Nucor Corporation

07/22/2021 | Press release | Distributed by Public on 07/22/2021 10:49

Nucor Reports Record Quarterly Earnings for the Second Quarter of 2021 (Form 8-K)

Nucor Reports Record Quarterly Earnings for the Second Quarter of 2021

CHARLOTTE, N.C. - July 22, 2021 - Nucor Corporation (NYSE: NUE) today announced record quarterly consolidated net earnings of $1.51 billion, or $5.04 per diluted share, for the second quarter of 2021. By comparison, Nucor reported consolidated net earnings of $942.4 million, or $3.10 per diluted share, for the first quarter of 2021 and $108.9 million, or $0.36 per diluted share, for the second quarter of 2020.

In the first six months of 2021, Nucor reported consolidated net earnings of $2.45 billion, or $8.13 per diluted share, compared with consolidated net earnings of $129.2 million, or $0.42 per diluted share, in the first six months of 2020.

'Nucor's second quarter earnings of $5.04 per diluted share marks the highest quarterly earnings in the Company's history. Additionally, first half earnings of $8.13 per diluted share exceeds our full year diluted earnings per share record of $7.42 set in 2018. We expect to set a new record for quarterly earnings in the third quarter of 2021 as demand remains robust and virtually all the steel end use markets that we monitor are growing,' said Leon Topalian, Nucor's President and Chief Executive Officer. 'We are thankful to our customers and grateful for the strategic partnerships and successes we've achieved together. Congratulations to our teammates for all you do to make these outstanding results possible.'

Selected Segment Data

Earnings (loss) before income taxes and noncontrolling interests by segment for the second quarter and first six months of 2021 and 2020 were as follows (in thousands):

Three Months (13 Weeks) Ended

Six Months (26 Weeks) Ended

July 3, 2021

July 4, 2020

July 3, 2021

July 4, 2020

Steel mills

$

2,174,807

$

150,424

$

3,489,781

$

306,930

Steel products

259,330

152,874

471,142

315,433

Raw materials

120,143

(1,389

)

343,378

(9,300

)

Corporate/eliminations

(528,532

)

(120,852

)

(980,307

)

(285,709

)

$

2,025,748

$

181,057

$

3,323,994

$

327,354

The steel mills segment and the steel products segment both set a record for the highest quarterly earnings before income taxes and noncontrolling interests in the second quarter of 2021.

Financial Review

Nucor's consolidated net sales increased 25% to $8.79 billion in the second quarter of 2021 compared with $7.02 billion in the first quarter of 2021 and increased 103% compared with $4.33 billion in the second quarter of 2020. Average sales price per ton in the second quarter of 2021 increased 20% compared with the first quarter of 2021 and increased 49% compared with the second quarter of 2020. A total of 7,482,000 tons were shipped to outside customers in the second quarter of 2021, a 4% increase from the first quarter of 2021 and a 37% increase from the second quarter of 2020. Total steel mill shipments in the second quarter of 2021

Page 1 of 9

Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211

Phone 704-366-7000 Fax 704-362-4208 www.nucor.com

NewsRelease

Nucor Reports Record Quarterly Earnings for the Second Quarter of 2021 (Continued)

increased 3% as compared to the first quarter of 2021 and increased 41% as compared to the second quarter of 2020. Steel mill shipments to internal customers represented 20% of total steel mill shipments in the second quarter of 2021, compared with 21% in both the first quarter of 2021 and the second quarter of 2020. Downstream steel product shipments to outside customers in the second quarter of 2021 increased 9% from the first quarter of 2021 and increased 18% from the second quarter of 2020.

In the first six months of 2021, Nucor's consolidated net sales of $15.81 billion were an increase of 59% compared with consolidated net sales of $9.95 billion reported in the first six months of 2020. Total tons shipped to outside customers in the first six months of 2021 were 14,658,000, an increase of 16% from the first six months of 2020, while the average sales price per ton in the first six months of 2021 increased 37% from the first six months of 2020.

