<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the period ended March 31, 2000
OR
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 0-21719
Steel Dynamics, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Indiana 35-1929476
(State or other jurisdiction of incorporation or organization) (I.R.S. employer Identification No.)
</TABLE>
7030 Pointe Inverness Way, Suite 310, Fort Wayne, IN 46804
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (219) 459-3553
Securities registered pursuant to Section 12(b) of the Act:
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<CAPTION>
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Title of each class Name of each exchange on which registered
None None
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value
Indicate by check mark whether the registrant (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 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days
Yes /X/ No / /
As of April 24, 2000, Registrant had outstanding 48,029,281 shares of Common
Stock.
<PAGE> 2
STEEL DYNAMICS, INC.
Table of Contents
PART I. Financial Information
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Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets as of March 31, 2000 (unaudited) and December 31, 1999 .............. 1
Consolidated Statements of Income for the three months ended
March 31, 2000 and 1999 (unaudited).............................................................. 2
Consolidated Statements of Cash Flows for the three months ended
March 31, 2000 and 1999 (unaudited).............................................................. 3
Notes to Consolidated Financial Statements....................................................... 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................................................... 6
Item 3. Quantitative and Qualitative Disclosures About Market Risk....................................... 8
</TABLE>
PART II. Other Information
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Item 1. Legal Proceedings................................................................................ 9
Item 6. Exhibits and Reports on Form 8-K................................................................. 9
Signature........................................................................................ 10
</TABLE>
<PAGE> 3
STEEL DYNAMICS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
---- ----
(unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............................................................... $ 16,160 $ 16,615
Accounts receivable, net................................................................ 88,757 74,642
Accounts receivable-related parties..................................................... 15,172 12,007
Inventories............................................................................. 118,923 106,742
Deferred taxes.......................................................................... 8,535 10,987
Other current assets.................................................................... 4,245 4,808
---------- ----------
Total current assets........................................................... 251,792 225,801
PROPERTY, PLANT, AND EQUIPMENT, NET.......................................................... 760,269 742,787
RESTRICTED CASH.............................................................................. 6,812 6,696
OTHER ASSETS................................................................................. 17,283 16,272
---------- ----------
TOTAL ASSETS................................................................... $1,036,156 $ 991,556
========== ==========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
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<CAPTION>
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CURRENT LIABILITIES:
Accounts payable........................................................................ $ 28,362 $ 19,622
Accounts payable-related parties........................................................ 27,313 18,014
Accrued interest........................................................................ 4,949 4,941
Other accrued expenses.................................................................. 24,765 20,077
Current maturities of long-term debt.................................................... 9,596 7,921
---------- ----------
Total current liabilities...................................................... 94,985 70,575
LONG-TERM DEBT, less current maturities...................................................... 497,733 498,042
DEFERRED TAXES............................................................................... 32,011 29,774
MINORITY INTEREST............................................................................ 4,584 1,795
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Class A common stock voting, $.01 par value; 100,000,000 shares
authorized; 49,312,783 and 49,265,078 shares issued; and
48,018,683 and 47,970,978
shares outstanding, as of March 31, 2000 and December 31, 1999, respectively .... 493 493
Treasury stock, at cost; 1,294,100 shares............................................... (19,650) (19,650)
Additional paid-in capital.............................................................. 335,460 335,237
Retained earnings....................................................................... 90,540 75,290
---------- ----------
Total stockholders' equity..................................................... 406,843 391,370
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..................................... $1,036,156 $ 991,556
========== ==========
</TABLE>
See notes to consolidated financial statements.
