Benefits from Productivity Initiatives
Tracking Ahead of Schedule
Strong Second Quarter Operating Cash Flow of
$35 million
Schnitzer Steel Industries, Inc. (Nasdaq: SCHN) today reported
results for its second quarter of fiscal 2019 ended
February 28, 2019. The Company reported earnings per share
from continuing operations of $0.46 and adjusted earnings per share
of $0.48. For the first quarter of fiscal 2019, reported and
adjusted earnings per share from continuing operations were $0.57
and $0.58, respectively. In the second quarter of fiscal 2018, the
Company’s reported and adjusted earnings per share from continuing
operations were $1.42, which included discrete tax benefits of
$0.52 per share. 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) achieved operating income of $22
million, or $25 per ferrous ton, compared to operating income in
the first quarter of fiscal 2019 of $23 million, or $25 per ferrous
ton. On a sequential basis, AMR’s performance benefited from
additional productivity initiatives and a decrease in selling,
general and administrative (“SG&A”) expense, which
substantially offset seasonally lower volumes and retail sales,
both of which were adversely impacted by unusually severe winter
weather, and lower average ferrous net selling prices of 6%.
Cascade Steel and Scrap (CSS) achieved operating income of $6
million, compared to $5 million in the prior year period. The
improvement in CSS’s year-over-year performance was driven
primarily by a 19% increase in finished steel average net selling
prices and benefits from productivity initiatives, partially offset
by the increase in the cost of steel-making raw materials and a 25%
decrease in finished steel sales volumes which were impacted by
construction delays in our West Coast markets resulting from
unusually severe winter weather in California and the Pacific
Northwest.
“Our team delivered a strong second quarter performance in a
challenging environment that reflected declining prices for scrap
during the winter months and severe weather in our West Coast and
Pacific Northwest markets. AMR’s results reflected benefits from
the swift execution of productivity initiatives, which are tracking
ahead of schedule, and the team’s ability to optimize purchase
volumes and to diversify sales. CSS delivered stronger
year-over-year operating and financial results despite
weather-related construction delays that impacted sales volumes,”
commented Tamara Lundgren, President and Chief Executive Officer.
“We generated strong operating cash flow and reduced debt while
continuing to return capital to our shareholders through both share
repurchases and our quarterly dividend. Looking forward, we remain
focused on the execution of our productivity initiatives and our
capital investment strategy to support our objectives of lowering
processing costs, increasing recovery rates, and further developing
products to meet our customers’ needs.”
Summary Results ($ in
millions, except per share amounts)
Quarter 2Q19
2Q18 Change 1Q19 Change Revenues $ 474
$ 559 (15 )% $ 564 (16 )% Operating income $ 19 $ 33 (43 )%
$ 23 (16 )% Asset impairment charges (recoveries), net — — NM — NM
Restructuring charges and other exit-related activities 1 — NM — NM
Recoveries related to the resale or modification of previously
contracted shipments — — NM — NM Adjusted
operating income(1) $ 20 $ 33 (41 )% $ 23 (15 )% Net income
attributable to SSI $ 13 $ 41 (69 )% $ 16 (20 )% Net income
from continuing operations attributable to SSI $ 13 $ 41 (68 )% $
16 (20 )% Adjusted net income from continuing operations
attributable to SSI(1) $ 13 $ 41 (67 )% $ 16 (18 )% Diluted
earnings per share attributable to SSI $ 0.46 $ 1.42 (68 )% $ 0.57
(20 )% Diluted earnings per share from continuing operations
attributable to SSI $ 0.46 $ 1.42 (67 )% $ 0.57 (19 )%
Adjusted diluted earnings per share from continuing operations
attributable to SSI(1) $ 0.48 $ 1.42 (66 )% $ 0.58 (18 )%
(1) See Non-GAAP Financial Measures for reconciliation to U.S.
