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8-K - SCHNITZER STEEL INDUSTRIES, INC. 8-K - SCHNITZER STEEL INDUSTRIES, INC. | a50778762.htm |
Exhibit 99.1
Schnitzer Reports First Quarter 2014 Financial Results
Sequential Improvements in Financial Performance
Continued Progress on Cost Reductions
PORTLAND, Ore.--(BUSINESS WIRE)--January 8, 2014--Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) today reported an adjusted loss per share of $(0.18) and a loss per share of $(0.23) for its fiscal 2014 first quarter ended November 30, 2013. Adjusted results for the first quarter exclude a $2 million, or $0.05 per share, restructuring charge associated with cost reduction initiatives. In the first quarter of fiscal 2013, the Company reported an adjusted loss per share of $(0.02) and a loss per share of $(0.06).
All three business segments generated positive operating income during the first quarter of fiscal 2014. As anticipated, our Metals Recycling Business improved sequentially, delivering results slightly above break-even. Our Auto Parts Business also improved compared to the fourth quarter of fiscal 2013, recording operating margins of 9%, excluding the impact of new stores added since the first quarter of fiscal 2013. Our Steel Manufacturing Business was in line sequentially notwithstanding a bad debt expense of $1 million, or $0.03 per share. The first quarter results also include a charge for deferred tax valuation allowances of $1 million, or $0.04 per share.
Market conditions improved as the quarter progressed. Both prices and demand were relatively weak in the first half of the quarter which impacted shipments in September and October. In the second half of the quarter, demand strengthened which increased prices by approximately $30 per ton. Consequently, performance in the last month of the quarter was significantly better than during the first two months. The softer demand at the start of the quarter resulted in an estimated adverse impact from average inventory costs of approximately $6 per ton in our Metals Recycling Business. Based on current market conditions and our cost reduction initiatives, we anticipate improved results in each of our businesses in the second quarter.
Summary Results | ||||||||||||
($ in millions, except per share amounts) | ||||||||||||
Quarter | ||||||||||||
1Q14 | 4Q13 | 1Q13 | ||||||||||
Revenues | $ | 588 | $ | 657 | $ | 593 | ||||||
Operating Income (Loss) | $ | (4 | ) | $ | (348 | ) | $ | 1 | ||||
Goodwill Impairment Charge | — | 321 | — | |||||||||
Other Asset Impairment Charges | — | 13 | — | |||||||||
Restructuring Charges | 2 | 3 | 2 | |||||||||
Adjusted Operating Income (Loss)(1) | $ | (2 | ) | $ | (11 | ) | $ | 3 | ||||
Net Loss attributable to SSI | $ | (6 | ) | $ | (289 | ) | $ | (2 | ) | |||
Adjusted Net Loss attributable to SSI(1) | $ | (5 | ) | $ | (14 | ) | $ | (1 | ) | |||
Net Loss per share attributable to SSI | $ | (0.23 | ) | $ | (10.82 | ) | $ | (0.06 | ) | |||
Adjusted diluted EPS attributable to SSI(1) | $ | (0.18 | ) | $ | (0.51 | ) | $ | (0.02 | ) | |||
(1) 1Q14 and 1Q13 include adjustments for restructuring charges. 4Q13 includes adjustments for a non-cash goodwill impairment charge, other asset impairment charges, restructuring charges and tax valuation allowances net of tax. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
“Market conditions improved as the quarter progressed and, consequently, performance in the last month of the quarter was significantly better than during the first two months. All three business segments generated positive operating income, including higher sequential performance for both our Metals Recycling and Auto Parts Businesses, and a continuing trend of profitability in our Steel Manufacturing Business," said Tamara Lundgren, President and Chief Executive Officer. "We generated $26 million in operating cash flow in the first quarter, our cost reduction initiatives are underway to deliver at least $20 million of savings in fiscal 2014, and we continued to expand our Auto Parts Business platform by acquiring our fourth store in the greater Seattle-Tacoma metropolitan area which provides supply chain synergies with our Metals Recycling Business."
