Schnitzer Reports Fourth Quarter and Fiscal 2016 Financial Results
PORTLAND, Ore.--(BUSINESS WIRE)--Oct. 25, 2016--
Schnitzer Steel Industries, Inc. (Nasdaq: SCHN) today reported financial
results for its fourth quarter and fiscal year ended August 31, 2016.
The Company reported earnings per share from continuing operations of
$0.59 for the fourth quarter, including a benefit from an insurance
reimbursement of approximately $0.21 per share. Adjusted earnings per
share from continuing operations of $0.60 excludes asset impairment
charges, a net gain from restructuring and other exit-related
activities, recoveries on previously contracted shipments, and income
tax benefits associated with these adjustments. For the third quarter of
fiscal 2016, reported earnings per share from continuing operations was
$0.41 and adjusted earnings per share from continuing operations was
$0.46. For the fourth quarter of fiscal 2015, reported earnings per
share from continuing operations was $0.42 and adjusted earnings per
share from continuing operations was $0.31.
For the fourth quarter, operating income in the Auto and Metals
Recycling (AMR) business increased 29% year over year as benefits from
cost reduction and productivity initiatives more than offset the adverse
impact of lower selling prices and sales volumes. Although the fourth
quarter represented the highest quarterly ferrous and nonferrous sales
volumes in fiscal 2016, during the quarter prices for recycled metals
fell sharply in June before stabilizing in the second half of the
quarter. As a result, the AMR fourth quarter results included an
estimated adverse impact from average inventory accounting of $3
million. In the Steel Manufacturing Business (SMB), fourth quarter
operating income was positive, but results were lower than the prior
year fourth quarter primarily due to the adverse impact of imports on
selling prices and volumes. In the fourth quarter, the Company generated
positive operating cash flow, leading to a year over year 16% reduction
in total debt.
"Our fourth quarter performance continued to demonstrate the benefits of
our cost reduction and productivity initiatives which significantly
contributed to our improved operating margins, despite a year over year
decline in prices and volumes as weak global conditions persisted," said
Tamara Lundgren, President and Chief Executive Officer. "Our higher
profitability and working capital efficiency generated positive
operating cash flow in fiscal 2016, enabling us to reduce our debt to
its lowest level since fiscal 2011 while continuing to return capital to
our shareholders. Going forward, our capital allocation priorities and
strong balance sheet provide us with the flexibility and financial
strength to take advantage of evolving market opportunities and further
increase shareholder value," added Lundgren.
|
Summary Results
|
($ in millions, except per share amounts)
|
|
|
|
|
Quarter
|
|
|
Year
|
|
|
|
4Q16
|
|
|
4Q15
|
|
|
3Q16
|
|
|
2016
|
|
|
2015
|
Revenues
|
|
|
$
|
391
|
|
|
|
$
|
457
|
|
|
|
$
|
352
|
|
|
|
$
|
1,353
|
|
|
|
$
|
1,915
|
|
Operating income (loss)
|
|
|
$
|
18
|
|
|
|
$
|
9
|
|
|
|
$
|
15
|
|
|
|
$
|
(8
|
)
|
|
|
$
|
(196
|
)
|
Goodwill impairment charge
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9
|
|
|
|
141
|
|
Other asset impairment charges
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21
|
|
|
|
45
|
|
Restructuring charges and other exit-related activities
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
1
|
|
|
|
7
|
|
|
|
13
|
|
Resale or modification of previously contracted shipments, net of
recoveries
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
7
|
|
Adjusted operating income(1)(2)
|
|
|
$
|
19
|
|
|
|
$
|
10
|
|
|
|
$
|
15
|
|
|
|
$
|
28
|
|
|
|
$
|
11
|
|
Net income (loss) attributable to SSI
|
|
|
$
|
16
|
|
|
|
$
|
11
|
|
|
|
$
|
11
|
|
|
|
$
|
(19
|
)
|
|
|
$
|
(197
|
)
|
Net income (loss) from continuing operations attributable to SSI
|
|
|
$
|
16
|
|
|
|
$
|
12
|
|
|
|
$
|
11
|
|
|
|
$
|
(18
|
)
|
|
|
$
|
(190
|
)
|
Adjusted net income from continuing operations attributable to SSI(1)
|
|
|
$
|
17
|
|
|
|
$
|
9
|
|
|
|
$
|
13
|
|
|
|
$
|
19
|
|
|
|
$
|
4
|
|
Diluted earnings (loss) per share attributable to SSI
|
|
|
$
|
0.58
|
|
|
|
$
|
0.39
|
|
|
|
$
|
0.40
|
|
|
|
$
|
(0.71
|
)
|
|
|
$
|
(7.29
|
)
|
Diluted earnings (loss) per share from continuing operations
attributable to SSI
|
|
|
$
|
0.59
|
|
|
|
$
|
0.42
|
|
|
|
$
|
0.41
|
|
|
|
$
|
(0.66
|
)
|
|
|
$
|
(7.03
|
)
|
Adjusted diluted EPS from continuing operations attributable to SSI(1)
|
|
|
$
|
0.60
|
|
|
|
$
|
0.31
|
|
|
|
$
|
0.46
|
|
|
|
$
|
0.69
|
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
|
(2) May not foot due to rounding.
|
|
Auto and Metals Recycling
AMR segment results and operating statistics reflect integrated auto and
metals recycling operations for all periods presented.
