Schnitzer Steel Industries Inc. (SCHN, Financial) filed Quarterly Report for the period ended 2009-05-31.
Schnitzer Steel Industries Inc. collects processes and recycles metals by operating one of the largest metals recycling businesses in the United States. They also manufacture finished steel products at their technologically advanced steel mini-mill. Schnitzer Steel Industries Inc. has a market cap of $1.49 billion; its shares were traded at around $52.86 with a P/E ratio of 10.4 and P/S ratio of 0.4. The dividend yield of Schnitzer Steel Industries Inc. stocks is 0.1%. Schnitzer Steel Industries Inc. had an annual average earning growth of 31.4% over the past 5 years.
For the third quarter of fiscal 2009, MRB revenues decreased by $493 million, or 61%, to $318 million compared to the same period in fiscal 2008. This included a $400 million, or 60%, decrease in ferrous revenues to $268 million and a $91 million, or 65%, decrease in nonferrous revenues to $49 million. The decrease in ferrous revenues was driven by a 52% decrease in the average net sales price and by a 19% decrease in sales volumes. Ferrous volumes in the third quarter of fiscal 2009 decreased by 251,000 tons compared to the same period in the prior year due to lower demand and reduced availability of raw materials arising from weaker global market conditions. When sales prices fall due to lower demand, MRB seeks to reduce its raw material purchase costs in order to maintain acceptable margins. However, in the third quarter of fiscal 2009, due to increased competition for raw materials and slightly improving demand, MRB was not able to reduce purchase costs enough to fully absorb the decrease in selling prices for shipped materials, which resulted in reduced operating income compared to the same period in the prior year. The decrease in nonferrous revenues was driven by a 52% decrease in the average net sales price and a 30% decrease in pounds sold due to lower demand and reduced availability of raw materials. Operating income for MRB was $6 million, or 1.9% of revenues, for the third quarter of fiscal 2009, compared to $94 million, or 11.5% of revenues, for the same period in fiscal 2008. The decrease in operating income of $88 million, or 94%, reflected the impact of the lower sales volumes and selling prices, which fell more than the purchase costs of raw materials. Also included in operating income were SG&A expenses that decreased by $11 million, or 37%, compared to the same period in the prior year due to lower compensation-related expenses, including incentive compensation, and reduced expenses resulting from cost containment measures which reduced headcount and other non-compensation related costs.
For the third quarter of fiscal 2009, APB revenues decreased by $35 million, or 35%, to $66 million compared to the same period in fiscal 2008. The decrease over the prior year period was driven by a $20 million, or 67%, decrease in scrap vehicle revenue due to lower sales volumes and prices, a $13 million, or 63%, decrease in core revenue due to lower sales volumes and prices, and a $3 million, or 6%, decrease in parts revenue. Operating income for APB was $3 million, or 4.5% of revenues, for the third quarter of fiscal 2009 compared to $17 million, or 16.6% of revenues, for the same period in fiscal 2008. The decrease in operating income of $14 million, or 82%, reflected the impact of lower sales volumes and prices as a result of lower demand due to weaker economic and market conditions. Included in the operating loss were SG&A expenses that decreased by $4 million, or 25%, compared to the same period in the prior year due to lower compensation-related expenses, including incentive compensation, and reduced expenses resulting from cost containment measures which reduced headcount and other non-compensation related costs.
