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Schnitzer Reports First Quarter 2013 Financial Results

Schnitzer Steel Industries, Inc. (Nasdaq:SCHN) today reported adjusted operating income of $3 million, an adjusted loss per share of $0.02 and a loss per share of $0.06 for its fiscal 2013 first quarter ended November 30, 2012. Adjusted results for the quarter exclude a $2 million pre-tax restructuring charge associated with cost reduction initiatives announced in August 2012. All three of the Company's business segments generated positive operating income. Reported results for the first quarter include the adverse impact of a noncash valuation allowance on deferred tax assets of approximately $2 million, which equates to $0.06 per share, and the $2 million restructuring charge, which equates to $0.04 per share. In the fourth quarter of 2012, the Company reported a loss per share of $0.02.

During the first quarter, export and domestic sales prices for recycled ferrous metals dropped approximately $50 per ton from August levels driven by significantly lower domestic utilization rates and weak global economic conditions which continued to adversely impact overall steel demand. In addition, the supply of scrap continued to be constrained by low US GDP growth, and supply volumes were negatively impacted by the lower price environment. The combination of declining trend in selling prices, the impact of constrained supply volumes on production costs and the timing of shipments resulted in lower sales volumes and compressed margins during the quarter.
 
Summary Results
($ in millions, except per share amounts)
  Quarter
1Q13   4Q12   Change   1Q12   Change
Revenues $ 593 $ 762 (22 )% $ 812 (27 )%
 
Operating Income (Loss) $ 1 $ (1 ) NM $ 15 (92 )%
Restructuring Charges 2   5   (68 )%    
Adjusted Operating Income (1) $ 3 $ 4 (23 )% $ 15 (81 )%
 
Net Income (Loss) attributable to SSI $ (2 ) $ NM $ 7 NM
Restructuring Charges, net of tax 1   3   (67 )%    
Adjusted Net Income (Loss) attributable to SSI (1) $ (1 ) $ 3 NM $ 7 NM
 
Net Income (Loss) per share attributable to SSI $ (0.06 ) $ (0.02 ) NM $ 0.25 NM
Restructuring Charges, net of tax, per share 0.04   0.12   (67 )%    
Adjusted diluted EPS attributable to SSI (1) $ (0.02 ) $ 0.10 NM $ 0.25 NM
 
(1) Adjusted for restructuring charges. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
NM = Not meaningful
 

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