FORT WAYNE, Ind., Oct. 16, 2024 /PRNewswire/ --

Third Quarter 2024 Performance Highlights:

Steel shipments of 3.2 million tons
Net sales of $4.3 billion, operating income of $395 million, net income of $318 million, and adjusted EBITDA of $557 million
Cash flow from operations of $760 million
Strong liquidity of $3.1 billion, as of September 30, 2024
Share repurchases of $310 million of the company's common stock, representing 1.6 percent of its outstanding shares

Steel Dynamics, Inc. (NASDAQ/GS: STLD) today announced third quarter 2024 financial results. The company reported third quarter 2024 net sales of $4.3 billion and net income of $318 million, or $2.05 per diluted share. Comparatively, the company's sequential second quarter 2024 net income was $428 million, or $2.72 per diluted share and prior year third quarter net income was $577 million, or $3.47 per diluted share.

"The teams achieved a solid third quarter 2024 performance across the platforms, with adjusted EBITDA of $557 million and cash flow from operations of $760 million," said Mark D. Millett, Co-Founder, Chairman, and Chief Executive Officer. "With our proven through-cycle cash generation, we increased liquidity to $3.1 billion, while also investing $621 million in our internal ongoing growth initiatives and distributing $381 million to our shareholders through cash dividends and share repurchases. Our three-year after-tax return-on-invested capital of 26 percent is a testament to our ongoing high-return capital allocation execution.

"Underlying steel demand continued to be stable in the third quarter," continued Millett. "However, earnings declined sequentially, based on lower average realized steel pricing, primarily within the flat rolled operations as generally 80 percent of this business is contractually based and tied to lagging pricing indices. Steady steel demand, coupled with continued low customer inventory and stabilized scrap prices, resulted in stabilization and improvement in flat rolled steel prices during the later part of the third quarter. Our long product steel operations realized a slight improvement in metal spread as scrap pricing declined more than average realized pricing."

Third Quarter 2024 Comments

Third quarter 2024 operating income for the company's steel operations was $305 million, lower than sequential results, as realized selling values declined more than scrap costs in the quarter. The third quarter 2024 average external product selling price for the company's steel operations decreased $79 per ton sequentially to $1,059 per ton. The average ferrous scrap cost per ton melted at the company's steel mills decreased $21 sequentially to $367 per ton. The company's Sinton Texas Flat Roll Steel Mill team has completed the planned changes discussed on the second quarter 2024 earnings call. The team had great operating momentum in September and operated at 72 percent of its capability, excluding scheduled downtime.

Compared to the sequential quarter, third quarter 2024 operating income from the company's metals recycling operations decreased to $12 million, based on softer demand as many domestic steel mills had scheduled maintenance outages. Shipments and pricing declined for both ferrous and nonferrous materials in the quarter. Additionally, the platform experienced an unexpected unrealized, non-cash copper hedging loss of $10 million, as copper prices sequentially increased significantly from August to September.

The company's steel fabrication operations achieved strong operating income of $166 million in the third quarter 2024, modestly lower than sequential second quarter results, as demand remained steady, and average realized pricing softened five percent yet remained historically strong. The order backlog was steady, extending into the first quarter 2025 at attractive pricing levels. Current order activity is steady with expectations for improved volumes in 2025, as interest rates decline and the support from the U.S. infrastructure program and onshoring are expected to positively impact demand for not only steel joist and deck products, but also for flat rolled and long product steels.

Year-to-Date September 30, 2024 Comparison

For the nine months ended September 30, 2024, net income was $1.3 billion, or $8.46 per diluted share, with net sales of $13.7 billion, as compared to net income of $2.0 billion, or $11.98 per diluted share, with net sales of $14.6 billion for the same period in 2023.

For the first nine months 2024, net sales decreased six percent to $13.7 billion and operating income declined 35 percent to $1.7 billion, when compared to the same period in 2023. Decreased earnings were the result of lower volume and pricing from the company's steel and steel fabrication operations during the period. For the first nine months 2024, operating income from the company's steel fabrication operations was $525 million, compared to $1.3 billion in the same prior year period. Operating income from the company's steel operations was $1.4 billion, compared to $1.5 billion for the same prior year period. The average nine-month 2024 external selling price for the company's steel operations decreased $38 per ton to $1,133 per ton compared to the first nine months of 2023, and the average ferrous scrap cost per ton melted at the company's steel mills decreased $30 per ton to $391 per ton.

Based on the company's differentiated business model and highly variable cost structure, the company achieved cash flow from operations of $1.5 billion in the first nine months of 2024, representing a strong performance. The company also invested $1.4 billion in capital investments, paid cash dividends of $212 million, and repurchased $917 million of its outstanding common stock, representing 4.5 percent of its outstanding shares, while maintaining strong liquidity of $3.1 billion.

