FORT WAYNE, Ind., April 19, 2021 /PRNewswire/ --

First Quarter 2021 Performance Highlights:

Near-record steel shipments of 2.8 million tons and record steel fabrication shipments of 184,000 tons
Record net sales of $3.5 billion
Record operating income of $594 million and record net income of $431 million
Strong cash flow from operations of $262 million and record adjusted EBITDA of $664 million

Steel Dynamics, Inc. (NASDAQ:STLD) today announced first quarter 2021 financial results. The company reported first quarter 2021 net sales of $3.5 billion and net income of $431 million, or $2.03 per diluted share. Excluding the impact from the following item, the company's first quarter 2021 adjusted net income was $445 million, or $2.10 per diluted share.

Costs of approximately $20 million, or $0.07 per diluted share (net of capitalized interest), associated with construction of the company's Sinton Texas Flat Roll Steel Mill growth investment

Comparatively, prior year first quarter net sales were $2.6 billion, with net income of $187 million, or $0.88 per diluted share. The company's sequential fourth quarter 2020 earnings were $0.89 per diluted share and adjusted earnings were $0.97 per diluted share, excluding refinancing costs of $0.04 per diluted share, construction costs related to the Texas steel mill of $0.05 per diluted share, a non-cash asset impairment charge of $0.06 per diluted share, and a tax benefit related to the reduction of a valuation allowance of $0.06 per diluted share.

"The team delivered a tremendous first quarter performance, achieving record quarterly net sales, operating income and adjusted EBITDA," said Mark D. Millett, President and Chief Executive Officer. "Our first quarter 2021 operating income increased 130 percent sequentially to $594 million, with adjusted EBITDA of $664 million. Numerous individual operating and financial records were attained — a truly amazing achievement and a testament to the passion and dedication of our team. Based on their performance, we achieved solid cash flow from operations of $262 million in the first quarter 2021, while at the same time supporting increased working capital needs, meaningfully growing our business through significant organic growth investments, increasing our quarterly cash dividend by four percent, and maintaining strong liquidity of over $2.4 billion.

"During the first quarter, steel demand remained robust and product pricing gained momentum across our entire steel platform. Higher flat roll steel selling values were the most significant drivers for our record quarterly earnings, as demand strength and historically low customer inventories throughout the supply chain supported prices. Domestic steel consumption remained strong from the automotive, construction and industrial sectors, and energy has shown some signs of rebounding.

"Despite the challenges of the pandemic, as a result of our safety culture and spirit of excellence among our teams, our first quarter 2021 segment operating results were once again phenomenal," continued Millett. "First quarter operating income from our steel operations was a record $641 million and our metals recycling operations nearly doubled their earnings sequentially, as improved domestic steel mill utilization increased ferrous scrap demand. Our steel fabrication operations also displayed a solid performance, achieving record quarterly shipments and ending March with a record order backlog that is over 50 percent higher than our previous high point, as we head into the summer construction season."

First Quarter 2021 Comments

First quarter 2021 operating income for the company's steel operations was a record $641 million, or 115 percent higher than sequential fourth quarter results, due to significant metal spread expansion and near-record steel shipments. Record flat roll and strong long product steel realized selling values, more than offset higher scrap input costs. The first quarter 2021 average external product selling price for the company's steel operations increased $227 sequentially to $1,041 per ton. The average ferrous scrap cost per ton melted at the company's steel mills increased $93 sequentially to $372 per ton.

As domestic steel production continued to rise in the quarter, demand and pricing for recycled scrap significantly improved. Ferrous prime scrap pricing indices increased approximately $170 per gross ton during the first quarter. As a result, first quarter 2021 operating income from the company's metals recycling operations nearly doubled to $54 million, compared to the sequential fourth quarter.

