FT. WAYNE, INDIANA — October 19, 2000 — Steel Dynamics, Inc. (NASDAQ: STLD)
today reported net income of $12.4 million or $.27 per diluted share of
common stock, for the third quarter of 2000, an increase in EPS of 23%
over a year ago. Net sales for the third quarter were $160 million.
For the nine months ended September 30, 2000, the company’s earnings
per diluted share were $.99, compared to $.53 for the first nine months
of 1999, an 87% increase. Net income for this year’s first nine months
was $46.7 million on sales of $540 million, an increase in sales of 22%.
The third quarter’s results represent a slowing from the
record-setting pace of this year’s second quarter. A slower shipment
rate and lower average selling prices, resulting from weakening market
demand for both hot roll and cold-rolled products, account for a decline
from second quarter’s sales of $191 million and net income of $19.1
million.
SDI’s third quarter steel shipments were 444,300 net tons, down 8%
from third quarter 1999. Third quarter hot band production was 498,900
tons, down from 502,900 in the year-earlier quarter. Compared to the
year-ago quarter, selling prices were 8% higher, while start-up and
interest costs declined. In the third quarter of 2000, costs related to
the start-up of new businesses were $3.7 million and capital
expenditures were $39.9 million.
Keith Busse, SDI’s President and CEO, stated, “Market conditions at
the end of the third quarter were significantly different from those at
the outset of the quarter. Our order book was solid in early July, but
by August many of our customers had cut back on their ordering patterns.
As a result of lower industry-wide demand and a huge over-supply driven
again by record levels of imports at prices suggestive of dumping,
selling values have fallen dramatically. Our mix-average price declined
to $359 per ton, from $386 in the second quarter. The good news, on the
other hand, is that steel scrap costs have also fallen sharply and may
continue to decline.”
Regarding prospects for the rest of the year, Busse said, “We
continue to see softness in both orders and pricing, with some relief
possible by year-end. We believe steel inventories at service centers
and end users will have to decline further before orders rebound.
Inventory building earlier this year, combined with a cooling in the
economy, account for some of the slackening of demand, but dumped
imports continue to be a huge supply-side problem that the current
administration seems reluctant to tackle in any meaningful way.”
In spite of lower shipment rates, the Flat Roll Steel Division at
Butler, Indiana remained strongly profitable. Operating profit
(operating income before start-up costs) was $27.3 million, or $61 per
net ton shipped, compared to $58 per net ton in the third quarter of
1999 and $86 per net ton shipped in 2000’s second quarter.
New Millennium Building Systems (NMBS) is now producing steel
trusses, joists and decking at its new production facility at Butler,
Indiana. NMBS, which contributed to SDI’s consolidated operating income
in September, is expected to contribute to consolidated profits in the
fourth quarter.
As previously reported, on September 29 the Indiana Department of
Environmental Management reissued the draft air permit for the planned
SDI structural steel mill in Whitley County, Indiana. After a 30-day
comment period, IDEM will hold a public hearing. After taking into
account any comments submitted to it, IDEM is expected to make
revisions, if necessary, and to issue the final permit. Steel Dynamics
has completed site preparation and is ready to begin construction of the
mill. Because of the delays in obtaining the construction permit, the
company now anticipates the earliest the new structural mill could begin
operation is the first quarter of 2002.
At Iron Dynamics, SDI’s wholly owned subsidiary, work continues on
the retrofit of its submerged arc furnace, which is being upgraded to
provide increased smelting capacity. The facility is expected to resume
production of direct-reduced liquid pig iron in January 2001.
As a part of the innovative electric-furnace mini-mill sector of the
U.S. steel industry, Steel Dynamics has grown quickly and has become a
consistently profitable independent domestic steel producer. SDI
produces a broad range of flat-rolled steel products, including light
gauge, micro-alloyed and high-strength steels for demanding automotive
and other applications at its mini mill in Butler, Indiana. |