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Schnitzer Reports Fourth Quarter And Full Year Fiscal 2012 Financial Results

Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) today reported adjusted diluted earnings per share of $0.10, excluding a $5 million pre-tax restructuring charge ($0.12 per diluted share) associated with initiatives announced in August. Including the restructuring charge, the Company reported a loss per share of $(0.02) for the fourth quarter ended August 31, 2012. This compares with diluted earnings per share of $1.31 for the fourth quarter of fiscal 2011. For the 2012 fiscal year, Schnitzer reported full year revenues of $3.3 billion, compared to $3.5 billion in fiscal 2011, and adjusted diluted earnings per share of $1.11, excluding the fourth quarter restructuring charge, compared to $4.23 in fiscal 2011. Including the restructuring charge, reported diluted earnings per share were $0.99 for fiscal 2012. Fourth quarter financial results exceeded the Company's recent market outlook primarily due to the achievement of higher than anticipated operational performance in August in our Metals Recycling and Auto Parts businesses.

Our quarterly financial performance was adversely impacted by a rapid decline in selling prices at the beginning of the quarter while the supply of scrap continued to be constrained by weak US GDP growth. As a result of these conditions, average inventory costs did not decline as quickly as cash purchase costs for raw materials, resulting in margin compression. Average inventory costs adversely impacted consolidated operating income by approximately $30 million compared to the third quarter, with nearly two-thirds of this impact affecting our Metals Recycling Business.

Summary Results
($ in millions, except per share amounts)
  Quarter     Year
4Q12     3Q12     4Q11 2012     2011 % Chg
Revenues $ 762 $ 880 $ 1,081 $ 3,341 $ 3,459 (3 )%
Operating Income (Loss) $ (1 ) $ 22 $ 56 $ 54 $ 186 (71 )%
Restructuring Charges 5       5    
Adjusted Operating Income (1) $ 4   $ 22   $ 56   $ 59   $ 186   (68 )%
Net Income (Loss) attributable to SSI $ $ 11 $ 37 $ 27 $ 118 (77 )%
Restructuring Charges, net of tax 3       3    
Adjusted Net Income attributable to SSI (1)(2) $ 3   $ 11   $ 37   $ 31   $ 118   (74 )%
Net Income (Loss) per share attributable to SSI $ (0.02 ) $ 0.40 $ 1.31 $ 0.99 $ 4.23 (77 )%
Restructuring Charges, net of tax, per share 0.12      


Adjusted diluted EPS attributable to SSI (1) $ 0.10   $ 0.40   $ 1.31   $ 1.11   $ 4.23   (74 )%
(1) Adjusted for restructuring charges taken in 4Q12. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
(2) Numbers may not foot due to rounding

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