Key business drivers during the first quarter of fiscal 2014:
- Metals Recycling Business (MRB) generated $1 million in operating income, including the estimated adverse impact from average inventory costing of approximately $6 per ton. The combination of improving market conditions, early benefits from our cost reduction program and non-recurrence of other cost items which impacted the previous quarter resulted in a sequential increase in MRB’s operating performance during the first quarter.
- Auto Parts Business (APB) operating income of $6 million and margin of 9%, which excludes new sites added since the first quarter of fiscal 2013, represents sequential increases of $1 million and 200 basis points, respectively. Including the new stores, car purchase volumes increased by 15% from the prior year first quarter, primarily reflecting contributions from those stores.
- Steel Manufacturing Business (SMB) operating income of $2 million reflected steady demand in the West Coast markets but was partially offset by a bad debt expense of $1 million from a customer bankruptcy.
Metals Recycling Business
Summary of Metals Recycling Business Results | |||||||||||||||||
($ in millions, except selling prices; Fe volumes 000s long tons; NFe volumes Ms lbs) | |||||||||||||||||
Quarter | |||||||||||||||||
1Q14 | 4Q13 | Change | 1Q13 | Change | |||||||||||||
Total Revenues | $ | 490 | $ | 535 | (8 | )% | $ | 494 | (1 | )% | |||||||
Ferrous Revenues | $ | 370 | $ | 398 | (7 | )% | $ | 370 | — | % | |||||||
Ferrous Volumes | 978 | 1,088 | (10 | )% | 955 | 2 | % | ||||||||||
Avg. Net Ferrous Sales Prices ($/LT)(1) | $ | 348 | $ | 336 | 4 | % | $ | 358 | (3 | )% | |||||||
Nonferrous Revenues | $ | 113 | $ | 129 | (12 | )% | $ | 117 | (3 | )% | |||||||
Nonferrous Volumes | 124 | 141 | (12 | )% | 119 | 4 | % | ||||||||||
Avg. Net Nonferrous Sales Prices ($/lb)(1) | $ | 0.89 | $ | 0.89 | — | % | $ | 0.95 | (6 | )% | |||||||
Operating Income (Loss)(2) | $ | 1 | $ | (340 | ) | NM | $ | 6 | (90 | )% | |||||||
Goodwill Impairment | — | 321 | NM | — | NM | ||||||||||||
Asset Impairment Charges | — | 13 | NM | — | NM | ||||||||||||
Adjusted Operating Income (Loss)(3) | $ | 1 | $ | (6 | ) | NM | $ | 6 | (90 | )% | |||||||
(1) Sales prices are shown net of freight. | |||||||||||||||||
(2) Operating income (loss) does not include the impact of restructuring charges. | |||||||||||||||||
(3) See Non-GAAP Financial Measures for reconciliation to U.S. GAAP. | |||||||||||||||||
NM = Not meaningful | |||||||||||||||||
Sales Volumes: Ferrous sales volumes of 978 thousand tons in the first quarter increased 2% and nonferrous volumes of 124 million pounds increased 4% compared to the prior year first quarter.
Export customers accounted for 67% of total ferrous sales volumes in the first quarter. Our ferrous and nonferrous products were shipped to 14 countries, with China, South Korea and Turkey being the top ferrous export destinations.
Pricing: Export prices were soft in the first part of the first quarter, but increased by $30 per ton toward the end of the quarter. The combination of improving export prices and the strong domestic market led to higher average net ferrous selling prices as compared to the previous quarter while nonferrous prices were stable.
Margins: Operating income of $1 per ferrous ton, which included the estimated adverse impact of average inventory accounting of $6 per ton, was partially mitigated by improving market conditions and benefits of $3 million from implementation of cost reduction initiatives.
Auto Parts Business
Summary of Auto Parts Business Results | ||||||||||||||||||
($ in millions) | ||||||||||||||||||
Quarter | ||||||||||||||||||
1Q14 | 4Q13 | Change | 1Q13 | Change | ||||||||||||||
Revenues | $ | 80 | $ | 79 | 1 | % | $ | 70 | 14 | % | ||||||||
Operating Income(1) | $ | 6 | $ | 3 | 76 | % | $ | 6 | (12 | )% | ||||||||
Car Purchase Volumes (000s) | 91 | 94 | (3 | )% | 79 | 15 | % | |||||||||||
Locations (end of quarter) | 62 | 61 | 2 | % | 51 | 22 | % | |||||||||||
(1) Operating income does not include the impact of restructuring charges. | ||||||||||||||||||
Revenues: Revenues in the first quarter increased 14% from the prior year quarter due to incremental contributions from retail stores added since the first quarter of fiscal 2013.