The company's steel fabrication operations reported operating income of $10 million in the first quarter 2021, over 60 percent lower than the sequential fourth quarter results. Notwithstanding achieving record quarterly shipments, earnings declined as significantly higher steel input costs more than offset higher realized selling values, due to the timing of matching a six-month backlog to more current higher-priced steel inputs. Lower earnings are not a reflection of weaker demand, as order activity is extremely strong and customers continue to be optimistic concerning non-residential construction projects. The company's steel fabrication order backlog is at a record level at the end of March, 85 percent higher than its previous peak. Steel joist and deck product pricing has also strengthened significantly to record levels due to the strong demand environment and higher steel input costs.

Outlook

"We remain confident that market conditions are in place to benefit the domestic steel industry in 2021 and beyond," said Millett. "While global economies are still recovering from the shock of COVID-19, we are seeing strong steel demand coupled with extremely low customer steel inventory throughout the supply chain. The automotive sector has experienced the strongest recovery, despite the electronic chip shortage, and the construction, equipment and transportation sectors are also strong. Our order entry continues to be robust across our businesses, and when coupled with historically low inventories, supports continued strong steel selling values. We believe this momentum will continue throughout the year and that our second quarter 2021 earnings will be even higher than our record first quarter 2021 results. We also believe U.S. trade policies and existing steel trade cases will continue to moderate steel imports. Based on strong domestic steel fundamentals and customer optimism, we continue to be confident regarding North American steel market dynamics. This positive environment coupled with our strategic growth initiatives provide firm drivers for our further growth in the coming years.

"We and our customers continue to be extremely excited about our Sinton Texas Flat Roll Steel Mill investment. It represents transformational competitively-advantaged strategic growth, with associated long-term value creation for all of our stakeholders. The facility is designed to have product capabilities beyond that of existing electric-arc-furnace (EAF) flat roll steel producers, competing even more effectively with the higher-carbon emitting integrated steel model and foreign competition, providing a broader steel portfolio and a climate-conscious supply option for our customers. Construction continues to go well and remains within our expected project cost of $1.9 billion, with plans to commence steel production late summer 2021. We have targeted specific regional steel consuming markets and are competitively located close to these areas, with an opportunity to also displace foreign steel imports. We have executed agreements with several customers to co-locate on our site, currently representing over 1.3 million tons of annual steel consumption and processing capabilities, and we are still in discussion with others. Our recent acquisition of a Mexican scrap company is also providing a key support for Sinton's ferrous scrap needs.

"Additionally, as recently announced, we are planning to add four additional value-added flat roll steel coating lines comprised of two paint lines and two galvanizing lines with Galvalume® coating capability. The sites for these lines are still to be determined but two lines comprised of one paint line and one galvanizing line will be located in the Southern U.S., to provide Sinton with the same diversification and higher-margin product capabilities as our Butler and Columbus Flat Roll Steel divisions. The estimated investment for these two lines is $225 million, with a combined annual coating capacity of 540,000 tons. The other two lines will have the same annual coating capacity with an estimated investment between $175 million and $200 million. They will be located in the Midwest to support the growing demand for coated flat roll steel products and to further increase the diversification and cash generation capacity of our existing Midwest flat roll steel operations. Our unique operating culture, coupled with our considerable experience in successfully constructing and operating highly-profitable EAF steel mills and flat roll steel coating lines, positions us well to execute these strategic growth initiatives. Based on our current estimates, we believe these four lines will likely begin operating sometime in the second half of 2022.

"Our commitment is to the health and safety of our teams, families, and communities, while meeting the current and future needs of our customers. Our culture and business model continue to positively differentiate our performance from the rest of the industry, and we are in a place of strength. We are competitively positioned and focused to generate long-term sustainable value for all of our stakeholders," concluded Millett.

Conference Call and Webcast

Steel Dynamics, Inc. will hold a conference call to discuss first quarter 2021 operating and financial results on Tuesday, April 20, 2021, at 10:00 a.m. Eastern Daylight Time. You may access the call and find dial-in information on the Investors section of the company's website at www.steeldynamics.com. A replay of the call will be available on our website until 11:59 p.m. Eastern Daylight Time on April 26, 2021.

About Steel Dynamics, Inc.

