Significantly Increased Earnings Per
Share
Auto and Metals Recycling Division Reports
Strongest Second Quarter Performance Since Fiscal 2012
Schnitzer Steel Industries, Inc. (Nasdaq: SCHN) today reported
results for its second quarter ended February 28, 2017. The
Company reported earnings per share from continuing operations of
$0.40 and adjusted earnings per share of $0.37. These results are
significantly improved from prior year second quarter results of a
loss per share from continuing operations of $1.48 and an adjusted
loss per share of $0.25, as well as first quarter of fiscal 2017
results of a loss per share from continuing operations of $0.05 and
an adjusted loss per share of $0.03. For a reconciliation of the
adjusted results to U.S. GAAP, see the Non-GAAP Financial Measures
provided after the financial statements in this document.
Auto and Metals Recycling (AMR) delivered its best second
quarter and first half fiscal year performance in five years. AMR's
operating income of $26 million for the second quarter, or
operating income per ferrous ton of $31, was more than double
compared to the first quarter and substantially higher than the
prior year quarter, driven by a combination of higher selling
prices, metal spread expansion, and sustained benefits from our
cost savings and productivity initiatives. Stronger demand for
recycled ferrous metals in both the export and domestic markets in
the second quarter resulted in a sequential 27% increase in average
ferrous net selling prices and 2% increase in sales volumes. For
the first half of fiscal 2017 compared to the prior year first
half, ferrous sales volumes increased 9% and nonferrous volumes
increased 10%, reflecting improved global demand for recycled
metals and supply conditions and our focus on growth.
In the Steel Manufacturing Business (SMB), operating performance
for the second quarter was impacted by higher beginning inventory
costs following the major equipment upgrade in the first quarter,
increased raw material costs which rose faster than selling prices,
and continued high levels of imports. These factors contributed to
an operating loss of $2 million for the second quarter, an
improvement of $1 million sequentially. Finished steel average
selling prices increased 5% sequentially and 3% from the prior year
quarter. Sales volumes were 5% higher sequentially and 4% lower
from the prior year quarter.
"Our second quarter results benefited from improved export and
domestic markets and from the operating leverage created within AMR
as a result of our productivity initiatives, cost reductions, and
internally generated operating synergies. These factors contributed
to AMR’s strongest second quarter and half-year results in the last
five years," commented Tamara Lundgren, President and Chief
Executive Officer. "While SMB continued to face challenging market
conditions due to a combination of pressure from lower priced
imports and seasonally slower demand, we expect SMB to see benefits
from recent productivity initiatives and the onset of seasonally
stronger construction activity."
Summary Results ($ in millions, except per share amounts)
Quarter 2Q17 2Q16
Change 1Q17 Change Revenues $
382 $ 289 32 % $ 334 14 % Operating income (loss) $ 14 $ (37
) NM $ 1
NM
Goodwill impairment charge — 9
NM
— NM Other asset impairment charges — 18
NM
—
NM
Restructuring charges and other exit-related activities — 5 NM — NM
Recoveries related to the resale or modification of previously
contracted shipments — — NM —
NM
Adjusted operating income (loss)(1)(2) $ 13 $ (4 ) NM $ 1
NM
Net income (loss) attributable to SSI $ 11 $ (41 ) NM $ (1 )
NM Income (loss) from continuing operations attributable to
SSI $ 11 $ (40 ) NM $ (1 ) NM Adjusted income (loss) from
continuing operations attributable to SSI(1) $ 10 $ (7 ) NM $ (1 )
NM Net income (loss) per share attributable to SSI $ 0.40 $
(1.52 ) NM $ (0.05 ) NM Income (loss) per share from
continuing operations attributable to SSI $ 0.40 $ (1.48 ) NM $
