01—Abstract
Summary
Summary of the 10-K filed March 28, 2001. Cited figures are marked; the original filing is the authoritative source.
Nucor Corporation's 10-K for fiscal 2000 reports net sales of $4.59 billiona and net earnings of $310.9 million, or $3.80 per share, compared with $4.01 billion and $244.6 million ($2.80 per share) in 1999.
Sales were a record and rose 14% from 1999, with more than 55% of the increase attributed to higher volume. The company states that demand decreased and imports increased significantly in the second half of 2000, and that difficult business conditions that began in that period are expected to continue through the first half of 2001. Nucor's average scrap cost rose to $120b per gross ton used in 2000 from $111 in 1999.
Steel production reached a record 11,271,000 tons. The balance sheet remained strong, with stockholders' equity of $2.13 billionc and long-term debt of $460.5 million, which the filing states was 16% of total capital. Working capital fell to $823.4 million, and the company repurchased treasury stock for $398.7 million during 2000.
Capital expenditures were $415.4 milliond in 2000, with 2001 projected to be less than $300 million. The filing also describes a December 2000 consent decree with the EPA and several states, under which Nucor agreed to pay a $9 million civil penalty and $4 million in supplemental environmental projects, and to carry out pilot environmental control programs at its facilities. Growth projects include a 1,000,000-ton plate mill in North Carolina that began casting and rolling in October 2000 at a cost of about $450 million, and a pending agreement announced in March 2001 to buy Auburn Steel Company's merchant bar facility in New York for about $115 million.
02—Key points
Key Highlights
- Record 2000 net sales of $4.59 billion, up 14% from $4.01 billion in 1999, with net earnings of $310.9 million ($3.80 per share) versus $244.6 million ($2.80 per share) in 1999
- Steel production hit a record 11,271,000 tons in 2000, up 9% from 10,376,000 tons, and sales to outside customers were a record 9,779,000 tons
- Demand fell and imports rose significantly in the second half of 2000; the filing expects difficult business conditions to continue through the first half of 2001
- Average scrap cost increased to $120 per gross ton in 2000 from $111 in 1999, though it had fallen to $109 by the end of the fourth quarter
- Nucor repurchased about $398.7 million of treasury stock in 2000 under a board authorization of up to 15,000,000 shares, while long-term debt rose to $460.5 million
- December 2000 consent decree with the EPA and several states requires a $9 million civil penalty, $4 million in supplemental environmental projects, and environmental pilot programs at its facilities
- Capital expenditures were $415.4 million in 2000 and are projected to be less than $300 million in 2001; the 1,000,000-ton plate mill in North Carolina began production in October 2000
03—Questions
Frequently Asked Questions
How did Nucor's financial performance change in 2000?
Net sales rose 14% to $4.59 billion, and net earnings increased to $310.9 million, or $3.80 per share, from $244.6 million, or $2.80 per share, in 1999. The filing attributes the increase in earnings mainly to higher margins and volume. Return on average equity was 14.2%, compared with 11.3% in 1999.
What challenges did Nucor identify for 2001?
The filing states that demand decreased and imports increased significantly in the second half of 2000. It expects difficult business conditions to continue through the first half of 2001 and projects a slowdown in building construction in 2001, which will affect Vulcraft's sales and earnings. Nonetheless, Nucor expects to continue generating above-average earnings from its steelmaking operations.
How is Nucor's balance sheet positioned?
Stockholders' equity was $2.13 billion at year-end 2000, and long-term debt was $460.5 million, or 16% of total capital, up from 13% in 1999. Working capital decreased 18% to $823.4 million, and the current ratio was 2.5. Unused long-term credit facilities totaled $248 million, and the company states it has the financial ability to borrow significant additional funds while maintaining reasonable leverage.
What growth investments and acquisitions does Nucor describe?
The 1,000,000-ton plate mill in North Carolina cost about $450 million and began casting and rolling in October 2000. A second caster at the South Carolina sheet mill and a second cold rolling facility are also under way, and a Vulcraft facility in Chemung, New York, is expected to start in the third quarter of 2001. In March 2001, Nucor announced a definitive agreement to buy Auburn Steel Company's merchant bar facility for about $115 million, with closing expected by April 1, subject to regulatory approvals and due diligence.
What environmental obligations did Nucor agree to?
In December 2000, Nucor entered a consent decree with the EPA, the Justice Department and several states to resolve alleged environmental violations. Nucor agreed to pay a $9 million penalty and $4 million in supplemental environmental projects, pilot new air pollution control technology, evaluate and improve water pollution controls, and implement an Environmental Management System across its operations. The filing states that the cost of complying with the decree will not affect liquidity, and Nucor does not believe that other legal proceedings will have a material adverse effect.
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