GAAP. 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 2Q19
2Q18 Change 1Q19
Change Total revenues $ 386 $ 450 (14 )% $ 436 (12 )%
Ferrous revenues $ 257 $ 308 (16 )% $ 299 (14 )% Ferrous volumes
858 896 (4 )% 919 (7 )% Avg. net ferrous sales prices ($/LT)(1) $
287 $ 314 (9 )% $ 306 (6 )% Nonferrous revenues $ 99 $ 110
(10 )% $ 104 (5 )% Nonferrous volumes(2) 141 130 9 % 153 (8 )% Avg.
net nonferrous sales prices ($/lb)(1)(2) $ 0.58 $ 0.72 (19 )% $
0.59 (2 )% Cars purchased for retail (000s) 89 102 (13 )% 94
(5 )% Operating income $ 22 $ 45 (52 )% $ 23 (6 )% Operating
income per Fe ton $ 25 $ 50 (50 )% $ 25 1 % Adjusted
operating income(3) $ 22 $ 45 (52 )% $ 23 (6 )% Adjusted operating
income per Fe ton $ 25 $ 50 (50 )% $ 25 1 %
(1) Sales prices are shown net of freight. (2) Excludes platinum
group metals (PGMs) in catalytic converters. (3) See Non-GAAP
Financial Measures for reconciliation to U.S. GAAP.
Volumes: Ferrous sales volumes in the second quarter
decreased 4% compared to the prior year second quarter and 7%
sequentially, primarily due to the adverse impact on supply flows
from unusually severe weather conditions, as well as the lower
price environment. Nonferrous sales volumes were 9% higher compared
to the prior year second quarter mainly due to the timing of
shipments, and were 8% lower sequentially due primarily to the
impact of the lower supply flows.
Export customers accounted for 60% of total ferrous sales
volumes. Our products, including ferrous and nonferrous, were
shipped to 22 countries in the second quarter of fiscal 2019, with
Bangladesh, South Korea and Turkey representing the top export
destinations for ferrous shipments.
Pricing: Average ferrous net selling prices decreased $27
per ton, or 9%, compared to the prior year second quarter, and were
down $19 per ton, or 6%, sequentially. Average nonferrous net
selling prices decreased 19% compared to the prior year second
quarter and decreased 2% sequentially.
Margins: Operating income was $22 million in the second
quarter, $1 million, or 6%, lower sequentially and a decrease of
$23 million, or 52%, compared to the prior year second quarter.
Operating income per ferrous ton of $25 was consistent sequentially
and represented a decrease of $25 per ton or 50% from the prior
year second quarter. Sequentially, AMR’s performance reflected
additional benefits from productivity initiatives and reduced
SG&A expense including from lower incentive compensation
accruals, which substantially offset seasonally lower sales volumes
and retail sales, both of which were adversely impacted by the
unusually inclement winter weather. The year-over-year margin
compression resulted primarily from the decline in net selling
prices for nonferrous and ferrous products which outpaced the
reduction in purchase costs for raw materials, partially offset by
the benefits from productivity initiatives and lower SG&A
expense. Second quarter operating results include an adverse impact
from average inventory accounting of $1 million compared to a
benefit of $4 million in the second quarter of fiscal 2018 and an
immaterial impact in the first quarter of fiscal 2019.
Cascade Steel and Scrap
Summary of Cascade Steel and Scrap Results ($ in millions,
except selling prices)
Quarter 2Q19
2Q18 Change 1Q19
Change Steel revenues $ 74 $ 82 (9 )% $ 101 (27 )% Recycling
revenues 16 35 (53 )% 29 (44 )% Total revenues
$ 90 $ 117 (23 )% $ 130 (31 )%
Operating income $ 6 $ 5 7 % $ 12 (52 )% Finished steel
average net sales price ($/ST) $ 737 $ 619 19 % $ 747 (1 )%
Finished steel sales volumes (000s ST) 94 125 (25 )% 119 (21 )%
Rolling mill utilization 76 % 83 % (8 )% 87 % (13 )% (1)
Price information is shown after netting the cost of freight
incurred to deliver the product to the customer.
Volumes: Finished steel sales volumes in the second
quarter were 25% lower year-over-year and down 21% sequentially,
primarily due to weather-related construction delays in our West
Coast markets resulting from prolonged periods of rain in
California and unusually cold weather in the Pacific Northwest.
Recycling revenues declined significantly year-over-year and
sequentially as a result of lower ferrous export sales and selling
prices.
Pricing: Average net selling prices for finished steel
products increased 19% from the prior year second quarter,
reflecting the impacts of reduced pressure from steel imports and
higher costs of steel-making raw materials and other consumables.