The average scrap and scrap substitute cost per gross ton used in the second quarter of 2021 was $457, a 13% increase compared to $405 in the first quarter of 2021 and a 61% increase compared to $284 in the second quarter of 2020. The average scrap and scrap substitute cost per gross ton used in the first six months of 2021 was $431, a 49% increase compared to $289 in the first six months of 2020.

Included in the second quarter of 2021 earnings is a $42.0 million, or $0.11 per diluted share, non-cash impairment charge related to our leasehold interest in unproved oil and natural gas properties. This charge is included in the raw materials segment.

Pre-operating and start-up costs related to the Company's growth projects were approximately $22 million, or $0.06 per diluted share, in the second quarter of 2021, compared with approximately $19 million, or $0.05 per diluted share, in the first quarter of 2021 and approximately $22 million, or $0.06 per diluted share, in the second quarter of 2020.

In the first six months of 2021, pre-operating and start-up costs related to the Company's growth projects were approximately $41 million, or $0.10 per diluted share, compared with approximately $51 million, or $0.13 per diluted share, in the first six months of 2020.

Overall operating rates at the Company's steel mills increased to 97% in the second quarter of 2021 as compared to 95% in the first quarter of 2021 and 68% in the second quarter of 2020. Operating rates in the first six months of 2021 increased to 96% as compared to 79% in the first six months of 2020.

Financial Strength

At the end of the second quarter of 2021, we had $3.21 billion in cash and cash equivalents, short-term investments and restricted cash and cash equivalents on hand. The Company's $1.50 billion revolving credit facility remains undrawn and does not expire until April 2023. Nucor continues to have the strongest credit

Page 2 of 9

Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211

Phone 704-366-7000 Fax 704-362-4208 www.nucor.com

NewsRelease

Nucor Reports Record Quarterly Earnings for the Second Quarter of 2021 (Continued)

rating in the North American steel sector (Baa1/A-) with stable outlooks at both Moody's and Standard & Poor's.

Commitment to Returning Capital to Stockholders

In May 2021, the board of directors approved the repurchase of up to $3.00 billion of the Company's common stock and terminated any previously authorized repurchase programs. Share repurchases will be made from time to time in the open market at prevailing market prices or through private transactions or block trades. The timing and amount of repurchases will depend on market conditions, share price, applicable legal requirements and other factors. The share repurchase authorization is discretionary and has no expiration date.

During the second quarter of 2021, Nucor repurchased approximately 6.8 million shares of its common stock at an average price of $90.80 per share (12.1 million shares year-to-date at an average price of $75.43 per share). As of July 3, 2021, Nucor had approximately 293,695,000 shares outstanding and approximately $2.80 billion remaining for repurchases under its newly authorized share repurchase program.

On June 8, 2021, Nucor's board of directors declared a cash dividend of $0.405 per share. This cash dividend is payable on August 11, 2021 to stockholders of record as of June 30, 2021 and is Nucor's 193rd consecutive quarterly cash dividend.

Second Quarter of 2021 Analysis

All three operating segments are continuing to generate robust profitability as overall strong demand is supporting higher average selling prices. Earnings of the steel mills segment significantly improved in the second quarter of 2021 as compared to the first quarter of 2021, primarily driven by the significant increase in profitability of our sheet and plate mills. The steel products segment's earnings in the second quarter of 2021 also increased from the first quarter of 2021. The steel mills segment and the steel products segment set new records for profitability in the second quarter of 2021. After setting a new record for segment earnings in the first quarter of 2021, earnings from the raw materials segment decreased in the second quarter of 2021 due to increased raw material input costs and the previously mentioned impairment charge.

