FORT WAYNE, INDIANA — February 2, 1999 — Steel Dynamics,
Inc. (NASDAQ: STLD) today announced consolidated earnings for the fourth
quarter of 1998 of $8.1 million, or $.17 per diluted share, compared to
$8.4 million, or $.17 per diluted share, for the fourth quarter of
1997. Operating profit (pretax income before interest and start-up
costs) was $20.5 million, or $52 per ton shipped on sales of $134.3
million, compared to an operating profit of $37 per ton for the fourth
quarter of 1997, on sales of $114.7 million. SDI’s fourth quarter 1998
shipments of 392,000 tons were 19% higher than in the fourth quarter of
1997. Start-up costs associated with Iron Dynamics, Inc. (“IDI”) and the
new Structural Mill Project were $2.5 million in the quarter. Hot band
production was 376,400 tons in the fourth quarter of 1998 compared to
301,600 in the fourth quarter of 1997.
For the full year 1998, SDI earned $31.7 million, or $.65 per diluted
share, on sales of $514.8 million and shipments of 1,417,000 tons. Hot
band production was 1,425,700 tons compared to 1,182,000 tons in 1997.
Commenting on the announced results, Keith Busse, SDI’s president and
chief executive officer, said, “I believe that the company’s fourth
quarter performance was quite good in light of the significant
deterioration in the flat rolled steel marketplace caused principally by
record levels of unfairly traded steel products being dumped at prices
which are as low, or lower, than they have been in decades. We believe
that the bottom, from a price and earnings perspective, will be reached
in the first quarter with positive signs on the horizon for the
remainder of 1999. Steel Dynamics has just recently apprised its
customers of a price increase principally effective in the second
quarter. Additional increases could follow.
“In 1998, we continued to position SDI for long-term competitiveness
by bringing our cold mill and galvanizing operations up to full
productivity, commissioning our second caster, substantially completing
our IDI construction, commencing construction activity on our structural
mill and installing a seventh rolling stand in our hot strip mill. I
believe that all of these activities will result in a stronger, even
more cost competitive company for years to come. Our operating profit
per ton is an excellent example of our ability to continue to focus on
our costs while engaged in multiple capital projects,” Mr. Busse said.
Mr. Busse also noted that the installation of the seventh stand and
certain other capital improvements occurred in late December 1998 and
early January of this year at the Butler facility. The results, he
stated, are very positive, although the time required for installation
took longer than anticipated and, together with the harsh weather
conditions of early January, will dampen the early first quarter
financial performance. The start-up of the submerged arc furnace at IDI
is running about 60 days behind schedule, but the hot commissioning test
results at the rotary hearth furnace continue to be very promising. The
Structural Mill’s air permit has been somewhat delayed, although
limited construction activity has begun. More significantly, it appears
that capital spending on the new mill will be well within budget with
the ultimate start-up still anticipated to occur in the first half of
2000, principally mid to late second quarter. |