Steel Dynamics Reports Fourth Quarter and Annual 2024 Results

, /PRNewswire/ -- Annual 2024 Performance Highlights: Second highest steel shipments of 12.7 million tons Net sales of $17.5 billion, operating income of $1.9 billion, and net income of $1.5 billion Adjusted EBITDA of $2.5 billion and cash flow from operations of $1.8 billion Strong liquidity of $2.2 billion as of December 31, 2024 Share repurchases of $1.2 billion of the company's common stock, representing six percent of its outstanding shares Strong after-tax return-on-invested-capital of 23 percent for the three-year period ended December 31, 2024 Steel Dynamics, Inc. (NASDAQ/GS: STLD) today announced fourth quarter and annual 2024 financial results. The company reported fourth quarter 2024 net sales of $3.9 billion and net income of $207 million, or $1.36 per diluted share. Comparatively, the company's sequential third quarter 2024 net income was $318 million, or $2.05 per diluted share, and prior year fourth quarter net income was $424 million, or $2.61 per diluted share. "The teams achieved solid operational and financial performance across our operating platforms during 2024, resulting in annual net sales of $17.5 billion, operating income of $1.9 billion, and adjusted EBITDA of $2.5 billion," said Mark D. Millett, Co-founder, Chairman, and Chief Executive Officer. "Based on the team's performance, we demonstrated the strength and consistency of our cash generation with annual cash flow from operations of $1.8 billion and liquidity of $2.2 billion. All while continuing to grow our business with significant organic growth investments, coupled with strong shareholder distributions through our positive dividend growth profile and meaningful share repurchases. We have a firm foundation for our continued long-term growth and ongoing value creation strategy. "Underlying domestic steel demand was stable throughout 2024 supported by the construction, automotive, industrial, and energy sectors," continued Millett. "However, steel imports of certain products, most notably coated flat rolled steels, increased significantly in 2024, negatively impacting the supply / demand balance, causing pricing pressure for flat rolled steel products. We do expect to see unfairly traded steel imports decline in 2025, based on the recent CORE trade case we initiated in late 2024. Declining steel imports, coupled with steady to increasing North American steel demand, provides a positive commercial environment for 2025. We have experienced strong order activity for flat rolled steel so far in 2025, and prices have stabilized with continued positive customer outlook. "Despite some headwinds in 2024, our steel operations achieved near-record annual shipments of 12.7 million tons and historically strong operating income of $1.6 billion," stated Millett. "Our steel fabrication business also achieved historically strong earnings with operating income of $667 million. Despite a challenging pricing environment throughout much of the year, our metals recycling team achieved operating income of $77 million. The strength of our diversified, value-added circular manufacturing model was certainly demonstrated in 2024." Fourth Quarter 2024 Comments Fourth quarter 2024 operating income for the company's steel operations was $165 million, representing a 46 percent sequential decline, based on seasonally lower steel shipments and metal spread compression, as average realized steel selling values declined. The company also experienced an unplanned outage at its Butler Flat Roll Division further reducing quarterly volume by an estimated 50,000 tons. The fourth quarter 2024 average external product selling price for the company's steel operations decreased $48 per ton sequentially to $1,011 per ton. The average ferrous scrap cost per ton melted at the company's steel mills increased to $370 per ton, or $3 per ton. Additionally, the company's Sinton Texas Flat Roll Steel Division operated at levels in excess of 80 percent during November and December, while also improving product quality and cost efficiency. However, there are still additional operating costs in the system, which elicited an operating loss of $58 million in the fourth quarter 2024 related to these operations. The company expects these extra costs to dissipate throughout the first quarter resulting in positive operating income contributions beginning in the first half of 2025 and increasing throughout the year. Fourth quarter 2024 operating income from the company's metals recycling operations was $23 million, representing a $13 million increase compared to sequential third quarter results, as metal spread improvement and continued cost efficiencies