FORT WAYNE, INDIANA — October 14, 1998 — Steel Dynamics,
Inc. (NASDAQ: STLD) today announced consolidated earnings for the third
quarter of 1998 of $8.5 million or $.18 per share on a diluted basis.
Operating profit (operating income before start-up costs) was $21.7
million, or $57 per ton. Sales for the third quarter were $141.0 million
on shipments of 379,200 tons. Start-up costs of the Structural Mill and
Iron Dynamics were $1.6 million in the quarter. Hot band production was
426,600 tons compared to 314,300 tons in the year-earlier quarter. In
the third quarter of 1997, the Company reported income from ongoing
operations of $13.0 million, $.27 per share, on shipments of 300,900
tons. Net income after the extraordinary item in the third quarter of
1997 was $5.4 million or $.11 per share on a diluted basis.
Keith Busse, SDI’s CEO, was pleased with the Company’s performance.
He noted that “operating profit, for the first time in several quarters,
was higher than that reported in both the previous quarter ($17.1
million in the second quarter of 1998) and the prior year’s comparable
quarter ($20.0 million in the third quarter of 1997).” Mr. Busse also
noted that “the Company’s net income from ongoing operations has
increased in each quarter of this year despite difficult markets and the
numerous start-ups which the Company faced earlier in the year. The
only major start-up that will impact earnings during the next several
quarters will be that of Iron Dynamics which is on schedule for a
mid-to-late fourth quarter start-up. The plans for our new structural
mill are proceeding well with capital spending currently below original
budget estimates.”
In other news, Mr. Busse announced that “Steel Dynamics and its
electricity provider, AEP, have reached a tentative agreement regarding
expanded service at the Butler facility. Both parties have been
struggling with last summer’s electric energy debacle which created
chaos in the market and cost the Company an estimated $.03 per share in
the third quarter. I believe the proposed competitive seven-year
agreement will benefit the Butler facility as it would regard stable
pricing and a continued commitment from AEP through the deregulation of
this market.”
Busse further noted that substantial volumes of dumped imports from
Russia, Asia and Brazil continue to flood domestic flat-rolled markets
and are likely to have a profound impact on the industry’s employment
levels and earnings. The resultant drop in earnings and its ripple
effect could have a recessionary impact on the U.S. economy. Even though
SDI’s fourth quarter earnings will be impacted by softer markets, Busse
observed that its earnings could grow slightly due to an improved
product mix and higher total shipment volumes.
In the third quarter SDI repurchased an aggregate of 277,200 of its
shares at an average price of $11.93 per share. Through the third
quarter, the Company has repurchased a total of 1,252,200 shares at an
average price of $15.32 per share since announcing the plan in the
fourth quarter of 1997. |