UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

-------------------------

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): July 21, 2016

 

NUCOR CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

 (State or other jurisdiction of incorporation)

 

1-4119   13-1860817
(Commission File Number)   (IRS Employer Identification No.)

 

1915 Rexford Road, Charlotte, North Carolina   28211
(Address of principal executive offices)   (Zip Code)

 

Registrant's telephone number, including area code: (704) 366-7000

 

N/A

(Former name or former address, if changed since last report.)

 

-------------------------

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

Item 2.02       Results of Operations and Financial Condition

 

On July 21, 2016, Nucor Corporation issued a news release reporting its financial results for the quarter ended July 2, 2016. A copy of the news release is furnished as Exhibit 99.1 and incorporated herein by reference.

 

The information contained in this Current Report on Form 8-K, including the exhibit attached hereto, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Furthermore, the information contained in this Current Report on Form 8-K shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.

 

Item 9.01       Financial Statements and Exhibits

 

(d)       Exhibits

 

            99.1     News Release of Nucor Corporation, issued July 21, 2016

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  NUCOR CORPORATION
   
  By:  /s/ James D. Frias
    James D. Frias
    Chief Financial Officer, Treasurer and
Executive Vice President

 

Dated: July 21, 2016

 

 

 

INDEX TO EXHIBITS

 

 

 Exhibit No.Description
   
99.1News Release of Nucor Corporation, issued July 21, 2016

 

 

 

 

Exhibit 99.1

Nucor Reports Results for Second Quarter and First Half of 2016

CHARLOTTE, N.C., July 21, 2016 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $233.8 million, or $0.73 per diluted share, for the second quarter of 2016. By comparison, Nucor reported net earnings of $70.8 million, or $0.22 per diluted share, for the first quarter of 2016 and net earnings of $124.8 million, or $0.39 per diluted share, for the second quarter of 2015.

In the first half of 2016, Nucor reported consolidated net earnings of $304.5 million, or $0.95 per diluted share, compared with consolidated net earnings of $192.6 million, or $0.60 per diluted share, in the first half of last year.

Earnings (loss) before income taxes and noncontrolling interests by segment were as follows for the second quarter and first six months of 2016 and 2015 (in thousands):



Three Months (13 Weeks) Ended


Six Months (26 Weeks) Ended



July 2, 2016


July 4, 2015


July 2, 2016


July 4, 2015

Steel mills


$        530,727


$      198,500


$     810,562


$     415,628

Steel products


82,946


70,636


125,313


103,094

Raw materials


(27,181)


(38,104)


(90,553)


(79,601)

Corporate/eliminations

(215,608)


(14,810)


(332,912)


(103,854)



$        370,884


$      216,222


$     512,410


$     335,267










Nucor's results include a charge of $19.0 million ($0.03 per diluted share) to value inventories using the last-in, first-out (LIFO) method of accounting. The charge is compared with a charge of $27.5 million ($0.05 per diluted share) in the first quarter of 2016 and a credit of $95.5 million ($0.19 per diluted share) in the second quarter of 2015. As a result, the LIFO charge in the first half of 2016 was $46.5 million ($0.09 per diluted share), compared with a LIFO credit of $112.0 million ($0.22 per diluted share) in the first half of 2015. Also included in the first quarter of 2016 earnings are out-of-period non-cash gains totaling $13.4 million ($0.04 per diluted share) related to a noncontrolling interest adjustment and to tax adjustments. Included in the second quarter of 2015 earnings were a $9.3 million ($0.03 per diluted share) benefit related to state tax credits and a $10.0 million ($0.02 per diluted share) benefit related to warranty claims at Nucor Steel Louisiana.

Nucor's consolidated net sales increased 14% to $4.25 billion in the second quarter of 2016 from $3.72 billion in the first quarter of 2016 and decreased 3% compared with $4.36 billion in the second quarter of 2015. Average sales price per ton in the second quarter of 2016 increased 9% from the first quarter of 2016 and decreased 9% from the second quarter of 2015. Total tons shipped to outside customers were 6,457,000 tons in the second quarter of 2016, a 5% increase from the first quarter of 2016 and a 7% increase from the second quarter of 2015. Total second quarter steel mill shipments increased 5% from the first quarter of 2016 and increased 11% from the second quarter of 2015. Second quarter downstream steel products shipments to outside customers increased 11% from the first quarter of 2016 and decreased 2% from the second quarter of 2015.