more than offset lower seasonal shipments. The company's steel fabrication operations achieved strong operating income of $142 million in the fourth quarter 2024, below sequential third quarter results, based on seasonally lower shipments and slight metal spread compression, as realized selling values declined modestly. Seasonal order inquiry in the fourth quarter was constructive, and the steel fabrication order backlog extends deep into the first half of 2025 at attractive pricing levels. The company believes that the continued onshoring of manufacturing, coupled with the robust U.S. infrastructure and Inflation Reduction Act programs will drive industrial construction activity, and provide an environment for strong steel joist and deck demand, as well as flat rolled and long product steel demand. Annual 2024 Comparison Annual 2024 net income was $1.5 billion, or $9.84 per diluted share, with net sales of $17.5 billion, as compared to net income of $2.5 billion, or $14.64 per diluted share, with net sales of $18.8 billion for the same period in 2023. Annual 2024, net sales decreased seven percent to $17.5 billion and operating income declined 38 percent to $1.9 billion, when compared to the same period of 2023. The decline in earnings was driven by lower shipments and metal spread contraction within the company's steel and steel fabrication operations, as lower realized product pricing outpaced lower primary raw material costs. Annual 2024 operating income from the company's steel operations declined $309 million and steel fabrication operations declined $926 million, when compared to prior year's earnings. The average 2024 external selling price for the company's steel operations decreased $48 per ton to $1,104 per ton compared to the same period of 2023, and the average ferrous scrap cost per ton melted at the company's steel mills decreased $28 per ton to $386 per ton. Additionally, the company's Sinton Texas Flat Roll Steel Division incurred operating losses of $182 million during 2024, compared to operating losses of $241 million in 2023. Based on the company's differentiated circular business model and highly-variable cost structure, the company generated strong cash flow from operations of $1.8 billion during 2024. The company also invested $1.9 billion in organic growth investments, paid cash dividends of $283 million, and repurchased $1.2 billion of its outstanding common stock, representing six percent of its outstanding shares, all while maintaining strong liquidity of $2.2 billion as of December 31, 2024. Outlook "We believe the market dynamics are in place to support increased demand across our operating platforms in 2025," said Millett. "Steel pricing has stabilized, and customer optimism continues to be solid across our steel operations, as demand continues to be steady. In addition, we believe demand for lower-carbon emission, U.S. produced steel products will also support future domestic steel pricing. The continued onshoring of manufacturing businesses, combined with 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, will competitively position the domestic steel industry. 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 broader dynamics will 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 in the first half of 2024 continue to increase volume. The teams produced prime quality galvanized and painted products on all four lines in record time. We have had limited benefit from these new lines as production ramped but expect to realize the full run-rate 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 over 65 percent of our steel revenues. "Our aluminum team is executing exceptionally well. The team successfully cast their first industrial and beverage can ingots on Cast Complex #1 in Columbus, Mississippi, on January 12, 2025," said Millett. "We plan to continue commissioning throughout the facility during the coming months, and to produce commercially viable products before mid-year 2025. This represents a meaningful growth opportunity for us, which is aligned with our existing business and operational expertise. 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 compared to others. We continue to strengthen our financial position through strong cash flow generation and the execution of our long-term strategy," concluded Millett. Conference Call and Webcast Steel Dynamics, Inc. will hold a conference call to discuss fourth quarter and annual 2024 operating and financial results on Thursday, January 23, 2025, at 11:00 a.m. Eastern Standard 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 Standard Time on January 30, 2025. 