Schnitzer Reports Second Quarter 2014 Financial Results

Schnitzer Steel Industries, Inc. (Nasdaq: SCHN) today reported adjusted earnings per share of $0.13 and earnings per share of $0.07 for its fiscal 2014 second quarter ended February 28, 2014. Adjusted results for the second quarter exclude $3 million, or $0.06 per share, of restructuring, other exit-related and asset impairment charges. In the second quarter of fiscal 2013, the Company reported adjusted earnings per share of $0.36 and earnings per share of $0.32 which included a release of deferred tax valuation allowances and other discrete tax benefits.

Our Metals Recycling Business delivered a substantial increase in adjusted operating income per ferrous ton of $11 compared to $1 in the previous quarter. Stronger ferrous selling prices early in the second quarter, and benefits from our productivity improvement and cost reduction programs more than offset the adverse impacts of weaker export demand and severe winter weather. Our Auto Parts Business experienced seasonally weaker retail sales which were further impacted by extreme weather conditions in the Midwest and on the East Coast. Our Steel Manufacturing Business achieved a sequential increase in profitability as it continued to benefit from steady demand for construction products on the West Coast and from production efficiencies.

The Company previously announced a target of $30 million of savings, 70% of which were to be achieved by the end of fiscal 2014. These savings are tracking ahead of schedule with $6 million achieved in the second quarter. The Company has identified an additional $10 million of annualized savings, primarily within selling, general and administrative activities, which increases our overall savings target to $40 million, of which we expect to achieve 70% by the end of fiscal 2014.
Summary Results
($ in millions, except per share amounts)
2Q14   1Q14   2Q13
Revenues $ 626 $ 588 $ 662
Operating Income (Loss) $ 7 $ (4 ) $ 11
Other Asset Impairment Charges 1
Restructuring Charges 2   2   2
Adjusted Operating Income (Loss) (1) $ 10 $ (2 ) $ 13
Net Income (Loss) attributable to SSI $ 2 $ (6 ) $ 9
Adjusted Net Income (Loss) attributable to SSI (1) $ 3 $ (5 ) $ 10
Net Income (Loss) per share attributable to SSI $ 0.07 $ (0.23 ) $ 0.32
Adjusted diluted EPS attributable to SSI (1) $ 0.13 $ (0.18 ) $ 0.36

(1) See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.

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