Average net selling prices decreased 1% sequentially primarily due
to the regional sales mix.
Margins: Operating income for the second quarter of
fiscal 2019 was $6 million, an improvement from the prior year
second quarter. The improved year-over-year performance reflected
an expansion in finished steel margins resulting from higher
average net selling prices and benefits from productivity
initiatives, partially offset by the increase in the cost of
steel-making raw materials, the impact of the lower finished steel
sales volumes and higher costs associated with planned maintenance.
Sequentially, operating income declined by $6 million driven
primarily by the impact of the lower sales volumes and higher
production costs associated with planned maintenance.
Corporate Items
In the second quarter of fiscal 2019, consolidated financial
performance included Corporate expense of $8 million, a decrease of
$9 million from the prior year second quarter and a decrease of $4
million sequentially, driven primarily by lower incentive
compensation accruals and, compared to the prior year, lower legal
and professional services expenses.
The Company made significant progress in implementing and
executing the productivity initiatives targeting $35 million in
benefits announced earlier in fiscal 2019. Consolidated results in
the second quarter of fiscal 2019 reflected approximately $9
million of benefits from these measures, of which approximately $7
million were achieved by AMR and the remainder by CSS and
Corporate. The Company expects to achieve at least 75% of the total
targeted benefits in fiscal 2019, with the full amount expected to
be achieved in fiscal 2020.
The Company’s effective tax rate for the second quarter of
fiscal 2019 was an expense of 22.3%.
The second quarter of fiscal 2019 reflected operating cash flow
of $35 million. Total debt at the end of the second quarter of
fiscal 2019 was $163 million, and debt, net of cash, was $150
million, a decrease compared to $169 million and $157 million,
respectively, at the end of the first quarter of fiscal 2019 (refer
to Non-GAAP Financial Measures provided after the financial
statements in this document).
Pursuant to its ongoing authorized share repurchase program,
during the second quarter the Company repurchased approximately
263,000 shares, or almost 1%, of its Class A common stock in open
market transactions. The Company also returned capital to
shareholders through its 100th consecutive quarterly dividend.
Analysts’ Conference Call: Second Quarter of Fiscal
2019
A conference call and slide presentation to discuss results will
be held today, April 4, 2019, at 11:30 a.m. Eastern 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 under Company > Investors
> Event Calendar at www.schnitzersteel.com/events.
Summary financial data is provided in the following pages. The
slides and related materials will be available prior to the call on
the 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 auto parts stores with 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. FINANCIAL HIGHLIGHTS
(in thousands) (Unaudited) For
the Three Months Ended For the Six Months Ended
February 28,2019
November 30,2018
February 28,2018
February 28,2019
February 28,2018
REVENUES: Auto and Metals Recycling: Ferrous revenues
$ 257,488 $ 298,812 $ 307,687 $ 556,300 $ 562,670 Nonferrous
revenues 99,484 104,181 110,388 203,665 220,731 Retail and other
revenues 29,093 33,419 31,710 62,512
64,438 Total Auto and Metals Recycling revenues 386,065
436,412 449,785 822,477 847,839 Cascade Steel and Scrap:
Steel revenues 74,025 101,337 81,542 175,362 161,988 Recycling
revenues 16,373 29,049 35,172 45,422
44,710 Total Cascade Steel and Scrap revenues 90,398 130,386
116,714 220,784 206,698 Intercompany sales eliminations (2,898 )
(2,778 ) (7,056 ) (5,676 ) (11,815 ) Total revenues $ 473,565
$ 564,020 $ 559,443 $ 1,037,585 $
1,042,722 OPERATING INCOME: AMR operating
income $ 21,741 $ 23,017 $ 45,132 $ 44,758 $ 80,304 CSS operating
income $ 5,768 $ 11,918 $ 5,413 $ 17,686 $ 13,889 Consolidated
operating income $ 19,036 $ 22,689 $ 33,358 $ 41,725 $ 59,781
Adjusted AMR operating income(1) $ 21,741 $ 23,080 $ 45,132
$ 44,821 $ 79,887 Adjusted CSS operating income(1) 5,768
