SECOND
QUARTER
1999
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 July 3, 1999 Commission file number 1-4119
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NUCOR CORPORATION
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(Exact name as specified in charter)
Delaware 13-1860817
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2100 Rexford Road, Charlotte, North Carolina 28211
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(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
--- ---
87,291,667 shares of common stock were outstanding at July 3, 1999.
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<PAGE>
PART I - FINANCIAL INFORMATION
Nucor Corporation - Consolidated Condensed Statements of Earnings
<TABLE>
<CAPTION>
Six Months (26 Weeks) Ended Three Months (13 Weeks) Ended
------------------------------ ------------------------------
July 3, 1999 July 4, 1998 July 3, 1999 July 4, 1998
-------------- ------------- --------------- --------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales................... $1,890,989,319 $2,267,212,238 $997,166,323 $1,128,350,083
--------------- ---------------- ------------ ---------------
Costs and expenses:
Cost of products sold..... 1,703,276,078 1,975,810,481 884,369,369 976,304,508
Marketing, administrative
and other expenses...... 65,052,020 78,949,401 33,665,488 40,081,649
Interest expense (income). (459,384) (2,111,167) (15,747) (762,084)
-------------- ------------- ----------- -------------
1,767,868,714 2,052,648,715 918,019,110 1,015,624,073
-------------- ------------- ----------- -------------
Earnings before
federal income taxes...... 123,120,605 214,563,523 79,147,213 112,726,010
Federal income taxes...... 44,300,000 77,200,000 28,500,000 40,500,000
-------------- -------------- ----------- -----------
Net earnings............ $ 78,820,605 $ 137,363,523 $ 50,647,213 $ 72,226,010
=============== =============== ============= ==============
Net earnings per share...... $.90 $1.56 $.58 $.82
==== ===== ==== ====
Dividends declared
per share............... $.26 $.24 $.13 $.12
==== ==== ==== ====
Average number of
shares outstanding... 87,298,950 88,042,141 87,288,165 88,064,592
</TABLE>
The information furnished 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.
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<PAGE>
Nucor Corporation - Consolidated Condensed Balance Sheets
<TABLE>
<CAPTION>
July 3, December 31,
1999 1998
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Assets (Unaudited) (Audited)
----- --------- -------
<S> <C> <C>
Current assets:
Cash and short-term investments................. $ 517,898,884 $308,696,460
Accounts receivable............................. 342,218,745 299,244,794
Inventories..................................... 384,073,126 435,884,838
Other current assets............................ 87,374,704 85,641,291
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Total current assets.......................... 1,331,565,459 1,129,467,383
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Property, plant and equipment..................... 2,093,098,100 2,097,078,473
-------------- -------------
Total assets.................................. $3,424,663,559 $3,226,545,856
============== ==============
Liabilities and stockholders' equity
- ------------------------------------
Current liabilities:
Accounts payable................................ $ 213,116,952 $ 198,329,771
Salaries, wages and related accruals............ 103,250,836 113,619,322
Federal income taxes............................ 22,042,012 26,090,271
Accrued expenses and other current liabilities.. 180,121,265 148,857,793
--------------- --------------
Total current liabilities..................... 518,531,065 486,897,157
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Long-term debt due after one year................. 390,450,000 215,450,000
-------------- -----------
Deferred credits and other liabilities............ 144,250,449 169,250,449
-------------- -----------
Minority interests................................ 245,488,216 282,396,469
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Stockholders' equity:
Common stock.................................... 36,036,490 36,020,714
Additional paid-in capital...................... 68,730,351 67,252,936
Retained earnings............................... 2,072,984,884 2,016,856,168
Treasury stock.................................. (51,807,896) (47,578,037)
-------------- ---------------
2,125,943,829 2,072,551,781
-------------- ---------------
Total liabilities and stockholders' equity.... $3,424,663,559 $3,226,545,856
============== ==============
</TABLE>
Inventories consisted of approximately 40% raw materials and supplies, and 60%
finished and semi-finished products, at July 3, 1999 (50% and 50% at December
31, 1998). Inventories valued on the last-in, first-out (LIFO) method of
accounting represent approximately 85% of total inventories as of July 3, 1999
and as of December 31, 1998. If the first-in, first-out method (FIFO) of
accounting had been used, inventories would have been $21,870,960 higher at July
3, 1999 ($5,120,960 higher at December 31, 1998).