1
<PAGE> 4
STEEL DYNAMICS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended March 31
2000 1999
---- ----
(unaudited)
<S> <C> <C>
NET SALES:
Unrelated parties...................................................................... $ 151,675 $ 85,133
Related parties........................................................................ 37,497 32,320
----------- -----------
Total net sales.................................................................... 189,172 117,453
Cost of goods sold.......................................................................... 145,161 99,072
----------- -----------
GROSS PROFIT................................................................................ 44,011 18,381
Selling, general and administrative expenses................................................ 13,850 8,099
----------- -----------
OPERATING INCOME............................................................................ 30,161 10,282
Interest expense............................................................................ (4,929) (5,599)
Other income .............................................................................. 183 262
----------- -----------
INCOME BEFORE INCOME TAXES.................................................................. 25,415 4,945
Income taxes .............................................................................. 10,166 1,975
----------- -----------
NET INCOME............................................................................. $ 15,249 $ 2,970
=========== ===========
BASIC EARNINGS PER SHARE:
Net income per share........................................................................ $ 0.32 $ 0.06
=========== ===========
Weighted average common shares outstanding.................................................. 47,996 47,877
=========== ===========
DILUTED EARNINGS PER SHARE:
Net income per share........................................................................ $ 0.32 $ 0.06
=========== ===========
Weighted average common shares and
share equivalents outstanding.......................................................... 48,203 48,244
=========== ===========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 5
STEEL DYNAMICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
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Three Months Ended March 31
2000 1999
---- ----
(unaudited)
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OPERATING ACTIVITIES:
Net income.............................................................................. $ 15,249 $ 2,970
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization....................................................... 11,903 8,191
Deferred income taxes............................................................... 4,689 (2,631)
Minority interest................................................................... 2,789 -
Changes in certain assets and liabilities:
Accounts receivable............................................................ (17,280) 157
Inventories.................................................................... (12,181) 7,651
Other assets................................................................... 563 3,258
Accounts payable............................................................... 18,039 14,825
Accrued expenses............................................................... 4,696 (1,371)
----------- ------------
Net cash provided by operating activities...................................... 28,467 33,050
----------- -----------
INVESTING ACTIVITIES:
Purchases of property, plant, and equipment............................................. (29,206) (47,851)
Other................................................................................... (1,305) (134)
----------- -----------
Net cash used in investing activities.......................................... (30,511) (47,985)
----------- -----------
FINANCING ACTIVITIES:
Issuance of long-term debt.............................................................. 5,651 21,762
Repayments of long-term debt............................................................ (4,285) (1,222)
Issuance of common stock, net of expenses and
proceeds and tax benefits from exercise of stock options............................ 223 83
Debt issuance costs..................................................................... - (14)
----------- -----------
Net cash provided by financing activities...................................... 1,589 20,609
----------- -----------
Increase (decrease) in cash and cash equivalents............................................. (455) 5,674
Cash and cash equivalents at beginning of period............................................. 16,615 5,243
----------- -----------
Cash and cash equivalents at end of period................................................... $ 16,160 $ 10,917
=========== ===========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid for interest....................................................................... $ 9,139 $ 8,246
=========== ===========
Cash paid for taxes.......................................................................... $ 355 $ 310
=========== ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 6
STEEL DYNAMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
Principles of Consolidation. The consolidated financial statements include the
accounts of Steel Dynamics, Inc. (SDI), together with its subsidiaries (the
company) after elimination of the significant intercompany accounts and
transactions. Minority interest represents the minority shareholders'
proportionate share in the equity or income of the company's consolidated
subsidiary, New Millennium Building Systems, LLC (NMBS).