11,918 5,413 17,686 13,801 Adjusted
segment operating income(1) 27,509 34,998 50,545 62,507 93,688
Corporate expense (8,095 ) (12,205 ) (16,750 ) (20,300 ) (33,394 )
Intercompany eliminations 158 161 (346 ) 319
(827 ) Adjusted operating income(1) 19,572 22,954 33,449 42,526
59,467 Asset impairment (charges) recoveries, net — (63 ) — (63 )
88 Restructuring charges and other exit-related activities (536 )
(202 ) (91 ) (738 ) (191 ) Recoveries related to the resale or
modification of previously contracted shipments — — —
— 417 Total operating income $ 19,036 $
22,689 $ 33,358 $ 41,725 $ 59,781 (1)
See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
SCHNITZER STEEL INDUSTRIES, INC. CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (In thousands) (Unaudited)
For the Three Months Ended For the Six Months
Ended
February 28,2019
November 30,2018
February 28,2018
February 28,2019
February 28,2018
Revenues $ 473,565 $ 564,020 $ 559,443 $
1,037,585 $ 1,042,722 Cost of goods sold 414,688
490,132 472,462 904,820 878,713 Selling, general and administrative
39,489 51,419 53,638 90,908 104,681 (Income) from joint ventures
(184 ) (485 ) (106 ) (669 ) (556 ) Asset impairment charges
(recoveries), net — 63 — 63 (88 ) Restructuring charges and other
exit-related activities 536 202 91 738
191 Operating income 19,036 22,689 33,358 41,725 59,781
Interest expense (2,067 ) (1,906 ) (2,281 ) (3,973 ) (4,340 ) Other
income, net 321 23 101 344 950
Income from continuing operations before income taxes 17,290 20,806
31,178 38,096 56,391 Income tax (expense) benefit (3,855 ) (4,116 )
10,577 (7,971 ) 4,620 Income from continuing
operations 13,435 16,690 41,755 30,125 61,011 Income (loss) from
discontinued operations, net of tax (138 ) (72 ) 164 (210 )
129 Net income 13,297 16,618 41,919 29,915 61,140 Net income
attributable to noncontrolling interests (405 ) (430 ) (903 ) (835
) (1,760 ) Net income attributable to SSI $ 12,892 $ 16,188
$ 41,016 $ 29,080 $ 59,380 Net
income per share attributable to SSI: Basic: Income per share from
continuing operations attributable to SSI $ 0.47 $ 0.59 $ 1.47 $
1.06 $ 2.14 Income (loss) per share from discontinued operations
attributable to SSI — — 0.01 (0.01 ) —
Net income per share attributable to SSI $ 0.47 $ 0.59
$ 1.48 $ 1.05 $ 2.14 Diluted: Income
per share from continuing operations attributable to SSI $ 0.46 $
0.57 $ 1.42 $ 1.04 $ 2.06 Income (loss) per share from discontinued
operations attributable to SSI — — 0.01 (0.01
) — Net income per share attributable to SSI(1) $ 0.46
$ 0.57 $ 1.42 $ 1.03 $ 2.07
Weighted average number of common shares: Basic 27,630
27,505 27,797 27,568 27,745 Diluted 28,114 28,364 28,805 28,239
28,737 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
1Q19 2Q19 2019 SSI Total
Volumes(1) Total ferrous volumes (LT) 1,079,705 957,214
2,036,919 Total nonferrous volumes (000s LB) 166,977 154,571
321,548
Auto and Metals Recycling Ferrous selling prices
($/LT)(2) Domestic $ 290 $ 286 $ 288 Export $ 314
$ 288 $ 301 Average $ 306 $ 287
$ 297
Ferrous sales volume (LT) Domestic 339,879 343,017
682,896 Export 578,976 515,171
1,094,147 Total 918,855 858,188 1,777,043
Nonferrous average price ($/LB)(2)(3) $ 0.59 $ 0.58 $
0.59
Nonferrous sales volume (000s LB)(3) 152,869
141,307 294,176
Car purchase volume (000s)(4) 94 89
183
Auto stores at end of quarter 51 51 51
Cascade Steel
and Scrap Finished steel average sales price
($/ST)(2) $ 747 $ 737 $ 743
Sales volume (ST)
Rebar 81,470 59,424 140,894 Coiled products 37,418 34,489 71,907
Merchant bar and other 316 209
525 Finished steel products sold 119,204 94,122 213,326
Rolling mill utilization(5) 87 % 76 % 81 %
(1) Ferrous and nonferrous volumes sold externally by AMR and CSS
and delivered to our steel mill for finished steel production. (2)
Price information is shown after a reduction for the cost of
freight incurred to deliver the product to the customer. (3)
Excludes PGM metals 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
1Q18 2Q18 3Q18
4Q18 2018 SSI Total Volumes(1)
Total ferrous volumes (LT) 912,145 1,062,260 1,118,743 1,205,803
4,298,951 Total nonferrous volumes (000s LB) 141,046 144,024
162,667 188,359 636,096
Auto and Metals Recycling Ferrous
