Strong Global Demand and Strategic Actions Drive Best Operating Performance in a Decade

Schnitzer Board Declares Quarterly Dividend

Schnitzer Steel Industries, Inc. (NASDAQ: SCHN) today reported results for its second quarter of fiscal 2021 ended February 28, 2021.

Second Quarter Fiscal 2021 Highlights

  • Diluted earnings per share from continuing operations of $1.54, more than triple earnings per share of $0.50 in the first quarter of fiscal 2021, and compared to $0.14 in the second quarter of fiscal 2020
  • Adjusted diluted earnings per share from continuing operations of $1.51, compared to adjusted diluted earnings per share of $0.57 in the first quarter of fiscal 2021 and $0.31 in the second quarter of fiscal 2020
  • Net income of $46 million, more than triple the net income of $15 million in the first quarter of fiscal 2021, and compared to net income of $5 million in the second quarter of fiscal 2020
  • Adjusted EBITDA of $71 million in the quarter, compared to adjusted EBITDA of $40 million in the first quarter of fiscal 2021 and $28 million in the second quarter of fiscal 2020

The Company’s performance benefited from strong global demand for recycled metals and finished steel products, with selling prices for ferrous and nonferrous scrap reaching multi-year highs. The sharp increase in selling prices during the quarter contributed to the Company’s strong margins, while ferrous sales volumes were impacted by severe weather, which affected the timing of shipments. Operating results also benefited from the continued strength in West Coast demand for finished steel products, as well as the execution of commercial initiatives and productivity improvements supported by the One Schnitzer operating platform.

Tamara Lundgren, Chairman and Chief Executive Officer, stated, “We are exceptionally pleased with our performance during the quarter, reflecting our best operating income per ton since 2008. This is a testament to the strength and agility of our team in leveraging positive market conditions while delivering on our operational and strategic initiatives. Since the end of the second quarter, we have commissioned two of the advanced metal recovery technology systems which are key to the execution of our strategic plan and the achievement of our Sustainability goals.”

Ms. Lundgren continued, “Price volatility during the quarter was significant, but trading was maintained at much higher price levels than in the recent past, reflecting the stronger demand associated with both the economic recovery and positive structural commodity trends. Decarbonization and broader ESG factors, together with the catalytic effect of global stimulus, are serving as structural drivers of demand for recycled metals. Scrap, in other words, is an important strategic solution for companies, industries and governments that are focused on carbon reduction.”

Summary Results

($ in millions, except per share amounts)

 

 

Three Months Ended

 

 

 

Six Months Ended

 

 

 

2Q21

 

 

1Q21

 

 

2Q20

 

 

 

2021

 

 

2020

 

Revenues

 

$

600

 

 

$

492

 

 

$

439

 

 

 

$

1,092

 

 

$

845

 

Gross margin (total revenues less cost of goods sold)

 

$

113

 

 

$

72

 

 

$

59

 

 

 

$

185

 

 

$

100

 

Gross margin (%)

 

 

18.8

%

 

 

14.6

%

 

 

13.4

%

 

 

 

16.9

%

 

 

11.8

%

Selling, general and administrative expense

 

$

54

 

 

$

50

 

 

$

46

 

 

 

$

104

 

 

$

93

 

Net income (loss)

 

$

46

 

 

$

15

 

 

$

5

 

 

 

$

61

 

 

$

(2

)

Net income (loss) per ferrous ton

 

$

47

 

 

$

14

 

 

$

5

 

 

 

$

30

 

 

$

(1

)

Diluted earnings (loss) per share from continuing operations attributable to SSI shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported

 

$

1.54

 

 

$

0.50

 

 

$

0.14

 

 

 

$

2.05

 

 

$

(0.11

)

Adjusted(1)

 

$

1.51

 

 

$

0.57

 

 

$

0.31

 

 

 

$

2.09

 

 

$

0.14

 

Adjusted EBITDA(1)

 

$

71

 

 

$

40

 