The information furnished has not been audited and is subject to year-end
adjustments.
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<PAGE>
Nucor Corporation - Consolidated Condensed Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months (26 Weeks) Ended
-----------------------------
July 3, 1999 July 4, 1998
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(Unaudited) (Unaudited)
--------- ---------
<S> <C> <C>
Operating activities:
Net earnings............................................ $ 78,820,605 $137,363,523
Adjustments:
Depreciation of plant and equipment................... 125,881,911 118,748,941
Minority interests.................................... 32,785,427 48,188,268
Changes in:
Current assets...................................... 7,104,348 (15,294,510)
Current liabilities................................. 31,633,908 (13,330,182)
Other............................................... (24,874,977) (8,918,147)
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Cash provided by operating activities................. 251,351,222 266,757,893
------------ ------------
Investing activities:
Capital expenditures (net).............................. (122,026,561) (212,953,010)
------------ ------------
Cash used in investing activities..................... (122,026,561) (212,953,010)
------------ ------------
Financing activities:
Increase in long-term debt.............................. 175,000,000 47,250,000
Distributions to minority interests..................... (69,693,680) (75,329,763)
Issuance of common stock................................ 2,114,280 3,323,609
Acquisition of treasury stock........................... (4,850,948) -
Cash dividends.......................................... (22,691,889) (21,134,866)
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Cash provided by (used in) financing activities....... 79,877,763 (45,891,020)
------------ ------------
Increase in cash and short-term investments............... $209,202,424 $ 7,913,863
============ ===========
</TABLE>
The information furnished has not been audited and is subject to year-end
adjustments.
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<PAGE>
Nucor Corporation - Analysis of Operations and Finances
Operations
Net sales decreased by about 12% from the second quarter of 1998 to the
second quarter of 1999, with substantially all of the net sales decrease
resulting from a decrease in average sales prices. Net sales decreased close to
17% from the first half of 1998 to the first half of 1999, with about 65% of the
net sales decrease resulting from a decrease in average sales prices and about
35% of the decrease resulting from a decrease in sales volume. Average sales
prices decreased about 11% both from the second quarter of 1998 to the second
quarter of 1999, and from the first half of 1998 to the first half of 1999.
The major component of cost of products sold is raw material costs. The
average price of raw materials decreased approximately 24% in both the second
quarter of 1999 compared with the second quarter of 1998, and the first half of
1999 compared with the first half of 1998.
Major components of marketing, administrative and other expenses are freight
and profit sharing costs. Unit freight costs decreased less than 5% from both
the second quarter of 1998 to the second quarter of 1999, and from the first
half of 1998 to the first half of 1999. Profit sharing costs decreased about 40%
from the second quarter of 1998 to the second quarter of 1999, and decreased
about 50% from the first half of 1998 to the first half of 1999. Profit sharing
costs are based upon and generally fluctuate with pre-tax earnings.
Interest income, net of interest expense, decreased for the second quarter
and first half of 1999 from the second quarter and first half of 1998, due
primarily to increased debt.
Federal income taxes were at a rate of about 36% for the second quarter and
first half of 1999, and the second quarter and first half of 1998.
Net earnings decreased during the second quarter and first half of 1999,
compared with the second quarter and first half of 1998, due to decreased
margins and increased pre-operating and start-up costs.
Margins were about 11% for the second quarter of 1999 and about 10% for the
first half of 1999, compared with about 13% for the second quarter and first
half of 1998.