Steel Dynamics is one of the largest domestic steel producers and metals recyclers in the United States, based on estimated annual steelmaking and metals recycling capability, with facilities located throughout the United States, and in Mexico. Steel Dynamics produces steel products, including hot roll, cold roll, and coated sheet steel, structural steel beams and shapes, rail, engineered special-bar-quality steel, cold finished steel, merchant bar products, specialty steel sections and steel joists and deck. In addition, the company produces liquid pig iron and processes and sells ferrous and nonferrous scrap.

Note Regarding Non-GAAP Financial Measures

The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes that Adjusted Net Income, Adjusted Diluted Earnings Per Share, EBITDA and Adjusted EBITDA, non-GAAP financial measures, provide additional meaningful information regarding the company's performance and financial strength. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the company's reported results prepared in accordance with GAAP. In addition, because not all companies use identical calculations, Adjusted Net Income, Adjusted Diluted Earnings Per Share, EBITDA and Adjusted EBITDA included in this release may not be comparable to similarly titled measures of other companies.

Forward-Looking Statements

This press release contains some predictive statements about future events, including statements related to conditions in domestic or global economies, conditions in steel and recycled metals market places, Steel Dynamics' revenues, costs of purchased materials, future profitability and earnings, and the operation of new, existing or planned facilities. These statements, which we generally precede or accompany by such typical conditional words as "anticipate", "intend", "believe", "estimate", "plan", "seek", "project", or "expect", or by the words "may", "will", or "should", are intended to be made as "forward-looking," subject to many risks and uncertainties, within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These statements speak only as of this date and are based upon information and assumptions, which we consider reasonable as of this date, concerning our businesses and the environments in which they operate. Such predictive statements are not a guarantee of future performance, and we undertake no duty to update or revise any such statements. Some factors that could cause such forward-looking statements to turn out differently than anticipated include: (1) domestic and global economic factors; (2) global steelmaking overcapacity and steel imports, together with increased scrap prices; (3) pandemics, epidemics, widespread illness or other health issues, such as the COVID-19 pandemic; (4) the cyclical nature of the steel industry and the industries we serve; (5) volatility and major fluctuations in prices and availability of scrap metal, scrap substitutes, and our potential inability to pass higher costs on to our customers; (6) cost and availability of electricity, natural gas, oil, or other resources are subject to volatile market conditions; (7) compliance with and changes in environmental and remediation requirements; (8) increased regulation associated with the environment, climate change, greenhouse gas emissions and sustainability; (9) significant price and other forms of competition from other steel producers, scrap processors and alternative materials; (10) availability of an adequate source of supply for our metals recycling operations; (11) cybersecurity threats and risks to the security of our sensitive data and information technology; (12) the implementation of our growth strategy; (13) litigation and legal compliance, (14) unexpected equipment downtime or shutdowns; (15) governmental agencies may refuse to grant or renew some of our licenses and permits; (16) our senior unsecured credit facility contains, and any future financing agreements may contain, restrictive covenants that may limit our flexibility; and (17) the impacts of impairment.

More specifically, refer to Steel Dynamics' more detailed explanation of these and other factors and risks that may cause such predictive statements to turn out differently, as set forth in our most recent Annual Report on Form 10-K under the headings Special Note Regarding Forward-Looking Statements and Risk Factors, in our quarterly reports on Form 10-Q, or in other reports which we file with the Securities and Exchange Commission. These are available publicly on the Securities and Exchange Commission website, www.sec.gov, and on the Steel Dynamics website, www.steeldynamics.com under "Investors — SEC Filings".