|
Summary of Auto and Metals Recycling Results
|
($ in millions, except selling prices and data per ton; Fe
volumes 000s long tons; NFe volumes Ms LB)
|
|
|
|
|
Quarter
|
|
|
Year
|
|
|
|
4Q16
|
|
|
4Q15
|
|
|
3Q16
|
|
|
2016
|
|
|
2015
|
Total revenues
|
|
|
$
|
343
|
|
|
|
$
|
403
|
|
|
|
$
|
307
|
|
|
|
$
|
1,173
|
|
|
|
$
|
1,716
|
|
Ferrous revenues
|
|
|
$
|
211
|
|
|
|
$
|
235
|
|
|
|
$
|
195
|
|
|
|
$
|
709
|
|
|
|
$
|
1,098
|
|
Ferrous volumes (000s LT)
|
|
|
914
|
|
|
|
929
|
|
|
|
832
|
|
|
|
3,289
|
|
|
|
3,708
|
|
Avg. net ferrous sales prices ($/LT)(1)
|
|
|
$
|
209
|
|
|
|
$
|
231
|
|
|
|
$
|
215
|
|
|
|
$
|
194
|
|
|
|
$
|
269
|
|
Nonferrous revenues(2)
|
|
|
$
|
103
|
|
|
|
$
|
140
|
|
|
|
$
|
80
|
|
|
|
$
|
340
|
|
|
|
$
|
488
|
|
Nonferrous volumes (Ms LB)(3)
|
|
|
153
|
|
|
|
176
|
|
|
|
122
|
|
|
|
510
|
|
|
|
585
|
|
Avg. net nonferrous sales prices ($/LB)(1)(3)
|
|
|
$
|
0.59
|
|
|
|
$
|
0.71
|
|
|
|
$
|
0.59
|
|
|
|
$
|
0.59
|
|
|
|
$
|
0.75
|
|
Cars purchased for retail (000s)
|
|
|
92
|
|
|
|
88
|
|
|
|
79
|
|
|
|
319
|
|
|
|
337
|
|
Operating income (loss)(4)
|
|
|
$
|
20
|
|
|
|
$
|
16
|
|
|
|
$
|
27
|
|
|
|
$
|
23
|
|
|
|
$
|
(164
|
)
|
Operating income (loss) per Fe ton
|
|
|
$
|
22
|
|
|
|
$
|
17
|
|
|
|
$
|
32
|
|
|
|
$
|
7
|
|
|
|
$
|
(44
|
)
|
Adjusted operating income (loss)(5)
|
|
|
$
|
20
|
|
|
|
$
|
16
|
|
|
|
$
|
27
|
|
|
|
$
|
49
|
|
|
|
$
|
28
|
|
Adjusted operating income per Fe ton
|
|
|
$
|
21
|
|
|
|
$
|
17
|
|
|
|
$
|
32
|
|
|
|
$
|
15
|
|
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Sales prices are shown net of freight.
|
(2) An adjustment of certain intrasegment items was made between
nonferrous revenue and retail and other revenue for the quarter
ended May 31, 2016 to conform with the presentation for the quarter
ended August 31, 2016. The adjustment had no impact on previously
reported earnings.
|
(3) Excludes PGM metals in catalytic converters.
|
(4) Operating income (loss) does not include the impact of
restructuring charges and other exit-related activities.
|
(5) See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
|
|
Volumes: Both ferrous and nonferrous sales volumes in the
fourth quarter represented the highest quarterly shipments in fiscal
2016. Compared to the prior year fourth quarter, ferrous sales volumes
of 914 thousand tons and nonferrous sales volumes of 153 million pounds
decreased 2% and 13%, respectively. Sequentially, ferrous sales volumes
in the fourth quarter increased 10%, primarily due to higher export
demand. Nonferrous sales volumes increased sequentially 25% due to
increased production levels and timing of shipments. Cars purchased in
the fourth quarter by our auto stores increased 5% year over year and
16% sequentially, primarily reflecting improved supply flows.
Export customers accounted for 64% of total ferrous sales volumes in the
fourth quarter. Our ferrous and nonferrous products were shipped to 17
countries in the fourth quarter.
Pricing: Ferrous export market prices fell sharply in June
by approximately $100 per ton before stabilizing in the latter half of
the quarter. Domestic market prices softened throughout the quarter
mainly due to lower U.S. steel mill utilization rates. Sequentially, the
average price for fourth quarter ferrous net sales decreased $6 per ton,
or 3%. Average nonferrous sales prices in the fourth quarter
approximated third quarter levels. Compared to the prior year fourth
quarter, lower prices for both ferrous and nonferrous reflected
generally weaker global demand.
Margins: Operating income in the fourth quarter was $20
million. Performance in the fourth quarter compared favorably to
operating income of $16 million in the prior year quarter as increased
benefits from cost reduction and productivity initiatives of $6 million
more than offset lower volumes and prices. Operating income was lower
sequentially, with the third quarter including an estimated $3 million
of benefits from average inventory accounting compared to an estimated
adverse impact of $3 million in the fourth quarter. In the prior year
fourth quarter, average inventory accounting was an estimated adverse
impact of $5 million.