Liquidity and capital resources
The current ratio was about 2.6 at the end of the first half of 1999, and
about 2.3 at year-end 1998. The percentage of long-term debt to total capital
was about 14% at the end of the first half of 1999, and about 8% at year-end
1998.
Capital expenditures decreased close to 40% during the first half of 1999,
compared with the first half of 1998. Capital expenditures are projected to be
more than $450 million for all of 1999. 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.
Year 2000 (Y2K)
Nucor has implemented a readiness program designed to have all significant
business and manufacturing systems functioning properly with respect to the Y2K
issue. Affected systems are being replaced or remediated, with testing performed
concurrently. Most mission-critical systems have been remediated and tested,
with the remainder to be completed by the end of 1999. Nucor is also reviewing
the progress of significant vendors and customers in addressing this issue.
Failure by Nucor or its vendors and customers to make material corrections could
result, in some circumstances, in an interruption of normal business operations.
Nucor has developed internal guidelines for business continuity planning and is
in process of developing appropriate mitigation, contingency and recovery plans.
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<PAGE>
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
At the annual meeting of stockholders held on May 13, 1999, two directors
were elected for terms of three years expiring in 2002; 76,752,246 shares were
voted for Peter C. Browning (668,995 abstained), and 76,741,176 shares were
voted for Victoria F. Haynes (680,065 abstained).
Item 6 - Exhibits and Reports on Form 8-K
Exhibit 11 - Computation of net earnings per share.
Reports on Form 8-K - None filed for the quarter.
Exhibit 11 - Computation of net earnings per share
<TABLE>
<CAPTION>
Six Months (26 Weeks) Ended Three Months (13 Weeks) Ended
--------------------------- -----------------------------
July 3, 1999 July 4, 1998 July 3, 1999 July 4, 1998
------------- ------------ -------------- -------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Basic:
Basic net earnings............. $78,820,605 $137,363,523 $50,647,213 $72,226,010
=========== ============ ============ ============
Average shares outstanding..... 87,298,950 88,042,141 87,288,165 88,064,592
========== ========== ============ ============
Basic net earnings per share... $.9029 $1.5602 $.5802 $.8201
====== ======= ====== ======
Diluted:
Diluted net earnings........... $78,820,605 $137,363,523 $50,647,213 $72,226,010
=========== ============ ============ ============
Diluted
average shares outstanding:
Basic shares outstanding..... 87,298,950 88,042,141 87,288,165 88,064,592
Dilutive effect of
employee stock options..... 39,420 21,564 57,077 27,160
---------- ---------- ----------- ------------
87,338,370 88,063,705 87,345,242 88,091,752
========== ========== =========== ============
Diluted net earnings per share. $.9025 $1.5598 $.5799 $.8199
====== ======= ====== ======
</TABLE>
The information furnished has not been audited and is subject to year-end
adjustments.
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
Vice President,
Dated: August 11, 1999 Corporate Controller
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUL-03-1999
<CASH> 517,898,884
<SECURITIES> 0
<RECEIVABLES> 342,218,745
<ALLOWANCES> 16,575,772
<INVENTORY> 384,073,126
<CURRENT-ASSETS> 1,331,565,459
<PP&E> 3,519,732,589
<DEPRECIATION> 1,426,634,489
<TOTAL-ASSETS> 3,424,663,559
<CURRENT-LIABILITIES> 518,531,065
<BONDS> 390,450,000
<COMMON> 36,036,490
0
0
<OTHER-SE> 2,089,907,339
<TOTAL-LIABILITY-AND-EQUITY> 3,424,663,559
<SALES> 1,890,989,319
<TOTAL-REVENUES> 1,890,989,319
<CGS> 1,703,276,078
<TOTAL-COSTS> 1,703,276,078
<OTHER-EXPENSES> 65,052,020
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (459,384)
<INCOME-PRETAX> 123,120,605
<INCOME-TAX> 44,300,000
<INCOME-CONTINUING> 78,820,605
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 78,820,605
<EPS-BASIC> .90
<EPS-DILUTED> .90
</TABLE>