 

$

28

 

 

 

$

112

 

 

$

38

 

Adjusted EBITDA per ferrous ton(1)

 

$

73

 

 

$

38

 

 

$

29

 

 

 

$

55

 

 

$

19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ferrous sales volumes (LT, in thousands)

 

 

977

 

 

 

1,053

 

 

 

988

 

 

 

 

2,030

 

 

 

1,964

 

Avg. net ferrous sales prices ($/LT)(2)

 

$

387

 

 

$

269

 

 

$

255

 

 

 

$

326

 

 

$

235

 

Nonferrous sales volumes (pounds, in millions)(3)

 

 

136

 

 

 

138

 

 

 

124

 

 

 

 

274

 

 

 

269

 

Avg. nonferrous sales prices ($/pound)(2)(3)

 

$

0.83

 

 

$

0.64

 

 

$

0.55

 

 

 

$

0.74

 

 

$

0.55

 

Finished steel average net sales price ($/ST)(2)

 

$

690

 

 

$

621

 

 

$

627

 

 

 

$

656

 

 

$

635

 

Finished steel sales volumes (ST, in thousands)

 

 

136

 

 

 

134

 

 

 

129

 

 

 

 

270

 

 

 

242

 

Rolling mill utilization (%)

 

 

88

%

 

 

97

%

 

 

72

%

 

 

 

93

%

 

 

79

%

LT = Long Ton, which is equivalent to 2,240 pounds ST = Short Ton, which is equivalent to 2,000 pounds

(1)

See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.

(2)

Price information is shown after netting the cost of freight incurred to deliver the product to the customer.

(3)

Nonferrous sales volumes and average nonferrous prices excludes platinum group metals (PGMs) in catalytic converters.

Second Quarter Fiscal 2021 Financial Review and Analysis

Sharply higher average selling prices for ferrous and nonferrous recycled metals led to an expansion in metal spreads and operating margins, reflected in net income per ferrous ton of $47 and adjusted EBITDA per ferrous ton of $73 in the quarter, both of which reflect a strong sequential increase from $14 and $38, respectively. Second quarter operating results also included benefits from average inventory accounting of approximately $10 per ferrous ton compared to $2 per ferrous ton in the first quarter of fiscal 2021.

On a sequential basis, ferrous sales volumes were down 7%, primarily driven by the impact of severe weather conditions in February on timing of shipments, and nonferrous sales volumes were down 2%, impacted by the availability of containers. Average ferrous and nonferrous net selling prices were up 44% and 30%, respectively. Finished steel sales volumes were up 1% and rolling mill utilization in the quarter was 88%, reflective of seasonality and severe weather conditions. Average net selling prices for finished steel products were up 11%.

Operating cash flow in the second quarter of fiscal 2021 was positive, as cash flows associated with increased profitability more than offset the increase in working capital resulting from the higher price environment. Capital expenditures were $23 million in the quarter, including investments in maintaining the business, environmental projects, advanced metal recovery technologies and other growth projects. Total debt at the end of the quarter was $171 million and debt, net of cash, was $159 million (for a reconciliation of adjusted results and debt, net of cash, to U.S. GAAP, see the table provided in the Non-GAAP Financial Measures section). The Company has a revolving credit facility of $700 million and CAD$15 million that matures in 2023. The Company’s effective tax rate for the second quarter of fiscal 2021 was an expense of 20%.

During the second quarter, the Company returned capital to shareholders through its 108th consecutive quarterly dividend.

Declaration of Quarterly Dividend

The Board of Directors declared a cash dividend of $0.1875 per common share, payable May 3, 2021, to shareholders of record on April 19, 2021. Schnitzer has paid a dividend every quarter since going public in November 1993.