Use of Estimates. These financial statements are prepared in conformity with
generally accepted accounting principles and, accordingly, include amounts that
are based on management's estimates and assumptions that affect the amounts
reported in the financial statements and in the notes thereto. Actual results
may differ from those estimates. In the opinion of management, these estimates
reflect all normal recurring adjustments necessary for a fair presentation of
the interim period results. These financial statements and notes should be read
in conjunction with the audited financial statements included in the company's
1999 Annual Report on Form 10-K.
2. INVENTORIES
Inventories are stated at lower of cost (principally standard cost which
approximates actual cost on a first-in, first-out basis) or market. Inventories
consisted of the following (in thousands):
<TABLE>
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March 31 December 31
2000 1999
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Raw Materials................................................................................ $ 53,860 $ 46,171
Supplies..................................................................................... 41,474 39,981
Work-in-progress............................................................................. 6,980 3,754
Finished Goods............................................................................... 16,609 16,836
---------- ----------
$ 118,923 $ 106,742
========== ==========
</TABLE>
3. EARNINGS PER SHARE
Diluted earnings per share amounts are based upon the weighted average number of
common and common equivalent shares outstanding during the year. Common
equivalent shares are excluded from the computation in periods in which they
have an anti-dilutive effect. The difference between basic and diluted earnings
per share for the company is solely attributable to the dilutive effect of stock
options. The reconciliation of the weighted average common shares for basic and
diluted earnings per share for the three months ended March 31 is as follows (in
thousands):
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2000 1999
---- ----
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Basic weighted average common shares outstanding............................................. 47,996 47,877
Dilutive effect of stock options ............................................................ 207 367
-------- --------
Diluted weighted average common shares and share equivalents outstanding .................... 48,203 48,244
======== =========
</TABLE>
4. NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," was issued in June 1998 and then was
amended by SFAS No. 137 in June 1999. SFAS No. 137 deferred the effective date
of SFAS No. 133 to all fiscal years beginning after June 15, 2000. This
statement establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
condition and measure those instruments at fair value. If certain conditions are
met a derivative may be specifically designated as a fair value hedge, a cash
flow hedge, or a hedge of foreign currency exposure. The accounting for
changes in the fair value of a derivative (that is, gains and losses) is
dependent upon the intended use of the derivative and the resulting designation.
Management has not yet quantified the effect, if any, of the new standard on the
financial statements.
4
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STEEL DYNAMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. SEGMENT INFORMATION
The company has two operating segments: Steel Operations and Steel Scrap
Substitute Operations. Steel Operations include all revenues from the flat roll
mill facility, which produces and sells hot rolled, cold rolled, and galvanized
sheet steel; and also includes all start-up costs associated with the structural
and rail mill, which will produce structural steel and rail products. Steel
Scrap Substitute Operations include revenues from Iron Dynamics, Inc., which
will provide liquid pig iron to the company. In addition, Corporate and
Eliminations include certain unallocated corporate accounts, such as SDI senior
bank debt and certain other investments, which include the start-up operation of
NMBS. The company's operations are primarily organized and managed by operating
segment. The company evaluates performance and allocates resources based on
operating profit or loss before income taxes. The accounting policies of the
operating segments are consistent with those described in Note 1 to the
financial statements. Intersegment sales and transfers are accounted for at
standard prices and are eliminated in consolidation. Segment results for the
three months ended March 31, are as follows (in thousands):
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2000 1999
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STEEL OPERATIONS
Net sales
External $ 189,172 $ 117,453
Other segments - -
Operating income 38,762 14,160
Assets 876,650 800,563
------------ -------------
STEEL SCRAP SUBSTITUTE OPERATIONS
Net sales
External $ - $ -
Other segments 3,264 53
Operating loss (4,110) (2,964)
Assets 126,001 105,550
------------ -------------
CORPORATE AND ELIMINATIONS
Net sales
External $ - $ -
Other segments (3,264) (53)
Operating loss (4,491) (914)
Assets 33,505 39,915
------------ -------------
CONSOLIDATED
Net sales
External $ 189,172 $ 117,453
Operating income 30,161 10,282
Assets 1,036,156 946,028
------------ -------------
</TABLE>
The external net sales of the company's Steel Operations include sales to
Non-U.S. companies of $6.1 million and $444,000 for the three months ended March
31, 2000 and 1999, respectively.
5
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
discussed in the forward-looking statement as a result of risks and
uncertainties, including those incorporated by reference herein from "Exhibit
99.1" filed with our Report on Form 10-K for the year ended December 31, 1999.
You should read this commentary in conjunction with our Annual Report on Form
10-K, for the year ended December 31, 1999 for a full understanding of our
financial condition and results of operations.
Overview
We operate a technologically advanced flat-rolled steel mini-mill in Butler,
Indiana with an annual production capacity of 2.2 million tons. We manufacture
and market a broad range of high quality flat-rolled carbon steel products. We
sell hot rolled, cold rolled and coated steel products, including high strength
low alloy and medium carbon steels. We sell these products directly to end users
and through steel service centers primarily in the Midwestern United States. Our
products are used for various applications, including automotive, appliance,
manufacturing, consumer durable goods, industrial machinery and various other
applications.
