Schnitzer Announces Second Quarter Fiscal 2017 Preliminary Results and Earnings Date
─ Second Quarter Earnings Conference Call 11:30 a.m. Eastern April 6,
2017 ─
PORTLAND, Ore.--(BUSINESS WIRE)--Mar. 22, 2017--
Schnitzer Steel Industries, Inc. (Nasdaq: SCHN) today announced
preliminary results for its second quarter ended February 28, 2017.
Schnitzer expects second quarter earnings per share from continuing
operations to be in the range of $0.37 - $0.40 and adjusted earnings per
share to be in the range of $0.34 - $0.37. This expected performance
compares favorably to results from continuing operations in the prior
year second quarter of a loss per share of $1.48 and an adjusted loss
per share of $0.25, and in the first quarter of fiscal 2017 of a loss
per share of $0.05 and an adjusted loss per share of $0.03. For a
reconciliation of adjusted results to U.S. GAAP, see the table provided
in the Non-GAAP Financial Measures section.
For the second quarter of fiscal 2017, Auto and Metals Recycling (AMR)
is expected to more than double its operating income compared to the
first quarter, delivering operating income in the range of $25 - $27
million, or operating income per ferrous ton of $29 - $31, driven by a
combination of higher selling prices, metal spread expansion, and
sustained benefits from our cost savings and productivity initiatives.
Average ferrous selling prices are expected to be approximately 27%
higher sequentially and 47% higher than the prior year quarter. Ferrous
sales volumes are expected to be approximately 2% higher sequentially
and 16% higher than the prior year quarter. AMR’s expected second
quarter results include an estimated $4 million favorable impact from
average inventory accounting which compares to an adverse impact of $2
million and $1 million in the first quarter and prior year quarter,
respectively.
In the Steel Manufacturing Business, operating performance was impacted
by higher beginning inventory costs following the major equipment
upgrade in the first quarter, increased raw material costs which rose
faster than selling prices, and continued high levels of imports. These
factors are expected to contribute to an operating loss of approximately
$2 million for the second quarter, an improvement of approximately $1
million sequentially. Finished steel average selling prices are expected
to increase approximately 5% sequentially and 3% from the prior year
quarter. Sales volumes are expected to be approximately 5% higher
sequentially and 4% lower from the prior year quarter.
The Company expects to deliver an estimated $6 million of higher
benefits from its targeted cost reductions and productivity initiatives
in the second quarter as compared to the prior year quarter.
Consolidated financial performance is expected to include Corporate
expense of approximately $10 million, an increase sequentially and
year-over-year primarily due to higher incentive compensation expense
reflecting improved financial performance. The Company’s effective tax
rate is expected to be approximately 5%. Total debt was $209 million as
of the end of the second quarter.
The preliminary information provided above is based on the Company’s
current estimate of its financial results for the second quarter ended
February 28, 2017 and remains subject to change based on final review of
the Company’s second quarter financial results.
Schnitzer will report its second quarter fiscal 2017 financial results
on Thursday, April 6, 2017 and will webcast a conference call to discuss
the performance at 11:30 a.m. Eastern on the same day. The webcast of
the call and the accompanying slide presentation may be accessed on
Schnitzer’s website under the Investor section Event Calendar at www.schnitzersteel.com/events.
The call will be hosted by Tamara L. Lundgren, President and Chief
Executive Officer, and Richard D. Peach, Senior Vice President, Chief
Financial Officer and Chief of Corporate Operations.
Replay Information
Toll Free Dial: (855) 859-2056
Toll Free International Dial: (404) 537-3406
Conference ID: 76694580
Replay Available: 04/06/2017 to 4/11/2017
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 with
approximately 5 million annual retail visits. The Company’s steel
manufacturing business produces finished steel products, including
rebar, wire rod and other specialty products. The Company began
operations in 1906 in Portland, Oregon.
Non-GAAP Financial Measures
This press release contains expected performance based on adjusted
diluted earnings per share from continuing operations attributable to
SSI, which is a non-GAAP financial measure as defined under SEC rules.
As required by SEC rules, the Company has provided reconciliations of
this measure 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 our results
from business operations excluding adjustments for a goodwill impairment
charge, other asset impairment charges, restructuring charges and other
exit-related activities, recoveries related to the resale or
modification of previously contracted shipments, and income tax expense
(benefits) associated with 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 of the
resale or modification of the terms, each at significantly lower prices
due to sharp declines in selling prices, of certain
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, are reported
within SG&A expense in the quarterly statements of operations and are
also excluded from the measure. This non-GAAP financial measure should
be considered in addition to, but not as a substitute for, the most
directly comparable U.S. GAAP measure.
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Diluted Earnings (Loss) Per Share From
Continuing Operations Attributable to SSI
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Quarter
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2Q17
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1Q17
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2Q16
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High
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Low
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Income (loss) per share from continuing operations attributable to
SSI
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$
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0.40
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$
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0.37
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$
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(0.05
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)
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$
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(1.48
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)
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Goodwill impairment charge, per share
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—
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—
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—
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0.33
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Other asset impairment charges, per share
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—
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—
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0.01
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0.68
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Restructuring charges and other exit-related activities, per share
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(0.02
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)
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(0.02
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)
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0.01
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0.19
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Recoveries related to the resale or modification of previously
contracted shipments, per share
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(0.01
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)
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(0.01
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)
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(0.01
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)
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—
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Income tax expense (benefit) allocated to adjustments, per share(1)
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—
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—
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—
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0.03
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Adjusted diluted earnings per share from continuing operations
attributable to SSI(2)
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$
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0.37
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$
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0.34
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$
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(0.03
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)
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$
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(0.25
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)
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(1)
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Income tax allocated to the aggregate adjustments reconciling
reported and adjusted diluted earnings (loss) per share from
continuing operations attributable to SSI is determined based on a
tax provision calculated with and without the adjustments.
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(2)
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May not foot due to rounding.
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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; the
Company’s outlook or 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 “outlook,
” “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 Part II of our Quarterly Report 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 the 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
and other claims; the impact of current or future 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/20170322005374/en/
Source: Schnitzer Steel Industries, Inc.
Schnitzer Steel Industries, Inc.
Investor Relations:
Alexandra
Deignan, 646-278-9711
[email protected]
www.schnitzersteel.com