Results

Nucor Corporation

10/21/2021 | Press release | Distributed by Public on 10/21/2021 09:44

Nucor Reports Record Quarterly Earnings for the Third Quarter of 2021 - Form 8-K

Nucor Reports Record Quarterly Earnings for the Third Quarter of 2021

CHARLOTTE, N.C. - October 21, 2021-Nucor Corporation (NYSE: NUE) today announced record quarterly consolidated net earnings of $2.13 billion, or $7.28 per diluted share, for the third quarter of 2021. By comparison, Nucor reported consolidated net earnings of $1.51 billion, or $5.04 per diluted share, for the second quarter of 2021 and $193.4 million, or $0.63 per diluted share, for the third quarter of 2020.

In the first nine months of 2021, Nucor reported consolidated net earnings of $4.58 billion, or $15.34 per diluted share, compared with consolidated net earnings of $322.6 million, or $1.06 per diluted share, in the first nine months of 2020.

"During the third quarter, we once again achieved record results, with earnings per share of $7.28. Our third quarter performance surpassed our previous record of $5.04 set in the second quarter of this year and almost matched our full year earnings record of $7.42 that we set back in 2018," said Leon Topalian, Nucor's President and Chief Executive Officer. "Congratulations to the entire Nucor team for delivering the phenomenal results we have seen so far this year while staying focused on our Safety goals. I am incredibly proud of our team and what we have accomplished."

Selected Segment Data

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

Three Months (13 Weeks) Ended Nine Months (39 Weeks) Ended
Oct. 2, 2021 Oct. 3, 2020 Oct. 2, 2021 Oct. 3, 2020

Steel mills

$ 3,116,539 $ 205,152 $ 6,606,320 $ 512,082

Steel products

368,595 186,976 839,737 502,409

Raw materials

161,870 6,232 505,248 (3,068 )

Corporate/eliminations

(777,897 ) (107,942 ) (1,758,204 ) (393,651 )
$ 2,869,107 $ 290,418 $ 6,193,101 $ 617,772

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 third quarter of 2021.

Financial Review

Nucor's consolidated net sales increased 17% to $10.31 billion in the third quarter of 2021 compared with $8.79 billion in the second quarter of 2021 and increased 109% compared with $4.93 billion in the third quarter of 2020. Average sales price per ton in the third quarter of 2021 increased 22% compared with the second quarter of 2021 and increased 86% compared with the third quarter of 2020. A total of 7,172,000 tons were shipped to outside customers in the third quarter of 2021, a 4% decrease from the second quarter of 2021 and a 13% increase from the third quarter of 2020. Total steel mill shipments in the third quarter of 2021 decreased 3% as compared to the second quarter of 2021 and increased 16% as compared to the third quarter

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

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

of 2020. Steel mill shipments to internal customers represented 21% of total steel mill shipments in the third quarter of 2021, compared with 20% in the second quarter of 2021 and 21% in the third quarter of 2020. Downstream steel product shipments to outside customers in the third quarter of 2021 was consistent with the second quarter of 2021 and increased 3% from the third quarter of 2020.

In the first nine months of 2021, Nucor's consolidated net sales of $26.12 billion were an increase of 76% compared with consolidated net sales of $14.88 billion reported in the first nine months of 2020. Total tons shipped to outside customers in the first nine months of 2021 were 21,830,000, an increase of 15% from the first nine months of 2020, while the average sales price per ton in the first nine months of 2021 increased 53% from the first nine months of 2020.

The average scrap and scrap substitute cost per gross ton used in the third quarter of 2021 was $511, a 12% increase compared to $457 in the second quarter of 2021 and an 84% increase compared to $277 in the third quarter of 2020. The average scrap and scrap substitute cost per gross ton used in the first nine months of 2021 was $457, a 60% increase compared to $285 in the first nine 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. Included in earnings for the third quarter of 2020 is a restructuring charge of $16.4 million, or $0.04 per diluted share, related to the realignment of Nucor's metal buildings business. This charge is included in the steel products segment.

Pre-operating and start-up costs related to the Company's growth projects were approximately $36 million, or $0.09 per diluted share, in the third quarter of 2021, compared with approximately $22 million, or $0.06 per diluted share, in the second quarter of 2021 and approximately $22 million, or $0.06 per diluted share, in the third quarter of 2020.

In the first nine months of 2021, pre-operating and start-up costs related to the Company's growth projects were approximately $76 million, or $0.19 per diluted share, compared with approximately $73 million, or $0.18 per diluted share, in the first nine months of 2020.

Overall operating rates at the Company's steel mills decreased to 96% in the third quarter of 2021 as compared to 97% in the second quarter of 2021 and increased from 83% in the third quarter of 2020. Operating rates in the first nine months of 2021 increased to 96% as compared to 80% in the first nine months of 2020.