Outlook

"Based on domestic steel demand fundamentals, we are constructive regarding the outlook for 2025 metal market dynamics," said Millett. "We expect steel pricing to recover with an anticipated lower domestic interest rate environment, coupled with continuing onshoring of manufacturing businesses, and the expectation of significant fixed asset investment to be derived from public funding related to the U.S. Infrastructure, Inflation Reduction Act, and Department of Energy programs. We believe current trade actions could also reduce volumes of unfairly traded steel imports into the United States, especially for coated flat rolled steel, which could have a significant positive impact for us, as we are the largest non-automotive flat rolled steel coater in the United States. We believe these dynamics collectively could benefit all of our operating platforms, especially our steel and steel fabrication businesses.

"Our four new value-added flat rolled steel coating lines that began operating earlier this year continue to increase production. The teams have produced prime quality galvanized and painted products on all four lines in record time. We have had limited benefit from these new lines so far this year, as we have been increasing production, and expect to realize the additional earnings potential in 2025. Value-added product investments such as these enhance our differentiated supply-chain capabilities, while also increasing our higher-margin product offerings, which already represent upwards of 65 percent of our steel revenues.

"We are also quickly progressing on our aluminum flat rolled products mill construction and are incredibly excited about this meaningful growth opportunity, which is aligned with our existing business and operational expertise," said Millett. "We plan to begin operating the aluminum flat rolled mill mid-2025. We have intentionally grown with our customers' needs, providing efficient sustainable supply chain solutions for the highest quality products. We are pleased to further diversify our end markets with plans to supply aluminum flat rolled products with high recycled content to the countercyclical sustainable beverage can and packaging industry, in addition to the automotive, industrial, and construction sectors. Our customers and our people are incredibly excited for this growth opportunity.

"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. We are competitively positioned and focused to generate long-term sustainable value," concluded Millett.

Conference Call and Webcast

Steel Dynamics, Inc. will hold a conference call to discuss third quarter 2024 operating and financial results on Thursday, October 17, 2024, at 11:00 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 October 24, 2024.

About Steel Dynamics, Inc.

Steel Dynamics is one of the largest domestic steel producers and metals recyclers in North America, 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 Financial Metrics

The company believes that after-tax return-on-invested capital (After-tax ROIC) provides an indication of the effectiveness of the company's invested capital and is calculated as follows:

After-tax ROIC =	Net Income Attributable to Steel Dynamics, Inc.
	(Quarterly Average Current Maturities of Long-term Debt + Long-term Debt + Total Equity)

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 the non-GAAP financial measures EBITDA and Adjusted EBITDA 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, not all companies use identical calculations for EBITDA or Adjusted EBITDA; therefore, 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, aluminum, 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 guarantees 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 imports of steel, together with increased scrap prices; (3) pandemics, epidemics, widespread illness or other health issues; (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 supplies, and our potential inability to pass higher costs on to our customers; (6) cost and availability of electricity, natural gas, oil, and other energy resources are subject to volatile market conditions; (7) increased environmental, greenhouse gas emissions and sustainability considerations from our customers or related regulations; (8) compliance with and changes in environmental and remediation requirements; (9) significant price and other forms of competition from other steel and aluminum producers, scrap processors and alternative materials; (10) availability of an adequate source of supply of scrap 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 charges.

More specifically, we refer you to our 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 reports are available publicly on the Securities and Exchange Commission website, www.sec.gov, and on our 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				Nine Months Ended				Three Months
	September 30,				September 30,				Ended
	2024		2023		2024		2023		June 30, 2024

Net sales	$	4,341,615	$	4,587,057	$	13,668,252	$	14,561,893	$	4,632,634
Costs of goods sold		3,736,398		3,635,038		11,307,400		11,246,894		3,857,797
Gross profit		605,217		952,019		2,360,852		3,314,999		774,837

Selling, general and administrative expenses		167,692		145,896		487,215		431,414		160,016
Profit sharing		34,444		64,413		145,149		224,978		48,053
Amortization of intangible assets		7,644		8,160		22,953		25,962		7,645
Operating income		395,437		733,550		1,705,535		2,632,645		559,123

Interest expense, net of capitalized interest		17,071		18,415		41,768		61,689		12,719
Other (income) expense, net		(29,659)		(39,464)		(75,151)		(105,748)		(18,708)
Income before income taxes		408,025		754,599		1,738,918		2,676,704		565,112

Income tax expense		87,131		174,817		398,834		636,412		133,422
Net income		320,894		579,782		1,340,084		2,040,292		431,690
Net income attributable to noncontrolling interests		(3,092)		(2,587)		(10,243)		(13,680)		(3,692)
Net income attributable to Steel Dynamics, Inc.	$	317,802	$	577,195	$	1,329,841	$	2,026,612	$	427,998