In addition to our flat-rolled mini-mill, we are completing a second facility,
preparing to build a third and investing in a steel fabrication plant. Our
second facility, operated by our subsidiary, Iron Dynamics Inc., involves the
pioneering of a process to produce direct reduced iron, which is then converted
into liquid pig iron, a high quality, lower-cost steel scrap substitute for use
in our flat-rolled facility. During 1999, we determined that Iron Dynamics would
require design modifications to obtain its fully intended operating
functionality. The modifications are planned to occur during the second half of
2000, until which time Iron Dynamics will operate at limited production levels.
Our third facility, a planned structural and rail mill, and our investment in
New Millennium Building Systems, LLC, (NMBS) provide an opportunity for further
product diversification and market penetration. Upon completion of the
structural and rail mill, which we estimate to be in the first half of 2001, we
plan to manufacture structural steel beams, pilings and rails for the
construction and railroad markets. In addition, our investment in New Millennium
provides a like opportunity for our steel to access the non-residential
construction markets with steel joists, trusses and girders and roof and floor
decking products.
NET SALES
Our sales are a factor of net tons shipped, product mix and related pricing. Our
net sales are determined by subtracting product returns, sales discounts, return
allowances and claims from total sales. We charge premium prices for certain
grades of steel, dimensions of product, or certain smaller volumes, based on our
cost of production. We also provide further value-added products from our cold
mill. These products include hot rolled and cold rolled galvanized products,
along with cold rolled products, allowing us to charge marginally higher prices
compared to hot-rolled products.
In order to ensure consistent and efficient hot band plant utilization, we have
entered into a multi-year "off-take" sales and distribution agreement with
Heidtman Steel Products, Inc. which accounts for approximately 30,000 tons of
our monthly flat-rolled production at prevailing market prices. We do not enter
into material fixed price, long-term, exceeding one calendar quarter, contracts
for the sale of steel. Although fixed price contracts may reduce risks related
to price declines, these contracts may also limit our ability to take advantage
of price increases.
COST OF GOODS SOLD
Our cost of goods sold represents all direct and indirect costs associated with
the manufacture of our flat-rolled carbon steel, and hot rolled, cold rolled and
coated products. The principal elements of these costs are:
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- Alloys - Electricity
- Natural gas - Oxygen
- Argon - Electrodes
- Steel scrap and scrap substitutes - Depreciation
- Direct and indirect labor and benefits
</TABLE>
Steel scrap and scrap substitutes represent the most significant component of
our cost of goods sold.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Selling, general and administrative expenses are comprised of all costs
associated with the sales, finance and accounting, materials and transportation,
and administrative departments. These costs include labor and benefits,
professional services, financing cost amortization, property taxes, profit
sharing expense and start-up costs associated with new projects.
6
<PAGE> 9
INTEREST EXPENSE
Interest expense consists of interest associated with our senior credit facility
and other debt agreements as described in our notes to financial statements, net
of capitalized interest costs that are related to construction expenditures
during the construction period of capital projects.
OTHER INCOME (EXPENSE)
Other income consists of interest income earned on our cash balance and any
other non-operating income activity. Other expense consists of any non-operating
costs, including permanent impairments of reported investments.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1999
Net Sales. Our net sales were $189.2 million, with shipments of 511,200 net tons
for the three months ended March 31, 2000, as compared to net sales of $117.5
million, with shipments of 369,500 net tons for the three months ended March 31,
1999, an increase in net sales of $71.7 million, or 61%. These increases were
attributable in part to increased volumes of 141,700 net tons, or 38%, in
conjunction with an increase of approximately $52, or 16%, in our average price
per ton, for the three months ended March 31, 2000, as compared to the same
period in 1999. These price increases were experienced throughout our product
lines as a result of the continued strengthening of the industry.
Cost of Goods Sold. Cost of goods sold was $145.2 million for the three months
ended March 31, 2000, as compared to $99.1 million for the three months ended
March 31, 1999, an increase of $46.1 million, or 47%. This increase was
primarily attributable to increased volumes. Steel scrap represented
approximately 55% and 51% of our total cost of goods sold for the three months
ended March 31, 2000 and 1999, respectively. Our costs associated with steel
scrap averaged $21 per ton more during the first quarter of 2000 than during the
first quarter of 1999 and $14 per ton more than during the fourth quarter of
1999.