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-taxROIC = 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 Year Ended Three Months December 31, December 31, Ended 2024 2023 2024 2023 Sept. 30, 2024 Net sales $ 3,872,138 $ 4,233,423 $ 17,540,390 $ 18,795,316 $ 4,341,615 Costs of goods sold 3,430,404 3,502,539 14,737,804 14,749,433 3,736,398 Gross profit 441,734 730,884 2,802,586 4,045,883 605,217 Selling, general and administrative expenses 176,904 157,207 664,119 588,621 167,692 Profit sharing 19,755 47,055 164,904 272,033 34,444 Amortization of intangible assets 7,573 8,086 30,526 34,048 7,644 Operating income 237,502 518,536 1,943,037 3,151,181 395,437 Interest expense, net of capitalized interest 14,579 14,795 56,347 76,484 17,071 Other (income) expense, net (21,040) (38,498) (96,191) (144,246) (29,659) Income before income taxes 243,963 542,239 1,982,881 3,218,943 408,025 Income tax expense 34,091 115,199 432,925 751,611 87,131 Net income 209,872 427,040 1,549,956 2,467,332 320,894 Net income attributable to noncontrolling interests (2,579) (2,770) (12,822) (16,450) (3,092) Net income attributable to Steel Dynamics, Inc. $ 207,293 $ 424,270 $ 1,537,134 $ 2,450,882 $ 317,802 Basic earnings per share attributable to Steel Dynamics, Inc. stockholders $ 1.36 $ 2.63 $ 9.89 $ 14.72 $ 2.06 Weighted average common shares outstanding 152,096 161,434 155,420 166,552 154,061 Diluted earnings per share attributable to Steel Dynamics, Inc. stockholders, including the effect of assumed conversions when dilutive $ 1.36 $ 2.61 $ 9.84 $ 14.64 $ 2.05 Weighted average common shares and share equivalents outstanding 152,801 162,276 156,136 167,431 154,810 Dividends declared per share $ 0.46 $ 0.425 $ 1.84 $ 1.70 $ 0.46 Steel Dynamics, Inc. CONSOLIDATED BALANCE SHEETS (in thousands) December 31, December 31, Assets 2024 2023 (unaudited) Current assets Cash and equivalents $ 589,464 $ 1,400,887 Short-term investments 147,811 721,210 Accounts receivable, net 1,417,199 1,608,307 Inventories 3,113,733 2,894,632 Other current assets 163,131 162,790 Total current assets 5,431,338 6,787,826 Property, plant and equipment, net 8,117,988 6,734,218 Intangible assets, net 227,234 257,759 Goodwill 477,471 477,471 Other assets 681,202 651,146 Total assets $ 14,935,233 $ 14,908,420 Liabilities and Equity Current liabilities Accounts payable $ 979,912 $ 1,088,330 Income taxes payable 3,783 5,524 Accrued expenses 739,898 778,455 Current maturities of long-term debt 426,990 459,987 Total current liabilities 2,150,583 2,332,296 Long-term debt 2,804,017 2,611,069 Deferred income taxes 902,186 944,768 Other liabilities 133,201 180,760 Total liabilities 5,989,987 6,068,893 Commitments and contingencies Redeemable noncontrolling interests 171,212 171,212 Equity Common stock 652 651 Treasury stock, at cost (7,094,266) (5,897,606) Additional paid-in capital 1,229,819 1,217,610 Retained earnings 14,798,082 13,545,590 Accumulated other comprehensive income - 421 Total Steel Dynamics, Inc. equity 8,934,287 8,866,666 Noncontrolling interests (160,253) (198,351) Total equity 8,774,034 8,668,315 Total liabilities and equity $ 14,935,233 $ 14,908,420 Steel Dynamics, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 Operating activities: Net income $ 209,872 $ 427,040 $ 1,549,956 $ 2,467,332 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 125,550 111,722 478,907 437,804 Equity-based compensation 25,136 21,944 66,589 61,744 Deferred income taxes (40,968) (16,348) (42,583) 55,665 Other adjustments (7,286) 912 (5,507) (19,716) Changes in certain assets and liabilities: Accounts receivable 147,758 273,743 191,108 446,765 Inventories (69,535) 43,952 (221,036) 232,282 Other assets 8,336 (13,273) (13,718) (23,777) Accounts payable (55,757) 24,085 (67,361) (30,148) Income taxes receivable/payable 3,166 (39,900) 10,183 56,756 Accrued expenses 600 30,763 (102,035) (164,779) Net cash provided by operating activities 346,872 864,640 1,844,503 3,519,928 Investing activities: Purchases of property, plant and equipment (453,175) (514,945) (1,868,006) (1,657,905) Purchases of short-term investments (39,461) (452,777) (739,340) (1,145,493) Proceeds from maturities of short-term investments 536,443 233,074 1,312,294 1,054,742 Other investing activities 7,348 (140) (8,308) (221,593) Net cash provided by (used in) investing activities 51,155 (734,788) (1,303,360) (1,970,249) Financing activities: Issuance of current and long-term debt 337,381 299,059 2,482,919 1,365,664 Repayment of current and long-term debt (792,089) (324,620) (2,324,058) (1,367,553) Dividends paid (70,400) (69,483) (282,616) (271,317) Purchase of treasury stock (295,140) (386,682) (1,212,164) (1,452,203) Other financing activities (3,525) (12,650) (16,678) (51,725) Net cash used in financing