(0.05 ) NM Adjusted diluted earnings (loss) per share from
continuing operations attributable to SSI(1) $ 0.37 $ (0.25 ) NM $
(0.03 ) NM (1) See Non-GAAP Financial Measures for
reconciliation to U.S. GAAP. (2) May not foot due to rounding. NM =
Not Meaningful
Auto and Metals Recycling
Summary of Auto and Metals Recycling Results ($ in millions,
except selling prices and data per ton; Fe volumes 000s long tons;
NFe volumes Ms lbs)
Quarter 2Q17
2Q16 Change 1Q17
Change Total revenues $ 349 $ 250 40 % $ 305 15 %
Ferrous revenues $ 230 $ 140 64 % $ 184 25 % Ferrous volumes 852
737 16 % 834 2 % Avg. net ferrous sales prices ($/LT)(1) $ 248 $
169 47 % $ 196 27 % Nonferrous revenues(2) $ 92 $ 80 14 % $
91 1 % Nonferrous volumes(3) 123 124 (1 )% 136 (10 )% Avg. net
nonferrous sales prices ($/lb)(1)(3) $ 0.65 $ 0.59 10 % $ 0.58 12 %
Cars purchased for retail (000s) 96 70 37 % 94 2 %
Operating income (loss)(4) $ 26 $ (26 ) NM $ 12 112 % Operating
income (loss) per Fe ton $ 31 $ (36 ) NM $ 15 108 % Adjusted
operating income(4)(5) $ 26 $ 1 2,868 % $ 12 111 % Adjusted
operating income per Fe ton $ 30 $ 1 2,468 % $ 15 107 %
(1) Sales prices are shown net of freight. (2) An adjustment
of certain intrasegment items was made between nonferrous revenues
and retail and other revenues for the quarter ended February 29,
2016 to conform to the presentation for the quarter ended February
28, 2017 and November 30, 2016. The adjustment had no impact on
previously reported total revenues or earnings. (3) Average sales
price and volume information excludes platinum group metals
(“PGMs”) in catalytic converters. (4) Segment operating income
(loss) does not include the impact of restructuring charges and
other exit-related activities. (5) See Non-GAAP Financial Measures
for reconciliation to U.S. GAAP. NM = Not Meaningful
Volumes: Ferrous sales volumes in the second quarter were
16% higher versus the prior year quarter, primarily due to stronger
export and domestic demand, improved supply conditions and
increased selling activity. Compared to the first quarter, volumes
were 2% higher. Nonferrous sales volumes decreased 1% versus the
prior year second quarter and 10% sequentially primarily due to the
timing of shipments. Export customers accounted for 64% of total
ferrous sales volumes. Ferrous and nonferrous products were
exported to 16 countries with Turkey, South Korea and Bangladesh
the top export destinations for ferrous shipments.
Pricing: Average ferrous net selling prices increased 47%
compared to the prior year second quarter and 27% sequentially
reflecting improved global demand for recycled metals. Nonferrous
prices increased 10% from the prior year quarter and 12%
sequentially reflecting higher commodity prices globally.
Margins: Operating income of $26 million and $39 million
represents the best second quarter and half-year performance,
respectively, since fiscal 2012. Operating income per ferrous ton
of $31 for the second quarter more than doubled compared to the
first quarter due to a combination of strengthening market
conditions in both the export and domestic markets, which resulted
in higher selling prices and metal spread expansion, and sustained
benefits from our cost savings and productivity initiatives.
Compared to the prior year second quarter, substantially improved
operating results reflected a combination of stronger market
conditions, improved supply flows and the benefits of our cost
savings and productivity initiatives which contributed $4 million,
or $5 per ton, of the improvement. Second quarter operating results
included an estimated favorable impact of $4 million, or $5 per
ton, from average inventory accounting, which compares to an
adverse impact of $2 million, or $2 per ton, in the first quarter
and an adverse impact of $1 million, or $2 per ton, in the prior
year second quarter. Prior year second quarter results were also
adversely impacted by $27 million in non-cash goodwill and other
asset impairment charges.