selling prices ($/LT)(2) Domestic $ 259 $ 278 $ 314 $
303 $ 291 Export $ 306 $ 327 $
347 $ 328 $ 328 Average $ 292 $
314 $ 337 $ 321 $ 317
Ferrous sales volume (LT) Domestic
237,464 239,571 293,323 314,974 1,085,332 Export 559,154
656,738 690,019 716,834
2,622,745 Total 796,618 896,309 983,342
1,031,808 3,708,077
Nonferrous average price
($/LB)(2)(3) $ 0.73 $ 0.72 $ 0.74 $ 0.69 $ 0.72
Nonferrous sales volume (000s LB)(3) 129,137 129,549
146,043 166,976 571,705
Car purchase volume (000s)(4)
108 102 109 105 424
Auto stores at end of quarter 53 53 53
52 52
Cascade Steel and Scrap Finished steel average
sales price ($/ST)(2) $ 599 $ 619 $ 703 $ 741 $ 666
Sales volume (ST) Rebar 84,243 79,718 91,603 81,182 336,746
Coiled products 40,928 43,056 46,673 43,878 174,535 Merchant bar
and other 2,049 1,937 1,945
1,950 7,881 Finished steel
products sold 127,220 124,711 140,221 127,010 519,162
Rolling mill utilization(5) 95 % 83 % 91 % 83 % 88 %
(1) Ferrous and nonferrous volumes sold externally by AMR and CSS
and delivered to our steel mill for finished steel production. (2)
Price information is shown after a reduction for the cost of
freight incurred to deliver the product to the customer. (3)
Excludes PGM metals 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. CONDENSED CONSOLIDATED BALANCE
SHEETS (In thousands) (Unaudited) February 28, 2019
August 31, 2018
Assets
Current assets: Cash and cash equivalents $ 13,173 $ 4,723 Accounts
receivable, net 165,307 169,418 Inventories 198,565 205,877 Other
current assets 41,908 68,341 Total current assets 418,953
448,359 Property, plant and equipment, net 428,777 415,711
Goodwill and other assets 239,522 240,747
Total assets $ 1,087,252 $ 1,104,817
Liabilities and
Equity
Current liabilities: Short-term borrowings $ 1,215 $ 1,139 Other
current liabilities 169,735 253,538 Total current
liabilities 170,950 254,677 Long-term debt 161,866 106,237
Other long-term liabilities 73,589 73,793 Equity:
Total Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity
676,607 666,078 Noncontrolling interests 4,240 4,032 Total
equity 680,847 670,110 Total liabilities and equity $
1,087,252 $ 1,104,817
Non-GAAP Financial Measures
This press release contains performance based on adjusted net
income and adjusted diluted earnings per share from continuing
operations attributable to SSI and adjusted consolidated, AMR and
CSS operating income, which are non-GAAP financial measures as
defined under SEC rules. As required by SEC rules, we have provided
reconciliations of these measures for each period discussed to the
most directly comparable U.S. GAAP measure. Management believes
that presenting these non-GAAP financial measures provides a
meaningful presentation of our results from business operations
excluding adjustments for asset impairment charges net of
recoveries, restructuring charges and other exit-related
activities, recoveries related to the resale or modification of
previously contracted shipments, and the income tax expense
(benefit) 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. 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 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 and concluded in the first quarter of fiscal 2018, are
reported within selling, general and administrative expense in the
quarterly statements of income and are also excluded from the
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 2Q19
2Q18 1Q19 2Q19
2Q18 Consolidated operating income: Operating income
$ 19 $ 33 $ 23 $ 42 $ 60 Asset impairment charges (recoveries), net
— — — — — Restructuring charges and other exit-related activities 1
— — 1 — Recoveries related to the resale or modification of
previously contracted shipments — — — —
— Adjusted consolidated operating income(1) $ 20 $ 33
$ 23 $ 43 $ 59
AMR operating income:
Operating income $ 22 $ 45 $ 23 $ 45 $ 80 Asset impairment charges
(recoveries), net — — — — — Recoveries related to the resale or
modification of previously contracted shipments — — —
— — Adjusted AMR operating income $ 22 $ 45
$ 23 $ 45 $ 80
CSS operating
income: Operating income $ 6 $ 5 $ 12 $ 18 $ 14 Asset
impairment charges (recoveries), net — — — —
— Adjusted CSS operating income $ 6 $ 5 $ 12
$ 18 $ 14 (1) May not foot due to rounding.
