FORT WAYNE, INDIANA, December 19, 2007— Steel Dynamics, Inc.
(NASDAQ/GS: STLD) today announced that it expects fourth quarter 2007
earnings to be within the range of guidance provided in October,
excluding the October 26, 2007 acquisition of OmniSource Corporation.
This update is based on current information regarding the financial
impact of the purchase of OmniSource, as well as quarter-to-date
performance of the company’s operations.
“At the time of our October guidance, we promised a December update
of our fourth quarter earnings estimates to reflect the anticipated
financial impact of the OmniSource acquisition,” said Keith Busse,
Chairman and CEO. “Outside of the adjustments we are making today to
reflect the OmniSource acquisition, our previous estimates of earnings
per diluted share would be unchanged, with our current expectation being
at the middle- to low-end of guidance. We are still in the process of
determining final purchase price allocations for the OmniSource
acquisition and the resulting impact on our fourth quarter earnings.
However, based on current estimates we believe the acquisition to be
dilutive to earnings by approximately $0.07 per diluted share, resulting
in an updated fourth-quarter earnings range of $0.95 to $1.00 per
diluted share as compared to the $1.02 to $1.07 range that we provided
in October. The October guidance did not include an estimate of
OmniSource operations or purchase accounting adjustments.
The dilution in fourth quarter earnings is the result of the 9.7
million shares issued as a part of the consideration paid for the
acquisition of OmniSource Corporation, as well as related additional
interest expense and purchase accounting adjustments. The estimated
purchase accounting adjustments for the fourth quarter are approximately
$0.03 per diluted share. Regarding OmniSource’s operations since the
acquisition, its performance is consistent with the dynamics of the
scrap industry wherein fourth quarter shipments are often weaker
seasonally, followed by increased shipments and stronger financial
results in the first quarter.
“Because of our two major acquisitions in 2007, as well as our
capacity expansions and product diversification at existing operations,
we also want to share our early views of 2008 to provide investors a
better idea of the company’s expected growth potential for the new year.
Our current view is that SDI’s earnings per diluted share could be in
the range of $5.00 to $5.50 for 2008. This is based on our outlook for
steel markets next year, as well as company-specific growth from
acquisitions and internal expansion,” Busse said.
“We are very positive about the prospects for stronger U.S. steel
markets in 2008, particularly for flat-rolled steels,” Busse said.
“Various positive factors exist to suggest a stronger year for flat
rolled steels, including low inventories, limited imports, high steel
prices abroad, and high ocean freight costs. We expect that by the
beginning of the second quarter, shipping volumes and prices will have
improved markedly. We also expect continued strength in structural and
bar steels, which should benefit from continued North American
investment in infrastructure, in institutional, industrial and
distribution buildings, and energy projects. Of course, there are risks
related to possible further deterioration in the U.S. economy and to
specific steel-consuming sectors, but we believe the steel markets
should strengthen in 2008 even without significant improvement in the
U.S. economy.
“In addition, Steel Dynamics expects to benefit in 2008 from
full-year contributions from the acquisitions of The Techs and
OmniSource Corporation, as well as from volume growth and margin
improvements due to recent capital investments. In particular, the
start-up in the first quarter of our second coil-coating line at
Jeffersonville, Indiana, and the start-up in the second quarter of a
second rolling mill at Columbia City, Indiana, will provide increased
volumes of steel shipments and potentially higher profit margins. In
addition, our investments in revamping three New Millennium Building
Systems fabricating plants should begin to pay off in 2008.”
Conference Call and Webcast — December 20, 2007 at 2:00 pm Eastern
On Thursday, December 20, 2007 at 2:00 pm Eastern, Steel Dynamics
will host a conference call in which management will provide additional
information concerning expected fourth quarter 2007 results. You are
invited to listen to the live audio webcast over the Internet,
accessible from Steel Dynamics’ Web site: www.steeldynamics.com. An audio replay of the Webcast will be available on the SDI Web site.
Dial-in information is as follows: (719) 325-4762
Confirmation Code: 4042301
Regular and Special Dividends Declared
The company’s Board of Directors has approved the regular quarterly
dividend of $0.10 per share and a continued special quarterly dividend
of $0.05 per share to be distributed to shareholders of record at the
close of business on December 31, 2007. Shareholders will receive a
combined cash dividend of $0.15 per share payable on January 11, 2008.
Steel Dynamics added to NASDAQ-100 Index
On December 14, NASDAQ announced that Steel Dynamics, Inc.
(NASDAQ/GS: STLD) would be added to the NASDAQ —100 Index, effective
Monday, December 17, 2007. The NASDAQ-100 Index includes 100 of the
largest non-financial domestic and international securities listed on
the NASDAQ stock market and is based on market capitalization.
Forward Looking Statements
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