Steel Manufacturing Business
Summary of Steel Manufacturing Business Results
|
($ in millions, except selling prices; volume 000s of short tons)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
|
Year
|
|
|
|
4Q16
|
|
|
4Q15
|
|
|
3Q16
|
|
|
2016
|
|
|
2015
|
Revenues
|
|
|
$
|
69
|
|
|
|
$
|
92
|
|
|
|
$
|
71
|
|
|
|
$
|
270
|
|
|
|
$
|
375
|
|
Operating income
|
|
|
$
|
1
|
|
|
|
$
|
6
|
|
|
|
$
|
1
|
|
|
|
$
|
4
|
|
|
|
$
|
20
|
|
Adjusted operating income(1)
|
|
|
$
|
3
|
|
|
|
$
|
6
|
|
|
|
$
|
1
|
|
|
|
$
|
6
|
|
|
|
$
|
20
|
|
Avg. net sales prices ($/ST)
|
|
|
$
|
528
|
|
|
|
$
|
600
|
|
|
|
$
|
501
|
|
|
|
$
|
522
|
|
|
|
$
|
639
|
|
Finished goods sales volumes
|
|
|
123
|
|
|
|
145
|
|
|
|
133
|
|
|
|
488
|
|
|
|
540
|
|
Rolling mill utilization
|
|
|
71
|
%
|
|
|
74
|
%
|
|
|
53
|
%
|
|
|
63
|
%
|
|
|
73
|
%
|
|
(1) See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
|
|
Volumes: Finished steel sales volumes in the fourth
quarter of 123 thousand tons decreased 8% sequentially and 15% from the
prior year quarter, primarily due to increased competition from lower
priced imports on the West Coast.
Pricing: Average net sales prices for finished steel
products increased 5% from the third quarter, reflecting higher priced
shipments in the first half of the quarter. Average selling prices
decreased 12% from the prior year fourth quarter mainly due to the
impact of lower priced imports and lower raw material costs.
Margins: Operating income of $1 million was adversely
impacted by a $2 million asset impairment charge in the fourth quarter
of fiscal 2016 associated with the implementation of our production
efficiency initiatives. Adjusted operating income of $3 million,
excluding the asset impairment charge, improved sequentially primarily
due to higher average selling prices and increased rolling mill
utilization of 71%, partially offset by the adverse impact of lower
finished steel sales volumes. Compared to the prior year fourth quarter,
adjusted operating income was lower primarily due to the adverse impact
of finished steel imports on average selling prices and volumes.
Fiscal 2016 Cost Reduction and Productivity
Initiatives
In the fourth quarter, we continued to successfully execute on the
additional cost reduction and productivity initiatives announced in
April 2016, generating incremental savings compared to the prior year
quarter of approximately $6 million. The cumulative impact of these
benefits in fiscal 2016 contributed to significantly improved operating
results in AMR and a 13% reduction in our SG&A costs year over year. In
fiscal 2016, we delivered a total of $14 million of the targeted $30
million of annual benefits announced in April 2016 and we expect to
achieve substantially all of these targeted annual benefits in fiscal
2017.
In connection with cost reduction initiatives, the Company incurred
restructuring charges and other exit-related costs of $7 million in
fiscal 2016.
Corporate Items
During fiscal 2016, the Company generated $99 million in operating cash
flow, including $48 million in the fourth quarter. Total debt of $193
million at the end of the fourth quarter was $36 million lower than at
the end of fiscal 2015. During fiscal 2016, the Company invested $35
million in capital expenditures and returned $24 million to shareholders
through dividend payments and share repurchases.
Consolidated financial performance in the fourth quarter included a
benefit in Corporate of $6 million from an insurance reimbursement of
legal and other defense costs which were incurred in previous years and
were associated with environmental matters.
The Company's effective tax rate was an expense of 4.7% for fiscal year
2016 which was lower than the federal statutory rate primarily due to
changes in valuation allowances.
Analysts' Conference Call: Fourth Quarter of Fiscal 2016
A conference call and slide presentation to discuss results will be held
today, October 25, 2016, at 11:30 a.m. ET 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 at www.schnitzersteel.com.