Margins: Operating margins, excluding the impact of the stores added in fiscal 2013, increased sequentially to 9%. During the first quarter, APB incurred approximately $1 million of operating losses related to the new stores added since the first quarter of fiscal 2013, including integration and start-up costs, which lowered APB's reported operating margin to 7%. (See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.)
New Sites: In November, APB acquired its fourth self-service retail store in the Seattle-Tacoma metropolitan area which expanded APB's presence in the Pacific Northwest market. This location will supply our Metals Recycling shredder in Tacoma, Washington, further enhancing synergies between our operating segments.
Steel Manufacturing Business
Summary of Steel Manufacturing Business Results | ||||||||||||||||||
($ in millions, except selling prices; volume 000s of short tons) | ||||||||||||||||||
Quarter | ||||||||||||||||||
1Q14 | 4Q13 | Change | 1Q13 | Change | ||||||||||||||
Revenues | $ | 88 | $ | 96 | (8 | )% | $ | 92 | (4 | )% | ||||||||
Operating Income | $ | 2 | $ | 2 | (20 | )% | $ | 3 | (49 | )% | ||||||||
Avg. Net Sales Prices ($/ST) | $ | 657 | $ | 667 | (1 | )% | $ | 680 | (3 | )% | ||||||||
Finished Goods Sales Volumes | 128 | 138 | (7 | )% | 130 | (1 | )% | |||||||||||
Sales Volumes: Finished steel sales volumes of 128 thousand tons approximated the prior year first quarter, reflecting steady demand for construction products on the West Coast.
Pricing: Average net sales prices for finished steel products of $657 per short ton declined slightly from the prior year quarter due to the impact of lower raw material prices on selling prices to end customers.
Margins: Operating income of $2 million approximated the fourth quarter of fiscal 2013 due to additional production efficiencies of $1 million, partially offset by slightly lower sales volumes and a bad debt expense of $1 million from a customer bankruptcy.
Cost Reductions
Our cost reduction initiatives to further reduce our annual operating expenses by $30 million continue to progress. Approximately 70% of the reduction is expected to benefit fiscal 2014 results, with the full annual benefit expected to be achieved in fiscal 2015. The reduction in operating expenses will primarily occur in MRB and be achieved through a combination of headcount reductions, implementation of transportation efficiencies, reduced lease costs, and other productivity and non-trade procurement savings. We achieved $4 million of benefits in the first quarter. We anticipate achieving a quarterly run rate of $6 million of benefits by the end of the second quarter. During the first quarter, we incurred a $2 million restructuring expense, or $0.05 per share, in connection with this cost reduction program.
Corporate Items
The Company's full year tax rate for fiscal 2014 is anticipated to be approximately 37%. The tax rate in the first quarter was a benefit of 12.7%, which was lower than the federal statutory rate primarily due to the recognition of a deferred tax valuation allowance on the results of foreign operations.
The Company generated $26 million in operating cash flow during the first quarter. Net debt of $364 million at the end of the first quarter decreased slightly from the end of the fourth quarter in fiscal 2013. (See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.)
Analysts' Conference Call: First Quarter of Fiscal 2014
A conference call and slide presentation to discuss results will be held today, January 8, 2014, at 11:30 a.m. EDT hosted by Tamara Lundgren, President and Chief Executive Officer, and Richard Peach, Chief Financial Officer. The call and the slides will be webcast and accessible on the Company's website at www.schnitzersteel.com.
Summary financial data is provided in the following pages. The slides and related materials will be available prior to the call on the website.