Steel Manufacturing Business
Summary of Steel Manufacturing Business Results ($ in
millions, except selling prices; volume 000s of short tons)
Quarter 2Q17 2Q16 Change
1Q17 Change Revenues $ 58 $ 58 — % $ 53 11 %
Operating loss(2) $ (2 ) $ (1 ) (45 )% $ (3 ) 43 % Adjusted
operating loss(1)(2) $ (2 ) $ (1 ) (45 )% $ (3 ) 35 % Avg.
net sales prices ($/ST) $ 517 $ 504 3 % $ 492 5 % Finished steel
sales volumes 106 110 (4 )% 101 5 % Rolling mill
utilization(3) 89 % 61 % 65 % (1) See Non-GAAP
Financial Measures for reconciliation to U.S. GAAP. (2) Segment
operating loss does not include the impact of restructuring charges
and other exit-related activities. (3) Rolling mill utilization for
fiscal 2017 is based on effective annual production capacity under
current conditions of 580 thousand tons of finished steel products,
reflecting a decrease in the effective finished steel production
capacity resulting from the decommissioning of the older rolling
mill during the first quarter of fiscal 2017.
Sales Volumes: Finished steel sales volumes in the second
quarter decreased 4% from the prior year quarter, primarily
reflecting continued competition from low-priced imports.
Sequentially, volumes increased 5% primarily due to customer
re-stocking and a rising price environment.
Pricing: Average net sales prices for finished steel
products increased 3% from the prior year quarter and 5%
sequentially, primarily reflecting the impact of higher raw
material prices.
Margins: Operating performance for the second quarter was
a loss of $2 million, an improvement of $1 million sequentially.
Benefits from sequentially higher sales volumes and selling prices
were partially offset by higher beginning inventory costs following
the equipment upgrade in the first quarter, higher raw material
costs which increased more rapidly than average selling prices and
the continued impact from a high level of imports. Compared to the
prior year second quarter, the decrease in operating results was
primarily due to the combination of lower sales volumes and raw
material costs rising faster than finished steel selling
prices.
Corporate Items
Corporate selling, general and administrative expense in the
second quarter of $10 million was higher compared to the prior year
second quarter and sequentially, primarily due to increased
incentive compensation accruals resulting from improved financial
performance and, to a lesser extent, increased professional
services expense.
The Company continues to deliver on its targeted $30 million of
annual cost savings and productivity measures announced in the
second quarter of fiscal 2016. In the second quarter of fiscal
2017, the Company achieved approximately $6 million in consolidated
incremental benefits compared to the prior year quarter, primarily
in AMR with the balance in SMB and reduced corporate shared
services costs. In total, the Company has delivered $27 million in
program benefits and expects to deliver the remaining $3 million of
annual benefits by the end of fiscal 2017.
In the second quarter, the rising price environment led to
higher working capital which offset the benefits to cash flow of
improved profitability, resulting in positive operating cash flow
of under $1 million. Total debt at the end of the second quarter
was $209 million and debt, net of cash was $200 million (see
Non-GAAP Financial Measures for reconciliation to U.S. GAAP). The
Company returned capital to shareholders through its 92nd
consecutive quarterly dividend.
The Company's effective tax rate was an expense of 5% in the
second quarter which was lower than the federal statutory rate
primarily due to the Company’s full valuation allowance positions
partially offset by increases in deferred tax liabilities.
Analysts' Conference Call: Second Quarter of Fiscal
2017
A conference call and slide presentation to discuss results will
be held today, April 6, 2017, at 11:30 a.m. EDT hosted by
Tamara Lundgren, President and Chief Executive Officer, and Richard
Peach, Senior Vice President, Chief Financial Officer, and Chief of
Corporate Operations. The call and the slides will be webcast and
accessible on the Company's website at www.schnitzersteel.com.
Summary financial data is provided in the following pages. The
slides and related materials will be available prior to the call on
the website.