activities (823,773) (494,376) (1,352,597) (1,777,134) Decrease in cash, cash equivalents, and restricted cash (425,746) (364,524) (811,454) (227,455) Cash, cash equivalents, and restricted cash at beginning of period 1,020,756 1,770,988 1,406,464 1,633,919 Cash, cash equivalents, and restricted cash at end of period $ 595,010 $ 1,406,464 $ 595,010 $ 1,406,464 Supplemental disclosure information: Cash paid for interest $ 41,512 $ 41,940 $ 100,978 $ 103,165 Cash paid for income taxes, net $ 80,308 $ 169,731 $ 463,763 $ 642,667 Steel Dynamics, Inc. SUPPLEMENTAL INFORMATION (UNAUDITED) (dollars in thousands) Fourth Quarter Year to Date 2024 2023 2024 2023 1Q 2024 2Q 2024 3Q 2024 External Net Sales Steel $ 2,645,994 $ 2,915,325 $ 12,061,484 $ 12,640,551 $ 3,366,237 $ 3,132,232 $ 2,917,021 Steel Fabrication 396,226 520,573 1,763,502 2,798,934 447,179 472,832 447,265 Metals Recycling 482,081 439,351 2,005,134 1,936,457 507,270 517,167 498,616 Aluminum 60,099 48,719 258,547 248,200 62,203 69,265 66,980 Other 287,738 309,455 1,451,723 1,171,174 311,114 441,138 411,733 Consolidated Net Sales $ 3,872,138 $ 4,233,423 $ 17,540,390 $ 18,795,316 $ 4,694,003 $ 4,632,634 $ 4,341,615 Operating Income (Loss) Steel $ 164,989 $ 364,829 $ 1,586,904 $ 1,895,983 $ 674,648 $ 442,317 $ 304,950 Steel Fabrication 142,189 249,930 666,984 1,593,425 178,381 180,780 165,634 Metals Recycling 23,361 6,703 76,807 67,236 16,659 26,746 10,041 Aluminum (28,896) (11,043) (72,331) 17,146 (7,555) (13,862) (22,018) 301,643 610,419 2,258,364 3,573,790 862,133 635,981 458,607 Non-cash amortization of intangible assets (7,573) (8,086) (30,526) (34,048) (7,664) (7,645) (7,644) Profit sharing expense (19,755) (47,055) (164,904) (272,033) (62,652) (48,053) (34,444) Non-segment operations (36,813) (36,742) (119,897) (116,528) (40,842) (21,160) (21,082) Consolidated Operating Income $ 237,502 $ 518,536 $ 1,943,037 $ 3,151,181 $ 750,975 $ 559,123 $ 395,437 Adjusted EBITDA Net income $ 209,872 $ 427,040 $ 1,549,956 $ 2,467,332 $ 587,500 $ 431,690 $ 320,894 Income taxes 34,090 115,199 432,924 751,611 178,281 133,422 87,131 Net interest expense (income) (3,481) (16,830) (33,738) (35,404) (14,327) (7,867) (8,063) Depreciation 116,147 102,082 441,584 397,437 106,030 107,849 111,558 Amortization of intangible assets 7,573 8,086 30,526 34,048 7,664 7,645 7,644 EBITDA 364,201 635,577 2,421,252 3,615,024 865,148 672,739 519,164 Non-cash adjustments Unrealized (gains) losses on derivatives and currency remeasurement (17,703) 461 6,882 (12,109) (1,347) 818 25,114 Equity-based compensation 25,121 22,694 65,624 60,060 14,825 12,855 12,823 Adjusted EBITDA $ 371,619 $ 658,732 $ 2,493,758 $ 3,662,975 $ 878,626 $ 686,412 $ 557,101 Other Operating Information Steel Average external sales price (Per ton) $ 1,011 $ 1,090 $ 1,104 $ 1,152 $ 1,201 $ 1,138 $ 1,059 Average ferrous cost (Per ton melted) $ 370 $ 393 $ 386 $ 414 $ 417 $ 388 $ 367 Flat Roll shipments Butler, Columbus, and Sinton 1,841,745 1,841,701 7,702,731 7,459,023 1,993,305 1,943,583 1,924,098 Steel Processing divisions * 460,162 423,690 1,779,429 1,731,911 418,547 429,279 471,441 Long Product shipments Structural and Rail Division 362,650 407,175 1,625,913 1,851,349 440,921 425,295 397,047 Engineered Bar Products Division 151,239 186,390 714,509 836,179 191,373 195,766 176,131 Roanoke Bar Division 123,133 117,244 516,258 564,776 124,920 130,109 138,096 Steel of West Virginia 81,387 87,537 321,647 378,515 86,528 79,168 74,564 Total Shipments (Tons) 3,020,316 3,063,737 12,660,487 12,821,753 3,255,594 3,203,200 3,181,377 External Shipments (Tons) 2,617,914 2,674,396 10,929,453 10,976,707 2,803,569 2,753,117 2,754,853 Steel Mill Production (Tons) 2,663,444 2,755,778 11,242,676 11,376,309 2,992,018 2,802,086 2,785,128 Metals Recycling Nonferrous shipments (000's of pounds) 226,434 233,931 965,491 970,445 243,950 253,815 241,292 Ferrous shipments (Gross tons) 1,421,021 1,365,956 5,850,544 5,792,484 1,457,789 1,509,924 1,461,810 External ferrous shipments (Gross tons) 529,335 506,128 2,194,510 2,199,156 536,973 591,120 537,082 Steel Fabrication Average sales price (Per ton) $ 2,718 $ 3,501 $ 2,917 $ 4,236 $ 3,141 $ 2,978 $ 2,836 Shipments (Tons) 145,901 150,002 607,407 662,539 143,842 159,069 158,595 Beginning the fourth quarter 2024, results from an entity previously included in Metals Recycling are presented within Aluminum. All prior periods presented have been recast to reflect the change. * Includes Heartland, The Techs and United Steel Supply operations SOURCE Steel Dynamics, Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Steel Dynamics Reports Fourth Quarter and Annual 2024 Results

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