10-Q 1 form10q_56090.txt NUCOR CORPORATION SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter ended March 31, 2001 Commission file number 1-4119 ------------------ ------ NUCOR CORPORATION (Exact name as specified in charter) Delaware 13-1860817 --------------------------------------------- --------------------------- (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 2100 Rexford Road, Charlotte, North Carolina 28211 --------------------------------------------- --------------------------- (Address of principal executive offices) (Zip code) Telephone number, including area code: (704) 366-7000 --------------------------- Indication by check mark whether Nucor Corporation (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months, and (2) has been subject to such filing requirements for the past 90 days: Yes X No ----- ----- 77,594,520 shares of common stock were outstanding at March 31, 2001. - 1 - PART I - FINANCIAL INFORMATION Nucor Corporation - Consolidated Condensed Statements of Earnings
Three Months (13 Weeks) Ended ------------------------------- March 31, 2001 April 1, 2000 -------------- -------------- (Unaudited) (Unaudited) -------------- -------------- Net sales........................................ $1,028,017,720 $1,199,634,778 -------------- -------------- Costs and expenses: Cost of products sold.......................... 943,772,386 1,031,750,001 Marketing, administrative and other expenses... 34,679,902 44,315,406 Interest expense (income)...................... (773,544) (2,720,474) ------------- -------------- 977,678,744 1,073,344,933 ------------- -------------- Earnings before federal income taxes............. 50,338,976 126,289,845 Federal income taxes........................... 17,600,000 44,800,000 ------------- -------------- Net earnings................................. $ 32,738,976 $ 81,489,845 ============= ============== Net earnings per share........................... $.42 $.94 ==== ==== Dividends declared per share................... $.17 $.15 ==== ==== Average number of shares outstanding......... 77,586,843 86,571,585
See notes to condensed consolidated financial statements. - 2 - Nucor Corporation - Consolidated Condensed Balance Sheets
March 31, December 31, 2001 2000 -------------- ---------------- Assets (Unaudited) (Audited) ------ --------- ------- Current assets: Cash and short-term investments................. $ 331,993,069 $ 490,576,279 Accounts receivable............................. 391,409,944 350,184,329 Inventories..................................... 492,338,985 461,151,913 Other current assets............................ 81,360,926 79,534,386 -------------- -------------- Total current assets.......................... 1,297,102,924 1,381,446,907 Property, plant and equipment..................... 2,397,205,642 2,340,340,812 -------------- -------------- Total assets.................................. $3,694,308,566 $3,721,787,719 ============== ============== Liabilities and stockholders' equity ------------------------------------ Current liabilities: Accounts payable................................ $ 231,728,991 $ 203,334,079 Federal income taxes............................ 7,174,944 - Salaries, wages and related accruals............ 83,111,217 134,953,274 Accrued expenses and other current liabilities.. 223,134,007 219,781,099 -------------- -------------- Total current liabilities..................... 545,149,159 558,068,452 -------------- -------------- Long-term debt due after one year................. 460,450,000 460,450,000 -------------- -------------- Deferred credits and other liabilities............ 268,751,254 260,054,154 -------------- -------------- Minority interests................................ 269,015,075 312,263,473 -------------- -------------- Stockholders' equity: Common stock.................................... 36,047,908 36,044,855 Additional paid-in capital...................... 71,791,929 71,494,670 Retained earnings............................... 2,498,333,617 2,478,785,710 -------------- -------------- 2,606,173,454 2,586,325,235 Treasury stock.................................. (455,230,376) (455,373,595) -------------- -------------- 2,150,943,078 2,130,951,640 -------------- -------------- Total liabilities and stockholders' equity.... $3,694,308,566 $3,721,787,719 ============== ==============
See notes to condensed consolidated financial statements. - 3 - Nucor Corporation - Consolidated Condensed Statements of Cash Flows