Net income from continuing operations attributable to
SSI ($ in millions)
Quarter YTD
2Q19 2Q18 1Q19 2Q19
2Q18 Net income from continuing operations
attributable to SSI $ 13 $ 41 $ 16 $ 29 $ 59 Asset impairment
charges (recoveries), net — — — — — Restructuring charges and other
exit-related activities 1 — — 1 — Recoveries related to the resale
or modification of previously contracted shipments — — — — — Income
tax expense (benefit) allocated to adjustments(1) — — — — —
Adjusted net income from continuing operations attributable to
SSI(2) $ 13 $ 41 $ 16 $ 30 $ 59
(1) Income tax allocated to the aggregate adjustments
reconciling reported and adjusted net income from continuing
operations attributable to SSI is determined based on a tax
provision calculated with and without the adjustments. (2) May not
foot due to rounding.
Diluted earnings per share from
continuing operations attributable to SSI ($ per share)
Quarter YTD 2Q19 2Q18
1Q19 2Q19 2Q18 Diluted earnings
per share from continuing operations attributable to SSI $ 0.46 $
1.42 $ 0.57 $ 1.04 $ 2.06 Asset impairment charges (recoveries),
net — — — — — Restructuring charges and other exit-related
activities 0.02 — 0.01 0.03 0.01 Recoveries related to the resale
or modification of previously contracted shipments — — — — (0.01 )
Income tax expense (benefit) allocated to adjustments(1) — — —
(0.01 ) — Adjusted diluted earnings per share from
continuing operations attributable to SSI(2) $ 0.48 $ 1.42 $ 0.58 $
1.06 $ 2.05
(1) Income tax allocated to the aggregate adjustments
reconciling reported and adjusted diluted earnings per share from
continuing operations attributable to SSI is determined based on a
tax provision calculated with and without the adjustments. (2) May
not foot due to rounding.
Debt, net of cash ($ in
thousands)
February 28, 2019 November 30,
2018 August 31, 2018 Short-term borrowings $
1,215 $ 1,156 $ 1,139 Long-term debt, net of current
maturities 161,866 167,394 106,237 Total debt 163,081
168,550 107,376 Less: cash and cash equivalents 13,173 11,216
4,723 Total debt, net of cash $ 149,908 $ 157,334 $
102,653
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,” “Company,” “Schnitzer,” 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 trends, cyclicality and changes in the markets
we sell into; the Company’s outlook, growth initiatives or expected
results or objectives, 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 and the impact of federal tax reform; the impact of
tariffs, quotas and other trade actions; 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, as supplemented by
our subsequently filed Quarterly Reports on Form 10-Q. Examples of
these risks include: 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 tariffs,
quotas and other trade actions; 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
equity investment impairment charges; inability to achieve or
sustain the benefits from productivity, cost savings and
restructuring initiatives; 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 our bank credit
agreement; the impact of 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 one or
more cybersecurity incidents; environmental compliance costs and
potential environmental liabilities; inability to obtain or renew
business licenses and permits or renew facility leases; 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190404005167/en/
Investor Relations:Michael Bennett(503)
323-2811mcbennett@schn.com
Company
Info:www.schnitzersteel.comir@schn.com
Schnitzer Steel Industries (NASDAQ:SCHN)
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