SCHNITZER STEEL INDUSTRIES, INC. FINANCIAL HIGHLIGHTS
(in thousands) (Unaudited) For
the Three Months Ended For the Six Months Ended
February 28,2017
November 30,2016
February 29,2016
February 28,2017
February 29,2016
REVENUES: Auto and Metals Recycling: Ferrous revenues
$ 230,177 $ 183,754 $ 140,126 $ 413,931 $ 303,539 Nonferrous
revenues(2) 91,512 90,936 80,068 182,448 157,658 Retail and other
revenues(2) 27,680 30,248 29,618 57,928
61,580 Total Auto and Metals Recycling revenues 349,369
304,938 249,812 654,307 522,777 Steel Manufacturing Business
58,291 52,596 58,391 110,887 130,292 Intercompany sales
eliminations (25,576 ) (23,373 ) (19,126 ) (48,949 ) (42,794 )
Total revenues $ 382,084 $ 334,161 $ 289,077 $ 716,245 $ 610,275
OPERATING INCOME (LOSS): AMR operating income
(loss)(3) $ 26,359 $ 12,419 $ (26,350 ) $ 38,778 $ (24,314 ) SMB
operating income (loss)(3) $ (1,746 ) $ (3,081 ) $ (1,202 ) $
(4,827 ) $ 1,552 Consolidated operating income (loss) $ 14,171 $
587 $ (37,076 ) $ 14,758 $ (41,104 ) Adjusted AMR operating
income(1)(3) $ 25,942 $ 12,280 $ 874 $ 38,222 $ 2,910 Adjusted SMB
operating income (loss)(1)(3) (1,746 ) (2,680 ) (1,202 ) (4,426 )
1,552 Adjusted segment operating income (loss)(1)(3) 24,196
9,600 (328 ) 33,796 4,462 Corporate expense(4) (10,430 ) (8,982 )
(6,315 ) (19,412 ) (14,616 ) Intercompany eliminations (506 ) 432
2,161 (74 ) 3,569 Adjusted operating income
(loss)(1) 13,260 1,050 (4,482 ) 14,310 (6,585 ) Goodwill impairment
charge — — (8,845 ) — (8,845 ) Other asset impairment charges —
(401 ) (18,458 ) (401 ) (18,458 ) Restructuring charges and other
exit-related activities 494 (201 ) (5,291 ) 293 (7,216 ) Recoveries
related to the resale or modification of previously contracted
shipments 417 139 — 556 — Total
operating income (loss) $ 14,171 $ 587 $ (37,076 ) $
14,758 $ (41,104 )
(1) See Non-GAAP Financial Measures for reconciliation to
U.S. GAAP. (2) An adjustment of certain intrasegment items was made
between nonferrous revenues and retail and other revenues for the
three and six months ended February 29, 2016 to conform to the
presentation for the periods in fiscal 2017. The adjustment had no
impact on previously reported total revenues or earnings. (3)
Segment operating income (loss) does not include the impact of
restructuring charges and other exit-related activities. (4)
Excludes a $79 thousand impairment charge related to Corporate for
the three and six months ended February 29, 2016, which is also
excluded from adjusted operating income (loss) for those periods.
