Schnitzer Steel Industries, Inc. (Nasdaq: SCHN) today reported adjusted earnings per share of $0.09 and earnings per share of $0.03 for its fiscal 2013 third quarter ended May 31, 2013. This compares to adjusted earnings per share of $0.36 and earnings per share of $0.32 in the second quarter of 2013. Adjusted results for the third quarter exclude a $2 million, or $0.06 per share, restructuring charge associated with cost reduction initiatives announced in August 2012. Third quarter results were adversely impacted by average inventory accounting which significantly reduced operating income in our Metals Recycling Business by approximately $10 million, or $9 per ton, as compared to the second quarter. The Company's results in the second quarter included $0.10 per share of discrete tax benefits. The Company generated $45 million in operating cash flow during the third quarter and our total debt to total capital ratio at the end of the third quarter approximated the second quarter.
Ferrous export selling prices declined steadily throughout the third quarter, with market prices at the end of May approximately $50 per ton lower than at the end of the second quarter of fiscal 2013 driven primarily by lower export demand. The combination of declining selling prices, constrained supply, adverse impacts of average inventory accounting and lower tax benefits resulted in sequentially lower consolidated net income.
Subsequent to the third quarter, we acquired our first Auto Parts store in Rhode Island which is located near our existing Metals Recycling facilities. This new store adds to our supply chain in the Northeast, increasing our combined regional presence to 16 facilities.
|($ in millions, except per share amounts)|
|Adjusted Operating Income (1)||$||9||$||13||(30||)%||$||22||(59||)%|
|Net Income attributable to SSI||$||1||$||9||(91||)%||$||11||(93||)%|
|Restructuring Charges, net of tax||1||1||49||%||—||NM|
|Adjusted Net Income attributable to SSI (1)||$||2||$||10||(76||)%||$||11||(79||)%|
|Net Income per share attributable to SSI||$||0.03||$||0.32||(91||)%||$||0.40||(92||)%|
|Restructuring Charges, net of tax, per share||0.06||0.04||50||%||—||NM|
|Adjusted diluted EPS attributable to SSI (1)(2)||$||0.09||$||0.36||(75||)%||$||0.40||(78||)%|
|(1) Adjusted for restructuring charges. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.|
|(2) Second quarter of fiscal 2013 included tax benefits of $3 million, or $0.10 per share, relating to the release of a valuation allowance which had been recorded in the first quarter of fiscal 2013 and other discrete tax benefits.|
|NM = Not meaningful|