Summary financial data is provided in the following pages. The slides
and appendix will be available prior to the call on the website.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
FINANCIAL HIGHLIGHTS
|
(in thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Year Ended
|
|
|
|
August 31, 2016
|
|
|
August 31, 2015
|
|
|
May 31, 2016
|
|
|
August 31, 2016
|
|
|
August 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auto and Metals Recycling:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ferrous revenues
|
|
|
$
|
210,954
|
|
|
|
$
|
235,415
|
|
|
|
$
|
194,961
|
|
|
|
$
|
709,454
|
|
|
|
$
|
1,098,225
|
|
Nonferrous revenues(1)
|
|
|
|
102,545
|
|
|
|
|
139,993
|
|
|
|
|
79,823
|
|
|
|
|
340,025
|
|
|
|
|
488,036
|
|
Retail and other revenues
|
|
|
|
29,905
|
|
|
|
|
27,875
|
|
|
|
|
32,067
|
|
|
|
|
123,553
|
|
|
|
|
130,035
|
|
Total Auto and Metals Recycling revenues
|
|
|
|
343,404
|
|
|
|
|
403,283
|
|
|
|
|
306,851
|
|
|
|
|
1,173,032
|
|
|
|
|
1,716,296
|
|
Steel Manufacturing Business
|
|
|
|
68,689
|
|
|
|
|
91,754
|
|
|
|
|
70,924
|
|
|
|
|
269,905
|
|
|
|
|
375,037
|
|
Intercompany sales eliminations
|
|
|
|
(21,429
|
)
|
|
|
|
(38,020
|
)
|
|
|
|
(26,171
|
)
|
|
|
|
(90,394
|
)
|
|
|
|
(175,934
|
)
|
Total revenues
|
|
|
$
|
390,664
|
|
|
|
$
|
457,017
|
|
|
|
$
|
351,604
|
|
|
|
$
|
1,352,543
|
|
|
|
$
|
1,915,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMR operating income (loss)
|
|
|
$
|
20,071
|
|
|
|
$
|
15,619
|
|
|
|
$
|
26,870
|
|
|
|
$
|
22,626
|
|
|
|
$
|
(164,031
|
)
|
SMB operating income
|
|
|
$
|
936
|
|
|
|
$
|
6,029
|
|
|
|
$
|
1,246
|
|
|
|
$
|
3,734
|
|
|
|
$
|
20,378
|
|
Consolidated operating income (loss)
|
|
|
$
|
18,376
|
|
|
|
$
|
8,717
|
|
|
|
$
|
14,886
|
|
|
|
$
|
(7,842
|
)
|
|
|
$
|
(195,529
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted AMR operating income(2)
|
|
|
$
|
19,516
|
|
|
|
$
|
15,619
|
|
|
|
$
|
26,731
|
|
|
|
$
|
49,156
|
|
|
|
$
|
28,292
|
|
Adjusted SMB operating income(2)
|
|
|
|
3,160
|
|
|
|
|
6,029
|
|
|
|
|
1,246
|
|
|
|
|
5,958
|
|
|
|
|
20,378
|
|
Adjusted segment operating income(2)(3)
|
|
|
|
22,676
|
|
|
|
|
21,648
|
|
|
|
|
27,977
|
|
|
|
|
55,114
|
|
|
|
|
48,670
|
|
Corporate expense
|
|
|
|
(4,360
|
)
|
|
|
|
(10,279
|
)
|
|
|
|
(10,669
|
)
|
|
|
|
(29,646
|
)
|
|
|
|
(35,315
|
)
|
Intercompany eliminations
|
|
|
|
753
|
|
|
|
|
(1,609
|
)
|
|
|
|
(2,019
|
)
|
|
|
|
2,304
|
|
|
|
|
(2,808
|
)
|
Adjusted operating income(2)
|
|
|
|
19,069
|
|
|
|
|
9,760
|
|
|
|
|
15,289
|
|
|
|
|
27,772
|
|
|
|
|
10,547
|
|
Goodwill impairment charge
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(8,845
|
)
|
|
|
|
(141,021
|
)
|
Other asset impairment charges
|
|
|
|
(2,224
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(20,682
|
)
|
|
|
|
(45,119
|
)
|
Restructuring charges and other exit-related activities
|
|
|
|
976
|
|
|
|
|
(1,043
|
)
|
|
|
|
(542
|
)
|
|
|
|
(6,781
|
)
|
|
|
|
(13,008
|
)
|
Resale or modification of previously contracted shipments, net of
recoveries
|
|
|
|
555
|
|
|
|
|
—
|
|
|
|
|
139
|
|
|
|
|
694
|
|
|
|
|
(6,928
|
)
|
Total operating income (loss)
|
|
|
$
|
18,376
|
|
|
|
$
|
8,717
|
|
|
|
$
|
14,886
|
|
|
|
$
|
(7,842
|
)
|
|
|
$
|
(195,529
|
)
|
|
(1) An adjustment of certain intrasegment items was made between
nonferrous revenue and retail and other revenue for the quarter
ended May 31, 2016 to conform with the presentation for the
quarter ended August 31, 2016. The adjustment had no impact on
previously reported earnings.
|
(2) See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
|
(3) Segment operating income (loss) does not include the impact of
restructuring charges and other exit-related activities.