SCHNITZER STEEL INDUSTRIES, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands)
(Unaudited) For the Three Months Ended For the
Six Months Ended
February 28,2017
November 30,2016
February 29,2016
February 28,2017
February 29,2016
Revenues $ 382,084 $ 334,161 $ 289,077 $
716,245 $ 610,275 Cost of goods sold 326,804 295,892
259,670 622,696 544,524 Selling, general and administrative 43,823
37,492 33,599 81,315 72,017 (Income) loss from joint ventures
(2,220 ) (412 ) 290 (2,632 ) 319 Goodwill impairment charge — —
8,845 — 8,845 Other asset impairment charges — 401 18,458 401
18,458 Restructuring charges and other exit-related activities (494
) 201 5,291 (293 ) 7,216 Operating income
(loss) 14,171 587 (37,076 ) 14,758 (41,104 ) Interest expense
(2,097 ) (1,741 ) (2,015 ) (3,838 ) (3,874 ) Other income, net 357
437 438 794 845 Income (loss)
from continuing operations before income taxes 12,431 (717 )
(38,653 ) 11,714 (44,133 ) Income tax (expense) benefit (637 ) 62
(1,293 ) (575 ) (715 ) Income (loss) from continuing
operations 11,794 (655 ) (39,946 ) 11,139 (44,848 ) Loss from
discontinued operations, net of tax (95 ) (53 ) (1,024 ) (148 )
(1,089 ) Net income (loss) 11,699 (708 ) (40,970 ) 10,991 (45,937 )
Net income attributable to noncontrolling interests (662 ) (618 )
(275 ) (1,280 ) (604 ) Net income (loss) attributable to SSI $
11,037 $ (1,326 ) $ (41,245 ) $ 9,711 $ (46,541 )
Net income (loss) per share attributable to SSI: Basic:
Income (loss) per share from continuing operations attributable to
SSI $ 0.40 $ (0.05 ) $ (1.48 ) $ 0.36 $ (1.67 ) Loss per share from
discontinued operations attributable to SSI — — (0.04
) (0.01 ) (0.04 ) Net income (loss) per share attributable to SSI $
0.40 $ (0.05 ) $ (1.52 ) $ 0.35 $ (1.71 ) Diluted:
Income (loss) per share from continuing operations attributable to
SSI $ 0.40 $ (0.05 ) $ (1.48 ) $ 0.35 $ (1.67 ) Loss per share from
discontinued operations attributable to SSI — — (0.04
) (0.01 ) (0.04 ) Net income (loss) per share attributable to
SSI(1) $ 0.40 $ (0.05 ) $ (1.52 ) $ 0.35 $ (1.71 )
Weighted average number of common shares: Basic 27,524
27,372 27,201 27,447 27,178 Diluted 27,864 27,372 27,201 27,814
27,178 Dividends declared per common share $ 0.1875 $ 0.1875 $
0.1875 $ 0.3750 $ 0.3750 (1) May not foot due to rounding.
SCHNITZER STEEL INDUSTRIES, INC. SELECTED OPERATING
STATISTICS (Unaudited)
YTD Fiscal
1Q17 2Q17 2017 1Q16
2Q16 3Q16 4Q16
2016 Auto and Metals Recycling Ferrous selling
prices ($/LT)(1) Domestic $ 184 $ 241 $ 213 $ 180 $ 161
$ 210 $ 216 $ 193 Export $ 202 $ 252 $
227 $ 179 $ 174 $ 218
$ 205 $ 195 Average $ 196 $ 248 $ 222 $
179 $ 169 $ 215 $ 209 $ 194
Ferrous sales volume (LT)
Domestic 287,942 310,320 598,262 290,170 282,200 322,315 329,911
1,224,596 Export 545,947 541,716
1,087,663 515,109 454,924
509,686 584,373 2,064,092 Total
833,889 852,036 1,685,925 805,279 737,124 832,001 914,284 3,288,688
Nonferrous average price ($/LB)(1)(2) $ 0.58 $
0.65 $ 0.61 $ 0.63 $ 0.59 $ 0.59 $ 0.59 $ 0.59
Nonferrous
sales volume (000s LB)(2) 136,057 122,554 258,611
111,077 123,675 122,244 153,287 510,283
Car purchase
volume (000s)(4) 94 96 190 77 70 79 92 319
Auto
stores at end of quarter 52 52 52 55 55 53 52 52
Steel Manufacturing Business Average sales prices
($/ST)(1)(3) $ 492 $ 517 $ 505 $ 554 $ 504 $ 501 $ 528 $
522
Sales volume (ST)(3) Rebar 73,903 69,136
143,039 85,899 71,935 84,193 88,591 330,618 Coiled products 23,934
34,371 58,305 32,482 33,742 42,168 29,891 138,283 Merchant bar and
other 3,038 2,482 5,520 4,757
3,974 6,490 4,080
19,301 Total 100,875 105,989 206,864 123,138 109,651
132,851 122,562 488,202
Rolling mill
utilization(5) 65 % 89 % 77 % 68 % 61 % 53 % 71 % 63 %
(1) Price information is shown after netting the cost
of freight incurred to deliver the product to the customer. (2)
Excludes PGM metals in catalytic converters. (3) Excludes billet
sales. (4) Cars purchased by auto stores only. (5) Rolling mill
utilization for fiscal 2017 is based on effective annual production
capacity under current conditions of 580 thousand tons of finished
steel products, reflecting a decrease in the effective finished
steel production capacity resulting from the decommissioning of the
older rolling mill during the first quarter of fiscal 2017.