Three Months (13 Weeks) Ended --------------------------------------- March 31, 2001 April 1, 2000 ------------ ------------- (Unaudited) (Unaudited) ------------ ------------- Operating activities: Net earnings............................................ $ 32,738,976 $ 81,489,845 Adjustments: Depreciation of plant and equipment................... 69,087,812 68,552,403 Minority interests.................................... 31,143,402 38,041,327 Changes in (exclusive of acquisition): Current assets...................................... (30,985,420) (47,459,865) Current liabilities................................. (20,504,244) 48,952,858 Other............................................... 8,344,269 5,398,143 ------------ ------------- Cash provided by operating activities................. 89,824,795 194,974,711 ------------ ------------ Investing activities: Capital expenditures (net).............................. (62,013,064) (118,461,013) Proceeds from sale of facility.......................... 15,724,799 - Acquisition (net of cash acquired)...................... (114,980,402) - ------------- ------------- Cash used in investing activities..................... (161,268,667) (118,461,013) ------------ ------------- Financing activities: Increase in long-term debt.............................. - - Distributions to minority interests..................... (74,391,800) (54,007,800) Issuance of common stock................................ 443,531 306,697 Acquisition of treasury stock........................... - (102,757,502) Cash dividends.......................................... (13,191,069) (12,793,006) ------------ ------------ Cash used in financing activities..................... (87,139,338) (169,251,611) ------------ ----------- Decrease in cash and short-term investments............... $(158,583,210) $(92,737,913) ============= ============
See notes to condensed consolidated financial statements. - 4 - Nucor Corporation - Notes to Condensed Consolidated Financial Statements - Unaudited 1. BASIS OF INTERIM PRESENTATION: The information furnished in Part I reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods. The information furnished has not been audited and is subject to year-end adjustments. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in Nucor's annual report for the fiscal year ended December 31, 2000. 2. INVENTORIES: Inventories consisted of approximately 40% raw materials and supplies, and 60% finished and semi-finished products, at March 31, 2001 (45% and 55% at December 31, 2000). Inventories valued on the last-in, first-out (LIFO) method of accounting represent approximately 80% of total inventories as of March 31, 2001 (85% as of December 31, 2000). If the first-in, first-out method (FIFO) of accounting had been used, inventories would have been $26,558,398 higher at March 31, 2001 ($19,358,398 at December 31, 2000). 3. CONTINGENCIES: Nucor is subject to environmental laws and regulations established by federal, state and local authorities; and makes provision for the estimated costs related to compliance. In December 2000, Nucor entered into a consent decree with the United States Environmental Protection Agency and certain states in order to resolve alleged environmental violations. Under terms of this decree, Nucor will conduct testing at some of its facilities, perform corrective action where necessary, and pilot certain pollution control technologies. 4. SHAREHOLDER RIGHTS PLAN: On March 8, 2001, the Board of Directors adopted a Shareholder Rights Plan ("Plan") in which one right ("Right") was declared as a dividend for each Nucor common share outstanding. Each Right entitles Nucor common shareholders to purchase, under certain conditions, one five-thousandth of a share of newly authorized Series A Junior Participating Preferred Stock ("Preferred Stock"), with one five-thousandth of a share of Preferred Stock intended to be the economic equivalent of one share of Nucor common stock. Until the occurrence of certain events, the Rights are represented by and traded in tandem with Nucor common stock. Rights will be exercisable only if a person or group acquires beneficial ownership of 15 percent (15%) or more of the Nucor common shares or commences a tender or exchange offer, upon the consummation of which such person or group would beneficially own 15 percent (15%) or more of the common shares. Upon such an event, the Rights enable dilution of the acquiring person's or group's interest by providing that other holders of Nucor common stock may purchase, at an exercise price of $150.00, Nucor common stock, or in the discretion of the Board of Directors, Preferred Stock, having double the value of such exercise price. Nucor will be entitled to redeem the Rights at $.001 per Right under certain circumstances set forth in the Plan. The Rights themselves have no voting power and will expire on March 8, 2011, unless earlier exercised, redeemed or exchanged. Each one five-thousandth of a share of Preferred Stock has the same voting rights as one share of Nucor common stock, and each share of Preferred Stock has 5,000 times the voting power of one share of Nucor common stock. - 5 - Nucor Corporation - Analysis of Operations and Finances Operations ---------- Net sales decreased by 14% from the first quarter of 2000 to the first quarter of 2001, due primarily to a decrease in average sales prices. The major component of cost of products sold is raw material costs. The average price of raw