|
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
(in thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Year Ended
|
|
|
|
August 31,
|
|
|
August 31,
|
|
|
May 31,
|
|
|
August 31,
|
|
|
August 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2016
|
|
|
2015
|
Revenues
|
|
|
$
|
390,664
|
|
|
|
$
|
457,017
|
|
|
|
$
|
351,604
|
|
|
|
$
|
1,352,543
|
|
|
|
$
|
1,915,399
|
|
Cost of goods sold
|
|
|
336,726
|
|
|
|
403,702
|
|
|
|
294,738
|
|
|
|
1,175,988
|
|
|
|
1,742,678
|
|
Selling, general and administrative
|
|
|
35,194
|
|
|
|
43,896
|
|
|
|
41,696
|
|
|
|
148,908
|
|
|
|
170,592
|
|
Income from joint ventures
|
|
|
(880
|
)
|
|
|
(341
|
)
|
|
|
(258
|
)
|
|
|
(819
|
)
|
|
|
(1,490
|
)
|
Goodwill impairment charge
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,845
|
|
|
|
141,021
|
|
Other asset impairment charges
|
|
|
2,224
|
|
|
|
—
|
|
|
|
—
|
|
|
|
20,682
|
|
|
|
45,119
|
|
Restructuring charges and other exit-related activities
|
|
|
(976
|
)
|
|
|
1,043
|
|
|
|
542
|
|
|
|
6,781
|
|
|
|
13,008
|
|
Operating income (loss)
|
|
|
18,376
|
|
|
|
8,717
|
|
|
|
14,886
|
|
|
|
(7,842
|
)
|
|
|
(195,529
|
)
|
Interest expense
|
|
|
(2,110
|
)
|
|
|
(2,147
|
)
|
|
|
(2,905
|
)
|
|
|
(8,889
|
)
|
|
|
(9,191
|
)
|
Other income (expense), net
|
|
|
462
|
|
|
|
1,246
|
|
|
|
(81
|
)
|
|
|
1,226
|
|
|
|
4,256
|
|
Income (loss) from continuing operations before income taxes
|
|
|
16,728
|
|
|
|
7,816
|
|
|
|
11,900
|
|
|
|
(15,505
|
)
|
|
|
(200,464
|
)
|
Income tax benefit (expense)
|
|
|
75
|
|
|
|
4,444
|
|
|
|
(95
|
)
|
|
|
(735
|
)
|
|
|
12,615
|
|
Income (loss) from continuing operations
|
|
|
16,803
|
|
|
|
12,260
|
|
|
|
11,805
|
|
|
|
(16,240
|
)
|
|
|
(187,849
|
)
|
Loss from discontinued operations, net of tax
|
|
|
(143
|
)
|
|
|
(913
|
)
|
|
|
(116
|
)
|
|
|
(1,348
|
)
|
|
|
(7,227
|
)
|
Net income (loss)
|
|
|
16,660
|
|
|
|
11,347
|
|
|
|
11,689
|
|
|
|
(17,588
|
)
|
|
|
(195,076
|
)
|
Net income attributable to noncontrolling interests
|
|
|
(528
|
)
|
|
|
(615
|
)
|
|
|
(689
|
)
|
|
|
(1,821
|
)
|
|
|
(1,933
|
)
|
Net income (loss) attributable to SSI
|
|
|
$
|
16,132
|
|
|
|
$
|
10,732
|
|
|
|
$
|
11,000
|
|
|
|
$
|
(19,409
|
)
|
|
|
$
|
(197,009
|
)
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per share from continuing operations attributable to
SSI
|
|
|
$
|
0.60
|
|
|
|
$
|
0.43
|
|
|
|
$
|
0.41
|
|
|
|
$
|
(0.66
|
)
|
|
|
$
|
(7.03
|
)
|
Loss per share from discontinued operations
|
|
|
(0.01
|
)
|
|
|
(0.03
|
)
|
|
|
—
|
|
|
|
(0.05
|
)
|
|
|
(0.27
|
)
|
Net income (loss) per share attributable to SSI(1)
|
|
|
$
|
0.59
|
|
|
|
$
|
0.40
|
|
|
|
$
|
0.40
|
|
|
|
$
|
(0.71
|
)
|
|
|
$
|
(7.29
|
)
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per share from continuing operations attributable to
SSI
|
|
|
$
|
0.59
|
|
|
|
$
|
0.42
|
|
|
|
$
|
0.41
|
|
|
|
$
|
(0.66
|
)
|
|
|
$
|
(7.03
|
)
|
Loss per share from discontinued operations
|
|
|
(0.01
|
)
|
|
|
(0.03
|
)
|
|
|
—
|
|
|
|
(0.05
|
)
|
|
|
(0.27
|
)
|
Net income (loss) per share attributable to SSI(1)
|
|
|
$
|
0.58
|
|
|
|
$
|
0.39
|
|
|
|
$
|
0.40
|
|
|
|
$
|
(0.71
|
)
|
|
|
$
|
(7.29
|
)
|
Weighted average number of common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
27,333
|
|
|
|
27,032
|
|
|
|
27,261
|
|
|
|
27,229
|
|
|
|
27,010
|
|
Diluted
|
|
|
27,623
|
|
|
|
27,439
|
|
|
|
27,327
|
|
|
|
27,229
|
|
|
|
27,010
|
|
Dividends declared per common share
|
|
|
$
|
0.1875
|
|
|
|
$
|
0.1875
|
|
|
|
$
|
0.1875
|
|
|
|
$
|
0.750
|
|
|
|
$
|
0.750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) May not foot due to rounding.