Steel Dynamics, Inc. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in thousands, except per share data)

	Three Months Ended				Three Months
	March 31,				Ended
	2021		2020		Dec. 31, 2020

Net sales	$	3,544,597	$	2,575,100	$	2,601,245
Costs of goods sold		2,744,331		2,159,871		2,158,992
Gross profit		800,266		415,229		442,253

Selling, general and administrative expenses		149,781		112,898		137,018
Profit sharing		48,848		21,454		19,404
Amortization of intangible assets		7,438		7,191		7,672
Asset impairment charges		-		-		19,409
Operating income		594,199		273,686		258,750

Interest expense, net of capitalized interest		17,269		28,019		20,206
Other expense (income), net		10,071		(2,589)		17,727
Income before income taxes		566,859		248,256		220,817

Income tax expense		128,104		57,420		23,867
Net income		438,755		190,836		196,950
Net income attributable to noncontrolling interests		(8,248)		(3,496)		(9,107)
Net income attributable to Steel Dynamics, Inc.	$	430,507	$	187,340	$	187,843


Basic earnings per share attributable to
Steel Dynamics, Inc. stockholders	$	2.04	$	0.88	$	0.89

Weighted average common shares outstanding		211,015		213,254		210,599

Diluted earnings per share attributable to
Steel Dynamics, Inc. stockholders, including the
effect of assumed conversions when dilutive	$	2.03	$	0.88	$	0.89

Weighted average common shares
and share equivalents outstanding		212,254		214,024		212,052


Dividends declared per share	$	0.26	$	0.25	$	0.25

Steel Dynamics, Inc. CONSOLIDATED BALANCE SHEETS (in thousands)

	March 31,		December 31,
Assets	2021		2020
	(unaudited)
Current assets
Cash and equivalents	$	1,245,165	$	1,368,618
Accounts receivable, net		1,366,463		971,918
Inventories		2,217,534		1,843,548
Other current assets		67,744		74,363
Total current assets		4,896,906		4,258,447

Property, plant and equipment, net		4,340,411		4,105,569

Intangible assets, net		317,139		324,577

Goodwill		456,378		457,226

Other assets		117,062		119,743
Total assets	$	10,127,896	$	9,265,562
Liabilities and Equity
Current liabilities
Accounts payable	$	1,134,672	$	769,455
Income taxes payable		52,969		2,386
Accrued expenses		392,322		400,052
Current maturities of long-term debt		81,226		86,894
Total current liabilities		1,661,189		1,258,787

Long-term debt		3,016,200		3,015,782

Deferred income taxes		602,185		536,288

Other liabilities		113,125		106,479
Total liabilities		5,392,699		4,917,336

Commitments and contingencies

Redeemable noncontrolling interests		163,614		158,614

Equity
Common stock		648		648
Treasury stock, at cost		(1,614,866)		(1,623,747)
Additional paid-in capital		1,202,945		1,207,392
Retained earnings		5,134,398		4,758,969
Accumulated other comprehensive income		5,667		1,902
Total Steel Dynamics, Inc. equity		4,728,792		4,345,164
Noncontrolling interests		(157,209)		(155,552)
Total equity		4,571,583		4,189,612
Total liabilities and equity	$	10,127,896	$	9,265,562

Steel Dynamics, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)

	Three Months Ended
	March 31,
	2021		2020

Operating activities:
Net income	$	438,755	$	190,836

Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		86,919		80,259
Equity-based compensation		17,040		17,844
Deferred income taxes		66,744		5,927
Other adjustments		(662)		(264)
Changes in certain assets and liabilities:
Accounts receivable		(394,545)		(154,072)
Inventories		(374,588)		44,505
Other assets		5,828		(1,541)
Accounts payable		360,681		51,596
Income taxes receivable/payable		59,593		52,385
Accrued expenses		(3,574)		(76,194)
Net cash provided by operating activities		262,191		211,281

Investing activities:
Purchases of property, plant and equipment		(309,863)		(217,535)
Purchases of short-term investments		-		(149,359)
Proceeds from maturities of short-term investments		-		192,340
Other investing activities		390		518
Net cash used in investing activities		(309,473)		(174,036)

Financing activities:
Issuance of current and long-term debt		297,441		216,261
Repayment of current and long-term debt		(304,284)		(235,757)
Dividends paid		(52,729)		(51,481)
Purchase of treasury stock		-		(106,529)
Other financing activities		(16,598)		(6,152)
Net cash used in financing activities		(76,170)		(183,658)