SCHNITZER STEEL INDUSTRIES, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands) (Unaudited)
February 28, 2017
August 31, 2016
Assets
Current assets: Cash and cash equivalents $ 9,830 $ 26,819 Accounts
receivable, net 132,790 113,952 Inventories 168,889 132,972 Other
current assets 19,989 26,063 Total current assets 331,498
299,806 Property, plant and equipment, net 384,883 392,820
Goodwill and other assets 204,069 198,803
Total assets $ 920,450 $ 891,429
Liabilities and
Equity
Current liabilities: Short-term borrowings $ 676 $ 8,374 Other
current liabilities 134,347 125,280 Total current
liabilities 135,023 133,654 Long-term debt 208,801 184,144
Other long-term liabilities 73,942 72,199 Equity:
Total Schnitzer Steel Industries, Inc. ("SSI") shareholders' equity
498,545 497,721 Noncontrolling interests 4,139 3,711 Total
equity 502,684 501,432 Total liabilities and equity $
920,450 $ 891,429
Non-GAAP Financial Measures
This press release contains performance based on adjusted income
(loss) and adjusted diluted earnings (loss) per share from
continuing operations attributable to SSI and adjusted
consolidated, AMR and SMB operating income (loss), which are
non-GAAP financial measures as defined under SEC rules. As required
by SEC rules, the Company has provided reconciliations of these
measures for each period discussed to the most directly comparable
U.S. GAAP measure. Management believes that presenting adjusted
non-GAAP financial measures provides a meaningful presentation of
our results from business operations excluding adjustments for a
goodwill impairment charge, other asset impairment charges,
restructuring charges and other exit-related activities, recoveries
related to the resale or modification of previously contracted
shipments, and income tax expense (benefits) associated with these
adjustments, items which are not related to underlying business
operational performance, and improves the period-to-period
comparability of our results from business operations. Adjusted
operating results in fiscal 2015 excluded the impact from the
resale or modification of the terms, each at significantly lower
prices due to sharp declines in selling prices, of certain
previously-contracted bulk shipments for delivery during fiscal
2015. Recoveries resulting from settlements with the original
contract parties, which began in the third quarter of fiscal 2016,
are reported within SG&A expense in the quarterly statements of
operations and are also excluded, with associated income tax
expense (benefits), from the non-GAAP financial measures. Further,
management believes that debt, net of cash, is a useful measure for
investors because, as cash and cash equivalents can be used, among
other things, to repay indebtedness, netting this against total
debt is a useful measure of our leverage. These non-GAAP financial
measures should be considered in addition to, but not as a
substitute for, the most directly comparable U.S. GAAP
measures.
($ in millions)
Quarter YTD 2Q17
2Q16 1Q17 2Q17
2Q16 Consolidated operating income (loss): Operating
income (loss) $ 14 $ (37 ) $ 1 $ 15 $ (41 ) Goodwill impairment
charge — 9 — — 9 Other asset impairment charges — 18 — — 18
Restructuring charges and other exit-related activities — 5 — — 7
Recoveries related to the resale or modification of certain
previously contracted shipments — — — (1 ) —
Adjusted consolidated operating income (loss)(1) $ 13
$ (4 ) $ 1 $ 14 $ (7 )
AMR operating income
(loss): Operating income (loss) $ 26 $ (26 ) $ 12 $ 39 $ (24 )
Goodwill impairment charge — 9 — — 9 Other asset impairment charges
— 18 — — 18 Recoveries related to the resale or modification of
certain previously contracted shipments — — —
(1 ) — Adjusted AMR operating income $ 26 $ 1
$ 12 $ 38 $ 3
SMB operating income
(loss): Operating income (loss) $ (2 ) $ (1 ) $ (3 ) $ (5 ) $ 2
Other asset impairment charges — — —
—
— Adjusted SMB operating income (loss) $ (2 ) $ (1 ) $ (3 )
$ (4 ) $ 2 (1) May not foot due to rounding.