|
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
SELECTED OPERATING STATISTICS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
1Q16
|
|
|
2Q16
|
|
|
3Q16
|
|
|
4Q16
|
|
|
2016
|
|
|
1Q15
|
|
|
2Q15
|
|
|
3Q15
|
|
|
4Q15
|
|
|
2015
|
Auto and Metals Recycling(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ferrous selling prices ($/LT)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
$
|
180
|
|
|
|
$
|
161
|
|
|
|
$
|
210
|
|
|
|
$
|
216
|
|
|
|
$
|
193
|
|
|
|
$
|
330
|
|
|
|
$
|
293
|
|
|
|
$
|
235
|
|
|
|
$
|
239
|
|
|
|
$
|
275
|
|
Export
|
|
|
$
|
179
|
|
|
|
$
|
174
|
|
|
|
$
|
218
|
|
|
|
$
|
205
|
|
|
|
$
|
195
|
|
|
|
$
|
319
|
|
|
|
$
|
286
|
|
|
|
$
|
236
|
|
|
|
$
|
225
|
|
|
|
$
|
265
|
|
Average
|
|
|
$
|
179
|
|
|
|
$
|
169
|
|
|
|
$
|
215
|
|
|
|
$
|
209
|
|
|
|
$
|
194
|
|
|
|
$
|
323
|
|
|
|
$
|
290
|
|
|
|
$
|
235
|
|
|
|
$
|
231
|
|
|
|
$
|
269
|
|
Ferrous sales volume (LT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
290,170
|
|
|
|
282,200
|
|
|
|
322,315
|
|
|
|
329,911
|
|
|
|
1,224,596
|
|
|
|
379,770
|
|
|
|
372,408
|
|
|
|
342,812
|
|
|
|
376,910
|
|
|
|
1,471,900
|
|
Export
|
|
|
515,109
|
|
|
|
454,924
|
|
|
|
509,686
|
|
|
|
584,373
|
|
|
|
2,064,092
|
|
|
|
604,683
|
|
|
|
415,765
|
|
|
|
663,456
|
|
|
|
552,573
|
|
|
|
2,236,477
|
|
Total
|
|
|
805,279
|
|
|
|
737,124
|
|
|
|
832,001
|
|
|
|
914,284
|
|
|
|
3,288,688
|
|
|
|
984,453
|
|
|
|
788,173
|
|
|
|
1,006,268
|
|
|
|
929,483
|
|
|
|
3,708,377
|
|
Nonferrous average price ($/LB)(2)(3)
|
|
|
$
|
0.63
|
|
|
|
$
|
0.59
|
|
|
|
$
|
0.59
|
|
|
|
$
|
0.59
|
|
|
|
$
|
0.59
|
|
|
|
$
|
0.81
|
|
|
|
$
|
0.77
|
|
|
|
$
|
0.71
|
|
|
|
$
|
0.71
|
|
|
|
$
|
0.75
|
|
Nonferrous sales volume (000s LB)(3)
|
|
|
111,077
|
|
|
|
123,675
|
|
|
|
122,244
|
|
|
|
153,287
|
|
|
|
510,283
|
|
|
|
142,661
|
|
|
|
123,672
|
|
|
|
143,073
|
|
|
|
176,029
|
|
|
|
585,435
|
|
Car purchase volume (000s)(5)
|
|
|
77
|
|
|
|
70
|
|
|
|
79
|
|
|
|
92
|
|
|
|
319
|
|
|
|
92
|
|
|
|
78
|
|
|
|
79
|
|
|
|
88
|
|
|
|
337
|
|
Auto stores at end of quarter
|
|
|
55
|
|
|
|
55
|
|
|
|
53
|
|
|
|
52
|
|
|
|
52
|
|
|
|
56
|
|
|
|
56
|
|
|
|
55
|
|
|
|
55
|
|
|
|
55
|
|
Steel Manufacturing Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average sales prices ($/ST)(2)(4)
|
|
|
$
|
554
|
|
|
|
$
|
504
|
|
|
|
$
|
501
|
|
|
|
$
|
528
|
|
|
|
$
|
522
|
|
|
|
$
|
688
|
|
|
|
$
|
658
|
|
|
|
$
|
618
|
|
|
|
$
|
600
|
|
|
|
$
|
639
|
|
Sales volume (ST)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rebar
|
|
|
85,899
|
|
|
|
71,935
|
|
|
|
84,193
|
|
|
|
88,591
|
|
|
|
330,618
|
|
|
|
79,065
|
|
|
|
74,928
|
|
|
|
100,413
|
|
|
|
94,773
|
|
|
|
349,179
|
|
Coiled products
|
|
|
32,482
|
|
|
|
33,742
|
|
|
|
42,168
|
|
|
|
29,891
|
|
|
|
138,283
|
|
|
|
40,361
|
|
|
|
49,403
|
|
|
|
35,477
|
|
|
|
45,176
|
|
|
|
170,417
|
|
Merchant bar and other
|
|
|
4,757
|
|
|
|
3,974
|
|
|
|
6,490
|
|
|
|
4,080
|
|
|
|
19,301
|
|
|
|
6,245
|
|
|
|
4,567
|
|
|
|
4,780
|
|
|
|
4,796
|
|
|
|
20,388
|
|
Total
|
|
|
123,138
|
|
|
|
109,651
|
|
|
|
132,851
|
|
|
|
122,562
|
|
|
|
488,202
|
|
|
|
125,671
|
|
|
|
128,898
|
|
|
|
140,670
|
|
|
|
144,745
|
|
|
|
539,984
|
|
Rolling mill utilization
|
|
|
68
|
%
|
|
|
61
|
%
|
|
|
53
|
%
|
|
|
71
|
%
|
|
|
63
|
%
|
|
|
72
|
%
|
|
|
76
|
%
|
|
|
69
|
%
|
|
|
74
|
%
|
|
|
73
|
%
|
|
(1) Ferrous and nonferrous volume and price data has been recast to
reflect the combined auto and metals recycling operations for all
periods presented.
|
(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) Excludes billet sales.
|
(5) Cars purchased by auto stores only.
