Schnitzer Reports Fourth Quarter Fiscal 2013 Financial Results
Steel Manufacturing Business Reports Best Performance since Fiscal 2008
Additional Cost Savings and Productivity Improvements Planned for Metals Recycling Business in Fiscal 2014
Reported Results Include a Non-cash Goodwill Impairment and Other Charges in the Metals Recycling Business
Business Wire Schnitzer Steel Industries, Inc.
October 29, 2013 8:30 AM
PORTLAND, Ore.--(BUSINESS WIRE)--
Schnitzer Steel Industries, Inc. (SCHN) today reported an adjusted loss per share of $(0.51) for the fourth quarter ended August 31, 2013, excluding a non-cash goodwill impairment charge, other asset impairment charges, restructuring charges and tax valuation allowances. The Company reported a loss per share of $(10.82) for the fourth quarter ended August 31, 2013. This compares with an adjusted earnings per share of $0.11, excluding restructuring charges, and a reported loss per share of $(0.02) for the fourth quarter of fiscal 2012. Notwithstanding the significant impact to earnings as a result of the impairments and other charges, the Company generated positive operating cash flows of $38 million in the fourth quarter.
Challenging market conditions for recycled ferrous metals resulted in lower export selling prices and reduced sales volumes as compared to both the third quarter of fiscal 2013 and the fourth quarter of fiscal 2012. In addition, purchase prices for raw materials did not decrease as much as selling prices during the quarter due to constrained supply which contributed to operating margin compression in both our Metals Recycling and Auto Parts Businesses.
In the fourth quarter, our Metals Recycling Business took a non-cash goodwill impairment charge of $321 million and other asset impairment charges of $13 million. In the fourth quarter, MRB’s adjusted operating loss of $6 per ton excludes the non-cash goodwill impairment, other asset impairment charges and restructuring charges. MRB's adjusted operating income includes an estimated adverse impact of $12 per ton from a combination of average inventory costing and other items related to inventory valuations, costs associated with fire damage at two facilities and a bad debt expense from a customer bankruptcy.
Our Auto Parts Business generated operating margins of 7% in the fourth quarter, before the impact of new stores opened in fiscal 2013. APB's operating margin includes an adverse impact of approximately 400 basis points from average inventory costing. During the fourth quarter, APB incurred $2 million of operating losses related to the new sites added during fiscal 2013 which lowered APB's reported operating margin to 4%.
Our Steel Manufacturing Business reported its best fourth quarter and full year performance since fiscal 2008, generating $2 million of quarterly operating income driven largely by slowly improving demand leading to increased sales volumes and by productivity improvements.
During fiscal 2013, we implemented restructuring initiatives which reduced annual operating expenses by $25 million. These benefits were more than offset by the impact of adverse market conditions. In light of continued market challenges, we are implementing additional cost reduction and productivity improvement initiatives which are targeted to further reduce our annual operating expenses by $30 million with approximately 70% expected to benefit fiscal 2014 performance and the full benefits achieved in fiscal 2015. The additional savings, which are primarily in our Metals Recycling operations, are expected to result from a combination of reducing organizational layers, productivity improvements, procurement savings, internal synergies and other operating efficiencies. We anticipate incremental restructuring charges of $3 million to be incurred in fiscal 2014.
