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     235  0 Kommentare Schnitzer Reports Second Quarter 2019 Financial Results

    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.



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    Schnitzer Reports Second Quarter 2019 Financial Results 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 …