|
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands)
|
(Unaudited)
|
|
|
|
August 31, 2016
|
|
|
August 31, 2015
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
26,819
|
|
|
$
|
22,755
|
Accounts receivable, net
|
|
|
113,952
|
|
|
111,492
|
Inventories
|
|
|
132,972
|
|
|
156,532
|
Other current assets
|
|
|
26,063
|
|
|
31,586
|
Total current assets
|
|
|
299,806
|
|
|
322,365
|
Property, plant and equipment, net
|
|
|
392,820
|
|
|
427,554
|
Goodwill and other assets
|
|
|
198,803
|
|
|
212,380
|
Total assets
|
|
|
$
|
891,429
|
|
|
$
|
962,299
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Short-term borrowings
|
|
|
$
|
8,374
|
|
|
$
|
584
|
Other current liabilities
|
|
|
125,280
|
|
|
119,862
|
Total current liabilities
|
|
|
133,654
|
|
|
120,446
|
Long-term debt, net of current maturities
|
|
|
184,144
|
|
|
227,572
|
Other long-term liabilities
|
|
|
72,199
|
|
|
75,730
|
Equity:
|
|
|
|
|
|
|
Total Schnitzer Steel Industries, Inc. ("SSI") shareholders' equity
|
|
|
497,721
|
|
|
534,535
|
Noncontrolling interests
|
|
|
3,711
|
|
|
4,016
|
Total equity
|
|
|
501,432
|
|
|
538,551
|
Total liabilities and equity
|
|
|
$
|
891,429
|
|
|
$
|
962,299
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
This press release contains performance based on adjusted net income
(loss) and adjusted diluted earnings per share from continuing
operations attributable to SSI and adjusted consolidated, AMR and SMB
operating income (loss), which are non-GAAP financial measures as
defined under SEC rules. As required by SEC rules, the Company has
provided reconciliations of these measures for each period discussed to
the most directly comparable U.S. GAAP measure. Management believes that
providing adjusted non-GAAP financial measures provides a meaningful
presentation of the Company's results from its business operations
excluding adjustments for goodwill impairment charges, other asset
impairment charges, the non-cash write-off of debt issuance costs as a
result of the renewal of the Company's credit facility in April 2016,
restructuring charges and other exit-related activities, and income tax
expense (benefit) associated with these adjustments, items which are not
related to the Company's underlying business operational performance,
and improves the period-to-period comparability of the Company's results
from its underlying business operations. These measures also exclude the
impact on operating results in fiscal 2015 from the resale or
modification of the terms, each at significantly lower prices, of
certain previously contracted bulk ferrous shipments for delivery during
the first and second quarters of fiscal 2015. Due to the sharp declines
in selling prices that occurred in the first and second quarters of
fiscal 2015, the revised prices associated with these shipments were
significantly lower than the prices in the original sales contracts
entered into between August and November 2014. Recoveries resulting from
settlements with the original contract parties, which began in the third
quarter of fiscal 2016, 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
|
|
|
Year
|
|
|
|
4Q16
|
|
|
4Q15
|
|
|
3Q16
|
|
|
2016
|
|
2015
|
Consolidated operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
$
|
18
|
|
|
|
$
|
9
|
|
|
|
$
|
15
|
|
|
|
$
|
(8
|
)
|
|
$
|
(196
|
)
|
Goodwill impairment charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9
|
|
|
141
|
|
Other asset impairment charges
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21
|
|
|
45
|
|
Restructuring charges and other exit-related activities
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
1
|
|
|
|
7
|
|
|
13
|
|
Resale or modification of certain previously contracted shipments,
net of recoveries
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
7
|
|
Adjusted operating income(1)
|
|
|
$
|
19
|
|
|
|
$
|
10
|
|
|
|
$
|
15
|
|
|
|
$
|
28
|
|
|
$
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMR operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
$
|
20
|
|
|
|
$
|
16
|
|
|
|
$
|
27
|
|
|
|
$
|
23
|
|
|
$
|
(164
|
)
|
Goodwill impairment charge
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9
|
|
|
141
|
|
Other asset impairment charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18
|
|
|
44
|
|
Resale or modification of certain previously contracted shipments,
net of recoveries
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
7
|
|
Adjusted AMR operating income(1)
|
|
|
$
|
20
|
|
|
|
$
|
16
|
|
|
|
$
|
27
|
|
|
|
$
|
49
|
|
|
$
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SMB operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
1
|
|
|
|
$
|
6
|
|
|
|
$
|
1
|
|
|
|
$
|
4
|
|
|
$
|
20
|
|
Other asset impairment charges
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
—
|
|
Adjusted SMB operating income(1)
|
|
|
$
|
3
|
|
|
|
$
|
6
|
|
|
|
$
|
1
|
|
|
|
$
|
6
|
|
|
$
|
20
|
|
|
(1) May not foot due to rounding.
|
|
|
Net income (loss) from continuing operations attributable to SSI
|
($ in millions)
|
|
|
Quarter
|
|
|
Year
|
|
|
|
4Q16
|
|
|
4Q15
|
|
|
3Q16
|
|
|
2016
|
|
|
2015
|
Net income (loss) from continuing operations attributable to SSI
|
|
|
$
|
16
|
|
|
|
$
|
12
|
|
|
|
$
|
11
|
|
|
|
$
|
(18
|
)
|
|
|
$
|
(190
|
)
|
Goodwill impairment charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9
|
|
|
|
141
|
|
Other asset impairment charges
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21
|
|
|
|
45
|
|
Restructuring charges and other exit-related activities
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
1
|
|
|
|
7
|
|
|
|
13
|
|
Resale or modification of certain previously contracted shipments,
net of recoveries
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
7
|
|
Non-cash write-off of debt issuance costs
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
1
|
|
|
|
—
|
|
Income tax expense (benefit) allocated to adjustments(2)
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
|
1
|
|
|
|
(13
|
)
|
Adjusted net income from continuing operations attributable to SSI(1)
|
|
|
$
|
17
|
|
|
|
$
|
9
|
|
|
|
$
|
13
|
|
|
|
$
|
19
|
|
|
|
$
|
4
|
|
|
(1) May not foot due to rounding.