Consolidated Summary Results
($ in millions, except per share amounts)
Quarter Year
4Q13
3Q13
4Q12
2013
2012
Revenues $ 657 $ 710 $ 762 $ 2,622 $ 3,341
Operating Income (Loss) (348 ) 7 (1 ) (328 ) 54
Goodwill Impairment Charge 321 — — 321 —
Other Asset Impairment Charges 13 — — 13 —
Restructuring Charges 3 2 5 8 5
Adjusted Operating Income (Loss) (11 ) 9 4 14 59
Net Income (Loss) attributable to SSI (289 ) 1 — (281 ) 27
Adjusted Net Income (Loss) attributable to SSI(1) $ (14 ) $ 2 $ 3 $ (2 ) $ 31
Net Income (Loss) per share attributable to SSI $ (10.82 ) $ 0.03 $ (0.02 ) $ (10.56 ) $ 0.99
Adjusted diluted EPS attributable to SSI(1) $ (0.51 ) $ 0.09 $ 0.11 $ (0.07 ) $ 1.12
(1) Includes same adjustments, net of tax, as in adjusted operating income above as well as a valuation allowance on deferred tax assets of $29 million. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
Tamara Lundgren, President and Chief Executive Officer, commented on the Company’s results, “While each of our businesses is well positioned to achieve higher profitability when market conditions improve, this quarter was negatively impacted by a number of significant items and an adverse impact from average inventory costs. Notwithstanding the significant impact to reported earnings, we generated $38 million of operating cash flow in the fourth quarter and continued to invest in our business and to return capital to our shareholders through our quarterly dividend.”
Lundgren continued: "In fiscal 2013, we delivered $25 million of savings from reducing SG&A and production efficiencies which lowered our cost of goods sold. However, these benefits were offset by the adverse impact of weak market conditions. In fiscal 2014, we expect to deliver organic growth in each of our businesses and, in addition, we are targeting $30 million of additional savings. With our major capital projects completed, we also anticipate significantly lower capital spending in fiscal 2014.”
Lundgren concluded: “With slowly improving demand for steel driving increased sales volumes and with the benefits of productivity improvements, SMB delivered its best performance since fiscal 2008. Our focus in fiscal 2014 will be to continue to deliver cost savings and productivity improvements throughout the Company and to further leverage the synergies between APB and MRB, all of which we expect will make our Company stronger in the long-run. We are very gratified that, in light of the market environment that the Company is facing, our teams continue to do an unwavering and excellent job in serving our customers and our communities. It is their commitment to excellence that was reflected in our selection as “Scrap Company of the Year” by American Metal Market.”
Metals Recycling Business
Summary of Metals Recycling Business Results
($ in millions, except selling prices; Fe volumes 000s long tons; NFe volumes M lbs)
Quarter Year
4Q13 3Q13 4Q12 2013 2012
Total Revenues $ 535 $ 605 $ 652 $ 2,210 $ 2,949
Ferrous Revenues $ 398 $ 465 $ 485 $ 1,677 $ 2,298
Ferrous Volumes 1,088 1,164 1,178 4,309 5,115
Avg. Net Ferrous Sales Prices ($/LT)(1) $ 336 $ 367 $ 378 $ 358 $ 415
Nonferrous Revenues $ 129 $ 131 $ 158 $ 502 $ 614
Nonferrous Volumes 141 135 169 520 629
Avg. Net Nonferrous Sales Prices ($/lb)(1) $ 0.89 $ 0.94 $ 0.90 $ 0.93 $ 0.94
Operating Income (Loss)(2) $ (340 ) $ 9 $ 13 $ (312 ) $ 64
Goodwill Impairment 321 — — 321 —
Asset Impairment Charges 13 — — 13 —
Adjusted Operating Income (Loss)(3)(4) $ (6 ) $ 9 $ 13 $ 23 $ 64
(1) Sales prices are shown net of freight.
(2) Operating income (loss) does not include the impact of restructuring charges.
(3) See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
(4) Numbers may not foot due to rounding
Sales Volumes: Ferrous sales volumes of 1.1 million tons in the fourth quarter decreased 7% from the third quarter, primarily due to softer export demand. Nonferrous sales volumes of 141 million pounds increased 4% sequentially, primarily due to benefits from higher production levels and increased shipments in August.
Export customers accounted for 74% of total ferrous sales volumes in the fourth quarter. Our ferrous and nonferrous products were shipped to 14 countries, with Turkey, China and South Korea the top export destinations for ferrous shipments.
Pricing: Demand softened in the export markets in early June, driving average ferrous net sales prices in the fourth quarter down by $31 per ton, or 8%, from third quarter levels. Domestic selling prices were also lower sequentially, however an upward movement mid-quarter resulted in a lower overall decline as compared to export prices. Nonferrous prices decreased 5% sequentially in the fourth quarter, primarily due to lower commodity prices.
