Common-Size Income Statement
Quarterly Data
Steel Dynamics Inc., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
The financial performance over the analyzed period is characterized by a significant expansion in profitability and operational efficiency, particularly beginning in 2021. While the early years show cyclical fluctuations in margins, the later period exhibits a structural shift toward higher gross and operating margins, coupled with a reduction in the relative weight of financial expenses.
- Revenue Composition and Sales Mix
- Sales are overwhelmingly driven by unrelated parties, consistently remaining above 96% of net sales. However, a notable increase in related party transactions is observed starting in March 2022, where the share rose from historical lows of approximately 0.1% to a peak of 4.00% in June 2022.
- Gross Profitability and Cost of Goods Sold
- Costs of goods sold remained high between 2017 and 2020, typically ranging from 78% to 87% of net sales. A decisive trend reversal occurred in 2021, with costs falling to a low of 66.82% in December 2021. This resulted in gross profit margins expanding from a historical average of 13% to 20% to a peak of 33.18% in December 2021, before moderating to 25.91% by September 2022.
- Operating Expense Management
- Selling, general, and administrative expenses demonstrated a general downward trend as a percentage of net sales, declining from approximately 4.35% in early 2017 to 2.35% by September 2022. Conversely, profit sharing expenses increased in correlation with higher profitability, rising from around 1% of sales to a peak of 2.70% in December 2021.
- Operating and Net Income Trends
- Operating income margins mirrored the gross profit surge, climbing from single-digit and low double-digit percentages between 2017 and 2020 to a peak of 26.91% in December 2021. This operational strength translated directly to the bottom line, with net income attributable to the company peaking at 20.53% of net sales in December 2021, a substantial increase from the 5% to 8% range observed in 2019.
- Financial and Non-Operating Items
- Interest expenses have decreased significantly as a percentage of net sales, dropping from 1.43% in March 2017 to 0.45% in September 2022, indicating either a reduction in debt load or a significant increase in the scale of revenue relative to interest obligations. Tax expenses as a percentage of sales also increased in the later periods, peaking at 6.29% in March 2022, reflecting the higher taxable income generated by expanded margins.
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