Steel Dynamics reports strong full-year 2014 results

Friday, 30 January 2015 01:55:19 (GMT+3)   |   San Diego
       

Steel Dynamics, Inc. announced Thursday 2014 fourth quarter and full-year results.  Excluding non-cash fixed asset impairment charges related to the company's Minnesota Operations of $0.55 per diluted share, and post-acquisition purchase accounting and lower of cost or market inventory adjustments of $0.04 per diluted share, the company's adjusted fourth quarter 2014 net income was $97 million, or $0.40 per diluted share, on net sales of $2.5 billion. Including these charges, the company reported a fourth quarter 2014 net loss of $45 million, or $0.19 per diluted share. 

Comparatively, prior year fourth quarter net income was $55 million, or $0.24 per diluted share, on net sales of $1.9 billion, and sequential third quarter 2014 net income was $91 million, or $0.38 per diluted share, which included the reduction of approximately $0.09 per diluted share related to acquisition costs, financing fees, and the effect of purchase accounting adjustments for the Columbus acquisition that occurred mid-September 2014.

Annual 2014 net income was $157 million, or $0.67 per diluted share.  Excluding charges related to fixed asset impairment, purchase accounting, acquisition-related expenses, and lower of cost or market adjustments, the company had adjusted net income of $323 million, or $1.35 per diluted share.  When compared to prior year results, annual 2014 shipments and average product pricing increased across all of the company's operating platforms.  Consolidated net sales increased 19 percent to $8.8 billion, attaining a new annual record.  On an adjusted basis, excluding the previously mentioned charges, consolidated 2014 operating income would have improved 58 percent to $612 million, primarily as a result of year-over-year improvement in steel shipments and metal spread. The average annual 2014 selling price for the company's steel operations increased $34 to $827 per ton, compared to 2013.  The average annual 2014 ferrous cost per ton melted increased $7 to $360 per ton, compared to prior year.

"As we enter 2015, we remain optimistic that the broader US economy will continue to improve," said CEO Mark Millett. "However, we are facing a challenging first quarter. The instability of global growth and continued decline in global oil prices weigh on general sentiment.  The combination of high import levels and a seasonally slow December resulted in higher levels of customer inventories, and consequently has resulted in decreased selling values.  We believe this overhang can be resolved during the first quarter of 2015.  The US economy continues to improve, and there continues to be strength in several key steel-consuming end markets, including automotive, manufacturing and nonresidential construction. The non-service sector portion of US GDP will continue to strengthen, and is capable of growing at a higher rate than overall US GDP, which is a positive for steel consumption in 2015 and the out years.”


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