BUTLER, INDIANA — January 20, 1998 — Steel Dynamics, Inc.
(NASDAQ: STLD) today announced consolidated earnings for the fourth
quarter of 1997 of $8.4 million or $.17 per share on a basic and diluted
basis. Operating profit (pretax income before interest and start-up
costs) was $12.2 million or $37 per ton. Sales for the fourth quarter
were $114.7 million on shipments of 328,600 tons. Start-up costs of the
Cold Mill Project, Second Caster Project, Iron Dynamics, Inc. (“IDI”)
and the Structural Mill Project were $1.4 million in the quarter. Hot
Band production was 301,600 tons compared to 245,800 tons in the
year-earlier quarter. In the fourth quarter of 1996, the Company
reported income before extraordinary loss of $7.3 million or $.16 per
share on a basic and diluted basis.
During 1997, SDI earned $51.6 million before extraordinary loss, or
$1.07 per share on a basic and $1.06 on a diluted basis, on sales of
$420.1 million and shipments of 1,205,000 tons. Start-up costs for the
year were $8.4 million. Hot band production was 1,182,000 tons compared
to 814,600 in 1996.
Keith Busse, SDI’s CEO, said, “Although our performance was below our
original fourth quarter expectations, we are pleased with our results
in light of recent market developments which impacted our operating
margins by an aggregate of approximately $30 per ton. By comparison with
the third quarter, hot band prices declined by $19 per ton while scrap
costs escalated by $11 per ton. The aforementioned fourth quarter margin
compression is the equivalent of $.10 per share, net of taxes, on a
basic and diluted basis. Moreover, by deliberately feeding early
cold-rolled and galvanized production with coils purchased on the spot
market, we further compressed our margins related to the Cold Mill
Project by the equivalent of $3.7 million ($.05 per share, net of taxes,
on a basic and diluted basis) in addition to the $1.4 million in
start-up costs.”
Construction on the Cold Mill Project (including new galvanizing
capacity) is now essentially complete and all lines are operational.
Production rates are anticipated to continue to increase through the end
of 1998 when the Company expects to be near 100% production run rates.
The Second Caster Project (including additional melting capacity)
continues to progress well toward an anticipated second quarter start
up. IDI’s scrap substitute facility is also on schedule for its start up
before the end of 1998. Site selection and equipment purchasing
discussions are continuing for the Structural Mill Project with
decisions imminent. Groundbreaking for this new mill is expected in the
third quarter of 1998.
Steel Dynamics, Inc. is now providing a broad range of flat-rolled
products to the market, including light gauge micro-alloyed and high
strength steels for demanding automotive applications. |