Basic earnings per share attributable to
Steel Dynamics, Inc. stockholders	$	2.06	$	3.49	$	8.50	$	12.04	$	2.73

Weighted average common shares outstanding		154,061		165,170		156,528		168,259		156,856

Diluted earnings per share attributable to
Steel Dynamics, Inc. stockholders, including the
effect of assumed conversions when dilutive	$	2.05	$	3.47	$	8.46	$	11.98	$	2.72

Weighted average common shares
and share equivalents outstanding		154,810		166,105		157,248		169,150		157,579


Dividends declared per share	$	0.46	$	0.425	$	1.38	$	1.275	$	0.46

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

	September 30,		December 31,
Assets	2024		2023
	(unaudited)
Current assets
Cash and equivalents	$	1,015,210	$	1,400,887
Short-term investments		645,343		721,210
Accounts receivable, net		1,564,957		1,608,307
Inventories		3,044,887		2,894,632
Other current assets		173,179		162,790
Total current assets		6,443,576		6,787,826

Property, plant and equipment, net		7,825,869		6,734,218

Intangible assets, net		234,806		257,759

Goodwill		477,471		477,471

Other assets		678,099		651,146
Total assets	$	15,659,821	$	14,908,420
Liabilities and Equity
Current liabilities
Accounts payable	$	1,079,816	$	1,088,330
Income taxes payable		6,248		5,524
Accrued expenses		724,219		778,455
Current maturities of long-term debt		882,013		459,987
Total current liabilities		2,692,296		2,332,296

Long-term debt		2,801,871		2,611,069

Deferred income taxes		943,154		944,768

Other liabilities		143,200		180,760
Total liabilities		6,580,521		6,068,893

Commitments and contingencies

Redeemable noncontrolling interests		171,212		171,212

Equity
Common stock		651		651
Treasury stock, at cost		(6,799,219)		(5,897,606)
Additional paid-in capital		1,220,089		1,217,610
Retained earnings		14,660,426		13,545,590
Accumulated other comprehensive income (loss)		(445)		421
Total Steel Dynamics, Inc. equity		9,081,502		8,866,666
Noncontrolling interests		(173,414)		(198,351)
Total equity		8,908,088		8,668,315
Total liabilities and equity	$	15,659,821	$	14,908,420

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023

Operating activities:
Net income	$	320,894	$	579,782	$	1,340,084	$	2,040,292

Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		121,052		107,418		353,357		326,082
Equity-based compensation		12,828		12,044		41,453		39,800
Deferred income taxes		14,832		19,625		(1,615)		72,013
Other adjustments		(10,523)		(12,163)		1,779		(20,628)
Changes in certain assets and liabilities:
Accounts receivable		210,435		260,915		43,350		173,022
Inventories		28,169		102,376		(151,501)		188,330
Other assets		(11,851)		(13,423)		(22,054)		(10,504)
Accounts payable		(13,852)		(57,532)		(11,604)		(54,233)
Income taxes receivable/payable		(12,971)		(7,105)		7,017		96,656
Accrued expenses		100,840		121,762		(102,635)		(195,542)
Net cash provided by operating activities		759,853		1,113,699		1,497,631		2,655,288

Investing activities:
Purchases of property, plant and equipment		(621,355)		(558,361)		(1,414,831)		(1,142,960)
Purchases of short-term investments		(430,826)		(170,887)		(699,879)		(692,716)
Proceeds from maturities of short-term investments		204,543		282,592		775,851		821,668
Other investing activities		(4,357)		(5,891)		(15,656)		(221,453)
Net cash used in investing activities		(851,995)		(452,547)		(1,354,515)		(1,235,461)

Financing activities:
Issuance of current and long-term debt		1,185,657		345,563		2,145,538		1,066,605
Repayment of current and long-term debt		(527,977)		(316,511)		(1,531,969)		(1,042,933)
Dividends paid		(71,584)		(70,713)		(212,216)		(201,834)
Purchase of treasury stock		(309,901)		(331,318)		(917,024)		(1,065,521)
Other financing activities		1,177		1,953		(13,153)		(39,075)
Net cash provided by (used in) financing activities		277,372		(371,026)		(528,824)		(1,282,758)

Increase (decrease) in cash, cash equivalents, and restricted cash		185,230		290,126		(385,708)		137,069
Cash, cash equivalents, and restricted cash at beginning of period		835,526		1,480,862		1,406,464		1,633,919
Cash, cash equivalents, and restricted cash at end of period	$	1,020,756	$	1,770,988	$	1,020,756	$	1,770,988


Supplemental disclosure information:
Cash paid for interest	$	9,102	$	9,848	$	59,466	$	61,225
Cash paid for income taxes, net	$	81,742	$	160,178	$	383,455	$	472,936

