Steel Dynamics — Oct 16, 2024 release

EXHIBIT 99.1   Exhibit 99.1   Press Release October 16, 2024     7575 W. Jefferson Blvd.   Fort Wayne, IN 46804   Steel Dynamics Reports Third Quarter 2024 Results   FORT WAYNE, INDIANA, October 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.”   Contact: Investor Relations — +1.260.969.3500         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,       2024     2023       (unaudited)         Assets                 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