SCHNITZER STEEL INDUSTRIES, INC. | |||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||
(in thousands) | |||||||||||||
(Unaudited) | |||||||||||||
For the Three Months Ended | |||||||||||||
November 30, 2013 | August 31, 2013 | November 30, 2012 | |||||||||||
REVENUES: | |||||||||||||
Metal Recycling Business: | |||||||||||||
Ferrous sales | $ | 369,555 | $ | 397,947 | $ | 370,476 | |||||||
Nonferrous sales | 113,154 | 129,199 | 116,601 | ||||||||||
Other sales | 7,600 | 7,817 | 7,384 | ||||||||||
TOTAL MRB SALES | 490,309 | 534,963 | 494,461 | ||||||||||
Auto Parts Business | 79,635 | 79,231 | 69,555 | ||||||||||
Steel Manufacturing Business | 88,123 | 96,235 | 92,029 | ||||||||||
Intercompany sales and eliminations | (70,322 | ) | (53,844 | ) | (63,225 | ) | |||||||
Total Revenues | $ | 587,745 | $ | 656,585 | $ | 592,820 | |||||||
OPERATING INCOME (LOSS): | |||||||||||||
Metal Recycling Business(1) | $ | 590 | $ | (6,097 | ) | $ | 5,654 | ||||||
Auto Parts Business | 5,609 | 3,191 | 6,364 | ||||||||||
Steel Manufacturing Business | 1,744 | 2,169 | 3,404 | ||||||||||
Segment operating income (loss)(2) | 7,943 | (737 | ) | 15,422 | |||||||||
Corporate expense | (8,725 | ) | (10,188 | ) | (11,144 | ) | |||||||
Intercompany eliminations | (1,031 | ) | 299 | (1,472 | ) | ||||||||
Adjusted operating income (loss) | (1,813 | ) | (10,626 | ) | 2,806 | ||||||||
Goodwill impairment charge | — | (321,000 | ) | — | |||||||||
Other asset impairment charges | — | (13,053 | ) | — | |||||||||
Restructuring charges | (1,812 | ) | (2,900 | ) | (1,593 | ) | |||||||
Total operating income (loss) | $ | (3,625 | ) | $ | (347,579 | ) | $ | 1,213 | |||||
(1) MRB operating income for the three months ended August 31, 2013 is
adjusted for goodwill impairment charge and other asset impairment
charges. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
(2)
Segment operating income (loss) does not include the impact of
restructuring charges.
SCHNITZER STEEL INDUSTRIES, INC. | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(in thousands) | ||||||||||||
(Unaudited) | ||||||||||||
For the Three Months Ended | ||||||||||||
November 30, 2013 | August 31, 2013 | November 30, 2012 | ||||||||||
Revenues | $ | 587,745 | $ | 656,586 | $ | 592,820 | ||||||
Cost of goods sold | 542,417 | 620,457 | 541,884 | |||||||||
Selling, general and administrative | 47,550 | 47,388 | 47,995 | |||||||||
(Income) loss from joint ventures | (409 | ) | (633 | ) | 135 | |||||||
Goodwill impairment charge | — | 321,000 | — | |||||||||
Other asset impairment charges | — | 13,053 | — | |||||||||
Restructuring charges | 1,812 | 2,900 | 1,593 | |||||||||
Operating income (loss) | (3,625 | ) | (347,579 | ) | 1,213 | |||||||
Interest expense | (2,702 | ) | (2,584 | ) | (2,017 | ) | ||||||
Other income (expense), net | 176 | (332 | ) | 321 | ||||||||
Loss before income taxes | (6,151 | ) | (350,495 | ) | (483 | ) | ||||||
Income tax benefit (expense) | 784 | 61,617 | (960 | ) | ||||||||
Net loss | (5,367 | ) | (288,878 | ) | (1,443 | ) | ||||||
Net income attributable to noncontrolling interests | (861 | ) | (356 | ) | (228 | ) | ||||||
Net loss attributable to SSI | $ | (6,228 | ) | $ | (289,234 | ) | $ | (1,671 | ) | |||
Net loss per share attributable to SSI - basic | $ | (0.23 | ) | $ | (10.82 | ) | $ | (0.06 | ) | |||
Net loss per share attributable to SSI - diluted | $ | (0.23 | ) | $ | (10.82 | ) | $ | (0.06 | ) | |||
Weighted average number of common shares: | ||||||||||||
Basic | 26,755 | 26,733 | 26,567 | |||||||||
Diluted | 26,755 | 26,733 | 26,567 | |||||||||
Dividends declared per common share | $ | 0.188 | $ | 0.188 | $ | 0.188 | ||||||
SCHNITZER STEEL INDUSTRIES, INC. | |||||||||||||||||||
SELECTED OPERATING STATISTICS | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Fiscal | |||||||||||||||||||
1Q14 | 1Q13 | 2Q13 | 3Q13 | 4Q13 | 2013 | ||||||||||||||
Metals Recycling Business | |||||||||||||||||||
Ferrous Selling Prices ($/LT) (1) | |||||||||||||||||||
Domestic | $ | 356 | $ | 354 | $ | 363 | $ | 367 | $ | 346 | $ | 358 | |||||||