Margins: Adjusted operating loss per ferrous ton of $6 in the fourth quarter of fiscal 2013 reflected weaker export market conditions, including an estimated adverse impact of $12 per ton from a combination of average inventory costs and other items related to inventory valuations, costs associated with fire damage at two facilities and a bad debt expense related to a customer bankruptcy.
Auto Parts Business
Summary of Auto Parts Business Results
($ in millions, except locations)
Quarter Year
4Q13 3Q13 4Q12 2013 2012
Revenues $ 79 $ 86 $ 72 $ 313 $ 317
Operating Income(1)(2) $ 3 $ 8 $ 2 $ 25 $ 33
Car Purchase Volumes (000s) 94 95 81 356 339
Locations (end of quarter) 61 61 51 61 51
(1) Operating income does not include the impact of restructuring charges.
(2) See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
Revenues: Revenues in the fourth quarter decreased 8% sequentially resulting from a decline in commodity prices and seasonally lower admissions and part sales.
Margins: Operating margins of 7%, before the impact of new stores added in fiscal 2013, were compressed by lower commodity prices, an estimated adverse impact of approximately 400 basis points from average inventory costing, and retail seasonality. During the fourth quarter, APB incurred $2 million of operating losses related to the new sites added during fiscal 2013, including integration and startup costs, which lowered APB's reported operating margin to 4%. (See Non-GAAP Financial Measures for reconciliation to U.S. GAAP)
Steel Manufacturing Business
Summary of Steel Manufacturing Business Results
($ in millions, except selling prices; volume in thousands of short tons)
Quarter Year
4Q13 3Q13 4Q12 2013 2012
Revenues $ 96 $ 93 $ 90 $ 352 $ 333
Operating Income (Loss) $ 2 $ — $ (3 ) $ 7 $ (2 )
Avg. Net Sales Prices ($/ST) $ 667 $ 687 $ 685 $ 680 $ 715
Finished Goods Sales Volumes 138 125 126 488 447
Sales Volumes: Finished steel sales volumes of 138 thousand tons increased 10% from the third quarter as well as the prior year quarter due to higher demand for long products on the West Coast.
Pricing: Average net sales prices for finished steel products decreased 3% primarily due to the impact of lower scrap prices on selling prices for finished goods.
Margins: Operating income of $2 million resulted from improved demand for finished steel products, benefits from higher sales volumes and operational efficiencies arising from productivity improvements.
Cost Reductions
During fiscal 2013, SG&A was lower by 9%, or $19 million, as compared to the prior year, excluding $5 million of operating expenses related to new APB sites in fiscal 2013 and $2 million of environmental credits which benefited fiscal 2012. Including production efficiencies which reduced costs of goods sold, our cost reduction initiatives lowered annual pre-tax operating costs by $25 million in fiscal 2013. Total restructuring charges in fiscal 2013 were $8 million pre-tax, or approximately $0.20 of diluted earnings per share. During the fourth quarter, we incurred $3 million of restructuring charges, or approximately $0.05 of diluted earnings per share. The restructuring charges consisted primarily of cash severance costs from headcount reductions, contract termination costs, and other related costs.
An additional cost reduction program beginning in fiscal 2014 is targeted to further reduce operating expenses by $30 million, primarily in our Metals Recycling Business. We expect these cost reductions to include approximately $27 million from reduced production expenses within costs of goods sold and $3 million from reduced SG&A.
Fiscal Year 2013 Results
For fiscal 2013, Schnitzer reported full year revenues of $2.6 billion and adjusted loss per share of $(0.07). Reported loss per share was $(10.56) for fiscal 2013. This compares with fiscal 2012 revenues of $3.3 billion and adjusted diluted earnings per share of $1.12 and reported diluted earnings per share of $0.99.
During fiscal 2013, the Company invested $50 million in acquisitions, including the purchase of noncontrolling interests, and $90 million in capital expenditures and returned $20 million to shareholders through dividend payments.