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

	Third Quarter				Year to Date
		2024		2023		2024		2023		1Q 2024		2Q 2024
*External Net Sales*
Steel	$	2,917,021	$	3,187,181	$	9,415,490	$	9,725,226	$	3,366,237	$	3,132,232
Steel Fabrication		447,265		630,184		1,367,276		2,278,361		447,179		472,832
Metals Recycling		565,596		520,746		1,721,501		1,696,587		569,473		586,432
Other		411,733		248,946		1,163,985		861,719		311,114		441,138
Consolidated Net Sales	$	4,341,615	$	4,587,057	$	13,668,252	$	14,561,893	$	4,694,003	$	4,632,634
*Operating Income (Loss)*
Steel	$	304,950	$	482,336	$	1,421,915	$	1,531,154	$	674,648	$	442,317
Steel Fabrication		165,634		330,061		524,795		1,343,495		178,381		180,780
Metals Recycling		11,616		18,505		66,383		101,727		22,635		32,132
Aluminum		(23,593)		(7,172)		(56,372)		(13,005)		(13,531)		(19,248)
		458,607		823,730		1,956,721		2,963,371		862,133		635,981

Non-cash amortization of intangible assets		(7,644)		(8,160)		(22,953)		(25,962)		(7,664)		(7,645)
Profit sharing expense		(34,444)		(64,413)		(145,149)		(224,978)		(62,652)		(48,053)
Non-segment operations		(21,082)		(17,607)		(83,084)		(79,786)		(40,842)		(21,160)
Consolidated Operating Income	$	395,437	$	733,550	$	1,705,535	$	2,632,645	$	750,975	$	559,123
*Adjusted EBITDA*
Net income	$	320,894	$	579,782	$	1,340,084	$	2,040,292	$	587,500	$	431,690
Income taxes		87,131		174,817		398,834		636,412		178,281		133,422
Net interest expense (income)		(8,063)		(10,350)		(30,257)		(18,574)		(14,327)		(7,867)
Depreciation		111,558		97,707		325,437		295,355		106,030		107,849
Amortization of intangible assets		7,644		8,160		22,953		25,962		7,664		7,645
EBITDA		519,164		850,116		2,057,051		2,979,447		865,148		672,739
Non-cash adjustments
Unrealized (gains) losses on derivatives
and currency remeasurement		25,114		14,005		24,585		(12,570)		(1,347)		818
Equity-based compensation		12,823		11,989		40,503		37,366		14,825		12,855
Adjusted EBITDA	$	557,101	$	876,110	$	2,122,139	$	3,004,243		878,626		686,412

*Other Operating Information*
Steel
Average external sales price (Per ton)	$	1,059	$	1,191	$	1,133	$	1,171	$	1,201	$	1,138
Average ferrous cost (Per ton melted)	$	367	$	405	$	391	$	421	$	417	$	388

Flat Roll shipments
Butler, Columbus, and Sinton		1,924,098		1,783,581		5,860,986		5,617,322		1,993,305		1,943,583
Steel Processing divisions *		471,441		452,139		1,319,267		1,308,221		418,547		429,279
Long Product shipments
Structural and Rail Division		397,047		469,638		1,263,263		1,444,174		440,921		425,295
Engineered Bar Products Division		176,131		201,903		563,270		649,789		191,373		195,766
Roanoke Bar Division		138,096		142,195		393,125		447,532		124,920		130,109
Steel of West Virginia		74,564		98,246		240,260		290,978		86,528		79,168
Total Shipments (Tons)		3,181,377		3,147,702		9,640,171		9,758,016		3,255,594		3,203,200

External Shipments (Tons)		2,754,853		2,676,068		8,311,539		8,302,311		2,803,569		2,753,117

Steel Mill Production (Tons)		2,785,128		2,782,870		8,579,232		8,620,531		2,992,018		2,802,086

Metals Recycling
Nonferrous shipments (000's of pounds)		293,470		279,877		886,923		845,477		289,436		304,017
Ferrous shipments (Gross tons)		1,459,206		1,442,964		4,420,054		4,415,949		1,453,619		1,507,229
External ferrous shipments (Gross tons)		537,082		547,646		1,665,175		1,693,028		536,973		591,120
Steel Fabrication
Average sales price (Per ton)	$	2,836	$	3,916	$	2,980	$	4,452	$	3,141	$	2,978
Shipments (Tons)		158,595		161,697		461,506		512,537		143,842		159,069

Effective the fourth quarter 2023, we added a new reporting segment, Aluminum Operations. All prior periods presented have been recast to reflect those changes.
* Includes Heartland, The Techs and United Steel Supply operations

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SOURCE Steel Dynamics, Inc.

Steel Dynamics Reports Third Quarter 2024 Results