Analysts’ Conference Call: Second Quarter of Fiscal 2021

A conference call and slide presentation to discuss results will be held today, April 7, 2021, at 11:30 a.m. Eastern and will be hosted by Tamara L. Lundgren, Chairman and Chief Executive Officer, and Richard Peach, Executive Vice President, Chief Financial Officer and Chief Strategy Officer. The call and the slide presentation will be webcast and accessible on the Company’s website under Company > Investors > Event Calendar at www.schnitzersteel.com/events.

Summary financial data is provided in the following pages. The slide presentation and related materials will be available prior to the call on the above website.

About Schnitzer Steel Industries, Inc.

Schnitzer Steel Industries, Inc. is one of the largest manufacturers and exporters of recycled metal products in North America 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 50 stores which sell serviceable used auto parts from salvaged vehicles and receive approximately 5 million annual retail visits. The Company’s steel manufacturing operations produce finished steel products, including rebar, wire rod and other specialty products. The Company began operations in 1906 in Portland, Oregon.

SCHNITZER STEEL INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

February 28,

2021

 

 

November 30,

2020

 

 

February 29,

2020

 

 

February 28,

2021

 

 

February 29,

2020

 

Revenues

 

$

600,111

 

 

$

492,107

 

 

$

439,482

 

 

$

1,092,218

 

 

$

845,066

 

Cost of goods sold

 

 

487,025

 

 

 

420,094

 

 

 

380,520

 

 

 

907,119

 

 

 

745,280

 

Selling, general and administrative expense

 

 

54,142

 

 

 

49,906

 

 

 

46,426

 

 

 

104,048

 

 

 

93,200

 

(Income) from joint ventures

 

 

(454

)

 

 

(727

)

 

 

(190

)

 

 

(1,181

)

 

 

(389

)

Asset impairment charges

 

 

 

 

 

 

 

 

402

 

 

 

 

 

 

2,094

 

Restructuring charges and other exit-related activities

 

 

814

 

 

 

64

 

 

 

4,633

 

 

 

878

 

 

 

5,100

 

Operating income (loss)

 

 

58,584

 

 

 

22,770

 

 

 

7,691

 

 

 

81,354

 

 

 

(219

)

Interest expense

 

 

(1,224

)

 

 

(1,780

)

 

 

(1,320

)

 

 

(3,004

)

 

 

(2,743

)

Other (loss) income, net

 

 

(242

)

 

 

(165

)

 

 

(98

)

 

 

(407

)

 

 

108

 

Income (loss) from continuing operations before income taxes

 

 

57,118

 

 

 

20,825

 

 

 

6,273

 

 

 

77,943

 

 

 

(2,854

)

Income tax (expense) benefit

 

 

(11,469

)

 

 

(5,719

)

 

 

(1,770

)

 

 

(17,188

)

 

 

764

 

Income (loss) from continuing operations

 

 

45,649

 

 

 

15,106

 

 

 

4,503

 

 

 

60,755

 

 

 

(2,090

)

Income (loss) from discontinued operations, net of tax

 

 

30

 

 

 

(42

)

 

 

1

 

 

 

(12

)

 

 

29

 

Net income (loss)

 

 

45,679

 

 

 

15,064

 

 

 

4,504

 

 

 

60,743

 

 

 

(2,061

)

Net income attributable to noncontrolling interests

 

 

(1,091

)

 

 

(960

)

 

 

(621

)

 

 

(2,051

)

 

 

(1,051

)

Net income (loss) attributable to SSI shareholders

 

$

44,588

 

 

$

14,104

 

 

$

3,883

 

 

$

58,692

 

 

$

(3,112

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to SSI shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per share from continuing operations

 

$

1.59

 

 

$

0.51

 

 

$

0.14

 

 

$

2.10

 

 

$

(0.11

)

Net income (loss) per share

 

$

1.59

 

 

$

0.51

 

 

$

0.14

 

 

$

2.10

 

 

$

(0.11

)

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per share from continuing operations

 

$

1.54

 

 

$

0.50

 

 

$

0.14

 

 

$

2.05

 

 

$

(0.11

)

Net income (loss) per share(1)

 

$

1.54

 

 