The Company's effective tax rate for fiscal year 2013 was a benefit of 17% which was lower than the federal statutory rate primarily due to the recognition of a valuation allowance on deferred tax assets and the impact of the non-deductible portion of the goodwill impairment charge.
Analysts' Conference Call: Fourth Quarter of Fiscal 2013
A conference call and slide presentation to discuss results will be held today, October 29, 2013, at 11:30 a.m. EDT 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 is 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 Year Ended
August 31,
2013
May 31,
2013
August 31,
2012
August 31,
2013
August 31,
2012
REVENUES:
Metals Recycling Business:
Ferrous revenues $ 397,947 $ 465,194 $ 485,030 $ 1,677,035 $ 2,297,580
Nonferrous revenues 129,199 130,600 157,915 501,655 614,467
Other revenues 7,817 9,076 8,864 31,794 36,660
Total Metals Recycling Business revenues 534,963 604,870 651,809 2,210,484 2,948,707
Auto Parts Business 79,231 86,439 71,662 313,306 316,884
Steel Manufacturing Business 96,235 92,943 90,179 352,454 333,227
Intercompany sales eliminations (53,844 ) (73,957 ) (51,365 ) (254,333 ) (257,880 )
Total revenues $ 656,585 $ 710,295 $ 762,285 $ 2,621,911 $ 3,340,938
OPERATING INCOME (LOSS):
Adjusted Metals Recycling Business(1) $ (6,097 ) $ 8,789 $ 13,004 $ 22,504 $ 63,872
Auto Parts Business 3,191 8,273 1,611 24,539 33,304
Steel Manufacturing Business 2,169 (72 ) (2,683 ) 6,541 (2,081 )
Segment operating income (loss)(2) (737 ) 16,990 11,932 53,584 95,095
Corporate expense (10,188 ) (8,625 ) (8,875 ) (38,750 ) (37,512 )
Intercompany eliminations 299 695 588 (664 ) 1,097
Adjusted operating income (loss) (10,626 ) 9,060 3,645 14,170 58,680
Goodwill impairment charge (321,000 ) — — (321,000 ) —
Other asset impairment charges (13,053 ) — — (13,053 ) —
Restructuring charges (2,900 ) (1,873 ) (5,012 ) (7,906 ) (5,012 )
Total operating income (loss) $ (347,579 ) $ 7,187 $ (1,367 ) $ (327,789 ) $ 53,668
(1) Adjusted for goodwill impairment charge and other asset impairment charges. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
(2) Segment operating income (loss) does not include the impact of restructuring charges.
SCHNITZER STEEL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
For the Three Months Ended Fiscal Year Ended
August 31,
2013
May 31,
2013
August 31,
2012
August 31,
2013
August 31,
2012
Revenues $ 656,586 $ 710,295 $ 762,285 $ 2,621,911 $ 3,340,938
Cost of goods sold 620,457 652,263 712,434 2,415,391 3,079,716
Selling, general and administrative 47,388 49,390 46,668 193,533 205,178
Income from joint ventures (633 ) (418 ) (462 ) (1,183 ) (2,636 )
Goodwill impairment charge 321,000 — — 321,000 —
Other asset impairment charges 13,053 — — 13,053 —
Restructuring 2,900 1,873 5,012 7,906 5,012
Operating income (loss) (347,579 ) 7,187 (1,367 ) (327,789 ) 53,668
Interest expense (2,584 ) (2,788 ) (2,407 ) (9,743 ) (11,880 )
Other income (expense), net (332 ) 141 1,097 83 1,168
Income (loss) before income taxes (350,495 ) 4,540 (2,677 ) (337,449 ) 42,956
Income tax benefit (expense)
61,617 (2,986 ) 1,830 57,426 (14,039 )
Net income (loss) (288,878 ) 1,554 (847 ) (280,023 ) 28,917
Net income (loss) attributable to noncontrolling interests (356 ) (734 ) 362 (1,419 ) (1,513 )
Net income (loss) attributable to SSI $ (289,234 ) $ 820 $ (485 ) $ (281,442 ) $ 27,404
Income (loss) per share attributable to SSI - basic $ (10.82 ) $ 0.03 $ (0.02 ) $ (10.56 ) $ 1.00
Income (loss) per share attributable to SSI - diluted $ (10.82 ) $ 0.03 $ (0.02 ) $ (10.56 ) $ 0.99
Weighted average number of common shares:
Basic 26,733 26,671 26,777 26,656 27,317
Diluted 26,733 26,813 26,777 26,656 27,553
Dividends declared per common share $ 0.188 $ 0.188 $ 0.188 $ 0.750 $ 0.410
SCHNITZER STEEL INDUSTRIES, INC.
