Steel Dynamics Reports Third Quarter 2024 Results

PR Newswire · 10/16 20:30

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.