As a percentage of net sales, cost of goods sold represented approximately 77%
and 84% for the three months ended March 31, 2000 and 1999, respectively,
reflecting the increase in our average price per ton and in our constant focus
on production efficiencies and cost savings.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $13.9 million for the three months ended March 31,
2000, as compared to $8.1 million for the three months ended March 31, 1999, an
increase of $5.8 million, or 72%. This increase was partially attributable to an
increase in start-up costs related to our expansion projects. Start-up costs
related to our structural mill project, NMBS project and IDI were $6.1 million
for the three months ended March 31, 2000, as compared to $4.0 million for the
three months ended March 31, 1999, an increase of $2.1 million, or 53%. As a
result of significantly improved operating results during the first quarter of
2000 as compared to 1999, employee performance-based incentives also comprised
approximately $2.4 million of the total selling, general and administrative
expense increase.
As a percentage of net sales, selling, general and administrative expenses
represented approximately 7% for the three months ended March 31, 2000 and 1999.
Interest Expense. Interest expense was $4.9 million for the three months ended
March 31, 2000, as compared to $5.6 million for the three months ended March 31,
1999, a decrease of $700,000, or 13%. This decrease was the direct result of
increased capitalized interest of $654,000, or 31%, offsetting interest costs
which were substantially level when comparing the first three months of 2000 to
the same period in 1999.
Other Income. For the three months ended March 31, 2000, other income, primarily
composed of interest income, was $183,000, as compared to $262,000 for the three
months ended March 31, 1999, a decrease of $79,000, or 30%.
Federal Income Taxes. Our federal income tax provision was $10.2 million for the
three months ended March 31, 2000, as compared to $2.0 million for the same
period in 1999. This tax provision reflects income tax expense at the statutory
income tax rate.
LIQUIDITY AND CAPITAL RESOURCES
Our business is capital intensive and requires substantial expenditures for,
among other things, the purchase and maintenance of equipment used in our
steelmaking and finishing operations and to remain compliant with environmental
laws. Our short-term and long-term liquidity needs arise primarily from capital
expenditures, working capital requirements and principal and interest payments
related to our outstanding indebtedness. We have met these liquidity
requirements with cash provided by operations, equity, long-term borrowings,
state and local grants and capital cost reimbursements.
7
<PAGE> 10
For the three months ended March 31, 2000, cash provided by operating activities
was $28.5 million, as compared to $33.1 million for the three months ended March
31, 1999, a decrease of $4.6 million. Increasing inventory and accounts
receivable levels were the primarily drivers of this decrease. Cash used in
investing activities was $30.5 million, as compared to $48.0 million for the
three months ended March 31, 2000 and 1999, respectively. Substantially all of
these funds were invested in our capital projects. Approximately 56% of our
capital investment costs incurred during the first three months of 2000 were
utilized in site preparation and other pre-construction activities for the
structural mill. Cash provided by financing activities was $1.6 million for the
three months ended March 31, 2000, as compared to $20.6 million for the same
period in 1999. This decrease in funds provided was the direct result of our
utilization of increased cash from operations in relation to our additional
borrowings.
We are in the process of amending our senior credit bank facility to provide us
with the ability to borrow an additional $50.0 million in the form of an
unsecured term loan facility. At least $25.0 million of these funds will be
available to us to provide additional funding to IDI during its redesign
efforts.
We believe the liquidity of our existing cash and cash equivalents, cash from
operating activities and our available credit facilities will provide sufficient
funding for our working capital and capital expenditure requirements during
2000. However, we may, if we believe circumstances warrant, increase our
liquidity through the issuance of additional equity or debt to finance growth or
take advantage of other business opportunities.
We have not paid dividends on our common stock.
INFLATION
We believe that inflation has not had a material effect on our results of
operation.
ENVIRONMENTAL AND OTHER CONTINGENCIES
We have incurred, and in the future will continue to incur, capital expenditures
and operating expenses for matters relating to environmental control,
remediation, monitoring and compliance. We believe, apart from our dependence on
environmental construction and operating permits for our existing and proposed
manufacturing facilities, such as our planned structural and rail mill project
in Whitley County, Indiana, that compliance with current environmental laws and
regulations is not likely to have a material adverse effect on our financial
condition, results of operations or liquidity; however, environmental laws and
regulations have changed rapidly in recent years and we may become subject to
more stringent environmental laws and regulations in the future.