$

0.50

 

 

$

0.14

 

 

$

2.05

 

 

$

(0.11

)

Weighted average number of common shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

27,991

 

 

 

27,807

 

 

 

27,721

 

 

 

27,899

 

 

 

27,618

 

Diluted

 

 

28,862

 

 

 

28,485

 

 

 

28,139

 

 

 

28,673

 

 

 

27,618

 

Dividends declared per common share

 

$

0.1875

 

 

$

0.1875

 

 

$

0.1875

 

 

$

0.3750

 

 

$

0.3750

 

  SCHNITZER STEEL INDUSTRIES, INC.

SELECTED OPERATING STATISTICS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

YTD

 

 

 

1Q21

 

 

2Q21

 

 

2021

 

Total ferrous volumes (LT, in thousands)(1)

 

 

1,053

 

 

 

977

 

 

 

2,030

 

Total nonferrous volumes (pounds, in thousands)(1)(3)

 

 

138,236

 

 

 

135,899

 

 

 

274,135

 

Ferrous selling prices ($/LT)(2)

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

$

242

 

 

$

349

 

 

$

297

 

Foreign

 

$

276

 

 

$

399

 

 

$

334

 

Average

 

$

269

 

 

$

387

 

 

$

326

 

Ferrous sales volume (LT, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

 

388

 

 

 

391

 

 

 

779

 

Foreign

 

 

665

 

 

 

586

 

 

 

1,251

 

Total

 

 

1,053

 

 

 

977

 

 

 

2,030

 

Nonferrous average price ($/pound)(2)(3)

 

$

0.64

 

 

$

0.83

 

 

$

0.74

 

Nonferrous sales volume (pounds, in thousands)(3)

 

 

138,236

 

 

 

135,899

 

 

 

274,135

 

Cars purchased (in thousands)(4)

 

 

78

 

 

 

80

 

 

 

158

 

Auto stores at period end

 

 

50

 

 

 

50

 

 

 

50

 

Finished steel average sales price ($/ST)(2)

 

$

621

 

 

$

690

 

 

$

656

 

Sales volume (ST, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Rebar

 

 

94

 

 

 

103

 

 

 

197

 

Coiled products

 

 

39

 

 

 

32

 

 

 

71

 

Merchant bar and other

 

 

1

 

 

 

1

 

 

 

2

 

Finished steel products sold

 

 

134

 

 

 

136

 

 

 

270

 

Rolling mill utilization(5)

 

 

97

%

 

 

88

%

 

 

93

%

(1)

Ferrous and nonferrous volumes sold externally and delivered to our steel mill for finished steel production.

(2)

Price information is shown after netting the cost of freight incurred to deliver the product to the customer.

(3)

Excludes platinum group metals (“PGMs”) in catalytic converters.

(4)

Cars purchased by auto parts stores only.

(5)

Rolling mill utilization is based on effective annual production capacity under current conditions of 580 thousand tons of finished steel products.

  SCHNITZER STEEL INDUSTRIES, INC.

SELECTED OPERATING STATISTICS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal

Year

 

 

 

1Q20

 

 

2Q20

 

 

3Q20

 

 

4Q20

 

 

2020(1)

 

Total ferrous volumes (LT, in thousands)(2)

 

 

976

 

 

 

988

 

 

 

927

 

 

 

1,063

 

 

 

3,954

 

Total nonferrous volumes (pounds, in thousands)(2)(5)

 

 

144,176

 

 

 

124,342

 

 

 

122,913

 

 

 

159,135

 

 

 

550,566

 

Ferrous selling prices ($/LT)(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

$

196

 

 

$

244

 

 

$

222

 

 

$

214

 

 

$

220

 

Foreign

 

$

229

 

 

$

258

 

 

$

236

 

 

$

242

 

 

$

241

 

Average

 

$

222

 

 

$

255

 

 

$

233

 

 

$

236

 

 

$

237

 

Ferrous sales volume (LT, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

 

