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): October 20, 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 2.02Results of Operations and Financial Condition

 

On October 20, 2016, Nucor Corporation issued a news release reporting its financial results for the quarter ended October 1, 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 9.01Financial Statements and Exhibits

 

(d)Exhibits

 

99.1News Release of Nucor Corporation, issued October 20, 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: October 20, 2016

 

 

 

 

INDEX TO EXHIBITS

 

 

Exhibit No.Description

 

99.1News Release of Nucor Corporation, issued October 20, 2016

 

 

 

 

 

 

 

Exhibit 99.1

Nucor Reports Results for Third Quarter and Nine Months of 2016

CHARLOTTE, N.C., Oct. 20, 2016 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $270.0 million, or $0.84 per diluted share, for the third quarter of 2016. By comparison, Nucor reported net earnings of $233.8 million, or $0.73 per diluted share, for the second quarter of 2016 and net earnings of $227.1 million, or $0.71 per diluted share, for the third quarter of 2015.

In the first nine months of 2016, Nucor reported consolidated net earnings of $547.6 million, or $1.79 per diluted share, compared with consolidated net earnings of $419.7 million, or $1.30 per diluted share, in the first nine months of last year.

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



Three Months (13 Weeks) Ended


Nine Months (39 Weeks) Ended



October 1, 2016


October 3, 2015


October 1, 2016


October 3, 2015

Steel mills


$                  593,149


$          260,776


$        1,403,711


$           676,404

Steel products


72,578


96,167


197,891


199,261

Raw materials


14,313


(43,177)


(76,240)


(122,778)

Corporate/eliminations

(253,768)


40,505


(586,680)


(63,349)



$                  426,272


$          354,271


$           938,682


$           689,538










Nucor's results include a charge of $59.3 million ($0.12 per diluted share) to value inventories using the last-in, first-out (LIFO) method of accounting. The charge is compared with a charge of $19.0 million ($0.03 per diluted share) in the second quarter of 2016 and a credit of $137.0 million ($0.27 per diluted share) in the third quarter of 2015. As a result, the LIFO charge in the first nine months of 2016 was $105.8 million ($0.20 per diluted s hare), compared with a LIFO credit of $249.0 million ($0.48 per diluted share) in the first nine months of 2015. Included in the third quarter of 2016 results were charges related to legal settlements of $33.7 million ($0.06 per diluted share) and a net benefit of $11.1 million ($0.02 per diluted share) related to fair value adjustments to assets in the corporate/eliminations segment. Included in the third quarter of 2015 earnings are out-of-period non-cash gains totaling $10.2 million ($0.03 per diluted share) related to a correction of deferred tax balances.

Nucor's consolidated net sales increased 1% to $4.29 billion in the third quarter of 2016 from $4.25 billion in the second quarter of 2016 and increased 2% compared with $4.23 billion in the third quarter of 2015. Average sales price per ton in the third quarter of 2016 increased 11% from the second quarter of 2016 and increased 2% from the third quarter of 2015. Total tons shipped to outside customers were 5,889,000 tons in the third quarter of 2016, a 9% decrease from the second quarter of 2016 and flat with the third quarter of 2015. Total third quarter steel mill shipments decreased 12% from the second quarter of 2016 and increased 1% from the third quarter of 2015. Third quarter downstream steel products shipments to outside customers increased 8% from the second quarter of 2016 and decreased 3% from the third quarter of 2015.

In the first nine months of 2016, Nucor's consolidated net sales decreased 6% to $12.25 billion, compared with $12.98 billion in last year's first nine months. Total tons shipped to outside customers increased 5% from the first nine months of 2015, while average sales price per ton decreased 10%.

The average scrap and scrap substitute cost per ton used during the third quarter of 2016 was $252, an increase of 9% from $232 in the second quarter of 2016 and a decrease of 4% compared to $262 in the third quarter of 2015. The average scrap and scrap substitute cost per ton used in the first nine months of 2016 was $225, a decrease of 21% from $285 in the first nine months of 2015.

Overall operating rates at our steel mills decreased to 71% in the third quarter of 2016 as compared to 83% in the second quarter of 2016 and increased from 69% in the third quarter of 2015. Steel mill operating rates for the first nine months of 2016 increased to 76% as compared to 69% for the first nine months of 2015.

Total steel mill energy costs in the third quarter of 2016 increased approximately $4 per ton compared to the second quarter of 2016 due to higher natural gas unit costs and decreased productivity resulting from lower steel production volumes. Total steel mill energy costs in the third quarter of 2016 decreased approximately $3 per ton compared to the third quarter of 2015 due to lower electricity and natural gas unit costs. Energy costs for the first nine months of 2016 decreased $5 per ton from the first nine months of 2015 due to improved productivity from increased production volumes and lower unit costs for electricity and natural gas.

