NUCOR CORP 10-K Summary: Fiscal Year Ended December 31, 1993
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 1993, for Nucor Corporation, a Delaware corporation incorporated in 1958. The company operates exclusively in the manufacture and sale of steel products, utilizing electric furnaces and continuous casting to process ferrous scrap. Principal products include hot rolled steel, cold rolled steel, steel joists, and steel grinding balls. As of December 31, 1993, the company employed 5,900 individuals, all within the steel products business.
Key Financial Metrics
The filing incorporates detailed financial statements by reference to the 1993 Annual Report; specific revenue, net income, and cash flow figures are not explicitly listed in the provided text. However, the following capital and operational metrics are disclosed:
- Order Backlog: $445,000,000 at December 31, 1993.
- Property, Plant, and Equipment (Gross): $1,820,988,721 at December 31, 1993.
- Accumulated Depreciation: $459,952,281 at December 31, 1993.
- Net Property, Plant, and Equipment: Approximately $1,361,036,440 (calculated from gross less accumulated depreciation).
- Allowance for Doubtful Accounts: $10,384,904 at December 31, 1993.
- Maintenance and Repairs Expense: $280,036,996 for the year ended December 31, 1993.
- Facility Utilization: Approximately 90% of production capacity in 1993.
- Market Capitalization (Non-Affiliates): $4,840,906,860 as of February 28, 1994.
Material Changes Versus Prior Period
Significant operational and balance sheet changes occurred between 1992 and 1993:
- Order Backlog Growth: The backlog of orders increased from $276,000,000 at December 31, 1992, to $445,000,000 at December 31, 1993, representing a substantial increase in future revenue visibility.
- Capital Expenditures: Additions to property, plant, and equipment totaled $364,160,462 in 1993, compared to $379,124,386 in 1992.
- Asset Retirements: Sales or retirements of property, plant, and equipment were $117,272,380 in 1993, compared to $66,556,300 in 1992.
- Stock Performance: Relative to a 1988 baseline of $100, Nucor's stock performance index reached 457.74 in 1993, significantly outperforming the S&P 500 (197.21) and the S&P Steel Group Index (172.20).
- Expense Trends: Maintenance and repairs expenses rose to $280,036,996 in 1993 from $221,694,798 in 1992.
Outlook, Risks, and Management Commentary
Management identifies low cost and production efficiency as the primary competitive advantages. The company's markets are tied to capital and durable goods spending, making them sensitive to general economic conditions. Competition is intense from both domestic manufacturers and foreign imports, with price and service being the principal competitive factors.
Risks and Contingencies:
- Raw Materials and Energy: The company relies on ferrous scrap, electricity, and gas. While supplies are currently adequate, the facilities are large consumers of energy.
- Legal Proceedings: The company is involved in various judicial and administrative proceedings regarding contracts, torts, environment, taxes, and insurance, which management considers immaterial.
- Contract Terms: All sales contracts are firm-fixed-price and competitively bid, exposing the company to margin compression if input costs rise unexpectedly.
Investor Verification Checklist
- Verify the specific revenue and net income figures in the 1993 Annual Report (pages 14-18) as they are not explicitly stated in this 10-K text.
- Confirm the details of the $445 million order backlog to assess near-term revenue realization.
- Review the 1993 Annual Report for the breakdown of debt levels and liquidity ratios, which are not detailed in the provided text.
- Monitor the impact of rising maintenance and repair costs ($280M in 1993) on future operating margins.
- Assess the sustainability of the 90% facility utilization rate in the context of broader economic conditions affecting durable goods spending.