363

 

 

 

379

 

 

 

312

 

 

 

375

 

 

 

1,429

 

Foreign

 

 

613

 

 

 

609

 

 

 

616

 

 

 

688

 

 

 

2,525

 

Total(4)

 

 

976

 

 

 

988

 

 

 

927

 

 

 

1,063

 

 

 

3,954

 

Nonferrous average price ($/pound)(3)(5)

 

$

0.54

 

 

$

0.55

 

 

$

0.54

 

 

$

0.56

 

 

$

0.55

 

Nonferrous sales volume (pounds, in thousands)(5)

 

 

144,176

 

 

 

124,342

 

 

 

122,913

 

 

 

159,135

 

 

 

550,566

 

Cars purchased (in thousands)(6)

 

 

83

 

 

 

85

 

 

 

74

 

 

 

74

 

 

 

316

 

Auto stores at period end

 

 

51

 

 

 

51

 

 

 

49

 

 

 

50

 

 

 

50

 

Finished steel average sales price ($/ST)(3)

 

$

643

 

 

$

627

 

 

$

633

 

 

$

618

 

 

$

630

 

Sales volume (ST, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rebar

 

 

83

 

 

 

86

 

 

 

85

 

 

 

105

 

 

 

358

 

Coiled products

 

 

29

 

 

 

42

 

 

 

39

 

 

 

34

 

 

 

144

 

Merchant bar and other

 

 

1

 

 

 

1

 

 

 

1

 

 

 

 

 

 

3

 

Finished steel products sold(4)

 

 

114

 

 

 

129

 

 

 

124

 

 

 

139

 

 

 

505

 

Rolling mill utilization(7)

 

 

85

%

 

 

72

%

 

 

91

%

 

 

96

%

 

 

86

%

LT = Long Ton, which is equivalent to 2,240 pounds ST = Short Ton, which is equivalent to 2,000 pounds

(1)

The sum of quarterly amounts may not agree to full year equivalent due to rounding.

(2)

Ferrous and nonferrous volumes sold externally and delivered to our steel mill for finished steel production.

(3)

Price information is shown after netting the cost of freight incurred to deliver the product to the customer.

(4)

May not foot due to rounding.

(5)

Excludes platinum group metals (“PGMs”) in catalytic converters.

(6)

Cars purchased by auto parts stores only.

(7)

Rolling mill utilization is based on effective annual production capacity under current conditions of 580 thousand tons of finished steel products.

  SCHNITZER STEEL INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in thousands)

(Unaudited)

 

 

 

February 28, 2021

 

 

August 31, 2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

11,326

 

 

$

17,887

 

Accounts receivable, net

 

 

210,480

 

 

 

139,147

 

Inventories

 

 

252,268

 

 

 

157,269

 

Other current assets

 

 

41,159

 

 

 

48,328

 

Total current assets

 

 

515,233

 

 

 

362,631

 

Property, plant and equipment, net

 

 

502,484

 

 

 

487,004

 

Operating lease right-of-use assets

 

 

136,278

 

 

 

140,584

 

Goodwill and other assets

 

 

251,334

 

 

 

239,708

 

Total assets

 

$

1,405,329

 

 

$

1,229,927

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Short-term borrowings

 

$

2,372

 

 

$

2,184

 

Operating lease liabilities

 

 

20,279

 

 

 

19,760

 

Other current liabilities

 

 

241,831

 

 

 

201,720

 

Total current liabilities

 

 

264,482

 

 

 

223,664

 

Long-term debt, net of current maturities

 

 

168,441

 

 

 

102,235

 

Operating lease liabilities, net of current maturities

 

 

119,751

 

 

 

125,001

 

Other long-term liabilities

 

 

118,616

 

 

 

98,591

 

Total liabilities

 

 

671,290

 

 

 

549,491

 

 

 

 

 

 

 

 

 

 

Total Schnitzer Steel Industries, Inc. ("SSI") shareholders' equity

 

 