Decrease in cash, cash equivalents, and restricted cash		(123,452)		(146,413)
Cash, cash equivalents, and restricted cash at beginning of period		1,374,122		1,387,397
Cash, cash equivalents, and restricted cash at end of period	$	1,250,670	$	1,240,984


Supplemental disclosure information:
Cash paid for interest	$	11,315	$	8,785
Cash paid for income taxes, net	$	2,142	$	518

Steel Dynamics, Inc. SUPPLEMENTAL INFORMATION (dollars in thousands)

	First Quarter
		2021		2020		Q4 2020
*External Net Sales*
Steel	$	2,510,684	$	1,941,706	$	1,870,841
Steel Fabrication		256,985		220,936		217,977
Metals Recycling		470,007		291,856		347,022
Other		306,921		120,602		165,405
Consolidated Net Sales	$	3,544,597	$	2,575,100	$	2,601,245
*Operating Income*
Steel	$	641,439	$	292,746	$	297,682
Steel Fabrication		9,895		29,204		25,067
Metals Recycling		53,933		8,326		27,035
		705,267		330,276		349,784

Non-cash amortization of intangible assets		(7,438)		(7,191)		(7,672)
Profit sharing expense		(48,848)		(21,454)		(19,404)
Non-segment operations		(54,782)		(27,945)		(44,549)
Non-cash asset impairment charges		-		-		(19,409)
Consolidated Operating Income	$	594,199	$	273,686	$	258,750

*Adjusted EBITDA*
Net income	$	438,755	$	190,836	$	196,950
Income taxes		128,104		57,420		23,867
Net interest expense		16,815		21,790		19,853
Depreciation		77,888		71,733		75,787
Amortization of intangible assets		7,438		7,191		7,672
Noncontrolling interest (a)		(8,422)		(3,496)		(2,352)
EBITDA		660,578		345,474		321,777
Non-cash adjustments
Unrealized (gains) losses		(6,852)		(1,262)		2,629
Inventory valuation		109		859		1,078
Equity-based compensation		10,210		10,812		18,746
Asset impairment charges		-		-		19,409
Refinancing charges		-		-		3,059
Adjusted EBITDA	$	664,045	$	355,883	$	366,698
*Other Operating Information*
Steel
Average external sales price (Per ton) (b)	$	1,041	$	774	$	814
Average ferrous cost (Per ton melted) (c)	$	372	$	267	$	279

Flat Roll shipments
Butler and Columbus Flat Roll divisions		1,496,531		1,584,264		1,447,125
Steel Processing divisions (d)		422,850		405,981		413,756
Long Product shipments
Structural and Rail Division		478,687		434,882		435,364
Engineered Bar Products Division		200,628		189,801		164,735
Roanoke Bar Division		136,420		140,222		126,163
Steel of West Virginia		87,158		92,032		83,303
Total Shipments (Tons)		2,822,274		2,847,182		2,670,446

External Shipments (Tons) (b)		2,410,817		2,495,164		2,299,310

Steel Mill Production (Tons)		2,476,939		2,535,233		2,273,273
Metals Recycling
Nonferrous shipments (000's of pounds)		280,809		272,078		271,552
Ferrous shipments (Gross tons)		1,395,843		1,192,144		1,341,316
External ferrous shipments (Gross tons)		437,182		393,651		446,233
Steel Fabrication
Average sales price (Per ton)	$	1,406	$	1,356	$	1,351
Shipments (Tons)		184,243		163,312		162,825

(a) Quarter ended March 31, 2021 and December 31, 2020, net of income tax expense of $175 and benefit of ($2,348), respectively
(b) Represents all steel operations
(c) Represents ferrous cost per ton melted at our six electric arc furnace steel mills
(d) Includes Heartland, The Techs, and United Steel Supply operations

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SOURCE Steel Dynamics, Inc.

Steel Dynamics Reports Record First Quarter 2021 Results