Exports | 344 | 360 | 374 | 367 | 332 | 359 | |||||||||||||
Average | $ | 348 | $ | 358 | $ | 372 | $ | 367 | $ | 336 | $ | 358 | |||||||
Ferrous Sales Volume (LT) | |||||||||||||||||||
Domestic | 322,531 | 279,450 | 260,509 | 314,240 | 288,112 | 1,142,311 | |||||||||||||
Export | 655,072 | 675,212 | 842,509 | 849,991 | 799,644 | 3,167,356 | |||||||||||||
Total | 977,603 | 954,662 | 1,103,018 | 1,164,231 | 1,087,756 | 4,309,667 | |||||||||||||
Nonferrous Average Price ($/LB) (1) | $ | 0.89 | $ | 0.95 | $ | 0.97 | $ | 0.94 | $ | 0.89 | $ | 0.93 | |||||||
Nonferrous Sales Volume (LB, in 000s) | 123,941 | 118,931 | 125,500 | 135,256 | 140,755 | 520,442 | |||||||||||||
Steel Manufacturing Business | |||||||||||||||||||
Sales Prices ($/ST) (1) (2) | |||||||||||||||||||
Average | $ | 657 | $ | 680 | $ | 690 | $ | 687 | $ | 667 | $ | 680 | |||||||
Sales Volume (ST) (2) | |||||||||||||||||||
Rebar | 83,618 | 78,159 | 58,132 | 71,561 | 83,911 | 291,763 | |||||||||||||
Coiled Products | 38,322 | 45,533 | 32,130 | 46,088 | 46,334 | 170,085 | |||||||||||||
Merchant Bar and Other | 6,222 | 5,926 | 5,355 | 7,358 | 7,298 | 25,937 | |||||||||||||
Total | 128,162 | 129,618 | 95,617 | 125,007 | 137,543 | 487,785 | |||||||||||||
Auto Parts Business | |||||||||||||||||||
Car purchase volumes (000) | 91 | 79 | 88 | 95 | 94 | 356 | |||||||||||||
Number of self-service locations at end of quarter | 62 | 51 | 59 | 61 | 61 | 61 | |||||||||||||
(1) Price information is shown after a reduction for the cost of freight incurred to deliver the product to the customer | |||||||||||||||||||
(2) Excludes billet sales | |||||||||||||||||||
SCHNITZER STEEL INDUSTRIES, INC. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
November 30, 2013 | August 31, 2013 | ||||||
Assets |
|||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 29,934 | $ | 13,481 | |||
Accounts receivable, net | 125,975 | 188,270 | |||||
Inventories, net | 280,100 | 236,049 | |||||
Other current assets | 29,898 | 29,430 | |||||
Total current assets | 465,907 | 467,230 | |||||
Property, plant and equipment, net | 554,010 | 564,426 | |||||
Goodwill and other assets | 372,202 | 373,856 | |||||
Total assets | $ | 1,392,119 | $ | 1,405,512 | |||
Liabilities and Equity |
|||||||
Current liabilities: | |||||||
Short-term borrowings | $ | 613 | $ | 9,174 | |||
Other current liabilities | 139,686 | 156,960 | |||||
Total current liabilities | 140,299 | 166,134 | |||||
Long-term debt | 393,426 | 372,663 | |||||
Other long-term liabilities | 86,123 | 85,516 | |||||
Equity: | |||||||
Total Schnitzer Steel Industries, Inc. ("SSI") shareholders' equity | 767,264 | 776,558 | |||||
Noncontrolling interests | 5,007 | 4,641 | |||||
Total equity | 772,271 | 781,199 | |||||
Total liabilities and equity | $ | 1,392,119 | $ | 1,405,512 | |||
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures as defined under SEC rules such as adjusted operating income, adjusted net income attributable to SSI, adjusted diluted earnings per share attributable to SSI, operating income margin for APB stores owned more than a year and debt, net of cash. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable U.S. GAAP measures. Management believes that each of the foregoing adjusted non-GAAP financial measures provides a meaningful presentation of the Company's results from its core business operations excluding adjustments for restructuring charges that are not related to the Company's ongoing core business operations and improves the period-to-period comparability of the Company's results from its core business operations. In addition, management believes that the non-GAAP financial measure relating to the Auto Parts Business new stores impact provides a meaningful presentation of the operating segment's results by excluding operating results relating to newly added stores and thus improve period-to-period comparability of the results of the segment's core business. 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.
