Steel Dynamics Inc. (STLD, Financial) filed Quarterly Report for the period ended 2010-03-31.
Steel Dynamics Inc. has a market cap of $3.24 billion; its shares were traded at around $14.98 with a P/E ratio of 23.8 and P/S ratio of 0.9. The dividend yield of Steel Dynamics Inc. stocks is 2%.STLD is in the portfolios of George Soros of Soros Fund Management LLC, Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates, RS Investment Management, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, Kenneth Fisher of Fisher Asset Management, LLC.
Selling, General and Administrative Expenses. Selling, general and administrative expenses (including profit sharing and amortization of intangible assets) were $78.2 million during the first quarter of 2010, as compared to $73.0 million during the first quarter of 2009, an increase of $5.2 million, or 7%. Our selling, general and administrative expenses represented 5% and 9% of our total net sales during the first quarters of 2010 and 2009, respectively. The percentage decrease is primarily a result of the significantly depressed nets sales in the first quarter of 2009 compared with the current year as measured against certain fixed cost components in selling, general and administrative expenses.
Interest Expense, net of Capitalized Interest. During the first quarter of 2010, gross interest expense increased $1.7 million, or 4%, to $41.0 million, and capitalized interest increased $437,000 to $3.5 million, when compared to the same period in 2009. The interest capitalization that occurred during these periods resulted from the interest required to be capitalized with respect to construction activities at our various operating segments. Our weighted-average interest rate on our outstanding borrowings was 7.2% and 5.8% at March 31, 2010 and 2009, respectively. We currently anticipate gross interest expense to increase marginally during the second quarter and then remain consistent through the remainder of the year.
Other Income, net. Other income was $3.1 million during the first quarter of 2010, as compared to $748,000 during the same period in 2009. During the first quarter of 2010, other income of $1.5 million was primarily attributable to earnings from investments in metals recycling entities accounted for under the equity method of accounting. In addition, we recorded interest income of $914,000 during the quarter.
Working Capital. During the first quarter of 2010, our operational working capital position, representing our cash invested in trade receivables, inventories and income taxes receivable, less current liabilities other than debt, increased $52.8 million to $1,041.9 million compared to December 31, 2009. Trade receivables increased $223.1 million, or 52%, during the first three months of 2010 to $649.7 million, of which over 98% were current or less than 60 days past due. Our largest customer is an affiliated company, Heidtman Steel, which represented 4% and 6% of our outstanding trade receivables at March 31, 2010 and December 31, 2009, respectively. Trade receivables increased during the first three months of 2010 due to increased sales from higher product prices and volumes compared to the fourth quarter of 2009. Total inventories increased $48.1 million, or 6%, to $900.9 million during the first three months of 2010, despite decreased volumes of raw materials, work-in-process and finished goods inventories. The dollar value of our raw materials, primarily steel scrap inventories, increased by approximately $37.9 million during the first three months of 2010, while volumes decreased by 47,000 gross tons. Likewise the dollar value of work-in-process and finished goods inventories increased $8.5 million while volumes decreased by 25,000 net tons. Our trade payables and general accruals increased $206.3 million, or 48%, during the first three months of 2010. The increase in trade payables is a reflection of increased production activities and commodity raw material purchasing during the first quarter of 2010 compared to the fourth quarter of 2009.
Capital Investments. During the first quarter of 2010, we invested $30.7 million in property, plant and equipment, of which $5.0 million was at the Structural and Rail Division, relating primarily to the addition of a second caster, $3.4 million related to metals
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Steel Dynamics Inc. has a market cap of $3.24 billion; its shares were traded at around $14.98 with a P/E ratio of 23.8 and P/S ratio of 0.9. The dividend yield of Steel Dynamics Inc. stocks is 2%.STLD is in the portfolios of George Soros of Soros Fund Management LLC, Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates, RS Investment Management, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, Kenneth Fisher of Fisher Asset Management, LLC.