For the third quarter of fiscal 2009, SMB revenues decreased by $121 million, or 72%, to $47 million compared to the same period in fiscal 2008. The decrease over the prior year period reflected lower demand due to weaker economic and market conditions, which caused a reduction in finished steel sales volumes and a decrease in average net selling prices for finished steel products. Sales volumes decreased 133,000 tons, or 61%, to 85,000 tons for the third quarter of fiscal 2009 compared to the same period in the prior year, primarily due to significantly reduced demand as a result of weaker economic and steel market conditions. The average net selling price per ton decreased $220, or 30%, to $524 for the third quarter of fiscal 2009 compared to the same period last year. Operating loss for SMB was ($5) million for the third quarter of fiscal 2009, compared to operating income of $23 million for the same period in fiscal 2008. The $28 million decrease in operating income was primarily due to reduced demand for finished steel products resulting from weaker economic and market conditions which led to lower sales volumes and selling prices and reflected lower production volumes that resulted in $3 million of production costs that could not be capitalized in inventory. In addition, included in the operating loss were SG&A expenses that decreased by $1 million, or 36%, compared to the same period in the prior year due to lower compensation-related expenses, including incentive compensation, and reduced expenses resulting from cost containment measures which reduced headcount and other non-compensation related costs.
Net cash provided by operating activities for the nine months ended May 31, 2009, was $241 million, an increase of $220 million, compared to net cash provided by operating activities of $21 million for the same period in fiscal 2008, primarily due to decreases in accounts receivable and inventory, partially offset by decreases in accounts payable and other accrued liabilities. As of May 31, 2009, debt, net of cash, was approximately $77 million, compared to $169 million at August 31, 2008 (refer to Non-GAAP Financial Measures below).
Read the The complete ReportSCHN is in the portfolios of David Williams of Columbia Value and Restructuring Fund, Richard Aster Jr of Meridian Fund.
Schnitzer Steel Industries Inc. collects processes and recycles metals by operating one of the largest metals recycling businesses in the United States. They also manufacture finished steel products at their technologically advanced steel mini-mill. Schnitzer Steel Industries Inc. has a market cap of $1.49 billion; its shares were traded at around $52.86 with a P/E ratio of 10.4 and P/S ratio of 0.4. The dividend yield of Schnitzer Steel Industries Inc. stocks is 0.1%. Schnitzer Steel Industries Inc. had an annual average earning growth of 31.4% over the past 5 years.
Highlight of Business Operations:
The Company generated consolidated revenues of $412 million for the third quarter of fiscal 2009, a decrease of $560 million, or 58%, from $972 million in the third quarter of fiscal 2008. Consolidated operating income (loss) for the third quarter of fiscal 2009 decreased $108 million, from $102 million of operating income for the third quarter of fiscal 2008 to a ($6) million operating loss for the third quarter of fiscal 2009. The decrease in operating income (loss) was primarily attributable to reduced demand and lower selling prices for scrap, recycled metal and finished steel products resulting from weaker global market conditions. Included in the operating loss was a $30 million reduction in selling, general and administrative expenses (SG&A) for the three months ended May 31, 2009 when compared to the same period in fiscal 2008. This decrease was primarily due to lower compensation-related expenses, including incentive compensation, and reduced expenses resulting from cost containment measures which reduced headcount and other non-compensation related costs. Also included in Operating income (loss) was a $2 million gain due to a settlement agreement to resolve disputes that had arisen from the Hugo Neu separation and termination agreement. Other income increased by $5 million when compared to the same period in fiscal 2008, primarily due to the settlement agreement discussed above, which is further described in Results of Operations Other Income below. For the third quarter of fiscal 2009, the Company incurred a net loss of ($2) million, a decrease of $64 million compared to net income of $62 million in the prior year period. Diluted net loss per share for the quarter was ($0.05) compared to diluted net income per share of $2.14 for the third quarter of fiscal 2008.For the third quarter of fiscal 2009, MRB revenues decreased by $493 million, or 61%, to $318 million compared to the same period in fiscal 2008. This included a $400 million, or 60%, decrease in ferrous revenues to $268 million and a $91 million, or 65%, decrease in nonferrous revenues to $49 million. The decrease in ferrous revenues was driven by a 52% decrease in the average net sales price and by a 19% decrease in sales volumes. Ferrous volumes in the third quarter of fiscal 2009 decreased by 251,000 tons compared to the same period in the prior year due to lower demand and reduced availability of raw materials arising from weaker global market conditions. When sales prices fall due to lower demand, MRB seeks to reduce its raw material purchase costs in order to maintain acceptable margins. However, in the third quarter of fiscal 2009, due to increased competition for raw materials and slightly improving demand, MRB was not able to reduce purchase costs enough to fully absorb the decrease in selling prices for shipped materials, which resulted in reduced operating income compared to the same period in the prior year. The decrease in nonferrous revenues was driven by a 52% decrease in the average net sales price and a 30% decrease in pounds sold due to lower demand and reduced availability of raw materials. Operating income for MRB was $6 million, or 1.9% of revenues, for the third quarter of fiscal 2009, compared to $94 million, or 11.5% of revenues, for the same period in fiscal 2008. The decrease in operating income of $88 million, or 94%, reflected the impact of the lower sales volumes and selling prices, which fell more than the purchase costs of raw materials. Also included in operating income were SG&A expenses that decreased by $11 million, or 37%, compared to the same period in the prior year due to lower compensation-related expenses, including incentive compensation, and reduced expenses resulting from cost containment measures which reduced headcount and other non-compensation related costs.