Our liquidity position remains strong with $2.35 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 September, Nucor's board of directors declared a cash dividend of $0.375 per share payable on November 10, 2016 to stockholders of record on September 30, 2016. This dividend is Nucor's 174th consecutive quarterly cash dividend, a record we expect to continue.

Nucor announced in September that it has agreed to acquire Independence Tube Corporation (ITC), a leading manufacturer of hollow structural section steel tubing, for $435 million, or approximately 6x average EBITDA over the 2013-2015 period. ITC operates four strategically located state-of-the-art facilities in Illinois and Alabama that produce roughly 600,000 tons annually and employ approximately 335 teammates. The acquisition is another important step in Nucor's long-term strategy to increase the number of value-added products offered to customers and provides another growth platform to the Nucor portfolio.

Also in September, Nucor announced the addition of the Specialty Cold Mill Complex at its Nucor Steel Arkansas division. The Specialty Cold Mill Complex will expand Nucor's capability to produce advanced high-strength, motor lamination, and high-strength low-alloy steel products. The new mill and expanded annealing capacity will cost an estimated $230 million to build and is expected to be in operation in approximately two years. The addition will give Nucor the capability to produce products the company currently does not make, adding to Nucor's comprehensive product portfolio and further differentiating Nucor from its competitors as the leader in providing solutions to its customers.

At the beginning of October, Nucor concluded several transactions to improve its access to a long-term supply of natural gas. Nucor purchased 49% of Encana's leasehold interest covering approximately 54,000 acres in the South Piceance Basin, terminated two Carry and Earning drilling agreements, and sold its 50% equity interest in Hunter Ridge Energy Services LLC to Encana. Nucor also entered into long-term agreements directly with existing third party gathering and processing service providers to support its operating and potential future well developments in the South Piceance Basin. These transactions provide Nucor with capital flexibility and preserve long-term access to low cost gas resources in support of its raw material strategy.

The flat-rolled trade cases are having a positive impact as steel imports are down approximately 20% this year compared to last year. Over the summer, affirmative final determinations were announced in the three flat-rolled antidumping duty and countervailing duty cases involving corrosion-resistant, cold-rolled and hot-rolled steel products. These final determinations are an important step in returning fair trade to the U.S. flat-rolled steel market. Last month, the Department of Commerce released its preliminary determinations in the cut-to-length plate investigations involving China and Korea and we expect preliminary determinations in the remaining cases to be announced soon. We expect the plate cases to conclude by mid-2017. We also filed new trade cases in September addressing rebar imports from Turkey, Taiwan and Japan.

The improvement in earnings in the third quarter of 2016 compared to the second quarter of 2016 is primarily due to the performance of our steel mills segment and raw materials segment. The profitability of our sheet mills improved due to higher average selling prices, which benefited in part from contract sales that are priced on a lagging quarterly basis. Demand for cold-rolled and galvanized sheet products remained robust, while demand for hot-rolled sheet products has weakened since the first half of the year. Market conditions for our plate and bar mills continue to be challenging due to high levels of imports. Energy, heavy equipment and agricultural markets remain weak. The automotive markets remain strong.

The performance of the raw materials segment in the third quarter of 2016 significantly improved compared to the second quarter of 2016 due to the improved performance of our DRI facilities, which were profitable for the quarter. We experienced decreased profitability for our steel products segment in the third quarter of 2016 as compared to the second quarter of 2016 due to margin compression resulting from higher steel prices. We continue to see gradual improvement in nonresidential construction markets.

Earnings in the fourth quarter of 2016 are expected to decrease notably compared to the third quarter of 2016 primarily due to lower margins in the steel mills segment, with the most significant impact being on the sheet mills. We expect the raw materials segment to return to a loss position due to the impact of lower transfer prices at our DRI facilities in the fourth quarter. The performance of our steel products segment is expected to decrease due to end of year seasonality that is typical in the fourth quarter.

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 third quarter results on October 20, 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 


 Nine Months (39 Weeks) Ended 




October 1, 2016


October 3, 2015


Percentage Change


October 1, 2016


October 3, 2015


Percentage Change

Steel mills production


5,012


4,942


1%


16,292


14,896


9%

Steel mills total shipments


5,213


5,166


1%


16,790


15,401


9%















Sales tons to outside customers:














Steel mills


4,465


4,440


1%


14,446


13,183


10%


Joist


129


124


4%


322


310


4%


Deck


123


117


5%


332


291


14%


Cold finished


99


107


-7%


328


354


-7%


Fabricated concrete














reinforcing steel


311


339


-8%


857


925


-7%


Other


762


756


1%


2,209


2,510


-12%




5,889


5,883


-


18,494


17,573


5%















CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)










  Three Months (13 Weeks) Ended  


Nine Months (39 Weeks) Ended  










October 1, 2016


October 3, 2015


October 1, 2016


October 3, 2015









Net sales

$         4,290,236


$         4,225,514


$         12,251,584


$     12,982,563









Costs, expenses and other:








  Cost of products sold

3,665,900


3,701,678


10,774,040


11,784,139

  Marketing, administrative and other expenses

169,223


124,339


440,679


377,492

  Equity in earnings of








unconsolidated affiliates

(14,168)


(115)


(30,232)


(550)

  Interest expense, net

43,009


45,341


128,415


131,944


3,863,964


3,871,243


11,312,902


12,293,025

Earnings before income taxes and








noncontrolling interests

426,272


354,271


938,682


689,538

Provision for income taxes

131,788


86,535


281,401


178,166

Net earnings

294,484


267,736


657,281


511,372

Earnings attributable to








noncontrolling interests

24,448


40,610


82,719


91,691

Net earnings attributable to 








Nucor stockholders

$            270,036


$            227,126


$               574,562


$           419,681









Net earnings per share:








  Basic

$0.84


$0.71


$1.79


$1.30

  Diluted

$0.84


$0.71


$1.79


$1.30









Average shares outstanding:








  Basic

319,737


320,819


319,444


320,544

  Diluted

320,028


320,900


319,632


320,695

 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) 

 (In thousands) 














October 1, 2016


Dec. 31, 2015

 ASSETS 






 Current assets: 






 Cash and cash equivalents 


$        1,704,707


$     1,939,469


 Short-term investments 


650,000


100,000


 Accounts receivable, net 


1,850,455


1,383,823


 Inventories, net 


2,338,432


2,145,444


 Other current assets 


156,828


185,644











 Total current assets 


6,700,422


5,754,380









 Property, plant and equipment, net 


4,913,355


4,891,153









 Goodwill 



2,026,841


2,011,278









 Other intangible assets, net 


757,627


770,672









 Other assets 


715,434


799,461











 Total assets 


$     15,113,679


$   14,226,944









 LIABILITIES 






 Current liabilities: 






 Short-term debt 


$             29,795


$           51,315


 Accounts payable 


926,118


566,527


 Salaries, wages and related accruals 


389,585


289,004


 Accrued expenses and other current liabilities 


552,989


478,327











 Total current liabilities 


1,898,487


1,385,173









 Long-term debt due after one year 


4,338,347


4,337,145









 Deferred credits and other liabilities 


786,329


718,613











 Total liabilities 


7,023,163


6,440,931









 EQUITY 






 Nucor stockholders' equity: 






 Common stock 


151,637


151,426


 Additional paid-in capital 


1,954,451


1,918,970


 Retained earnings 


7,469,580


7,255,972


 Accumulated other comprehensive loss, 







 net of income taxes 


(288,584)


(351,362)


 Treasury stock 


(1,559,838)


(1,558,128)



 Total Nucor stockholders' equity 


7,727,246


7,416,878









 Noncontrolling interests 


363,270


369,135











 Total equity 


8,090,516


7,786,013











 Total liabilities and equity 


$     15,113,679


$   14,226,944

















 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 

 (In thousands) 
















Nine Months (39 Weeks) Ended
















October 1, 2016


October 3, 2015










Operating activities:







Net earnings 



$            657,281


$            511,372


Adjustments:








Depreciation



459,109


469,239



Amortization



54,066


55,673



Stock-based compensation


44,210


39,542



Deferred income taxes


49,834


(52,661)



Distributions from affiliates


38,474


14,149



Equity in earnings of unconsolidated affiliates

(30,232)


(550)



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







Accounts receivable


(328,000)


328,671




Inventories


(184,320)


370,445




Accounts payable


216,218


(83,396)




Federal income taxes


28,915


113,458




Salaries, wages and related accruals

103,324


(15,993)




Other operating activities

62,801


7,350










Cash provided by operating activities


1,171,680


1,757,299










Investing activities:







Capital expenditures


(327,436)


(283,087)


Investment in and advances to affiliates

(48,167)


(41,271)


Disposition of plant and equipment

14,883


24,996


Acquisitions (net of cash acquired)

(48,105)


(253)


Purchases of investments


(650,000)


(111,927)


Proceeds from the sale of investments

100,000


111,452


Other investing activities


13,350


2,947










Cash used in investing activities


(945,475)


(297,143)










Financing activities:







Net change in short-term debt


(21,520)


(152,529)


Repayment of long-term debt


-


(16,300)


Issuance of common stock


5,727


423


Excess tax benefits from stock-based compensation

1,507


1,700


Distributions to noncontrolling interests

(86,808)


(56,085)


Cash dividends



(360,675)


(359,461)


Acquisition of treasury stock


(5,173)


-


Other financing activities


(5,212)


(1,630)










Cash used in financing activities 


(472,154)


(583,882)










Effect of exchange rate changes on cash

11,187


(4,993)










(Decrease) increase in cash and cash equivalents

(234,762)


871,281










Cash and cash equivalents - beginning of year

1,939,469


1,024,144










Cash and cash equivalents - end of nine months

$         1,704,707


$         1,895,425










Non-cash investing activity:






Change in accrued plant and equipment purchases

$            140,347


$             (14,577)












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