Nucor Corporation

Good morning and welcome to Nucor's first quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise, and today's call is being recorded. After the speaker's prepared remarks, I will provide instructions for callers wishing to ask questions. I would now like to introduce Jack Sullivan, Vice President of Nucor Investor Relations. You may begin your call.

Thank you and good morning, everyone. Welcome to Nucor's first quarter 2025 earnings review and business update. Leading our call today is Leon Topalian, Chair, President, and CEO, along with Steve Laxton, Executive Vice President and CFO. Other members of Nucor's executive team are also here with us today and may participate during the Q&A portion of the call. Yesterday, we posted our first quarter earnings release and investor presentation to NUCOR's IR website. We encourage you to access these materials as we will cover portions of them during the call. Today's discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. Actual results may be different than forward-looking statements and involve risks outlined in our safe harbor statement and disclosed in NUCOR's SEC filings. The appendix of today's presentation includes supplemental information and disclosures, along with a reconciliation of non-GAAP financial measures. So, with that, let's turn the call over to Leon.

Thanks, Jack. Before we discuss the quarterly results, I'd like to acknowledge the important contributions of two retiring executive team members. Chad Udemark, our EVP of New Markets and Innovation, will retire in June after more than three decades with Nucor. Chad has exemplified the Nucor culture and has positively impacted thousands of team members during his tenure. His leadership in executing our expand beyond strategy and driving key acquisitions has been invaluable. We extend our best wishes to Chad and his family in his retirement. Additionally, Greg Murphy, our EVP of Business Services and General Counsel, will also retire in June. Since joining Nucor in 2015, Greg has provided exceptional leadership, and his impact and advocacy leading our legal, environmental, government affairs, and communications teams has been instrumental in developing long-term strategies that serve our shareholders, customers, and our team. So on behalf of our more than 32,000 team members, thank you both. For all of your leadership, friendship, and dedication to Nucor, you will be greatly missed. With Greg's retirement, Ben Pickett has also been promoted to EVP of Business Services, and Doug Wilner has been promoted to President of Corporate Legal Affairs and General Counsel. And just last week, we announced Tom Batterby will be promoted to EVP of Human Resources and Talent, effective May 11th. Tom is an exceptional leader with more than 35 years of service with Nucor. In his new role, Tom will drive Nucor strategy for the growth, retention, and development of all Nucor team members. Please join me in giving a warm welcome to Ben, Doug, and Tom in their new roles. Turning now to our first quarter results, Nucor generated EBITDA of 696 million and earned 77 cents of adjusted EPS. Despite the lower results compared to prior quarters, Nucor's strong balance sheet and deep liquidity allowed the company to advance its long-term growth plans on a number of fronts. During the quarter, we reinvested nearly $860 million into the company, with approximately two-thirds of that going into projects that will commence operations over the next two years. We've returned nearly $430 million of capital to Nucor shareholders. We've pre-funded upcoming debt maturities raising $1 billion in new senior notes with a weighted average coupon of 4.88%, and took steps to wind down or repurpose certain operations at divisions where we believe resources can be allocated more efficiently. Through it all, we've continued to live our culture, taking care of our team, customers, and shareholders. The capital projects we've undertaken are designed to strengthen and diversify our earnings profile for shareholders, and better serve the evolving needs of our customers. Several of these projects will commence operations within the next 12 months, and I'd like to take a moment to provide an update on them. Within the bar mill group, our rebar micro mill in Lexington, North Carolina rolled its first billet in April and is on track to produce its first heat in June. Commercial shipments are expected to occur in the third quarter. At our Kingman, Arizona bar mill, we expect a new melt shop to produce its first heat in June and be operational in the third quarter. We've also made considerable headway with new coating facilities at our existing sheet mills. The coating complex at our Crawfordsville, Indiana sheet mill is scheduled to be completed by year's end and will add galvanizing and prepain capabilities at the location. Additionally, the new galvanizing line at our Berkeley County sheet mill in South Carolina is on track to completion by mid-2026. Within our towers and structured business, The greenfield projects in Alabama and Indiana will commence operations throughout the next nine months. Customers have already started to tour our Alabama location, and we are working through