Income (loss) from continuing operations attributable to SSI
($ in millions)
Quarter YTD
2Q17 2Q16 1Q17 2Q17
2Q16 Income (loss) from continuing operations
attributable to SSI $ 11 $ (40 ) $ (1 ) 10 (45 ) Goodwill
impairment charge — 9 — 9 Other asset impairment charges — 18 — —
18 Restructuring charges and other exit-related activities — 5 — —
7 Recoveries related to the resale or modification of certain
previously contracted shipments — — — (1 ) — Income tax expense
(benefit) allocated to adjustments(2) — 1 — —
1 Adjusted income (loss) from continuing operations
attributable to SSI(1) $ 10 $ (7 ) $ (1 ) $ 9
$ (10 ) (1) May not foot due to rounding. (2) Income
tax allocated to the aggregate adjustments reconciling Reported and
Adjusted income (loss) from continuing operations attributable to
SSI is determined based on a tax provision calculated with and
without the adjustments.
Diluted earnings (loss) per
share from continuing operations attributable to SSI ($ per
share)
Quarter YTD 2Q17
2Q16 1Q17 2Q17 2Q16 Net
income (loss) per share attributable to SSI $ 0.40 $ (1.52 ) $
(0.05 ) $ 0.35 $ (1.71 ) Less: Loss per share from discontinued
operations attributable to SSI — (0.04 ) — (0.01 )
(0.04 ) Income (loss) per share from continuing operations
attributable to SSI(1) 0.40 (1.48 ) (0.05 ) 0.35 (1.67 ) Goodwill
impairment charge, per share — 0.33 — — 0.33 Other asset impairment
charges, per share — 0.68 0.01 0.01 0.68 Restructuring charges and
other exit-related activities, per share (0.02 ) 0.19 0.01 (0.01 )
0.27 Recoveries related to the resale or modification of previously
contracted shipments, per share (0.01 ) — (0.01 ) (0.02 ) — Income
tax expense (benefit) allocated to adjustments, per share(2) —
0.03 — — 0.02 Adjusted diluted
EPS from continuing operations attributable to SSI(1) $ 0.37
$ (0.25 ) $ (0.03 ) $ 0.34 $ (0.38 )
(1) May not foot due to rounding. (2) Income tax allocated
to the aggregate adjustments reconciling Reported and Adjusted
diluted earnings (loss) per share from continuing operations
attributable to SSI is determined based on a tax provision
calculated with and without the adjustments.
Debt, net of
cash ($ in thousands)
February 28, 2017
August 31, 2016 Short-term borrowings $ 676 $ 8,374
Long-term debt, net of current maturities 208,801 184,144
Total debt 209,477 192,518 Less: cash and cash equivalents 9,830
26,819 Total debt, net of cash $ 199,647 $ 165,699
About Schnitzer Steel Industries, Inc.
Schnitzer Steel Industries, Inc. is one of the largest
manufacturers and exporters of recycled metal products in the
United States with operating facilities located in 23 states,
Puerto Rico and Western Canada. Schnitzer has seven deep water
export facilities located on both the East and West Coasts and in
Hawaii and Puerto Rico. The Company's integrated operating platform
also includes auto parts stores and with approximately 5 million
annual retail visits. The Company's steel manufacturing business
produces finished steel products, including rebar, wire rod and
other specialty products. The Company began operations in 1906 in
Portland, Oregon.