SELECTED OPERATING STATISTICS
(Unaudited)
Fiscal Year Fiscal Year
1Q13 2Q13 3Q13 4Q13 2013 1Q12 2Q12 3Q12 4Q12 2012
Metals Recycling Business
Ferrous Selling Prices ($/LT) (1)
Domestic $ 354 $ 363 $ 367 $ 346 $ 358 $ 420 $ 424 $ 414 $ 357 $ 406
Exports 360 374 367 332 359 436 420 427 384 417
Average $ 358 $ 372 $ 367 $ 336 $ 358 $ 432 $ 421 $ 424 $ 378 $ 415
Ferrous Sales Volume (LT)
Domestic 279,450 260,509 314,240 288,112 1,142,311 319,450 297,142 308,521 261,748 1,186,861
Export 675,212 842,509 849,991 799,644 3,167,356 912,939 1,055,237 1,044,063 915,927 3,928,166
Total Processed 954,662 1,103,018 1,164,231 1,087,756 4,309,667 1,232,389 1,352,379 1,352,584 1,177,675 5,115,027
Nonferrous Average Price ($/LB) (1) $ 0.95 $ 0.97 $ 0.94 $ 0.89 $ 0.93 $ 1.00 $ 0.91 $ 0.97 $ 0.90 $ 0.94
Nonferrous Sales Volume (LB, in 000s) 118,931 125,500 135,256 140,755 520,442 137,243 168,545 154,071 168,794 628,652
Steel Manufacturing Business
Sales Prices ($/ST) (1) (2)
Average $ 680 $ 690 $ 687 $ 667 $ 680 $ 722 $ 725 $ 734 $ 685 $ 715
Sales Volume (ST) (2)
Rebar 78,159 58,132 71,561 83,911 291,763 62,487 51,141 55,378 74,797 243,803
Coiled Products 45,533 32,130 46,088 46,334 170,085 39,120 55,785 42,753 45,103 182,761
Merchant Bar and Other 5,926 5,355 7,358 7,298 25,937 5,030 5,097 4,812 5,837 20,776
Total 129,618 95,617 125,007 137,543 487,785 106,637 112,023 102,943 125,737 447,340
Auto Parts Business
Car purchase volumes (000) 79 88 95 94 356 85 84 89 81 339
Number of self-service locations at end of quarter 51 59 61 61 61 50 51 51 51 51
(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)
August 31, 2013 August 31, 2012
Assets
Current Assets:
Cash and cash equivalents $ 13,481 $ 89,863
Accounts receivable, net 188,270 137,313
Inventories, net 236,049 246,992
Other current assets 29,430 42,651
Total current assets 467,230 516,819
Property, plant and equipment, net 564,426 564,185
Goodwill and other assets 373,856 682,569
Total assets $ 1,405,512 $ 1,763,573
Liabilities and Equity
Current liabilities:
Short-term borrowings $ 9,174 $ 683
Other current liabilities 156,960 178,159
Total current liabilities 166,134 178,842
Long-term debt, net of current maturities 372,663 334,629
Other long-term liabilities 85,516 142,158
Redeemable noncontrolling interest — 22,248
Equity:
Total Schnitzer Steel Industries, Inc. ("SSI") shareholders' equity 776,558 1,080,583
Noncontrolling interests 4,641 5,113
Total equity 781,199 1,085,696
Total liabilities and equity $ 1,405,512 $ 1,763,573
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures as defined under SEC rules such as adjusted operating income, adjusted net income attributable to SSI, adjusted diluted earnings per share attributable to SSI and the impact from new stores in our Auto Parts Business. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable U.S. GAAP measures. Management believes that each of the foregoing non-GAAP financial measures provides a meaningful presentation of the Company's results from its core underlying business operations excluding adjustments for goodwill and other impairment charges, restructuring charges, tax valuation allowances and startup costs that are not related to the Company's core underlying business operational performance and improves the period-to-period comparability of the Company's results from its core underlying business operations. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the most directly comparable U.S. GAAP measures.
