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Schnitzer Reports Second Quarter Fiscal 2012 Financial Results

Corporate Items

The Company's effective tax rate for the second quarter was 31.5%, the same as the first quarter. The effective tax rate for the fiscal year is expected to be approximately 34%.

Total debt decreased from the first quarter by $82 million to $414 million, reflecting reduced inventories primarily due to increased shipments.

Analysts' Conference Call: Second Quarter of Fiscal 2012

A conference call and slide presentation to discuss results will be held today, April 5, 2012, at 11:30 a.m. EST 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 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   For the Six Months Ended

February 29,

2012 (1)

November 30,

2011 (1)

 

February 28,

2011 (1)

February 29,

2012 (1)

February 28,

2011 (1)

 
REVENUES:
 
Metals Recycling Business:
Ferrous sales $ 612,603 $ 578,024 $ 502,289 $ 1,190,627 $ 983,157
Nonferrous sales 158,997 142,290 130,441 301,287 238,713
Other sales 10,333   8,124   4,298   18,457   6,866  
TOTAL MRB SALES 781,933 728,438 637,028 1,510,371 1,228,736
 
Auto Parts Business 78,232 84,054 72,533 162,285 139,214
Steel Manufacturing Business 84,523 79,902 70,068 164,424 133,703
Intercompany sales eliminations (58,076 ) (80,218 ) (57,787 ) (138,293 ) (104,707 )
TOTAL $ 886,612   $ 812,176   $ 721,842   $ 1,698,787   $ 1,396,946  
 
 
OPERATING INCOME:
 
Metals Recycling Business $ 19,952 $ 13,099 $ 41,691 $ 33,051 $ 67,225
Auto Parts Business 8,708 10,442 15,957 19,150 29,996
Steel Manufacturing Business (868 ) 1,218 (711 ) 349 (2,746 )
Corporate expense (9,589 ) (10,296 ) (11,100 ) (19,885 ) (21,663 )
Intercompany eliminations (216 ) 507   100   290   1,565  
TOTAL $ 17,987   $ 14,970   $ 45,937   $ 32,955   $ 74,377  
 
(1) Excludes discontinued operations

 
SCHNITZER STEEL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(Unaudited)
 
  For the Three Months Ended   For the Six Months Ended

February 29,

2012

 

November 30,

2011

 

February 28,

2011

February 29,

2012

 

February 28,

2011

Revenues $ 886,612   $ 812,176   $ 721,842   $ 1,698,787   $ 1,396,946  
Cost of goods sold 817,087 742,215 632,856 1,559,303 1,235,402
Selling, general and administrative 52,370 55,992 44,033 108,362 88,908
Income from joint ventures (832 ) (1,001 ) (984 ) (1,833 ) (1,741 )
Operating income 17,987 14,970 45,937 32,955 74,377
Other income (expense):
Interest income 72 163 234 234 289
Interest expense (3,472 ) (3,271 ) (1,157 ) (6,743 ) (1,755 )
Other income (expense), net 545   (556 ) 2,854   (11 ) 3,015  
Total other income (expense) (2,855 ) (3,664 ) 1,931   (6,520 ) 1,549  
Income from continuing operations before income taxes 15,132 11,306 47,868 26,435 75,926
Income tax expense (4,767 ) (3,561 ) (15,745 ) (8,328 ) (24,909 )
Income from continuing operations 10,365 7,745 32,123 18,107 51,017
Income from discontinued operations, net of tax     11     34  
Net income 10,365 7,745 32,134 18,107 51,051
Net income attributable to noncontrolling interests (735 ) (727 ) (1,309 ) (1,462 ) (2,432 )
Net income attributable to SSI $ 9,630   $ 7,018   $ 30,825   $ 16,645   $ 48,619  
Basic: (2)
Income per share from continuing operations attributable to SSI (1) $ 0.35 $ 0.26 $ 1.12 $ 0.61 $ 1.76
Income per share from discontinued operations          
Net income per share attributable to SSI $ 0.35   $ 0.26   $ 1.12   $ 0.61   $ 1.76  
Diluted: (2)
Income per share from continuing operations attributable to SSI (1) $ 0.35 $ 0.25 $ 1.10 $ 0.60 $ 1.74
Income per share from discontinued operations          
Net income per share attributable to SSI $ 0.35   $ 0.25   $ 1.10   $ 0.60   $ 1.74  
Weighted average number of common shares:
Basic 27,509 27,451 27,627 27,480 27,595
Diluted 27,781 27,715 27,944 27,734 27,918
Dividends declared per common share $ 0.017 $ 0.017 $ 0.017 $ 0.034 $ 0.034
 