Third Quarter of 2021 Outlook
We expect earnings in the third quarter of 2021 to be the highest quarterly earnings in Nucor history, surpassing the record set in the second quarter of 2021. The primary drivers for the expected increase in earnings in the third quarter of 2021 are improved pricing and margins in the steel mills segment. We expect increased profitability across the steel mills segment, with the largest increase at our sheet mills. The steel products segment and the raw materials segment are expected to have increased earnings in the third quarter of 2021 compared to the second quarter of 2021.

Page 3 of 9

Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211

Phone 704-366-7000 Fax 704-362-4208 www.nucor.com

NewsRelease

Nucor Reports Record Quarterly Earnings for the Second Quarter of 2021 (Continued)

Earnings Conference Call

You are invited to listen to the live broadcast of Nucor's conference call during which management will discuss Nucor's second quarter results on July 22, 2021 at 2:00 p.m. Eastern Time. The conference call will be available over the Internet at www.nucor.com, under Investors.

About Nucor

Nucor and its affiliates are manufacturers of steel and steel products, with operating facilities in the United States, Canada and Mexico. Products produced include: carbon and alloy steel -- in bars, beams, sheet and plate; hollow structural section tubing; electrical conduit; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; precision castings; steel fasteners; metal building systems; steel grating; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and hot briquetted iron / direct reduced iron; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.

Forward-Looking Statements

Certain statements contained in this news release are 'forward-looking statements' that involve risks and uncertainties. The words 'anticipate,' 'believe,' 'expect,' 'intend,' 'project,' 'may,' 'will,' 'should,' 'could' and similar expressions are intended to identify those forward-looking statements. These forward-looking statements reflect the Company's best judgment based on current information, and, although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the projected results and expectations discussed in this news release. Factors that might cause the Company's actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) competitive pressure on sales and pricing, including pressure from imports and substitute materials; (2) U.S. and foreign trade policies affecting steel imports or exports; (3) the sensitivity of the results of our operations to prevailing market steel prices and changes in the supply and cost of raw materials, including pig iron, iron ore and scrap steel; (4) the availability and cost of electricity and natural gas, which could negatively affect our cost of steel production or result in a delay or cancellation of existing or future drilling within our natural gas drilling programs; (5) critical equipment failures and business interruptions; (6) market demand for steel products, which, in the case of many of our products, is driven by the level of nonresidential construction activity in the United States; (7) impairment in the recorded value of inventory, equity investments, fixed assets, goodwill or other long-lived assets; (8) uncertainties surrounding the global economy, including excess world capacity for steel production; (9) fluctuations in currency conversion rates; (10) significant changes in laws or government regulations affecting environmental compliance, including legislation and regulations that result in greater regulation of greenhouse gas emissions that could increase our energy costs, capital expenditures and operating costs or cause one or more of our permits to be revoked or make it more difficult to obtain permit modifications; (11) the cyclical nature of the steel industry; (12)

Page 4 of 9

Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211

Phone 704-366-7000 Fax 704-362-4208 www.nucor.com

NewsRelease

Nucor Reports Record Quarterly Earnings for the Second Quarter of 2021 (Continued)

capital investments and their impact on our performance; (13) our safety performance; and (14) the impact of the COVID-19 pandemic. These and other factors are discussed in Nucor's regulatory filings with the Securities and Exchange Commission, including those in 'Item 1A. Risk Factors' of Nucor's Annual Report on Form 10-K for the year ended December 31, 2020. The forward-looking statements contained in this news release speak only as of this date, and Nucor does not assume any obligation to update them, except as may be required by applicable law.