In the first half of 2016, Nucor's consolidated net sales decreased 9% to $7.96 billion, compared with $8.76 billion in last year's first half. Total tons shipped to outside customers increased 8% from the first half of 2015, while average sales price per ton decreased 16%.

The average scrap and scrap substitute cost per ton used during the second quarter of 2016 was $232, an increase of 20% from $193 in the first quarter of 2016 and a decrease of 14% compared to $271 in the second quarter of 2015. The average scrap and scrap substitute cost per ton used in the first half of 2016 was $213, a decrease of 28% from $297 in the first half of 2015.

Overall operating rates at our steel mills increased to 83% in the second quarter of 2016 as compared to 74% in the first quarter of 2016 and 73% in the second quarter of 2015. Operating rates for the first half of 2016 increased to 79% as compared to 69% for the first half of 2015.

Total steel mill energy costs in the second quarter of 2016 decreased approximately $1 per ton compared to the first quarter of 2016 and decreased approximately $5 per ton compared to the second quarter of 2015. Energy costs for the first half of 2016 decreased $7 per ton from the first half of 2015. These decreases were due to lower electricity and natural gas unit costs and improved productivity resulting from higher steel production volumes.

Our liquidity position remains strong with $2.33 billion in cash and cash equivalents and short-term investments and an undrawn $1.5 billion line of credit that does not expire until April 2021.

In May, Nucor announced that its Vulcraft/Verco Group is expanding into Canada. The new production facility will operate as Vulcraft Canada, Inc., and will be located near Hamilton, Ontario to serve the Central and Eastern Canadian markets. The facility will produce steel joists, joist girders and decking. Product fabrication is expected to begin later this year.

In June, Nucor announced that it is forming a 50-50 joint venture with JFE Steel Corporation of Japan to build and operate a plant in central Mexico to supply that country's automotive market. The plant is expected to have a cost of $270 million and a capacity of 400,000 tons per year of galvanized sheet steel. The companies are currently working to secure required conditions to move to completion, including but not limited to regulatory approvals. Operations are expected to begin in the second half of 2019.

Also in June, Nucor's board of directors declared a cash dividend of $0.375 per share payable on August 11, 2016 to stockholders of record on June 30, 2016. This dividend is Nucor's 173rd consecutive quarterly cash dividend, a record we expect to continue.

Flat-rolled trade cases are having a positive impact as steel imports are down in the first five months of this year compared to the same period last year and preliminary duties are in place and being collected. Affirmative final determinations in the antidumping duty and countervailing duty cases of corrosion-resistant and cold-rolled steel products were recently announced by the Department of Commerce and the International Trade Commission. Over the next few months, final determinations will be announced on the remaining cold-rolled steel cases and on the hot-rolled steel trade cases. We believe that once all the facts are known, the government's final determinations will address all dumping and subsidies associated with these cases. Nucor and other domestic steel producers also recently filed trade cases against cut-to-length steel plate imports from 12 countries because of injury that has occurred from unfairly traded imports in this market. We believe these cases should provide positive results as they work their way through the legal process over the next several months.

The performance of the steel mills segment in the second quarter of 2016 was much improved compared to the first quarter of 2016 due to higher average selling prices and improved volumes. The profitability of our sheet, bar and plate mills for the second quarter of 2016 increased compared to the first quarter of 2016, with the largest improvement by the sheet mills. The sheet mills have benefited from lower inventory levels in the supply chain, mainly at service centers, and decreased levels of imports. Average sheet product pricing has increased significantly in the second quarter of 2016. However, since contract pricing represents over 50% of our sheet steel shipments, and a portion of our contract sales are priced on a lagging quarterly basis, we still have not realized the full benefit of the current improved pricing environment for sheet steel. We therefore expect a further improvement in sheet steel pricing and margins in the third quarter of 2016. Energy, heavy equipment and agricultural markets remain weak. The automotive markets remain strong.

