Today Steel Dynamics, Inc. (Nasdaq: STLD) announced net sales of $3.2 billion for the year 2006, a 48 percent increase over 2005 net sales of $2.2 billion. Net income for 2006 was $397 million, or $3.77 per diluted share, compared to 2005 net income of $222 million or $2.17 per diluted share, an increase in net income of 79 percent. Per-share figures for all periods reflect a two-for-one stock split in the company's common stock effective November 20, 2006.

For the fourth quarter of 2006 net income was $105 million, or $1.03 per diluted share, compared to $65 million or $0.65 per diluted share in the fourth quarter of 2005. Net sales were $840 million for the quarter, an increase of 47 percent over the fourth quarter of 2005. Consolidated shipments in the fourth quarter were up 27 percent to 1.2 million tons compared to 920,000 tons in the fourth quarter of 2005. Compared to the third quarter of 2006, consolidated shipments were 6 percent lower. The average consolidated selling price per ton in the fourth quarter of 2006 decreased to $720 from $733 in the third quarter, but was up 16 percent compared to the fourth quarter of 2005. The cost of steel scrap per net ton charged decreased $28 from the third quarter to the fourth quarter.

Consolidated shipments for 2006 grew 30 percent to 4.7 million tons. All three of the company's Indiana steel mills established annual records for sales and profits. Each mill also achieved new production and shipping milestones. For the first time, the Flat Roll Division's annual shipments exceeded 2.5 million tons, the Structural and Rail Division topped 1 million tons, and Engineered Bar Products surpassed 500,000 tons. In addition, both steel mills that were acquired as a part of the merger with the Roanoke Electric Steel Corporation achieved record results in 2006. Roanoke contributed to Steel Dynamics' results for slightly less than three calendar quarters, following the merger's effective date of April 12, 2006.

In 2006 the company's operating income was $141 per ton shipped with an operating margin of 20 percent. SDI's 2006 average consolidated selling price per ton increased to $691 from $608 in 2005. During 2006, Steel Dynamics generated $404 million in cash flow from operations. Capital expenditures for the year were $129 million. During 2006 the company invested $247 million to repurchase 9.4 million shares of common stock, post-split.

"2006 was an excellent year for Steel Dynamics," said Keith Busse, President and CEO. "During 2006 we were able to take advantage of numerous marketplace opportunities as a result of the production capabilities we've put into place over the past several years. With the exception of some softening of demand for flat-rolled steel in the fourth quarter due to market oversupply, the markets for our products were strong all year. With prices for steel scrap and energy costs remaining relatively stable or declining, and selling prices relatively strong, we were able to achieve stronger margins.

"The integration of Roanoke Electric Steel into Steel Dynamics is progressing extremely well, with a strong contribution to SDI's earnings from those operations starting in the third quarter. With the addition to our product mix of Roanoke's merchant bars and Steel of West Virginia's specialty structural steel products, as well as the strong growth in wide-flange beams and SBQ bars, Steel Dynamics ended 2006 as a much more diversified steelmaker. In 2005 two-thirds of our volume was in flat-rolled steel, but by the fourth quarter of 2006 flat rolled accounted for slightly less than half of our steel operations shipments. The strength of other steel products helped us offset lower volumes in flat rolled toward the end of the year."

"As we look ahead to 2007, we are optimistic about our ability to continue our growth in sales and earnings, continuing to take advantage of our production assets and our capabilities to provide our customers with quality steel products tailored to meet their needs," Busse said. "The capital spending projects now underway in 2007 should increase our production capacity to nearly 6.5 million tons by the end of 2008. As for the current market conditions, we expect the inventory correction for flat-rolled steel to be resolved by the second quarter, and at this time foresee continued favorable market conditions in 2007 for other product categories related to non- residential building, commercial transportation, and commercial and industrial investment. SDI sees its first quarter 2007 earnings in the range of $0.85 to $0.90 per diluted share. Although the first quarter appears to be slightly softer than the fourth quarter due to continued weakness in the flat-rolled sector, it will still be stronger than the first quarter of 2006. All in all, should the economy remain strong and stable, 2007 could be another record year."

Forward-Looking Statements

This press release contains some predictive statements about future events, including statements related to conditions in the steel marketplace, Steel Dynamics' revenue growth, costs of raw materials, future profitability and earnings, and the operation of new or existing facilities. These statements are intended to be made as "forward-looking," subject to many risks and uncertainties, within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. Such predictive statements are not guarantees of future performance, and actual results could differ materially from our current expectations.

