Schnitzer Steel Subsidiary Pick-N-Pull Acquires GreenLeaf Auto Recyclers
PORTLAND, Ore., Oct 03, 2005 (BUSINESS WIRE) -- Schnitzer Steel Industries, Inc. (Nasdaq:SCHN) today
announced that its subsidiary, Pick-N-Pull Auto Dismantlers
("Pick-N-Pull"), has acquired GreenLeaf Auto Recyclers, LLC
("GreenLeaf"), an auto dismantling and recycling business that sells
reclaimed auto parts primarily to collision and mechanical repair
shops. Pick-N-Pull, a leading self-service used auto parts retailer,
will add GreenLeaf's 22 locations to its existing network of 30
stores, significantly increasing its presence in the Southern, Eastern
and Midwestern United States.
"Our acquisition of GreenLeaf significantly expands Pick-N-Pull's
national retail footprint and represents our initial venture into the
substantial full-service segment of the recycled auto parts market
that services commercial customers. We believe there is excellent
growth potential in both the self-service and full-service markets,"
stated John D. Carter, Schnitzer Steel's President and Chief Executive
Officer. "As we swiftly integrate these stores with our existing
business, we intend to convert some to our very successful
self-service model while others will remain full-service or have
combined operations. Additionally, we will continue to evaluate the
effectiveness and synergies of individual GreenLeaf stores and
appropriately address incompatible locations. We anticipate that this
acquisition may have a modestly dilutive to neutral effect on earnings
in the first year and provide significant earnings growth in future
years."
Carter continued, "As we continue growing our metals recycling
business, these operations have the capacity and geographic
distribution to be significant sources of scrap metal to our existing
and future facilities in these regions."
The newly acquired locations are in Arizona, Florida, Georgia,
Illinois, Massachusetts, Michigan, Nevada, North Carolina, Ohio,
Virginia, and Texas. Prior to this announcement, Pick-N-Pull had
existing operations in nine states and two Canadian provinces that
serve more than four million retail customers and process more than
225,000 cars per year. The combined operations of Pick-N-Pull and
GreenLeaf will make Schnitzer Steel one of the largest suppliers of
used OEM (original equipment manufacturer) parts in the industry.
"We will leverage our proprietary technology, systems and other
resources to enhance these complementary operations," stated Tom
Klauer, President of Pick-N-Pull. "Also, we look forward to combining
the knowledge and expertise of GreenLeaf's talented management and
workforce with our own. Together, we will be able to provide an even
broader spectrum of parts offerings and superior customer service."
The total consideration paid to GreenLeaf for these operations was
$22.5 million, subject to a post-closing working capital adjustment.
In a related transaction, Pick-N-Pull purchased five parcels of real
estate and certain GreenLeaf debt obligations from Ford Motor Company.
GreenLeaf leased these parcels in connection with its business. Total
consideration for the property and the promissory notes was $21.5
million. The Company will discuss the GreenLeaf acquisition as part of
its fourth quarter results conference call on October 6, 2005.
Schnitzer Steel Industries, Inc. is one of the nation's largest
recyclers of ferrous metals, a used auto parts retailer with more than
50 locations across the U.S. and in Canada, and a manufacturer of
finished steel products. The Company has a significant metals presence
on both the West Coast and Northeastern seaboard, as well as a trading
business that principally sells recycled metal products in foreign
markets. In addition, the Company's steel mill has an annual
production capacity of approximately 700,000 tons of finished steel
products. For more information about Schnitzer Steel Industries, Inc.,
visit www.schnitzersteel.com.
Certain statements in this press release are "forward-looking
statements" within the meaning of U.S. federal securities laws. The
Company intends that these statements be covered by the safe harbors
created under these laws. In particular, this press release includes a
prediction that the GreenLeaf acquisition will be modestly dilutive to
neutral to the Company's earnings in the first year and provide
significant growth in future years. These forward-looking statements
are subject to risks, uncertainties, and other factors that could
cause actual results to differ materially from future results
expressed or implied by the forward-looking statements. The used auto
parts business, including the GreenLeaf stores, is subject to a number
of risks that could prevent the GreenLeaf stores from maintaining or
exceeding their current levels of profitability, such as volatile
supply and demand conditions affecting prices and volumes in the
markets for products, services, automobile feedstock and other raw
materials; local and worldwide economic conditions; increased
competition; weather; and business integration issues, all as
discussed in more detail under the heading "Factors That Could Affect
Future Results" in the Company's most recent quarterly report on Form
10-Q. One should understand that it is not possible to predict or
identify all factors that could cause actual results to differ from
the Company's forward looking statements. Moreover, many of these
factors and events are beyond the Company's ability to control or
predict. Given these uncertainties, readers are cautioned not to place
undue reliance on the forward-looking statements, which only speak as
of the date of this press release. The Company does not undertake any
obligation to release publicly any revisions to these forward-looking
statements to reflect events or circumstances after the date of this
press release or to reflect the occurrence of unanticipated events,
except as may be required under applicable securities laws.
SOURCE: Schnitzer Steel Industries, Inc.
Schnitzer Steel Industries, Inc.
Vice President, Asset and Business Integration
Kelly Lang, 503-224-9900
or
Gard & Gerber
David Dugan, 503-552-5008