Operating Income (Loss)
($ in millions) Quarter Year
4Q13 3Q13 4Q12 2013 2012
Consolidated Operating Income (Loss):
Operating Income (Loss) $ (348 ) $ 7 $ (1 ) $ (328 ) $ 54
Goodwill Impairment Charge 321 — — 321 —
Other Asset Impairment Charges 13 — — 13 —
Restructuring Charges 3 2 5 8 5
Adjusted Operating Income (Loss) $ (11 ) $ 9 $ 4 $ 14 $ 59
MRB Operating Income (Loss):
Operating Income (Loss) $ (340 ) $ 9 $ 13 $ (312 ) $ 64
Goodwill Impairment Charge 321 — — 321 —
Other Asset Impairment Charges 13 — — 13 —
Adjusted Operating Income (Loss)(1) $ (6 ) $ 9 $ 13 $ 23 $ 64
(1) Numbers may not foot due to rounding
Net Income (Loss) attributable to SSI
($ in millions) Quarter Year
4Q13 3Q13 4Q12 2013 2012
Net Income (Loss) attributable to SSI $ (289 ) $ 1 $ — $ (281 ) $ 27
Goodwill impairment charge, net of tax 254 — — 254 —
Other asset impairment charges, net of tax 9 — — 9 —
Restructuring charges, net of tax 1 1 3 5 3
Valuation allowance on deferred tax assets 11 — — 11 —
Adjusted Net Income (Loss) attributable to SSI(1) $ (14 ) $ 2 $ 3 $ (2 ) $ 31
(1) Numbers may not foot due to rounding
Diluted Earnings per share attributable to SSI
($ per share) Quarter Year
4Q13 3Q13 4Q12 2013 2012
Net Income (Loss) per share attributable to SSI $ (10.82 ) $ 0.03 $ (0.02 ) $ (10.56 ) $ 0.99
Goodwill impairment charge, net of tax, per share 9.52 — — 9.55 —
Other asset impairment charges, net of tax, per share 0.33 — — 0.33 —
Restructuring charges, net of tax, per share 0.05 0.06 0.12 0.20 0.12
Valuation allowance on deferred tax assets, per share 0.41 — 0.01 0.41 0.01
Adjusted Diluted EPS attributable to SSI $ (0.51 ) $ 0.09 $ 0.11 $ (0.07 ) $ 1.12
Auto Parts Business New Stores Impact
($ in millions) 4Q13
Existing Stores(1) New Stores(2) Reported
Revenues $ 72 $ 7 $ 79
Operating Income (Loss)
$ 5 $ (2 ) $ 3
Operating Income Margin 7 % NM 4 %
Car Purchase Volumes (000) 84 10 94
3Q13
Existing Stores(1) New Stores(2) Reported
Revenues(3) $ 80 $ 7 $ 86
Operating Income (Loss)(3) $ 10 $ (1 ) $ 8
Operating Income Margin 12 % NM 10 %
Car Purchase Volumes (000) 87 8 95
FY13
Existing Stores(1) New Stores(2) Reported
Revenues
$ 296 $ 17 $ 313
Operating Income (Loss)(3)
$ 29 $ (5 ) $ 25
Operating Income Margin 10 % NM 8 %
Car Purchase Volumes (000) 335 21 356
(1) Existing Stores represents APB operations for stores owned one year or more.