materials decreased about 15% from the first quarter of 2000. Pre-operating and start-up costs of new facilities increased to $20,000,000 in the first quarter of 2001, compared with $6,600,000 in the first quarter of the prior year. Major components of marketing, administrative and other expenses are freight and profit sharing costs. Unit freight costs increased 11% from the first quarter of 2000 to the first quarter of 2001, and profit sharing costs decreased by 66% compared with the 2000 first quarter. Profit sharing costs are based upon and generally fluctuate with pre-tax earnings. Interest income, net of interest expense, decreased for the first quarter of 2001 from the first quarter of 2000, primarily due to increased debt and decreased short-term investments. Federal income taxes were at a rate of 35% for the first quarter of 2001 and 35.5% for the first quarter of 2000. Net earnings decreased approximately 60% from the first quarter of 2000 to the first quarter of 2001, due to decreased margins and increased pre-operating and start-up costs. Margins were approximately 8% for the first quarter of 2001 and approximately 14% for the first quarter of 2000. On March 31, 2001, Nucor purchased substantially all of the assets of Auburn Steel Company, Inc.'s steel bar facility in Auburn, New York for approximately $115,000,000. This facility has the capacity to produce up to 430,000 tons of merchant bar quality steel shapes, SBQ and rebar. Liquidity and capital resources ------------------------------- The current ratio was 2.4 at the end of the 2001 first quarter, and 2.5 at year-end 2000. The percentage of long-term debt to total capital was about 16% at the end of the first quarter of 2001 and at year-end 2000. Capital expenditures decreased approximately 48% during the first quarter of 2001 compared with the first quarter of 2000. However, this decrease was offset by the purchase of substantially all of the assets of Auburn Steel Company, Inc.'s steel bar facility for approximately $115,000,000. Capital expenditures are projected to be more than $275 million for all of 2001. Funds provided from operations, existing credit facilities and new borrowings are expected to be more than adequate to meet future capital expenditure and working capital requirements. Nucor's directors have approved the purchase of up to 15,000,000 shares of Nucor common stock. There were no repurchases during the first quarter of 2001. Since the inception of the stock repurchase program in 1998, a total of approximately 10,800,000 shares have been repurchased at a cost of about $445,000,000. - 6 - PART II - OTHER INFORMATION Item 1 - Legal Proceedings In December 2000, the United States Environmental Protection Agency and the Department of Justice announced an agreement with Nucor and certain states that resolved alleged environmental violations. Under the terms of the agreement or Consent Decree, Nucor will pilot new air pollution control technology and will evaluate and improve, as appropriate, its water pollution control systems. Nucor will also evaluate and remediate any contamination that may be present on its sites. Nucor has also agreed to pay a $9,000,000 penalty with another $4,000,000 in Supplemental Environmental Projects under this Consent Decree. As part of the Consent Decree, Nucor will implement an Environmental Management System throughout its operations. The agreement is comprehensive and involves eight Nucor Steel Mills and six Vulcraft Facilities throughout the nation. Nucor is involved in various other judicial and administrative proceedings as both plaintiff and defendant, arising in the ordinary course of business. Nucor does not believe that any such proceedings (including matters relating to contracts, torts, taxes, warranties and insurance) will have a material adverse effect on its business, operating results, financial condition or cash flows. Item 6 - Exhibits and Reports on Form 8-K a. Exhibits: 3 - By-Laws as amended January 23, 2001 4 - Rights Agreement, dated as of March 8, 2001, between Nucor Corporation and American Stock Transfer & Trust Co. (incorporated by reference to Exhibit 4 to Nucor's Form 8-K filed March 9, 2001) 11 - Computation of net earnings per share b. Reports on Form 8-K: On March 9, 2001, Nucor filed a current report on Form 8-K under Item 5 concerning the adoption of a Shareholder Rights Plan in which rights were distributed as a dividend at the rate of one Right for each share of common stock par value, $.40 per share, of the Company held by shareholders of record as of the close of business on March 12, 2001. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Nucor Corporation has duly caused this report to be signed on its behalf by the undersigned, who is (1) a duly authorized officer, and (2) the principal accounting officer. NUCOR CORPORATION By: -------------------------------------- Terry S. Lisenby Chief Financial Officer, Treasurer Dated: May 8, 2001 and Executive Vice President - 7 -