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

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

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

Financial Strength

At the end of the third quarter of 2021, we had $2.29 billion in cash and cash equivalents, short-term investments and restricted cash and cash equivalents on hand. Our significant cash flow generation has allowed us to maintain our strong liquidity position all while funding two strategic acquisitions and continuing to execute our share repurchase program during the third quarter.

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 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

During the third quarter of 2021, Nucor repurchased approximately 8.2 million shares of its common stock at an average price of $104.60 per share (20.3 million shares year-to-date at an average price of $87.19 per share). As of October 2, 2021, Nucor had approximately 285,799,000 shares outstanding and approximately $1.9 billion remaining for repurchases under its newly authorized share repurchase program.

On September 17, 2021, Nucor's board of directors declared a cash dividend of $0.405 per share. This cash dividend is payable on November 10, 2021 to stockholders of record as of September 30, 2021 and is Nucor's 194th consecutive quarterly cash dividend.

Third Quarter of 2021 Analysis

All three operating segments continued to generate robust profitability in the third quarter of 2021. Earnings of the steel mills segment increased significantly in the third quarter of 2021 as compared to the second quarter of 2021, mainly driven by higher realized selling prices. The steel products segment generated significantly increased earnings in the third quarter of 2021 due to margin expansion caused by higher average selling prices. The raw materials segment's earnings in the third quarter of 2021 were comparable to the second quarter of 2021, excluding the impairment charge recorded in the second quarter of 2021.

Fourth Quarter of 2021 Outlook

We expect continued strong results for the fourth quarter of 2021, potentially exceeding the net earnings record set in the third quarter of 2021. Demand remains robust across most end-use markets, a trend we expect will continue well into 2022. Backlogs in our steel mills and steel products segments remain elevated compared to historical levels.

We expect the profitability of the steel mills segment to improve in the fourth quarter of 2021 as compared to the third quarter of 2021, driven by additional earnings growth at our sheet and plate mills. We expect the profitability of the steel products segment to increase in the fourth quarter of 2021 compared to the third quarter of 2021. The raw materials segment's earnings in the fourth quarter of 2021 are expected to decrease compared to the third quarter of 2021 due primarily to margin compression at our direct reduced iron facilities.

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

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

Nucor Reports Record Quarterly Earnings for the Third 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 third quarter results on October 21, 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 racking; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; precision castings; steel fasteners; metal building systems; insulated metal panels; 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;

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

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

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

(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) capital investments and their impact on our performance; (13) our safety performance; and (14) the impact of the COVID-19 pandemic and any variants of the virus. 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

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

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

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

Tonnage Data

(In thousands)

Three Months (13 Weeks) Ended Nine Months (39 Weeks) Ended
Oct. 2, 2021 Oct. 3, 2020 Percent
Change
Oct. 2, 2021 Oct. 3, 2020 Percent
Change

Steel mills total shipments:

Sheet

2,789 2,469 13 % 8,629 7,345 17 %

Bars

2,350 2,119 11 % 7,092 6,092 16 %

Structural

738 553 33 % 2,042 1,754 16 %

Plate

605 424 43 % 1,800 1,472 22 %

Other

61 61 - 258 230 12 %
6,543 5,626 16 % 19,821 16,893 17 %

Sales tons to outside customers:

Steel mills

5,144 4,442 16 % 15,690 13,382 17 %

Joist

190 153 24 % 529 406 30 %

Deck

139 129 8 % 404 365 11 %

Cold finished

123 99 24 % 383 300 28 %

Rebar fabrication products

323 328 -2 % 943 948 -

Piling

144 186 -23 % 451 522 -14 %

Tubular products

272 280 -3 % 791 816 -3 %

Other steel products

116 92 26 % 325 278 17 %

Raw materials

721 658 10 % 2,314 2,016 15 %
7,172 6,367 13 % 21,830 19,033 15 %

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

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

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

Condensed Consolidated Statements of Earnings (Unaudited)

(In thousands, except per share data)

Three Months (13 Weeks) Ended Nine Months (39 Weeks) Ended
Oct. 2, 2021 Oct. 3, 2020 Oct. 2, 2021 Oct. 3, 2020

Net sales

$ 10,313,223 $ 4,927,960 $ 26,119,527 $ 14,879,603

Costs, expenses and other:

Cost of products sold

6,906,950 4,425,765 18,617,314 13,370,181

Marketing, administrative and other expenses

526,345 165,513 1,204,539 460,922

Equity in (earnings) losses of unconsolidated affiliates

(32,464 ) (479 ) (65,106 ) 14,422

Losses on assets

- 6,604 50,970 299,450

Interest expense, net

43,285 40,139 118,709 116,856
7,444,116 4,637,542 19,926,426 14,261,831

Earnings before income taxes and noncontrolling interests

2,869,107 290,418 6,193,101 617,772

Provision for income taxes

645,842 67,788 1,410,863 207,610

Net earnings

2,223,265 222,630 4,782,238 410,162

Earnings attributable to noncontrolling interests

95,522 29,215 205,195 87,535

Net earnings attributable to Nucor stockholders

$ 2,127,743 $ 193,415 $ 4,577,043 $ 322,627

Net earnings per share:

Basic

$ 7.29 $ 0.63 $ 15.37 $ 1.06

Diluted

$ 7.28 $ 0.63 $ 15.34 $ 1.06

Average shares outstanding:

Basic

290,510 303,394 296,431 303,072

Diluted

291,152 303,441 296,928 303,099

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

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

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

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands)

Oct. 2, 2021 Dec. 31, 2020

ASSETS

Current assets:

Cash and cash equivalents

$ 1,764,293 $ 2,639,671

Short-term investments

247,247 408,004

Accounts receivable, net

4,087,293 2,298,850

Inventories, net

5,678,715 3,569,089

Other current assets

346,277 573,048

Total current assets

12,123,825 9,488,662

Property, plant and equipment, net

7,777,277 6,899,110

Restricted cash and cash equivalents

281,345 115,258

Goodwill

2,787,992 2,229,672

Other intangible assets, net

1,171,292 668,021

Other assets

807,748 724,671

Total assets

$ 24,949,479 $ 20,125,394

LIABILITIES

Current liabilities:

Short-term debt

$ 102,737 $ 57,906

Current portion of long-term debt and finance lease obligations

615,130 10,885

Accounts payable

1,870,035 1,432,159

Salaries, wages and related accruals

1,323,365 462,727

Accrued expenses and other current liabilities

886,332 664,183

Total current liabilities

4,797,599 2,627,860

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

4,949,945 5,271,789

Deferred credits and other liabilities

1,251,643 993,884

Total liabilities

10,999,187 8,893,533

EQUITY

Nucor stockholders' equity:

Common stock

152,061 152,061

Additional paid-in capital

2,131,514 2,121,288

Retained earnings

15,561,261 11,343,852

Accumulated other comprehensive loss, net of income taxes

(85,901 ) (118,861 )

Treasury stock

(4,336,415 ) (2,709,675 )

Total Nucor stockholders' equity

13,422,520 10,788,665

Noncontrolling interests

527,772 443,196

Total equity

13,950,292 11,231,861

Total liabilities and equity

$ 24,949,479 $ 20,125,394

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

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

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

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

Nine Months (39 Weeks) Ended
Oct. 2, 2021 Oct. 3, 2020

Operating activities:

Net earnings

$ 4,782,238 $ 410,162

Adjustments:

Depreciation

546,619 525,688

Amortization

76,656 62,877

Stock-based compensation

97,652 56,122

Deferred income taxes

166,748 140,606

Distributions from affiliates

200 3,021

Equity in (earnings) losses of unconsolidated affiliates

(65,106 ) 14,422

Losses on assets

50,970 299,450

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

Accounts receivable

(1,622,668 ) 37,547

Inventories

(1,976,738 ) 590,434

Accounts payable

343,014 15,366

Federal income taxes

262,195 18,848

Salaries, wages and related accruals

835,381 (69,235 )

Other operating activities

123,202 100,283

Cash provided by operating activities

3,620,363 2,205,591

Investing activities:

Capital expenditures

(1,207,088 ) (1,179,081 )

Investment in and advances to affiliates

(193 ) (16,542 )

Disposition of plant and equipment

15,581 19,492

Acquisitions (net of cash acquired)

(1,346,608 ) (20,368 )

Purchase of investments

(394,141 ) (401,986 )

Proceeds from the sale of investments

554,898 301,249

Other investing activities

1,042 (33,536 )

Cash used in investing activities

(2,376,509 ) (1,330,772 )

Financing activities:

Net change in short-term debt

44,831 1,334

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

196,990 1,237,635

Repayment of long-term debt

- (97,150 )

Bond issuance related costs

- (6,250 )

Proceeds from exercise of stock options

143,874 -

Payment of tax withholdings on certain stock-based compensation

(71,494 ) (17,691 )

Distributions to noncontrolling interests

(120,619 ) (106,193 )

Cash dividends

(366,606 ) (368,636 )

Acquisition of treasury stock

(1,773,848 ) (39,499 )

Other financing activities

(7,993 ) (6,983 )

Cash (used in) provided by financing activities

(1,954,865 ) 596,567

Effect of exchange rate changes on cash

1,720 (7,790 )

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

(709,291 ) 1,463,596

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 nine months

$ 2,045,638 $ 2,998,201

Non-cash investing activity:

Change in accrued plant and equipment purchases

$ 14,997 $ -

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