FORT WAYNE, INDIANA, July 10, 2002 — Today Steel Dynamics, Inc. (NASDAQ:STLD)
announced second quarter consolidated earnings of $17.7 million, or
$0.37 per diluted share. Net sales for the second quarter of 2002 were
$214 million, a 28% increase compared to the first quarter of 2002 and a
54% increase compared to the fourth quarter of 2001. SDI’s second
quarter average consolidated selling price per ton was $340, 14% higher
than the $297 recorded for both the first quarter of 2002 and the fourth
quarter of 2001. SDI’s second quarter 2002 consolidated shipments of
628,000 tons set a quarterly record, and included approximately 66% of
value-added, higher-margin flat-roll products.
As compared to the year-earlier quarter, SDI’s net sales of $214
million compared favorably to last year’s second-quarter figure of $158
million, a 35% increase. Total shipments increased from 516,000 to
628,000, up 22%. SDI had net income of $2.0 million in the year-earlier
quarter, versus $17.7 million this quarter, a 785% increase. Earnings
per share rose from $.04 per diluted share to $0.37 per diluted share
this quarter.
The Flat Roll Division continued to attain peak operating results,
achieving record production of 600,000 tons in the second quarter. The
mill’s strong performance resulted in an operating profit of $66 per
shipped ton, or a 94% increase as compared to the first quarter of 2002,
a level last achieved in 1997 prior to the steel import crisis.
“SDI’s operating results continued to improve in the second quarter,
resulting in our second highest reported quarterly earnings per diluted
share since inception,” said Keith Busse, president and chief executive
officer. “The fact that we are able to operate the flat roll mill at
levels beyond our estimated capacity is providing significant cost
compression. This cost reduction combined with increased selling values
resulted in a near- record consolidated gross margin percentage of 25%
for the second quarter.
“Flat-roll steel pricing has returned to near normalized levels due
to reductions in the supply of domestic steel brought about by mill
closures and lower levels of imported steel resulting from successful
trade cases and the Bush Administration’s Section 201 action.
Flat-rolled steel prices continue to strengthen and I am very optimistic
about the outlook for the remainder of the year. We have fully booked
the flat roll mill for the third quarter at more favorable selling
values than were experienced in the second quarter,” Busse said.
Iron Dynamics, SDI’s direct-reduced-iron scrap-substitute subsidiary,
is expected to begin experimental production trials in the fourth
quarter of this year. Should these trials prove successful, it is
expected that SDI could begin commercial production in 2003.
“Our new structural steel and rail mill at Columbia City, Indiana, is
substantially complete and has begun limited production of structural
products,” Busse said. “We are very pleased with the rapid progress
being achieved at the mill. Construction was completed on the structural
mill in less than twelve months, which we believe is an industry record
for similar projects. The commissioning process is also proceeding very
well. After our first melting and casting trials in April and May, we
initiated production trials of selected products in the rolling mill in
late June. I’m pleased to report that as of this release, we have
shipped our first structural products to initial customers.”
SDI expects structural steel production to ramp up gradually
throughout the remainder of this year, as the company continues to gain
experience in rolling and qualifying a wide variety of structural steel
products.
During the second quarter, SDI received approval from the Indiana
Department of Environmental Management for the installation of the
vacuum degassing equipment required for the production of rail products
at the new mill. The company expects construction and equipment
installation for the rail portion of the mill to proceed during the
third and fourth quarter of 2002, with rail production anticipated to
begin early in 2003. “We believe, in time, that the Structural and Rail
Division will make a substantial contribution to our earnings,” Busse
said.
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 2002 results and the business outlook is
scheduled for 11:00 am EDT on July 11, 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 become
available about 1:00 pm EDT July 11 through midnight, July 15, 2002, at
719-457-0820 (confirmation code: 788570).
The Webcast, as well as other information about Steel Dynamics, can be found at:
www.steeldynamics.com
Forward Looking Statements
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