For the third quarter of fiscal 2009, APB revenues decreased by $35 million, or 35%, to $66 million compared to the same period in fiscal 2008. The decrease over the prior year period was driven by a $20 million, or 67%, decrease in scrap vehicle revenue due to lower sales volumes and prices, a $13 million, or 63%, decrease in core revenue due to lower sales volumes and prices, and a $3 million, or 6%, decrease in parts revenue. Operating income for APB was $3 million, or 4.5% of revenues, for the third quarter of fiscal 2009 compared to $17 million, or 16.6% of revenues, for the same period in fiscal 2008. The decrease in operating income of $14 million, or 82%, reflected the impact of lower sales volumes and prices as a result of lower demand due to weaker economic and market conditions. Included in the operating loss were SG&A expenses that decreased by $4 million, or 25%, compared to the same period in the prior year due to lower compensation-related expenses, including incentive compensation, and reduced expenses resulting from cost containment measures which reduced headcount and other non-compensation related costs.
For the third quarter of fiscal 2009, SMB revenues decreased by $121 million, or 72%, to $47 million compared to the same period in fiscal 2008. The decrease over the prior year period reflected lower demand due to weaker economic and market conditions, which caused a reduction in finished steel sales volumes and a decrease in average net selling prices for finished steel products. Sales volumes decreased 133,000 tons, or 61%, to 85,000 tons for the third quarter of fiscal 2009 compared to the same period in the prior year, primarily due to significantly reduced demand as a result of weaker economic and steel market conditions. The average net selling price per ton decreased $220, or 30%, to $524 for the third quarter of fiscal 2009 compared to the same period last year. Operating loss for SMB was ($5) million for the third quarter of fiscal 2009, compared to operating income of $23 million for the same period in fiscal 2008. The $28 million decrease in operating income was primarily due to reduced demand for finished steel products resulting from weaker economic and market conditions which led to lower sales volumes and selling prices and reflected lower production volumes that resulted in $3 million of production costs that could not be capitalized in inventory. In addition, included in the operating loss were SG&A expenses that decreased by $1 million, or 36%, compared to the same period in the prior year due to lower compensation-related expenses, including incentive compensation, and reduced expenses resulting from cost containment measures which reduced headcount and other non-compensation related costs.
Net cash provided by operating activities for the nine months ended May 31, 2009, was $241 million, an increase of $220 million, compared to net cash provided by operating activities of $21 million for the same period in fiscal 2008, primarily due to decreases in accounts receivable and inventory, partially offset by decreases in accounts payable and other accrued liabilities. As of May 31, 2009, debt, net of cash, was approximately $77 million, compared to $169 million at August 31, 2008 (refer to Non-GAAP Financial Measures below).
Read the The complete ReportSCHN is in the portfolios of David Williams of Columbia Value and Restructuring Fund, Richard Aster Jr of Meridian Fund.