729,842

 

 

 

676,707

 

Noncontrolling interests

 

 

4,197

 

 

 

3,729

 

Total equity

 

 

734,039

 

 

 

680,436

 

Total liabilities and equity

 

$

1,405,329

 

 

$

1,229,927

 

 

Non-GAAP Financial Measures

This press release contains performance based on adjusted diluted earnings (loss) per share from continuing operations attributable to SSI shareholders, adjusted EBITDA and adjusted EBITDA per ferrous ton which are non-GAAP financial measures as defined under SEC rules. As required by SEC rules, the Company has provided a reconciliation of these measures for each period discussed to the most directly comparable U.S. GAAP measure. Management believes that providing these non-GAAP financial measures adds a meaningful presentation of our results from business operations excluding adjustments for restructuring charges and other exit-related activities, (recoveries) charges for legacy environmental matters (net of recoveries), business development costs not related to ongoing operations, asset impairment charges and the income tax (benefit) expense allocated to 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. We believe that presenting debt, net of cash is useful to investors as a measure of our leverage, as cash and cash equivalents can be used, among other things, to repay indebtedness. 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.

Reconciliation of adjusted diluted earnings (loss) per share from continuing operations attributable to SSI shareholders

($ per share)

 

Three Months Ended

 

 

 

Six Months Ended

 

 

 

2Q21

 

 

1Q21

 

 

2Q20

 

 

 

2021

 

 

2020

 

As reported

 

$

1.54

 

 

$

0.50

 

 

$

0.14

 

 

 

$

2.05

 

 

$

(0.11

)

Restructuring charges and other exit-related activities, per share

 

 

0.03

 

 

 

 

 

 

0.16

 

 

 

 

0.03

 

 

 

0.18

 

(Recoveries) charges for legacy environmental matters, net, per share(1)

 

 

(0.08

)

 

 

0.10

 

 

 

0.02

 

 

 

 

0.02

 

 

 

0.06

 

Business development costs, per share

 

 

 

 

 

 

 

 

0.03

 

 

 

 

 

 

 

0.03

 

Asset impairment charges, per share

 

 

 

 

 

 

 

 

0.01

 

 

 

 

 

 

 

0.08

 

Income tax expense (benefit) allocated to adjustments, per share(2)

 

 

0.01

 

 

 

(0.02

)

 

 

(0.05

)

 

 

 

(0.01

)

 

 

(0.09

)

Adjusted(3)

 

$

1.51

 

 

$

0.57

 

 

$

0.31

 

 

 

$

2.09

 

 

$

0.14

 

Reconciliation of adjusted EBITDA and adjusted EBITDA per ferrous ton

($ in millions)

 

Three Months Ended

 

 

 

Six Months Ended

 

 

 

2Q21

 

 

1Q21

 

 

2Q20

 

 

 

2021

 

 

2020

 

Net income (loss)

 

$

46

 

 

$

15

 

 

$

5

 

 

 

$

61

 

 

$

(2

)

Plus interest expense

 

 

1

 

 

 

2

 

 

 

1

 

 

 

 

3

 

 

 

3

 

Plus tax expense (benefit)

 

 

11

 

 

 

6

 

 

 

2

 

 

 

 

17

 

 

 

(1

)

Plus depreciation and amortization

 

 

14

 

 

 

15

 

 

 

14

 

 

 

 

29

 

 

 

28

 

Plus restructuring charges and other exit-related activities

 

 

1

 

 

 

 

 

 

5

 

 

 

 

1

 

 

 

5

 

Plus (recoveries) charges for legacy environmental matters, net(1)

 

 

(2

)

 

 

3

 

 

 

 

 

 

 

1

 

 

 

2

 

Plus business development costs

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

1

 

Plus asset impairment charges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

Adjusted EBITDA(3)

 

$

71

 

 

$

40

 

 

$

28

 

 

 

$

112

 

 

$

38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ferrous sales volume (LT, in thousands)

 

 

977

 

 

 

1,053

 

 

 

988

 

 

 

 

2,030

 

 

 

1,964

 

Adjusted EBITDA per ferrous ton sold ($/LT)

 

$

73

 

 

$

38

 

 

$

29

 

 

 

$

55

 

 

$

19

 

LT = Long Ton, which is equivalent to 2,240 pounds

(1)

 

Legal and environmental (recoveries) charges for legacy environmental matters, net of recoveries. Legacy environmental matters include (recoveries) charges (net of recoveries) related to the Portland Harbor Superfund site and to other legacy environmental loss contingencies.