The performance of our downstream products segment improved from the first quarter of 2016 due to seasonal factors and the gradual improvement in nonresidential construction markets. We believe that the performance of the downstream products segment for the full year 2016 will be improved compared to 2015, despite higher expected steel costs and minimal benefits from the 2015 highway bill, which we believe will have a greater impact on future years' performance.

The profitability of the raw materials segment in the second quarter of 2016 improved compared to the first quarter of 2016 due primarily to the performance of our scrap processing business, which benefited from increased pricing, improved collaboration with our steel mills, and efficiency improvements resulting from cost reduction initiatives. The second quarter of 2016 performance of our direct reduced iron (DRI) facilities was also improved from the first quarter of 2016. We expect our DRI facilities will be profitable in the third quarter of 2016, benefiting from improved iron units pricing, lower iron ore costs and continued gains in yield performance.

We expect further strong improvement in earnings in the third quarter of 2016. Most of the quarter over quarter improvement will be in the steel mills segment, primarily in our sheet mills. The performance of the raw materials segment is expected to improve significantly in the third quarter of 2016 as compared to the second quarter of 2016 due primarily to improved performance at our DRI facilities. We expect increased profitability for our downstream products segment in the third quarter of 2016 as compared to the second quarter of 2016 due to the gradual improvement in nonresidential construction markets.

Nucor and its affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and alloy steel -- in bars, beams, sheet and plate; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.

Certain statements contained in this news release are "forward-looking statements" that involve risks and uncertainties. The words "believe," "expect," "project," "will," "should," "could" and similar expressions are intended to identify those forward-looking statements. Factors that might cause the Company's actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) competitive pressure on sales and pricing, including competition from imports and substitute materials; (2) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including scrap steel; (3) market demand for steel products; and (4) energy costs and availability. These and other factors are discussed in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's fiscal 2015 Annual Report on Form 10-K, Item 1A. Risk Factors. The forward-looking statements contained in this news release speak only as of this date, and Nucor does not assume any obligation to update them.

You are invited to listen to the live broadcast of Nucor's conference call in which management will discuss Nucor's second quarter results on July 21, 2016 at 2:00 p.m. eastern time. The conference call will be available over the Internet at www.nucor.com, under Investor Relations.

TONNAGE DATA

 (in thousands)


















 Three Months (13 Weeks) Ended


 Six Months (26 Weeks) Ended




July 2, 2016


July 4, 2015


Percentage
Change


July 2, 2016


July 4, 2015


Percentage
Change

Steel mills production


5,890


5,196


13%


11,280


9,954


13%

Steel mills total shipments

5,930


5,348


11%


11,577


10,235


13%















Sales tons to outside customers:













Steel mills


5,082


4,578


11%


9,981


8,743


14%


Joist


95


97


-2%


193


186


4%


Deck


108


92


17%


209


174


20%


Cold finished


110


117


-6%


229


247


-7%


Fabricated concrete













reinforcing steel

304


324


-6%


546


586


-7%


Other


758


847


-11%


1,447


1,754


-18%




6,457


6,055


7%


12,605


11,690


8%















CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)










  Three Months (13 Weeks) Ended 


  Six Months (26 Weeks) Ended 










July 2, 2016


July 4, 2015


July 2, 2016


July 4, 2015









Net sales

$   4,245,772


$    4,357,609


$   7,961,348


$   8,757,049









Costs, expenses and other:








  Cost of products sold

3,679,512


3,971,303


7,108,140


8,082,461

  Marketing, administrative and other expenses

161,711


128,592


271,456


253,153

  Equity in earnings of








unconsolidated affiliates

(6,819)


(694)


(16,064)


(435)

  Interest expense, net

40,484


42,186


85,406


86,603


3,874,888


4,141,387


7,448,938


8,421,782

Earnings before income taxes and








noncontrolling interests

370,884


216,222


512,410


335,267

Provision for income taxes

112,548


56,878


149,613


91,631

Net earnings

258,336


159,344


362,797


243,636

Earnings attributable to








noncontrolling interests

24,564


34,589


58,271


51,081

Net earnings attributable to








Nucor stockholders

$      233,772


$       124,755


$      304,526


$       192,555









Net earnings per share:








  Basic

$0.73


$0.39


$0.95


$0.60

  Diluted

$0.73


$0.39


$0.95


$0.60









Average shares outstanding:








  Basic

319,360


320,506


319,299


320,409

  Diluted

319,578


320,708


319,435


320,594

















CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

 (In thousands)














July 2, 2016


Dec. 31, 2015

 ASSETS






 Current assets:






 Cash and cash equivalents


$      1,781,150


$     1,939,469


 Short-term investments


550,000


100,000


 Accounts receivable, net


1,789,942


1,383,823


 Inventories, net


2,288,134


2,145,444


 Other current assets


129,272


185,644











 Total current assets


6,538,498


5,754,380









 Property, plant and equipment, net


4,816,988


4,891,153









 Goodwill



2,030,551


2,011,278









 Other intangible assets, net


740,788


770,672









 Other assets


797,758


799,461











 Total assets


$    14,924,583


$   14,226,944









 LIABILITIES






 Current liabilities:






 Short-term debt


$            19,951


$           51,315


 Accounts payable


1,023,213


566,527


 Federal income taxes payable


47,059


-


 Salaries, wages and related accruals


319,633


289,004


 Accrued expenses and other current liabilities


526,252


478,327











 Total current liabilities


1,936,108


1,385,173









 Long-term debt due after one year


4,337,561


4,337,145









 Deferred credits and other liabilities


730,205


718,613











 Total liabilities


7,003,874


6,440,931









 EQUITY






 Nucor stockholders' equity:






 Common stock


151,592


151,426


 Additional paid-in capital


1,943,886


1,918,970


 Retained earnings


7,319,961


7,255,972


 Accumulated other comprehensive loss,







 net of income taxes


(281,378)


(351,362)


 Treasury stock


(1,560,298)


(1,558,128)



 Total Nucor stockholders' equity


7,573,763


7,416,878









 Noncontrolling interests


346,946


369,135











 Total equity


7,920,709


7,786,013











 Total liabilities and equity


$    14,924,583


$   14,226,944

















CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 (In thousands)










Six Months (26 Weeks) Ended










July 2, 2016


July 4, 2015







Operating activities:





Net earnings

$       362,797


$       243,636


Adjustments:






Depreciation

306,088


314,521



Amortization

35,587


36,895



Stock-based compensation

37,576


33,947



Deferred income taxes

(4,281)


(35,383)



Distributions from affiliates

37,026


12,142



Equity in earnings of unconsolidated affiliates

(16,064)


(435)



Changes in assets and liabilities (exclusive of acquisitions and dispositions):







Accounts receivable

(398,266)


254,343




Inventories

(136,019)


472,104




Accounts payable

452,815


(159,872)




Federal income taxes

129,325


128,391




Salaries, wages and related accruals

32,091


(77,214)




Other operating activities

18,290


(28,371)







Cash provided by operating activities

856,965


1,194,704







Investing activities:





Capital expenditures

(227,342)


(175,253)


Investment in and advances to affiliates

(12,508)


(23,750)


Disposition of plant and equipment

11,631


17,932


Acquisitions (net of cash acquired)

-


(253)


Purchases of investments

(550,000)


(111,927)


Proceeds from the sale of investments

100,000


100,000


Other investing activities

6,265


1,870






Cash used in investing activities

(671,954)


(191,381)







Financing activities:





Net change in short-term debt

(31,375)


(164,466)


Repayment of long-term debt

-


(8,000)


Issuance of common stock

1,882


423


Excess tax benefits from stock-based compensation

916


1,200


Distributions to noncontrolling interests

(78,684)


(39,347)


Cash dividends

(240,302)


(239,476)


Acquisition of treasury stock

(5,173)


-


Other financing activities

(4,630)


(1,081)







Cash used in financing activities

(357,366)


(450,747)







Effect of exchange rate changes on cash

14,036


(224)







(Decrease) increase in cash and cash equivalents

(158,319)


552,352







Cash and cash equivalents - beginning of year

1,939,469


1,024,144







Cash and cash equivalents - end of six months

$    1,781,150


$    1,576,496







Non-cash investing activity:





Change in accrued plant and equipment purchases

$           2,630


$        (12,644)


















CONTACT: For Investor/Analyst Inquiries - Gregg Lucas, 704-972-1841, or For Media Inquiries - Katherine Miller, 704-353-9015