FORT WAYNE, INDIANA, April 17, 2001—Steel Dynamics, Inc. (NASDAQ:STLD)
today reported first quarter consolidated earnings of $4.4 million, or
$.10 per diluted share, on sales of $154 million. First quarter 2001
sales improved slightly from the fourth quarter, but were 18 percent
lower than the $189 million reported in the first quarter of 2000. Net
income per diluted share decreased 69 percent from the $.32 reported a
year earlier. Operating profit for the first quarter of 2001 (pretax
income before interest and start-up costs) was $16.9 million, or $35 per
ton shipped.
“Despite extremely difficult market conditions during the first
quarter of 2001, our production and shipments improved slightly from the
fourth quarter of 2000, helping us to record our seventeenth
consecutive profitable quarter,” said Keith Busse, president and chief
executive officer. “Unfortunately, industry selling values continued to
fall due to weak market demand and high service center inventories
resulting from the continuing avalanche of dumped imports. Even though
steel scrap prices fell slightly, the lower selling values for our
products resulted in a continued squeeze on margins.
“As a result of solid performances by our marketing and
manufacturing teams, we met our internal expectations,” Busse said,
“Looking ahead to the second quarter, we expect little improvement in
pricing or demand due to continued slowness in the economy. Assuming the
economy begins its rebound in the next few months, we could see
improved pricing and demand during the second half of 2001.”
SDI’s first quarter steel shipments increased to 482,400 net tons, up
6 percent from the fourth quarter of 2000, but down 6 percent from
511,200 tons a year ago. First quarter hot band production was 503,000
tons, an increase of 10 percent from the fourth quarter, but down 8
percent from the first quarter of 2000. In the first quarter of 2001,
costs related to the start-up of new businesses were $5.1 million.
Capital expenditures were $10.4 million in the quarter.
With regard to the trade cases involving unfairly traded hot-rolled
sheet steels filed in November 2000, the U.S. Department of Commerce
announced on April 16 affirmative determinations of subsidies averaging
10 to 40 percent against steel producers in five countries. Preliminary
dumping margins against steel producers in eleven countries will be
issued next week. Later this summer the International Trade Commission
will make injury determinations that could result in the imposition of
duties on hot-rolled sheet steels imported from those countries that
were determined to have sold dumped and subsidized steel into the United
States for a period of five years. If these duties are implemented,
they are expected to have a stabilizing effect on the U.S. steel market,
both in terms of reduced quantities of imports as well as improved
selling values for the domestic industry.
New Millennium Building Systems, SDI’s steel-building components
joint venture, achieved better than planned sales and earnings in the
first quarter in spite of difficult market conditions. New Millennium is
experiencing strong acceptance of its products in the commercial and
industrial building markets in the upper Midwest.
Iron Dynamics, SDI’s wholly owned subsidiary, restarted operations in
March 2001, after completing significant process re-engineering and
equipment upgrades during the second half of 2000. The facility is
expected to remain in a start-up production mode through the second
quarter of 2001. During this period, problem solving will continue as
IDI works to test new processes and equipment. IDI hopes to ramp up to
full production during the latter half of the year.
Final resolution of the environmental permitting process required for
the commencement of construction of our structural steel and rail mill
in Whitley County, Indiana, may occur in the next few months. The
Indiana Department of Environmental Management reissued the permit in
January 2001, but a local citizens’ group again appealed the permit to
the EPA’s Environmental Appeals Board (EAB) in February. All parties
submitted legal briefs to the EAB in April, allowing the board to begin
its review of the remaining issues. The EAB provides no timetable for
concluding this matter; however, SDI remains very optimistic that the
appeal will not be successful and that the permit will soon become
effective. Our current estimate is that we should be able to complete
construction of the new mill by or in the third quarter of 2002.
Conference Call Webcast:
A conference call in which Steel Dynamics’ management will discuss
its first quarter 2001 results is scheduled for 11:00 am Eastern
Daylight Time on April 17, 2001.
Detailed Historical Sales and Earnings Statistics Available:
For the first time, Steel Dynamics is releasing a tabular summary of
the company’s historical quarterly and annual sales and earnings results
by product category. The data may be downloaded from the “Investor
Info” section of SDI’s Web site. For those without Internet access, we
would be happy to mail a copy of the summary on request.
Forward Looking Statements
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