Name: Steel Dynamics Inc. (NASDAQ:STLD) | Common-Size Income Statement
Creator: Stock Analysis on Net

Common-Size Income Statement

Steel Dynamics Inc., common-size consolidated income statement

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Unrelated parties	99.83%	99.86%	99.87%	99.83%	98.17%
Related parties	0.17%	0.14%	0.13%	0.17%	1.83%
Net sales	100.00%	100.00%	100.00%	100.00%	100.00%
Costs of goods sold	-70.87%	-85.06%	-85.37%	-80.35%	-83.41%
Gross profit	29.13%	14.94%	14.63%	19.65%	16.59%
Selling, general and administrative expenses	-3.50%	-4.97%	-4.17%	-3.52%	-4.14%
Profit sharing	-2.11%	-0.64%	-0.75%	-1.32%	-0.96%
Amortization of intangible assets	-0.16%	-0.30%	-0.28%	-0.23%	-0.31%
Asset impairment charges	0.00%	-0.20%	0.00%	0.00%	0.00%
Operating income	23.36%	8.82%	9.43%	14.57%	11.18%
Interest expense, net of capitalized interest	-0.31%	-0.99%	-1.21%	-1.07%	-1.41%
Other income (expense), net	-0.19%	-0.49%	0.15%	0.20%	0.03%
Income before income taxes	22.86%	7.35%	8.36%	13.70%	9.80%
Income tax expense	-5.23%	-1.40%	-1.89%	-3.08%	-1.36%
Net income	17.64%	5.95%	6.48%	10.62%	8.45%
Net (income) loss attributable to noncontrolling interests	-0.18%	-0.21%	-0.06%	0.02%	0.07%
Net income attributable to Steel Dynamics, Inc.	17.46%	5.74%	6.41%	10.64%	8.52%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The financial performance between 2017 and 2021 is characterized by a period of moderate volatility followed by a significant expansion in profitability in the final year. While margins remained relatively stable or slightly contracted from 2019 to 2020, a substantial increase in operational efficiency and pricing power is evident in 2021.

Gross Profitability and Cost Management: The Cost of Goods Sold (COGS) maintained a range between 80.35% and 85.37% of net sales from 2017 through 2020. However, a sharp decline to 70.87% occurred in 2021, resulting in the gross profit margin peaking at 29.13%. This represents a significant departure from the 14% to 20% range observed in previous years, indicating a substantial reduction in production costs relative to sales revenue.
Operating Efficiency: Selling, general, and administrative expenses remained consistently low, fluctuating between 3.50% and 4.97% of net sales. This stability in overhead, combined with the reduction in COGS, led to a surge in operating income, which rose from 8.82% in 2020 to 23.36% in 2021. Profit sharing expenses also showed an increase in 2021, reaching 2.11% of net sales, reflecting the stronger operational performance.
Financial Costs and Tax Impact: Interest expense as a percentage of net sales demonstrated a consistent downward trend, decreasing from 1.41% in 2017 to 0.31% in 2021. This suggests an improvement in debt coverage or a reduction in relative leverage. Income tax expense as a percentage of sales peaked in 2021 at 5.23%, correlating with the higher pre-tax income levels of that year.
Net Income Trends: Net income attributable to the company experienced a decline from a high of 10.64% in 2018 to a low of 5.74% in 2020. This trend was reversed aggressively in 2021, with the net income margin climbing to 17.46%. This growth was primarily driven by the expansion of the gross margin rather than reductions in operating expenses.
Revenue Composition: A shift in the source of net sales is observable. Sales to related parties dropped from 1.83% in 2017 to a range of 0.13% to 0.17% from 2018 onward, indicating a transition toward near-total reliance on unrelated third-party customers.

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