FORT WAYNE, INDIANA, June 19, 2009— Steel Dynamics, Inc. (NASDAQ/GS:
STLD) today provided its outlook for the second quarter of 2009. Steel
Dynamics now anticipates a small loss of $0.10 to $0.15 per diluted
share in the second quarter after taking into account the recent
issuance of common stock and convertible securities. The effect of the
increase in share count in calculating diluted earnings per share for
the second quarter is predominantly offset by certain expenses related
to the repayment of our term loan in June, resulting in little impact on
diluted per-share earnings this quarter.
The company had provided qualitative guidance in April suggesting the
possibility of improving results in the second quarter, indicating that
the second quarter could be close to break even, possibly showing a
small loss or a small profit. The expected small loss in the second
quarter marks an improvement compared to a reported first-quarter loss
of $0.48 per diluted share.
“As we expected early in the quarter, we have experienced some
improvement in flat-roll steel order entry and shipping volumes as the
quarter progressed while, at the same time, pricing continued to erode,”
said Keith Busse, Chairman and CEO. “I do believe, though, that
flat-roll pricing has finally bottomed and is currently moving higher.
Our principal weakness in steel operations remains at our Structural and
Rail Division, with our other steel operations experiencing steady or
improving results. On balance, we expect our steel operations to produce
a small operating profit in the second quarter while operating at a
quarterly utilization rate of about 50 percent. Our metals recycling
operations are now expected to produce a small second-quarter operating
loss, although showing month-to-month improvement and an expected profit
for the month of June.
“Regarding costs, we have benefitted from consuming lower-cost scrap
at our steel mills during the quarter. We are, at all of our operations,
exercising tight cost control, implemented successfully through the
cooperation, support, and ideas of our dedicated employees. During the
first half of this year we have right-sized the workforce at OmniSource
operations by approximately 20 percent based on a review of the ongoing
staffing levels required to maintain future operating volumes and
customer service.
“The outlook for the remainder of the year remains uncertain, but is
improving, as demand is strengthening for some of our steel products and
recycled metals. We now expect to be profitable in the third and fourth
quarters of 2009 assuming only a modest increase in production volume.
Steel Dynamics is in an excellent position to take advantage of any
improvement in order flow in the second half as our operations are
poised to increase production rates. Our production facilities are in
top-notch operating condition with adequate raw materials on hand or
available, and our trained workforce is ”at the ready’,” Busse said.
Forward Looking Statements
Contact:
Fred Warner, Investor Relations Manager
(260) 969-3564 or fax (260) 969-3590
f.warner@steeldynamics.com |