Highlight of Business Operations:
Net income was $65.0 million, or $.29 per diluted share, during the first quarter of 2010, compared with a net loss of $87.9 million, or $.48 per diluted share, during the first quarter of 2009 and net income of $26.7 million, or $.12 per diluted share, during the fourth quarter of 2009. When comparing the first quarter of 2010 with the first quarter of 2009, our net sales increased $741.1 million, or 91%, to $1.6 billion. Our gross profit percentage was 14% during the first quarter of 2010 as compared to a negative 5% for the first quarter of 2009, and 13% on a linked-quarter basis. The most significant non-operating component of our first quarter 2009 loss was a pretax non-cash adjustment to inventory values of $83.3 million, which had the effect of reducing diluted earnings per share by $.27, due principally to the rapid decline in flat-rolled steel product values. Excluding inventory write downs, gross profit percentage was 5% during the first quarter of 2009. Our improved gross profit percentage on a linked-quarter basis is primarily the result of increasing volumes and sales prices coupled with production costs being spread across higher volumes during the first quarter of 2010 as compared to the fourth quarter of 2009.Selling, General and Administrative Expenses. Selling, general and administrative expenses (including profit sharing and amortization of intangible assets) were $78.2 million during the first quarter of 2010, as compared to $73.0 million during the first quarter of 2009, an increase of $5.2 million, or 7%. Our selling, general and administrative expenses represented 5% and 9% of our total net sales during the first quarters of 2010 and 2009, respectively. The percentage decrease is primarily a result of the significantly depressed nets sales in the first quarter of 2009 compared with the current year as measured against certain fixed cost components in selling, general and administrative expenses.
Interest Expense, net of Capitalized Interest. During the first quarter of 2010, gross interest expense increased $1.7 million, or 4%, to $41.0 million, and capitalized interest increased $437,000 to $3.5 million, when compared to the same period in 2009. The interest capitalization that occurred during these periods resulted from the interest required to be capitalized with respect to construction activities at our various operating segments. Our weighted-average interest rate on our outstanding borrowings was 7.2% and 5.8% at March 31, 2010 and 2009, respectively. We currently anticipate gross interest expense to increase marginally during the second quarter and then remain consistent through the remainder of the year.
Other Income, net. Other income was $3.1 million during the first quarter of 2010, as compared to $748,000 during the same period in 2009. During the first quarter of 2010, other income of $1.5 million was primarily attributable to earnings from investments in metals recycling entities accounted for under the equity method of accounting. In addition, we recorded interest income of $914,000 during the quarter.
Working Capital. During the first quarter of 2010, our operational working capital position, representing our cash invested in trade receivables, inventories and income taxes receivable, less current liabilities other than debt, increased $52.8 million to $1,041.9 million compared to December 31, 2009. Trade receivables increased $223.1 million, or 52%, during the first three months of 2010 to $649.7 million, of which over 98% were current or less than 60 days past due. Our largest customer is an affiliated company, Heidtman Steel, which represented 4% and 6% of our outstanding trade receivables at March 31, 2010 and December 31, 2009, respectively. Trade receivables increased during the first three months of 2010 due to increased sales from higher product prices and volumes compared to the fourth quarter of 2009. Total inventories increased $48.1 million, or 6%, to $900.9 million during the first three months of 2010, despite decreased volumes of raw materials, work-in-process and finished goods inventories. The dollar value of our raw materials, primarily steel scrap inventories, increased by approximately $37.9 million during the first three months of 2010, while volumes decreased by 47,000 gross tons. Likewise the dollar value of work-in-process and finished goods inventories increased $8.5 million while volumes decreased by 25,000 net tons. Our trade payables and general accruals increased $206.3 million, or 48%, during the first three months of 2010. The increase in trade payables is a reflection of increased production activities and commodity raw material purchasing during the first quarter of 2010 compared to the fourth quarter of 2009.
Capital Investments. During the first quarter of 2010, we invested $30.7 million in property, plant and equipment, of which $5.0 million was at the Structural and Rail Division, relating primarily to the addition of a second caster, $3.4 million related to metals
Read the The complete Report