initial phases of the qualification process. The Alabama project is slated to begin operations in the third quarter of this year, and the Indiana project is on track to begin operations in the first quarter of 2026. While construction on our West Virginia sheet mill will continue through 2026, the team there continues to do a great job of moving the project forward. We're near the midpoint of construction timeline and equipment installation is well underway. We remain on schedule to commission the mill by the end of next year and look forward to supplying the markets with some of North America's cleanest and most advanced sheet steels. Over the past several months, we've seen significant changes in federal trade policy, including the Welcome Marine Statement and broadening of Section 232 steel tariffs. Since its implementation in 2018, the 232 tariffs have been significantly weakened through country exemptions, quotas, and numerous product exclusions. By 2024, fewer than 18% of steel imports were subject to Section 232 tariffs. Ending the exclusions and quota agreements was necessary to strengthen the US steel industry, which was the original goal of the 232 tariffs. We have always maintained the belief that America's national security depends on a robust and healthy American steel industry. As America's largest and most diversified steel producer, we applaud recent steps to help level the playing field for American steel producers. In addition, the trade case relating to certain corrosion-resistant steel products continues to progress. Earlier this month, the Department of Commerce announced preliminary anti-dumping duties on coated flat-rolled steel from 10 countries. Many of our country's trading partners have taken advantage of our open markets for far too long, to the detriment of the American manufacturer and their teams. These trade remedies, as well as the comprehensive Section 232 tariffs, are the sort of enforcement mechanisms required to stop unfairly traded imports. For nearly 30 years, Nucor has worked across administrations to ensure strong trade law enforcement, and we will continue to be outspoken on these issues so long as there are trading partners who do not play by the rules of free and fair trade. When speaking to investors over the past several weeks, we've heard a lot of questions about the outlook for steel demand in light of macroeconomic uncertainty and volatility. So let me spend a few moments describing what we're seeing and what we're focused on. For starters, in the first quarter, we saw backlogs rise over 30% in our steel mill segments and rise nearly 25% in steel products. We recognize a portion of this may be pulled forward. However, we continue to see very healthy order entry rates and relative stable pricing. We're also seeing an administration that seeks less regulation, a lower corporate tax rate, and has demonstrated a willingness to pivot and course correct as conditions evolve. We're seeing steady to improving demand for steel among customers who are engaged in the reshoring, rebuilding, and repowering of American industry. And Nucor is best positioned to supply these growing markets as evidenced by our order books, which include projects like the advanced manufacturing facilities, infrastructure projects, new hospitals, schools, airports, power plants, and stadiums. Overall, we continue to see the current improving demand environment in line with our expectations of 2025. And when you couple that with Nucor's product breadth and capabilities paired up with recent policies in support of U.S. manufacturers, it's hard not to be optimistic about Nucor's future. While the economy is grappling with a lot of uncertainty and volatility, rest assured Nucor is built for this. We have the right capabilities, the right team, and the right financial strength to preserve, regardless of the macroeconomic trends. Our mission to grow the core, expand beyond, and live our culture is how we plan to succeed. But all this requires execution. It's through great execution that Nucor turns potential into value creation for our shareholders and our customers. And that's why my most important message to the team during this period of transformative growth is to stay focused and accountable as we bring new projects to life across the enterprise. Before handing it over to Steve, I want to mention that we recently posted our 2024 corporate sustainability report to the NUCOR website. We're proud to share that our greenhouse gas emission intensity is among the lowest in the global steel industry, and we believe demand for cleaner steels will continue to grow. The report highlights how we're advancing the development of cleaner energy sources such as nuclear energy, as well as carbon-free iron sources and other low-carbon raw materials. The report also highlights impressive progress our team has made in reducing injuries over the last several years. I'd encourage you to look through it and learn more about how our team is working to care for one another, the environment, and the communities we call home. With that, I'll turn it over to Steve, who will provide more details about our performance in the first quarter and our outlook for the second. Steve?