(2) New Stores represent new acquisitions, or greenfield development, owned less than one year.
(3) Does not foot due to rounding.
NM = Not meaningful
About Schnitzer Steel Industries, Inc.
Schnitzer Steel Industries, Inc. is one of the largest manufacturers and exporters of recycled ferrous metal products in the United States with 60 operating facilities located in 14 states, Puerto Rico and Western Canada. The business has seven deep water export facilities located on both the East and West Coasts and in Hawaii and Puerto Rico. The Company's integrated operating platform also includes its auto parts and steel manufacturing businesses. The Company's auto parts business sells used auto parts through its 61 self-service facilities located in 16 states and Western Canada. With an effective annual production capacity of approximately 800,000 tons, the Company's steel manufacturing business produces finished steel products, including rebar, wire rod and other specialty products. The Company commenced its 106th year of operations in 2013.
Safe Harbor for Forward Looking Statements
Statements and information included in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Except as noted herein or as the context may otherwise require, all references to “we,” “our,” “us” and “SSI” refer to the Company and its consolidated subsidiaries.
Forward-looking statements in this press release include statements regarding our expectations, intentions, beliefs and strategies regarding the future, which may include statements regarding trends, cyclicality and changes in the markets we sell into; strategic direction; changes to manufacturing and production processes; the cost of compliance with environmental and other laws; expected tax rates, deductions and credits; the realization of deferred tax assets; planned capital expenditures; liquidity positions; ability to generate cash from continuing operations; the potential impact of adopting new accounting pronouncements; expected results, including pricing, sales volumes and profitability; obligations under our retirement plans; benefits, savings or additional costs from business realignment and cost containment programs; and the adequacy of accruals.
When used in this report, the words “believes,” “expects,” “anticipates,” “intends,” “assumes,” “estimates,” “evaluates,” “may,” “could,” “opinions,” “forecasts,” “future,” “forward,” “potential,” “probable,” and similar expressions are intended to identify forward-looking statements.
We may make other forward-looking statements from time to time, including in reports filed with the Securities and Exchange Commission, press releases and public conference calls. All forward-looking statements we make are based on information available to us at the time the statements are made, and we assume no obligation to update any forward-looking statements, except as may be required by law. Our business is subject to the effects of changes in domestic and global economic conditions and a number of other risks and uncertainties that could cause actual results to differ materially from those included in, or implied by, such forward-looking statements. Some of these risks and uncertainties are discussed in Item 1A. Risk Factors of Part I of our most recent quarterly report on Form 10-Q and annual report on Form 10-K. Examples of these risks include: potential environmental cleanup costs related to the Portland Harbor Superfund site; the impact of general economic conditions; volatile supply and demand conditions affecting prices and volumes in the markets for both our products and raw materials we purchase; difficulties associated with acquisitions and integration of acquired businesses; the impact of goodwill impairment charges; the impact of long-lived asset impairment charges; the realization of expected cost reductions related to restructuring initiatives; the inability of customers to fulfill their contractual obligations; the impact of foreign currency fluctuations; potential limitations on our ability to access capital resources and existing credit facilities; restrictions on our business and financial covenants under our bank credit agreement; the impact of the consolidation in the steel industry; the impact of imports of foreign steel into the U.S.; inability to realize expected benefits from investments in technology; freight rates and availability of transportation; impact of equipment upgrades and failures on production; product liability claims; the impact of impairment of our deferred tax assets; costs associated with compliance with environmental regulations; the adverse impact of climate change; inability to obtain or renew business licenses and permits; compliance with greenhouse gas emission regulations; reliance on employees subject to collective bargaining agreements; and the impact of the underfunded status of multiemployer plans in which we participate.
Contact:
Schnitzer Steel Industries, Inc.
Investor Relations:
Alexandra Deignan, 646-278-9711
adeignan@schn.com
or
Media Relations:
Tom Zelenka, 503-323-2821
tzelenka@schn.com
or
Company Info:
www.schnitzersteel.com
ir@schn.com
