
operating profit (pretax income before interest, start-up costs and
extraordinary losses) was $19.1 million, or $34 per shipped ton.
“Our business experienced considerable improvement in the first
quarter, hopefully beginning a rebound from the difficult environment we
experienced in 2001,” said Keith Busse, president and chief executive
officer. “Our March results were very strong as a result of higher
production and shipment levels combined with improved product pricing
and lower scrap costs. We are currently producing at capacity at our
Butler facility. Although our average selling values for the first
quarter increased only slightly from the fourth quarter, prices were
much improved from the extremely low December levels. Pricing for
shipments and orders continued to strengthen throughout the first
quarter.”
By comparison to the fourth quarter of 2001, SDI’s first quarter
flat-roll mill shipments increased from 461,800 tons to 551,300 tons, or
19%, while hot-band production increased from 462,900 tons to 579,800
tons, or 25%. These combined achievements were largely responsible for
an increase in consolidated gross margin to approximately $27 million,
or a 147% improvement in the first quarter versus the fourth quarter.
“The market for our products has become more resilient over the past
several months,” Busse said. “We believe the Section 201 tariff action
announced in March, combined with earlier trade case dumping duties
leveled against companies unfairly exporting into the U.S. markets, have
had a positive effect on the market climate. In addition, the steel
market has been influenced by supply constraints caused by the reduction
of domestic industry capacity, whether permanent or temporary in
nature.
“Our order book for the second quarter has been full for some time
now at significantly higher selling values than those achieved in the
first quarter,” Busse continued. “We will shortly be opening our order
book for the third quarter and we anticipate continued heavy product
demand. We have resumed our usual practice of accepting and scheduling
orders a quarter in advance after several quarters of weak activity in
2001. When we can schedule manufacturing more predictably, the mill
becomes more productive and we are able to achieve better operating
results through cost compression. As a result, I am very optimistic
about the outlook for coming quarters.”
Construction of Steel Dynamics’ $315 million structural steel and
rail mill at Columbia City, Indiana, has proceeded rapidly since
construction began in May of 2001. The mill is expected to commence
production of structural steel by the end of the second quarter, 2002.
SDI’s start-up costs in the first quarter, all related to the structural
steel and rail mill, were $5 million. Capital expenditures in the first
quarter were $34 million, primarily related to the new mill project.
New Millennium Building Systems, co-owned by SDI and New Process
Steel, remained profitable during the first quarter in a difficult
market for non-residential construction. This business continues to gain
ground in the midwestern marketplace it serves. New Millennium has
begun exploring the possibility of expanding its geographic coverage
which could result in the construction of an additional manufacturing
facility.
Conference Call Webcast Available on SDI Web Site
A conference call in which Steel Dynamics’ management will discuss
the company’s first quarter 2002 results and the business outlook is
scheduled for 2:00 pm EDT on April 17, 2002.
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 replay of the Webcast will be available from the SDI Web site for
sixty days. A dial-in telephone replay of the call will be available at
719-457-0820 (confirmation code: 450907) through midnight, April 21,
2002.
The Webcast, as well as other information about Steel Dynamics, can be found at: www.steeldynamics.com.
Forward Looking Statements
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