Operating Income (Loss) | |||||||||||
($ in millions) | Quarter | ||||||||||
1Q14 | 4Q13 | 1Q13 | |||||||||
Consolidated Operating Income (Loss): | |||||||||||
Operating Income (Loss) | $ | (4 | ) | $ | (348 | ) | $ | 1 | |||
Goodwill Impairment Charge | — | 321 | — | ||||||||
Other Asset Impairment Charges | — | 13 | — | ||||||||
Restructuring Charges | 2 | 3 | 2 | ||||||||
Adjusted Operating Income (Loss) |
$ | (2 | ) | $ | (11 | ) | $ | 3 | |||
MRB Operating Income (Loss): | |||||||||||
Operating Income (Loss) | $ | 1 | $ | (340 | ) | $ | 6 | ||||
Goodwill Impairment Charge | — | 321 | — | ||||||||
Other Asset Impairment Charges | — | 13 | — | ||||||||
Adjusted Operating Income (Loss) | $ | 1 | $ | (6 | ) | $ | 6 |
Net Loss attributable to SSI | ||||||||||||
($ in millions) | Quarter | |||||||||||
1Q14 | 4Q13 | 1Q13 | ||||||||||
Net Loss attributable to SSI | $ | (6 | ) | $ | (289 | ) | $ | (2 | ) | |||
Goodwill impairment charge, net of tax | — | 254 | — | |||||||||
Other asset impairment charges, net of tax | — | 9 | — | |||||||||
Restructuring Charges, net of tax | 1 | 1 | 1 | |||||||||
Valuation allowance on deferred tax assets | — | 11 | — | |||||||||
Adjusted Net Loss attributable to SSI | $ | (5 | ) | $ | (14 | ) | $ | (1 | ) |
Diluted Earnings per share attributable to SSI | ||||||||||||
($ per share) | Quarter | |||||||||||
1Q14 | 4Q13 | 1Q13 | ||||||||||
Net loss per share attributable to SSI | $ | (0.23 | ) | $ | (10.82 | ) | $ | (0.06 | ) | |||
Goodwill impairment charge, net of tax, per share | — | 9.52 | — | |||||||||
Other asset impairment charges, net of tax, per share | — | 0.33 | — | |||||||||
Restructuring Charges, net of tax, per share | 0.05 | 0.05 | 0.04 | |||||||||
Valuation allowance on deferred tax assets, per share | — | 0.41 | — | |||||||||
Adjusted Diluted EPS attributable to SSI | $ | (0.18 | ) | $ | (0.51 | ) | $ | (0.02 | ) |
Debt, Net of Cash | |||||||
November 30, 2013 | August 31, 2013 | ||||||
Short-term borrowings | $ | 613 | $ | 9,174 | |||
Long-term debt, net of current maturities | 393,426 | 372,663 | |||||
Total debt | 394,039 | 381,837 | |||||
Less: cash and cash equivalents | 29,934 | 13,481 | |||||
Total debt, net of cash | $ | 364,105 | $ | 368,356 |
Auto Parts Business New Stores Impact | |||||||||
($ in millions) | 1Q14 | ||||||||
Existing Stores(1) | New Stores(2) | Reported | |||||||
Revenues | 71 | 9 | 80 | ||||||
Operating Income (Loss)(3) | 6 | (1 | ) | 6 | |||||
Operating Income Margin | 9 | % | NM | 7 | % | ||||
Car Purchase Volumes (000) | 80 | 11 | 91 | ||||||
4Q13 | |||||||||
Existing Stores(1) | New Stores(2) | Reported | |||||||
Revenues | 72 | 7 | 79 | ||||||
Operating Income (Loss) | 5 | (2 | ) | 3 | |||||
Operating Income Margin | 7 | % | NM | 4 | % | ||||
Car Purchase Volumes (000) | 84 | 10 | 94 | ||||||
(1) Existing Stores represents APB operations for stores owned one year or more. | |||||||||
(2) New Stores represent new acquisitions, or greenfield development, owned less than one year. | |||||||||
(3) Does not foot due to rounding | |||||||||
NM = Not meaningful | |||||||||
About Schnitzer Steel Industries, Inc.