|
(2) Income tax allocated to adjustments reconciling Reported and
Adjusted net income (loss) from continuing operations attributable
to SSI and diluted earnings per share from continuing operations
attributable to SSI is determined based on a tax provision
calculated with and without the adjustments.
|
|
|
Diluted earnings per share attributable to SSI
|
($ per share)
|
|
|
Quarter
|
|
|
Year
|
|
|
|
4Q16
|
|
|
4Q15
|
|
|
3Q16
|
|
|
2016
|
|
|
2015
|
Net income (loss) per share attributable to SSI
|
|
|
$
|
0.58
|
|
|
|
$
|
0.39
|
|
|
|
$
|
0.40
|
|
|
|
$
|
(0.71
|
)
|
|
|
$
|
(7.29
|
)
|
Less: Loss per share from discontinued operations attributable to SSI
|
|
|
(0.01
|
)
|
|
|
(0.03
|
)
|
|
|
—
|
|
|
|
(0.05
|
)
|
|
|
(0.27
|
)
|
Net income (loss) per share from continuing operations attributable
to SSI(1)
|
|
|
0.59
|
|
|
|
0.42
|
|
|
|
0.41
|
|
|
|
(0.66
|
)
|
|
|
(7.03
|
)
|
Goodwill impairment charges, per share
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.32
|
|
|
|
5.22
|
|
Other asset impairment charges, per share
|
|
|
0.08
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.76
|
|
|
|
1.67
|
|
Restructuring charges and other exit-related activities, per share
|
|
|
(0.04
|
)
|
|
|
0.04
|
|
|
|
0.02
|
|
|
|
0.25
|
|
|
|
0.48
|
|
Resale or modification of previously contracted shipments net of
recoveries, per share
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
(0.01
|
)
|
|
|
(0.03
|
)
|
|
|
0.26
|
|
Non-cash write-off of debt issuance costs, per share
|
|
|
—
|
|
|
|
—
|
|
|
|
0.03
|
|
|
|
0.03
|
|
|
|
—
|
|
Income tax expense (benefit) allocated to adjustments, per share(2)
|
|
|
(0.01
|
)
|
|
|
(0.15
|
)
|
|
|
0.01
|
|
|
|
0.02
|
|
|
|
(0.47
|
)
|
Adjusted diluted EPS from continuing operations attributable to SSI(1)
|
|
|
$
|
0.60
|
|
|
|
$
|
0.31
|
|
|
|
$
|
0.46
|
|
|
|
$
|
0.69
|
|
|
|
$
|
0.13
|
|
|
(1) May not foot due to rounding.
|
(2) Income tax allocated to adjustments reconciling Reported and
Adjusted net income (loss) from continuing operations attributable
to SSI and diluted earnings per share from continuing operations
attributable to SSI is determined based on a tax provision
calculated with and without the adjustments.
|
|
|
|
|
|
|
|
|
|
|
|
Debt, net of cash
|
|
|
|
|
|
|
|
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
August 31, 2016
|
|
|
August 31, 2015
|
|
|
May 31, 2016
|
Short-term borrowings
|
|
|
$
|
8,374
|
|
|
$
|
584
|
|
|
$
|
648
|
Long-term debt, net of current maturities
|
|
|
|
184,144
|
|
|
|
227,572
|
|
|
|
202,070
|
Total debt
|
|
|
|
192,518
|
|
|
|
228,156
|
|
|
|
202,718
|
Less: cash and cash equivalents
|
|
|
|
26,819
|
|
|
|
22,755
|
|
|
|
7,018
|
Total debt, net of cash
|
|
|
$
|
165,699
|
|
|
$
|
205,401
|
|
|
$
|
195,700
|
|
|
|
|
|
|
|
|
|
|
About Schnitzer Steel Industries, Inc.
Schnitzer Steel Industries, Inc. is one of the largest manufacturers and
exporters of recycled metal products in the United States 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 and steel
manufacturing. The Company's steel manufacturing business produces
finished steel long products, including rebar, wire rod and other
specialty products. The Company began operations in 1906 in Portland,
Oregon.
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 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; expected
results, including pricing, sales volumes and profitability; strategic
direction; 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; 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
“believes,” “expects,” “anticipates,” “intends,” “assumes,” “estimates,”
“evaluates,” “may,” "will," “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 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” in our most recent annual report on
Form 10-K and in our quarterly reports on Form 10-Q. Examples of these
risks include: potential environmental cleanup costs related to the
Portland Harbor Superfund site; the cyclicality and impact of general
economic conditions; instability in international markets; 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 joint
venture investment impairment charges; the realization of expected
benefits or cost reductions associated with productivity improvement and
restructuring initiatives; difficulties associated with acquisitions and
integration of acquired businesses; customer fulfillment of their
contractual obligations; changes 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 a cybersecurity incident; costs
associated with compliance with environmental regulations; 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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20161025005601/en/
Source: Schnitzer Steel Industries, Inc.
Schnitzer Steel Industries, Inc.
Investor Relations:
Alexandra
Deignan, 646-278-9711
adeignan@schn.com
or
Company
Info:
www.schnitzersteel.com
ir@schn.com