Fort Wayne, Indiana, June 16, 2011—Steel Dynamics, Inc. (NASDAQ/GS: STLD) today announced that its board of directors has declared a quarterly cash dividend of $0.10 per common share. The dividend is payable on or about July 14, 2011, to shareholders of record at the close of business on June 30, 2011.
The company also expects second quarter earnings to be in the range of $0.35 to $0.40 per diluted share, somewhat lower than the first quarter 2011 reported results of $0.46, but higher than earnings of $0.22 per diluted share achieved in the second quarter of 2010. On a comparative basis, unrealized hedging gains at the company’s metals recycling operations were $9.5 million in the first quarter 2011, as compared to an estimated second quarter unrealized hedging loss of approximately $3 million, resulting in a non-cash fluctuation in the company’s quarter over quarter pretax earnings of $12.5 million, an estimated impact of approximately $0.03 per diluted share.
During the quarter, the company has been experiencing reduced metal margins in its metals recycling operations, as the cost of acquiring unprocessed scrap material more than outpaced any price increases, resulting in an estimated 15% quarterly reduction in ferrous margins and an estimated 25% reduction in nonferrous margins (excluding the impact from unrealized hedging adjustments), driven by the copper and stainless steel markets. The impact of Mesabi Nugget on the company’s results is estimated to be comparable to that experienced in the first quarter 2011, due to the previously discussed planned May maintenance outage.
In addition, during the second quarter the company experienced periods of weaker than expected market dynamics for both its sheet and structural products. April incoming orders for flat-rolled steel were about 25% less than the monthly average achieved in the first quarter; however, orders since the beginning of May have returned to levels consistent with those achieved earlier in the year and currently the company expects this trend to continue. Unexpectedly, incoming orders for structural steel weakened in the quarter, as the residential and non-residential construction markets remain a challenge.
Despite these volume and pricing issues, the company’s steel operations’ operating results are expected to be further improved from those experienced in the first quarter 2011.
Forward Looking Statements
Contact:
Fred Warner, Investor Relations Manager
(260) 969-3564 or fax (260) 969-3590
f.warner@steeldynamics.com