Schnitzer Steel Industries, Inc. is one of the largest manufacturers and exporters of recycled ferrous metal products in the United States with 60 operating facilities located in 14 states, Puerto Rico and Western Canada. The business 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 its auto parts and steel manufacturing businesses. The Company's auto parts business sells used auto parts through its 61 self-service facilities located in 16 states and Western Canada. With an effective annual production capacity of approximately 800,000 tons, the Company's steel manufacturing business produces finished steel products, including rebar, wire rod and other specialty products. The Company commenced its 108th year of operations in 2014.
Safe Harbor for 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 to “we,” “our,” “us” and “SSI” refer to the Company and its consolidated subsidiaries.
Forward-looking statements in this press release include statements regarding our expectations, intentions, beliefs and strategies regarding the future, which may include statements regarding trends, cyclicality and changes in the markets we sell into; strategic direction; changes to manufacturing and production processes; the cost of compliance with environmental and other laws; expected tax rates, deductions and credits; the realization of deferred tax assets; planned capital expenditures; liquidity positions; ability to generate cash from continuing operations; the potential impact of adopting new accounting pronouncements; expected results, including pricing, sales volumes and profitability; obligations under our retirement plans; benefits, savings or additional costs from business realignment and cost containment programs; and the adequacy of accruals.
When used in this report, the words “believes,” “expects,” “anticipates,” “intends,” “assumes,” “estimates,” “evaluates,” “may,” “could,” “opinions,” “forecasts,” “future,” “forward,” “potential,” “probable,” and similar expressions are intended to identify forward-looking statements.
We may make other forward-looking statements from time to time, including in reports filed with the Securities and Exchange Commission, press releases and 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 our most recent annual report on Form 10-K. Examples of these risks include: potential environmental cleanup costs related to the Portland Harbor Superfund site; the impact of general economic conditions; volatile supply and demand conditions affecting prices and volumes in the markets for both our products and raw materials we purchase; difficulties associated with acquisitions and integration of acquired businesses; the impact of goodwill impairment charges; the impact of long-lived asset impairment charges; the realization of expected cost reductions related to restructuring initiatives; the inability of customers to fulfill their contractual obligations; the impact of foreign currency fluctuations; potential limitations on our ability to access capital resources and existing credit facilities; restrictions on our business and financial covenants under our bank credit agreement; the impact of the consolidation in the steel industry; the impact of imports of foreign steel into the U.S.; inability to realize expected benefits from investments in technology; freight rates and availability of transportation; impact of equipment upgrades and failures on production; product liability claims; the impact of impairment of our deferred tax assets; costs associated with compliance with environmental regulations; the adverse impact of climate change; inability to obtain or renew business licenses and permits; compliance with greenhouse gas emission regulations; reliance on employees subject to collective bargaining agreements; and the impact of the underfunded status of multiemployer plans in which we participate.
CONTACT:
Schnitzer Steel Industries, Inc.
Investor Relations:
Alexandra
Deignan, 646-278-9711
adeignan@schn.com
or
Media Relations:
Tom
Zelenka, 503-323-2821
tzelenka@schn.com
or
Company Info:
www.schnitzersteel.com
ir@schn.com