Steel Dynamics Inc. (NASDAQ:STLD) Q3 2018 Earnings Conference Call Transcript

Oct 18, 2018 • 10:00 am ET


Steel Dynamics Inc. (NASDAQ:STLD) Q3 2018 Earnings Conference Call Transcript


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Good day, and welcome to Steel Dynamics Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's remarks, we will conduct a question-and-answer session, instructions will follow at that time. Please be advised this call is being recorded today October 18th, 2018. Your participation implies consent to our recording this call. If you do not agree to these terms, please disconnect.

At this time, I would like to turn the conference over to Tricia Meyers, Investor Relations Manager. Please go ahead.

Tricia Meyers

Good morning, everyone, and welcome to Steel Dynamics third quarter 2018 earnings conference call. As a reminder, today's call is being recorded and will be available on the company's website for replay later today.

Leading today's call are Mark Millett, President and Chief Executive Officer of Steel Dynamics; and Theresa Wagler, Executive Vice President and Chief Financial Officer. We also have our leaders from the Company's operating platforms, including our Metals Recycling Operations and Russ Rinn, Executive Vice President; our Steel Fabrication Operations, Chris Graham, Senior Vice President, Downstream Manufacturing Group; and our Steel Operations, Glenn Pushis, Senior Vice President, Long Private Steel Group; and Barry Schneider, Senior Vice President, Flat Roll Steel Group.

(Forward-Looking Cautionary Statements)

And now I'm pleased to turn the call over to Mark.

Mark Millett

Welcome to our third quarter 2018 earnings call and we certainly value and appreciate your time and interest in our company. We're excited to share that the Steel Dynamics team delivered another tremendous record performance this quarter. Our underlying growth and market positioning during the last four to five years is showing its power in the strong demand environment.

I think that firms our perspective that SDI is a very different company today relative to the last market peak and I'd like to take a moment to specifically thank the leadership group here today. And along with the respective teams for an absolutely extraordinary job. Not just their execution in this past quarter, but over the last several years as we intentionally position the company for long-term prosperity and superior shareholder return.

Our growth expanded product diversification and market positioning will continue to achieve higher highs and just as importantly higher lows driving considerably higher through cycle cash flow generation capability. So team, hats off to you, you are the best team on the planet. But to begin this morning Theresa would you provide some clarity into our financial results.

Theresa Wagler

Good morning, everyone. It's great to be with you here today. Our third quarter 2018 net income was a record $398 million or a $1.69 per diluted share, which includes fair value purchase accounting adjustments of approximately $13 million or $0.04 per diluted share associated with our recent Heartland acquisition and all of those additional charges are actually in our cost of goods sold line on the income statement, and we -- it also included a discrete tax benefit of $10 million or $0.04 per diluted share related to a change in tax accounting