Contact Information

For Investor/Analyst Inquiries - Paul Donnelly, 704-264-8807, or Gregg Lucas, 704-972-1841

For Media Inquiries - Katherine Miller, 704-353-9015

Page 5 of 9

Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211

Phone 704-366-7000 Fax 704-362-4208 www.nucor.com

NewsRelease

Nucor Reports Record Quarterly Earnings for the Second Quarter of 2021 (Continued)

Tonnage Data

(In thousands)

Three Months (13 Weeks) Ended

Six Months (26 Weeks) Ended

July 3, 2021

July 4, 2020

Percent Change

July 3, 2021

July 4, 2020

Percent Change

Steel mills total shipments:

Sheet

2,913

2,002

46%

5,840

4,876

20%

Bars

2,423

1,731

40%

4,742

3,973

19%

Structural

681

517

32%

1,304

1,201

9%

Plate

599

438

37%

1,195

1,048

14%

Other

118

81

46%

197

169

17%

6,734

4,769

41%

13,278

11,267

18%

Sales tons to outside customers:

Steel mills

5,356

3,758

43%

10,546

8,940

18%

Joist

167

122

37%

339

253

34%

Deck

130

111

17%

265

236

12%

Cold finished

128

75

71%

260

201

29%

Rebar fabrication products

338

309

9%

620

620

-

Piling

171

156

10%

307

336

-9%

Tubular products

269

249

8%

519

536

-3%

Other steel products

109

87

25%

209

186

12%

Raw materials

814

612

33%

1,593

1,358

17%

7,482

5,479

37%

14,658

12,666

16%

Page 6 of 9

Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211

Phone 704-366-7000 Fax 704-362-4208 www.nucor.com

NewsRelease

Nucor Reports Record Quarterly Earnings for the Second Quarter of 2021 (Continued)

Condensed Consolidated Statements of Earnings (Unaudited)

(In thousands, except per share data)

Three Months (13 Weeks) Ended

Six Months (26 Weeks) Ended

July 3, 2021

July 4, 2020

July 3, 2021

July 4, 2020

Net sales

$

8,789,164

$

4,327,306

$

15,806,304

$

9,951,643

Costs, expenses and other:

Cost of products sold

6,315,661

3,949,347

11,710,364

8,944,416

Marketing, administrative and other expenses

387,070

142,017

678,194

295,409

Equity in (earnings) losses of unconsolidated affiliates

(19,403

)

14,078

(32,642

)

14,901

Losses on assets

44,308

5,000

50,970

292,846

Interest expense, net

35,780

35,807

75,424

76,717

6,763,416

4,146,249

12,482,310

9,624,289

Earnings before income taxes and noncontrolling interests

2,025,748

181,057

3,323,994

327,354

Provision for income taxes

454,289

47,904

765,021

139,822

Net earnings

1,571,459

133,153

2,558,973

187,532

Earnings attributable to noncontrolling interests

64,591

24,272

109,673

58,320

Net earnings attributable to Nucor stockholders

$

1,506,868

$

108,881

$

2,449,300

$

129,212

Net earnings per share:

Basic

$

5.05

$

0.36

$

8.14

$

0.42

Diluted

$

5.04

$

0.36

$

8.13

$

0.42

Average shares outstanding:

Basic

296,817

302,921

299,359

302,915

Diluted

297,529

302,933

299,738

302,932

Page 7 of 9

Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211

Phone 704-366-7000 Fax 704-362-4208 www.nucor.com

NewsRelease

Nucor Reports Record Quarterly Earnings for the Second Quarter of 2021 (Continued)

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands)

July 3, 2021

Dec. 31, 2020

ASSETS

Current assets:

Cash and cash equivalents

$

2,722,656

$

2,639,671

Short-term investments

398,409

408,004

Accounts receivable, net

3,399,076

2,298,850

Inventories, net

5,240,750

3,569,089

Other current assets

295,048

573,048

Total current assets

12,055,939

9,488,662

Property, plant and equipment, net

7,235,536

6,899,110

Restricted cash and cash equivalents

84,350

115,258

Goodwill

2,241,558

2,229,672

Other intangible assets, net

627,201

668,021

Other assets

750,998

724,671

Total assets

$

22,995,582

$

20,125,394

LIABILITIES

Current liabilities:

Short-term debt

$

100,686

$

57,906

Current portion of long-term debt and finance lease obligations

12,027

10,885

Accounts payable

2,204,137

1,432,159

Salaries, wages and related accruals

850,396

462,727

Accrued expenses and other current liabilities

712,704

664,183

Total current liabilities

3,879,950

2,627,860

Long-term debt and finance lease obligations due after one year

5,275,496

5,271,789

Deferred credits and other liabilities

1,130,485

993,884

Total liabilities

10,285,931

8,893,533

EQUITY

Nucor stockholders' equity:

Common stock

152,061

152,061

Additional paid-in capital

2,117,155

2,121,288

Retained earnings

13,550,406

11,343,852

Accumulated other comprehensive loss,

net of income taxes

(73,729

)

(118,861

)

Treasury stock

(3,491,915

)

(2,709,675

)

Total Nucor stockholders' equity

12,253,978

10,788,665

Noncontrolling interests

455,673

443,196

Total equity

12,709,651

11,231,861

Total liabilities and equity

$

22,995,582

$

20,125,394

Page 8 of 9

Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211

Phone 704-366-7000 Fax 704-362-4208 www.nucor.com

NewsRelease

Nucor Reports Record Quarterly Earnings for the Second Quarter of 2021 (Continued)

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

Six Months (26 Weeks) Ended

July 3, 2021

July 4, 2020

Operating activities:

Net earnings

$

2,558,973

$

187,532

Adjustments:

Depreciation

362,492

349,691

Amortization

41,858

42,165

Stock-based compensation

66,729

39,101

Deferred income taxes

102,367

90,515

Distributions from affiliates

180

2,000

Equity in losses (earnings) of unconsolidated affiliates

(32,642

)

14,901

Losses on assets

50,970

292,846

Changes in assets and liabilities (exclusive of acquisitions and dispositions):

Accounts receivable

(1,093,021

)

264,424

Inventories

(1,673,962

)

464,004

Accounts payable

726,649

(272,910

)

Federal income taxes

290,287

26,145

Salaries, wages and related accruals

385,265

(142,388

)

Other operating activities

97,041

(8,058

)

Cash provided by operating activities

1,883,186

1,349,968

Investing activities:

Capital expenditures

(702,378

)

(777,317

)

Investment in and advances to affiliates

(169

)

(9,756

)

Disposition of plant and equipment

10,665

17,652

Acquisitions (net of cash acquired)

300

794

Purchase of investments

(357,917

)

(222,500

)

Proceeds from the sale of investments

367,512

275,067

Other investing activities

587

1,132

Cash used in investing activities

(681,400

)

(714,928

)

Financing activities:

Net change in short-term debt

42,780

2,208

Proceeds from issuance of long-term debt, net of discount

-

1,074,995

Repayment of long-term debt

-

(77,150

)

Bond issuance related costs

-

(6,250

)

Proceeds from exercise of stock options

128,800

-

Payment of tax withholdings on certain stock-based compensation

(64,416

)

(17,263

)

Distributions to noncontrolling interests

(97,196

)

(62,965

)

Cash dividends

(246,539

)

(245,619

)

Acquisition of treasury stock

(916,145

)

(39,499

)

Other financing activities

(5,072

)

(4,645

)

Cash (used in) provided by financing activities

(1,157,788

)

623,812

Effect of exchange rate changes on cash

8,079

(4,268

)

Increase in cash and cash equivalents and restricted cash and cash equivalents

52,077

1,254,584

Cash and cash equivalents and restricted cash and cash equivalents - beginning of year

2,754,929

1,534,605

Cash and cash equivalents and restricted cash and cash equivalents - end of six months

$

2,807,006

$

2,789,189

Non-cash investing activity:

Change in accrued plant and equipment purchases

$

44,754

$

(25,897

)

Page 9 of 9

Nucor Executive Offices: 1915 Rexford Road, Charlotte, North Carolina 28211

Phone 704-366-7000 Fax 704-362-4208 www.nucor.com