Factors that could cause such predictive statements to turn out other than as anticipated or predicted include, among others: changes in economic conditions affecting steel consumption; increased foreign imports; increased price competition; difficulties in integrating acquired businesses; risks and uncertainties involving new products or new technologies; changes in the availability or cost of steel scrap or substitute materials; increases in energy costs; occurrence of unanticipated equipment failures and plant outages; labor unrest; and the effect of the elements on production or consumption.

In addition, we refer you to SDI's detailed explanation of these and other factors and risks that may cause such predictive statements to turn out differently, as set forth in our most recent Annual Report on Form 10-K and in other reports which we from time to time file with the Securities and Exchange Commission, available publicly on the SEC Web site, http://www.sec.gov, and on the Steel Dynamics Web site, http://www.steeldynamics.com

Forward-looking or predictive statements we make are based on our knowledge of our businesses and the environment in which they operate as of the date on which the statements were made. Due to these risks and uncertainties, as well as matters beyond our control which can affect forward- looking statements, you are cautioned not to place undue reliance on these predictive statements, which speak only as of the date of this press release. We undertake no duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Conference Call and Webcast

On Wednesday, January 24, 2007 at 11:00 am EST, Steel Dynamics will host a conference call in which Steel Dynamics' management will discuss fourth quarter and 2006 results. You are invited to listen to the live audio broadcast of the conference call over the Internet, accessible from Steel Dynamics' Web site: http://www.steeldynamics.com

Dial-in information is available on our Web site. No telephone replay will be available. An audio replay of the Webcast will be available on the SDI Web site.

Steel Dynamics, Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

Three Months Ended Twelve Months Ended

December 31, December 31,

2006 2005 2006 2005

Net Sales $839,800 $569,645 $3,238,787 $2,184,866

Costs of goods sold 610,654 429,689 2,408,795 1,699,717

Selling, general,

and administrative

expenses 53,872 26,058 170,878 91,974

Operating Income 175,274 113,898 659,114 393,175

Interest expense 8,498 7,898 32,104 34,341

Other (income)

expense, net (1,615) 411 (4,545) (1,792)

Income before income

taxes 168,391 105,589 631,555 360,626

Income taxes 63,325 40,652 234,848 138,841

Net income $105,066 $64,937 $396,707 $221,785

Basic earnings

per share $1.14 $.75 $4.22 $2.49

Weighted average

common shares

outstanding 92,545 86,267 93,931 89,242

Diluted earnings

per share, including

effect of assumed

conversions $1.03 $.65 $3.77 $2.17

Weighted average common

shares and share

equivalents

outstanding 102,297 100,263 105,774 103,284

Dividends declared

per share $.15 $.05 $.50 $.20

Note: All prior period share data has been adjusted to include the

company's two for one stock split effective November 20, 2006.

Steel Dynamics, Inc.

UNAUDITED SUPPLEMENTAL OPERATING INFORMATION

Three Months Ended Twelve Months Ended

December 31, December 31,

2006 2005 2006 2005

Shipments and

Production Data (tons)

Shipments

Steel Operations*

Flat Roll Division 580,967 623,156 2,541,251 2,375,469

Structural & Rail

Division 266,941 198,363 1,018,426 826,661

Engineered Bar

Division 122,156 93,333 502,169 357,241

Roanoke Bar Division 145,639 - 458,327 -

Steel of West Virginia 71,119 - 237,437 -

1,186,822 914,852 4,757,610 3,559,371

Steel Fabrication

Operations** 68,256 43,706 236,012 141,125

Other Operations*** 115,043 80,685 420,169 319,323

Intercompany (203,440) (119,665) (725,522) (426,087)

Consolidated

shipments 1,166,681 919,578 4,688,269 3,593,732

Steel Operations*

production 1,202,254 941,915 4,696,455 3,616,480

Average consolidated

selling price per ton $ 720 $ 619 $ 691 $ 608

Average Steel Operations*

selling price per ton 674 596 656 587

Steel Dynamics, Inc.

UNAUDITED SUPPLEMENTAL OPERATING INFORMATION

Quarterly 2006

First Second Third

Shipments and Production Data (tons)

Shipments

Steel Operations*

Flat Roll Division 663,045 653,075 644,164

Structural & Rail Division 247,133 242,627 261,725

Engineered Bar Division 125,350 124,132 130,531

Roanoke Bar Division - 146,260 166,428

Steel of West Virginia - 80,412 85,906

1,035,528 1,246,506 1,288,754

Steel Fabrication Operations** 40,689 60,862 66,205

Other Operations*** 73,196 122,595 109,335

Intercompany (93,661) (208,388) (220,033)

Consolidated shipments 1,055,752 1,221,575 1,244,261

Steel Operations* production 1,060,885 1,170,218 1,263,098

Average consolidated selling

price per ton $ 631 $ 672 $ 733

Average Steel Operations*

selling price per ton 611 639 693

*Steel Operations include the company's Flat Roll Division, Structural and

Rail Division, Engineered Bar Products Division, and after the effective

date of the merger on April 12, 2006, also include Roanoke Bar Division

and Steel of West Virginia operations.