(1) Excludes income attributable to noncontrolling interests
(2) Net income used in EPS calculation:
Income from continuing operations $ 10,365 $ 7,745 $ 32,123 $ 18,107 $ 51,017
Net income attributable to noncontrolling interests (735 ) (727 ) (1,309 ) (1,462 ) (2,432 )
Income from continuing operations attributable to SSI 9,630 7,018 30,814 16,645 48,585
Income from discontinued operations, net of tax     11     34  
Net income attributable to SSI $ 9,630   $ 7,018   $ 30,825   $ 16,645   $ 48,619  

 
SCHNITZER STEEL INDUSTRIES, INC.
SELECTED OPERATING STATISTICS
(Unaudited)
 
      Fiscal YTD           Fiscal YTD
1Q12   2Q12   2012 1Q11   2Q11   3Q11   4Q11   2011
Metals Recycling Business
Ferrous Processing Selling Prices ($/LT) (1)
Steel Manufacturing Business $429 $432 $430 $350 $408 $442 $435 $412
Other domestic 413 421 417 315 399 422 410 389
Exports 436   420   428   359   424   443   449   421  
Average $432 $421 $426 $353 $419 $440 $443 $416
 
Ferrous Processing Sales Volume (LT)
SMB 135,512 90,510 226,022 90,537 95,774 122,238 95,351 403,900
Domestic 183,938 206,632 390,570 161,301 144,250 199,818 183,502 688,871
Export 912,939   1,055,237   1,968,176   979,063   860,005   1,142,156   1,254,708   4,235,932  
Total Processed 1,232,389 1,352,379 2,584,768 1,230,901 1,100,029 1,464,212 1,533,561 5,328,703
 
Nonferrous Average Price ($/LB) (1) $1.00 $0.91 $0.95 $0.94 $1.04 $1.12 $1.08 $1.06
 
Nonferrous Sales Volume (LB, in 000s) 137,243 168,545 305,788 111,495 121,498 144,505 191,062 568,560
 
Steel Manufacturing Business
Sales Prices ($/NT) (1) (2)
Average $722 $725 $724 $634 $687 $734 $721 $697
 
Sales Volume (NT) (2)
Rebar 62,487 51,141 113,628 63,668 51,569 45,494 61,411 222,142
Coiled Products 39,120 55,785 94,905 26,917 40,947 67,020 57,553 192,437
Merchant Bar and Other 5,030   5,097   10,127   7,071   6,322   5,811   5,290   24,494  
Total 106,637 112,023 218,660 97,656 98,838 118,325 124,254 439,073
 
Rolling mill utilization 60 % 54 % 57 % 48 % 52 % 68 % 57 % 56 %
 
Auto Parts Business
Number of self-service locations at end of quarter 50 51 51 45 50 50 50 50
Car purchase volumes (000) 85 84 169 82 81 93 97 353
 
(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)
     
February 29, 2012 August 31, 2011 February 28, 2011

Assets

Current assets:
Cash and cash equivalents $ 51,720 $ 49,462 $ 48,245
Accounts receivable, net 210,083 229,975 161,015
Inventories, net 324,818 335,120 356,559
Other current assets 55,859   39,442   38,975
Total current assets 642,480 653,999 604,794
 
Property, plant and equipment, net 552,851 555,284 488,328
 
Goodwill and other assets 678,456   680,886   566,668
 
Total assets $ 1,873,787   $ 1,890,169   $ 1,659,790

 

Liabilities and Equity

Current liabilities:
Short-term borrowings $ 668 $ 643 $ 700
Other current liabilities 185,872   232,670   190,595
Total current liabilities 186,540 233,313 191,295
 
Long-term debt 412,891 403,287 320,112
 
Other long-term liabilities 136,057 133,280 111,235
 
Redeemable noncontrolling interest 21,176 19,053
 
Equity:
Total SSI shareholders' equity 1,111,307 1,094,712 1,031,629
Noncontrolling interests 5,816   6,524   5,519
Total equity 1,117,123   1,101,236   1,037,148
Total liabilities and shareholders' equity $ 1,873,787   $ 1,890,169   $ 1,659,790




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