(2)

 

Income tax allocated to the aggregate adjustments reconciling reported and adjusted diluted earnings (loss) per share from continuing operations attributable to SSI shareholders is determined based on a tax provision calculated with and without the adjustments.

(3)

 

May not foot due to rounding. 

  Reconciliation of debt, net of cash

($ in thousands)

 

 

February 28, 2021

 

 

November 30, 2020

 

 

August 31, 2020

 

Short-term borrowings

 

$

2,372

 

 

$

2,171

 

 

$

2,184

 

Long-term debt, net of current maturities

 

 

168,441

 

 

 

141,172

 

 

 

102,235

 

Total debt

 

 

170,813

 

 

 

143,343

 

 

 

104,419

 

Less: cash and cash equivalents

 

 

11,326

 

 

 

7,258

 

 

 

17,887

 

Total debt, net of cash

 

$

159,487

 

 

$

136,085

 

 

$

86,532

 

Forward-Looking Statements

Statements and information included in this press release 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 in this press release to “we,” “our,” “us,” “the Company” and “SSI” refer to Schnitzer Steel Industries, Inc. 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 the impact of pandemics, epidemics or other public health emergencies, such as the coronavirus disease 2019 (“COVID-19”) pandemic; the Company’s outlook, growth initiatives or expected results or objectives, including pricing, margins, sales volumes and profitability; liquidity positions; our ability to generate cash from continuing operations; trends, cyclicality and changes in the markets we sell into; strategic direction or goals; targets; changes to manufacturing and production processes; the realization of deferred tax assets; planned capital expenditures; 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 impact of sanctions and tariffs, quotas and other trade actions and import restrictions; 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” of Part I of our most recent Annual Report on Form 10-K, as supplemented by our subsequently filed Quarterly Reports on Form 10-Q. Examples of these risks include: the impact of pandemics, epidemics or other public health emergencies, such as the COVID-19 pandemic; potential environmental cleanup costs related to the Portland Harbor Superfund site or other locations; the cyclicality and impact of general economic conditions; changing conditions in global markets including the impact of sanctions and tariffs, quotas and other trade actions and import restrictions; volatile supply and demand conditions affecting prices and volumes in the markets for raw materials and other inputs we purchase; significant decreases in scrap metal prices; imbalances in supply and demand conditions in the global steel industry; reliance on third party shipping companies, including with respect to freight rates and the availability of transportation; inability to obtain or renew business licenses and permits; the impact of goodwill impairment charges; the impact of long-lived asset and equity investment impairment charges; failure to realize or delays in realizing expected benefits from investments in processing and manufacturing technology improvements; inability to achieve or sustain the benefits from productivity, cost savings and restructuring initiatives; inability to renew facility leases; difficulties associated with acquisitions and integration of acquired businesses; customer fulfillment of their contractual obligations; increases 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 the agreement governing our bank credit facilities; the impact of consolidation in the steel industry; 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 property tax increases or property tax rate changes; the impact of one or more cybersecurity incidents; environmental compliance costs and potential environmental liabilities; compliance with climate change and greenhouse gas emission laws and regulations; reliance on employees subject to collective bargaining agreements; and the impact of the underfunded status of multiemployer plans in which we participate.

Investor Relations: Michael Bennett (503) 323-2811 mcbennett@schn.com

Company Info: www.schnitzersteel.com ir@schn.com

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