**Steel Fabrication Operations include the company's two joist and deck

fabrication plants located in Indiana and Florida, and after the effective

date of the merger on April 12, 2006, also include three additional joist

fabrication plants located in Ohio, Virginia, and South Carolina.

***Other Operations include Iron Dynamics and Paragon Steel Enterprises,

and after the effective date of the merger on April 12, 2006, also include

the operations from two steel scrap processing facilities.

Steel Dynamics, Inc.

CONSOLIDATED BALANCE SHEETS

(in thousands)

December 31, December 31,

2006 2005

(unaudited)

Assets

Current assets

Cash and equivalents $29,373 $65,518

Accounts receivable 408,376 253,500

Inventories 569,317 386,892

Deferred income taxes 13,964 6,516

Other current assets 15,167 13,307

Total current assets 1,036,197 725,733

Property, plant and equipment, net 1,136,703 999,969

Restricted cash 5,702 1,588

Intangible assets 12,226 -

Goodwill 30,966 1,925

Other assets 25,223 28,472

Total assets $2,247,017 $1,757,687

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable $147,942 $108,723

Income taxes payable 30,497 6,819

Accrued expenses 94,024 66,449

Accrued profit sharing 46,341 23,030

Current portion of long-term debt 80,686 2,156

Total current liabilities 399,490 207,177

Long-term debt

Senior unsecured 9.5% notes 300,000 300,000

Convertible subordinated 4.0% notes 37,500 115,000

Other long-term debt 16,920 17,960

Unamortized bond premium 3,772 5,459

Total long-term debt 358,192 438,419

Deferred income taxes 256,803 231,105

Minority interest 1,424 1,118

Commitments and contingencies

Stockholders' equity

Common stock 537 529

Treasury stock, at cost (230,472) (270,905)

Additional paid-in capital 367,772 405,900

Retained earnings 1,093,271 744,344

Total stockholders' equity 1,231,108 879,868

Total liabilities and stockholders' equity $2,247,017 $1,757,687

Steel Dynamics, Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended Twelve Months Ended

December 31, December 31,

2006 2005 2006 2005

Operating activities:

Net income $105,066 $64,937 $396,707 $221,785

Adjustments to

reconcile net income

to net cash provided

by operating

activities:

Depreciation and

amortization 27,519 23,397 114,812 91,865

Stock option expense 2,233 - 7,479 -

Deferred income taxes 8,252 8,365 (478) 22,230

Minority interest (390) 174 306 (1,351)

Changes in certain

assets and liabilities:

Accounts receivable (5,178) (34,875) (72,277) 361

Inventories (11,591) (7,406) (66,240) (5,404)

Accounts payable (46,634) 1,190 (9,787) (32,299)

Income taxes payable (3,349) 3,764 13,974 6,553

Other working capital 25,546 32,452 19,073 7,016

Net cash provided by

operating activities 101,474 91,998 403,569 310,756

Investing activities:

Purchase of property,

plant and equipment (44,264) (18,031) (128,618) (63,386)

Acquisition of

business, net of

cash acquired - - (89,106) -

Purchase of short-term

investments - - (14,075) -

Maturities of short-term

investments - - 14,075 -

Other investing activities 69 - 311 1,345

Net cash used in

investing activities(44,195) (18,031) (217,413) (62,041)

Financing activities:

Issuance of debt 265,000 - 330,000 268,706

Repayment of debt (215,533) (36,299) (297,231) (276,510)

Issuance of common

stock (net of expenses)

and proceeds and

tax benefits from

exercise of stock

options 2,351 1,556 29,099 15,401

Purchase of treasury

stock (86,264) - (246,624) (186,764)

Dividends paid (14,303) (4,310) (37,545) (18,276)

Debt issuance costs - - - (2,088)

Net cash used in

financing activities(48,749) (39,053) (222,301) (199,531)

Increase (decrease)

in cash and

equivalents 8,530 34,914 (36,145) 49,184

Cash and equivalents

at beginning of

period 20,843 30,604 65,518 16,334

Cash and equivalents

at end of period $29,373 $65,518 $29,373 $65,518

Supplemental disclosure

of cash flow information:

Cash paid for interest $1,917 $2,135 $32,448 $34,914

Cash paid for federal

and state income

taxes $70,392 $20,060 $226,354 $110,160

Source: prnewswire

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