Steel Dynamics(STLD)2025-02-28 13:07Production Capacity and Operations - Steel Dynamics, Inc. has an estimated steelmaking and steel coating capacity of approximately 16 million tons and actual metals recycling volumes as of December 31, 2024[22]. - The company is nearing completion of a 650,000-metric ton recycled aluminum flat rolled products mill in Columbus, Mississippi, expected to begin shipments in mid-2025[35]. - The product mix from the new aluminum mill is projected to be approximately 45% sustainable beverage packaging, 35% automotive, and 20% common alloy and industrial use[35]. - The company has approximately 9.4 million tons of flat roll steel annual production capacity and an additional 2.0 million tons of flat roll steel processing capacity[67]. - Annual flat roll galvanizing capability is 5.5 million tons and painting capability is 2.0 million tons[67]. - The recycled aluminum flat rolled products mill in Columbus, Mississippi is expected to have an annual production capacity of 650,000 metric tons, with commercial production anticipated by mid-2025[152]. Financial Performance - Total net sales for 2024 were 18,795.32 million in 2023[305]. - Gross profit for 2024 was 4,045.88 million in 2023[305]. - Operating income decreased to 3,151.18 million in 2023[305]. - Net income attributable to Steel Dynamics, Inc. for 2024 was 2,450.88 million in 2023[305]. - Basic earnings per share for 2024 were 14.72 in 2023[305]. - Total current assets decreased to 6,787.83 million in 2023[302]. - Total liabilities decreased to 6,068.89 million in 2023[302]. - Retained earnings increased to 13,545.59 million in 2023[302]. - Dividends declared per share increased to 1.70 in 2023[305]. - Total assets slightly increased to 14,908.42 million in 2023[302]. - Net income for 2024 was 2,467,332 in 2023[311]. - Net cash provided by operating activities decreased to 3,519,928 in 2023, reflecting a decline of 47.5%[311]. - Total cash and equivalents at the end of 2024 was 1,406,464 at the end of 2023, representing a decrease of 57.7%[311]. Market and Sales - Over 70% of steel and steel fabrication sales are considered value-added, contributing to higher volume and profitability through varying market environments[28]. - In 2024, the company’s steel-consuming businesses purchased 1.7 million tons of steel from its steel mills, representing 14% of total steel shipments[31]. - Steel operations accounted for 69%, 67%, and 65% of consolidated net sales in 2024, 2023, and 2022 respectively[66]. - Export sales represented 6%, 8%, and 5% of steel segment net sales during 2024, 2023, and 2022 respectively[66]. - Sheet steel operations represented 72% of steel operations net sales in 2024, with 9.5 million tons produced[73]. - The company shipped 7,702,731 tons of sheet steel products from Butler, Columbus, and Sinton in 2024, an increase from 7,459,023 tons in 2023[74]. - Long products shipments totaled 1,625,913 tons in 2024, down from 1,851,349 tons in 2023[82]. - Steel fabrication operations accounted for 10%, 15%, and 19% of consolidated net sales during 2024, 2023, and 2022, respectively[100]. - The company sold 607,000, 663,000, and 856,000 tons of joist and deck products during 2024, 2023, and 2022, respectively[100]. - The company maintains approximately one-third of the total domestic steel joist and deck market for bookings, with approximately 1.7 million tons, 1.8 million tons, and 2.1 million tons during 2024, 2023, and 2022, respectively[102]. Sustainability and Environmental Initiatives - The company’s commitment to sustainability includes using EAF technology, which produces lower-carbon emission quality steel products[36]. - The company’s biocarbon production facility, projected to begin operations in the first half of 2025, aims for a 35% reduction in Scope 1 GHG absolute emissions[38]. - The company is committed to reducing its environmental footprint with specific GHG emission reduction goals for 2025, 2030, and 2050, which may involve additional capital expenditures[136]. - Increased environmental regulations and sustainability considerations may lead to higher operational costs and affect demand for the company's products[136]. - The company is subject to various environmental regulations and may incur significant cleanup costs related to hazardous waste management[145]. Workforce and Safety - Companywide team retention was approximately 79%, with U.S.-based teams retention of 89% in 2024[58]. - The company employs approximately 13,000 full-time team members as of December 31, 2024[54]. - Over 60% of a production team member's total potential compensation is "at risk" based on quality production and cost-effectiveness metrics[27]. - The company is focused on safety as its first core strategic pillar, aiming for zero injuries across operations[56]. - The company has a culture of trust and individual empowerment, fostering decision-making throughout the business[54]. Risks and Challenges - The company is significantly affected by global economic conditions, including potential recessions and slower than anticipated economic growth, which could adversely impact demand for its products[124]. - The steel industry is cyclical, and fluctuations in demand from key sectors such as construction, automotive, and manufacturing can lead to volatility in sales and profitability[130]. - Global steelmaking overcapacity currently exceeds consumption, leading to downward pressure on U.S. steel prices, which may adversely affect the company's financial performance[127]. - The company faces risks related to the creditworthiness of customers and suppliers, which can be exacerbated during periods of high interest rates, potentially leading to reduced sales and increased exposure to uncollectible accounts[126]. - The prices and availability of raw materials, particularly ferrous scrap, are subject to significant market fluctuations, which can constrain operating levels and reduce profit margins[131]. - The company is exposed to risks associated with energy costs and availability, which are subject to volatile market conditions and can disrupt production[135]. - The company may face challenges in passing on increased costs to customers, which could result in production slowdowns or curtailments[133]. - Cybersecurity threats pose risks to the company's sensitive data and operational capabilities, potentially leading to production delays and reputational harm[154]. - The company faces significant competition from other steel and aluminum producers, which may adversely affect its market share and financial condition[151]. - The availability of scrap supply is critical for the metals recycling operations, and any disruptions could negatively impact the company's results of operations[153]. Debt and Financial Management - As of December 31, 2024, total outstanding debt is $3,252,432, with a weighted-average interest rate of 3.6% for fixed-rate debt and 6.4% for variable-rate debt[271]. - The company has received notices from regulatory agencies identifying it as potentially responsible for cleanup costs at various disposal sites[149]. - The company is required to maintain certain financial covenants under its senior unsecured credit facility, which could limit operational flexibility[171]. - Impairment charges may adversely affect the company's results of operations if the fair value of assets falls below their recorded value[173]. - The company is exposed to interest rate changes, which could impact earnings and cash flows[270]. - The company has established effective internal control over financial reporting as of December 31, 2024, according to management's evaluation[280]. - The independent auditor confirmed the effectiveness of the company's internal control over financial reporting as of December 31, 2024[283]. - The consolidated financial statements present fairly the financial position of the company at December 31, 2024, in accordance with U.S. GAAP[292].