Safe Harbor for Forward-Looking Statements
Statements and information included in this press release by
Schnitzer Steel Industries, Inc. (the "Company") that are not
purely historical are forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934 and are made
pursuant to the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. Except as noted herein or as the
context may otherwise require, all references to “we,” “our,” “us,”
and “SSI” refer to the Company and its consolidated
subsidiaries.
Forward-looking statements in this press release include
statements regarding future events or our expectations, intentions,
beliefs and strategies regarding the future, which may include
statements regarding trends, cyclicality and changes in the markets
we sell into; the Company's outlook or expected results, including
pricing, margins, sales volumes and profitability; strategic
direction or goals; targets; changes to manufacturing and
production processes; the cost of and the status of any agreements
or actions related to our compliance with environmental and other
laws; expected tax rates, deductions and credits; the realization
of deferred tax assets; planned capital expenditures; liquidity
positions; ability to generate cash from continuing operations; the
potential impact of adopting new accounting pronouncements;
obligations under our retirement plans; benefits, savings or
additional costs from business realignment, cost containment and
productivity improvement programs; and the adequacy of
accruals.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain, and often contain words such
as “outlook,” “target,” “aim,” “believes,” “expects,”
“anticipates,” “intends,” “assumes,” “estimates,” “evaluates,”
“may,” “will,” “should,” “could,” “opinions,” “forecasts,”
“projects,” “plans,” “future,” “forward,” “potential,” “probable,”
and similar expressions. However, the absence of these words or
similar expressions does not mean that a statement is not
forward-looking. We may make other forward-looking statements from
time to time, including in reports filed with the Securities and
Exchange Commission, press releases, presentations and on public
conference calls. All forward-looking statements we make are based
on information available to us at the time the statements are made,
and we assume no obligation to update any forward-looking
statements, except as may be required by law. Our business is
subject to the effects of changes in domestic and global economic
conditions and a number of other risks and uncertainties that could
cause actual results to differ materially from those included in,
or implied by, such forward-looking statements. Some of these risks
and uncertainties are discussed in “Item 1A. Risk Factors” in Part
I of our most recent Annual Report on Form 10-K and in Part II of
our Quarterly Report on Form 10-Q. Examples of these risks include:
potential environmental cleanup costs related to the Portland
Harbor Superfund site; the cyclicality and impact of general
economic conditions; instability in international markets; volatile
supply and demand conditions affecting prices and volumes in the
markets for both our products and raw materials we purchase;
imbalances in supply and demand conditions in the global steel
industry; the impact of goodwill impairment charges; the impact of
long-lived asset and joint venture investment impairment charges;
the realization of expected benefits or cost reductions associated
with productivity improvement and restructuring initiatives;
difficulties associated with acquisitions and integration of
acquired businesses; customer fulfillment of their contractual
obligations; changes in the relative value of the U.S. dollar; the
impact of foreign currency fluctuations; potential limitations on
our ability to access capital resources and existing credit
facilities; restrictions on our business and financial covenants
under our bank credit agreement; the impact of the consolidation in
the steel industry; inability to realize expected benefits from
investments in technology; freight rates and the availability of
transportation; the impact of equipment upgrades, equipment
failures and facility damage on production; product liability
claims; the impact of legal proceedings and legal compliance; the
adverse impact of climate change; the impact of not realizing
deferred tax assets; the impact of tax increases and changes in tax
rules; the impact of a cybersecurity incident; costs associated
with compliance with environmental regulations; inability to obtain
or renew business licenses and permits; compliance with greenhouse
gas emission regulations; reliance on employees subject to
collective bargaining agreements; and the impact of the underfunded
status of multiemployer plans in which we participate.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170406005316/en/
Schnitzer Steel Industries, Inc.Investor
Relations:Alexandra Deignan,
646-278-9711adeignan@schn.comorCompany
Info:www.schnitzersteel.comir@schn.com
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