IMPACT OF YEAR 2000
We did not experience any material adverse issues or business interruptions
arising from the date change to January 1, 2000. During 1999, we completed the
process of preparing for Year 2000 issues. As a result of our efforts to date,
we have not incurred any material costs and do not expect to incur any future
material costs in addressing the Year 2000 issue related to either our products
or our business and process control systems, operating equipment with embedded
chips or software and third party interfaces.
We have devoted and will continue to devote the resources necessary to ensure
that all Year 2000 issues, if any should arise, are properly addressed. However,
there can be no assurance that all Year 2000 issues have been detected. Although
considered unlikely, unanticipated problems in our mission critical operating
systems, including problems associated with non-compliant third parties and
disruptions to our customers and suppliers could still occur despite efforts to
date.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
MARKET RISK
In the normal course of business our market risk is limited to changes in
interest rates. We utilize long-term debt as a primary source of capital. A
portion of our debt has an interest component that resets on a periodic basis to
reflect current market conditions. We manage exposure to fluctuations in
interest rates through the use of an interest rate swap. We agree to exchange,
at specific intervals, the difference between fixed rate and floating rate
interest amounts calculated on an agreed upon notional amount. This interest
differential paid or received is recognized in the consolidated statements of
income as a component of interest expense. At March 31, 2000, no material
changes had occurred related to our interest rate risk from the information
disclosed in the Annual Report of Steel Dynamics, Inc. and on form 10-K for the
year ended December 31, 1999.
8
<PAGE> 11
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We incorporate by reference to Part I, Item III of our 1999 Form 10-K Annual
Report, filed with the Securities and Exchange Commission on March 29, 2000, the
description of our pending litigation involving the nine related lawsuits,
aggregating some $240 million in claims, brought against us and various
investment banking firms, relating to a note offering in March 1998 by
Nakornthai Strip Mill Public Company Ltd. ("NSM") and its investment bankers
(the other co-defendants in the litigation). Discovery is proceeding in all of
these cases.
We also incorporate by reference the description of a pending lawsuit brought by
our Iron Dynamics subsidiary, for declaratory relief against Taft Contracting
Company, involving a $1 million commercial dispute over some work Taft was
contracted to provide. This suit is also in the discovery stage.
A third lawsuit referenced in our 1999 Form 10-K filing, involving another
action for declaratory relief brought by our Iron Dynamics subsidiary against
Dover Conveyor Company, and arising out of another construction dispute
involving conveyor equipment purchased from Dover, has now been settled and
dismissed.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits -
*27.1 Financial Data Schedule
(B) Reports on Form 8-K for the quarter ended March 31, 2000:
None
*Filed herewith
Items 2 - 5 of Part II are not applicable for this reporting period and have
been omitted.
9
<PAGE> 12
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of Securities
Exchange Act of 1934, Steel Dynamics, Inc. has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
May 3, 2000
STEEL DYNAMICS, INC.
By: /s/ TRACY L. SHELLABARGER
Tracy L. Shellabarger
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer
and Duly Authorized Officer)
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 16,159,887
<SECURITIES> 0
<RECEIVABLES> 105,334,720
<ALLOWANCES> 1,405,382
<INVENTORY> 118,923,351
<CURRENT-ASSETS> 251,792,359
<PP&E> 880,635,456
<DEPRECIATION> 120,366,369
<TOTAL-ASSETS> 1,036,155,679
<CURRENT-LIABILITIES> 94,984,556
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0
0
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<SALES> 189,172,067
<TOTAL-REVENUES> 189,172,067
<CGS> 145,161,132
<TOTAL-COSTS> 13,849,812
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<LOSS-PROVISION> 86,000
<INTEREST-EXPENSE> 4,928,608
<INCOME-PRETAX> 25,415,212
<INCOME-TAX> 10,166,086
<INCOME-CONTINUING> 15,249,126
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<NET-INCOME> 15,249,126
<EPS-BASIC> .32
<EPS-DILUTED> .32
</TABLE>
