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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Schnitzer Steel Industries Inc | NASDAQ:SCHN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 33.20 | 32.89 | 33.20 | 0 | 01:00:00 |
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x
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Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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For the Quarterly Period Ended February 28, 2017
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o
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Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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For the Transition Period from _______ to_______
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Commission File Number 0-22496
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OREGON
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93-0341923
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(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer
Identification No.)
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|
|
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299 SW Clay Street, Suite 350
Portland, Oregon
|
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97201
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(Address of principal executive offices)
|
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(Zip Code)
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
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Smaller Reporting company
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o
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PAGE
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ITEM 1.
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FINANCIAL STATEMENTS (UNAUDITED)
|
|
February 28, 2017
|
|
August 31, 2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
9,830
|
|
|
$
|
26,819
|
|
Accounts receivable, net of allowance for doubtful accounts of $2,365
and $2,315
|
132,790
|
|
|
113,952
|
|
||
Inventories
|
168,889
|
|
|
132,972
|
|
||
Refundable income taxes
|
1,442
|
|
|
1,254
|
|
||
Prepaid expenses and other current assets
|
18,547
|
|
|
24,809
|
|
||
Total current assets
|
331,498
|
|
|
299,806
|
|
||
Property, plant and equipment, net of accumulated depreciation of $733,771 and $714,965
|
384,883
|
|
|
392,820
|
|
||
Investments in joint ventures
|
13,057
|
|
|
13,616
|
|
||
Goodwill
|
166,534
|
|
|
166,847
|
|
||
Intangibles, net of accumulated amortization of $3,596 and $3,457
|
4,779
|
|
|
4,931
|
|
||
Other assets
|
19,699
|
|
|
13,409
|
|
||
Total assets
|
$
|
920,450
|
|
|
$
|
891,429
|
|
Liabilities and Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
676
|
|
|
$
|
8,374
|
|
Accounts payable
|
72,641
|
|
|
58,439
|
|
||
Accrued payroll and related liabilities
|
26,977
|
|
|
29,116
|
|
||
Environmental liabilities
|
1,342
|
|
|
1,967
|
|
||
Other accrued liabilities
|
33,387
|
|
|
35,758
|
|
||
Total current liabilities
|
135,023
|
|
|
133,654
|
|
||
Deferred income taxes
|
17,489
|
|
|
16,682
|
|
||
Long-term debt, net of current maturities
|
208,801
|
|
|
184,144
|
|
||
Environmental liabilities, net of current portion
|
46,228
|
|
|
44,383
|
|
||
Other long-term liabilities
|
10,225
|
|
|
11,134
|
|
||
Total liabilities
|
417,766
|
|
|
389,997
|
|
||
Commitments and contingencies (Note 6)
|
|
|
|
||||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity:
|
|
|
|
||||
Preferred stock – 20,000 shares $1.00 par value authorized, none issued
|
—
|
|
|
—
|
|
||
Class A common stock – 75,000 shares $1.00 par value authorized, 26,842 and 26,482 shares issued and outstanding
|
26,842
|
|
|
26,482
|
|
||
Class B common stock – 25,000 shares $1.00 par value authorized, 200 and 306 shares issued and outstanding
|
200
|
|
|
306
|
|
||
Additional paid-in capital
|
32,965
|
|
|
30,948
|
|
||
Retained earnings
|
479,432
|
|
|
480,100
|
|
||
Accumulated other comprehensive loss
|
(40,894
|
)
|
|
(40,115
|
)
|
||
Total SSI shareholders’ equity
|
498,545
|
|
|
497,721
|
|
||
Noncontrolling interests
|
4,139
|
|
|
3,711
|
|
||
Total equity
|
502,684
|
|
|
501,432
|
|
||
Total liabilities and equity
|
$
|
920,450
|
|
|
$
|
891,429
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2/28/2017
|
|
2/29/2016
|
|
2/28/2017
|
|
2/29/2016
|
||||||||
Revenues
|
$
|
382,084
|
|
|
$
|
289,077
|
|
|
$
|
716,245
|
|
|
$
|
610,275
|
|
Operating expense:
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
326,804
|
|
|
259,670
|
|
|
622,696
|
|
|
544,524
|
|
||||
Selling, general and administrative
|
43,823
|
|
|
33,599
|
|
|
81,315
|
|
|
72,017
|
|
||||
(Income) loss from joint ventures
|
(2,220
|
)
|
|
290
|
|
|
(2,632
|
)
|
|
319
|
|
||||
Goodwill impairment charge
|
—
|
|
|
8,845
|
|
|
—
|
|
|
8,845
|
|
||||
Other asset impairment charges
|
—
|
|
|
18,458
|
|
|
401
|
|
|
18,458
|
|
||||
Restructuring charges and other exit-related activities
|
(494
|
)
|
|
5,291
|
|
|
(293
|
)
|
|
7,216
|
|
||||
Operating income (loss)
|
14,171
|
|
|
(37,076
|
)
|
|
14,758
|
|
|
(41,104
|
)
|
||||
Interest expense
|
(2,097
|
)
|
|
(2,015
|
)
|
|
(3,838
|
)
|
|
(3,874
|
)
|
||||
Other income, net
|
357
|
|
|
438
|
|
|
794
|
|
|
845
|
|
||||
Income (loss) from continuing operations before income taxes
|
12,431
|
|
|
(38,653
|
)
|
|
11,714
|
|
|
(44,133
|
)
|
||||
Income tax expense
|
(637
|
)
|
|
(1,293
|
)
|
|
(575
|
)
|
|
(715
|
)
|
||||
Income (loss) from continuing operations
|
11,794
|
|
|
(39,946
|
)
|
|
11,139
|
|
|
(44,848
|
)
|
||||
Loss from discontinued operations, net of tax
|
(95
|
)
|
|
(1,024
|
)
|
|
(148
|
)
|
|
(1,089
|
)
|
||||
Net income (loss)
|
11,699
|
|
|
(40,970
|
)
|
|
10,991
|
|
|
(45,937
|
)
|
||||
Net income attributable to noncontrolling interests
|
(662
|
)
|
|
(275
|
)
|
|
(1,280
|
)
|
|
(604
|
)
|
||||
Net income (loss) attributable to SSI
|
$
|
11,037
|
|
|
$
|
(41,245
|
)
|
|
$
|
9,711
|
|
|
$
|
(46,541
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to SSI:
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
|
|||||||
Income (loss) per share from continuing operations attributable to SSI
|
$
|
0.40
|
|
|
$
|
(1.48
|
)
|
|
$
|
0.36
|
|
|
$
|
(1.67
|
)
|
Loss per share from discontinued operations attributable to SSI
|
—
|
|
|
(0.04
|
)
|
|
(0.01
|
)
|
|
(0.04
|
)
|
||||
Net income (loss) per share attributable to SSI
|
$
|
0.40
|
|
|
$
|
(1.52
|
)
|
|
$
|
0.35
|
|
|
$
|
(1.71
|
)
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Income (loss) per share from continuing operations attributable to SSI
|
$
|
0.40
|
|
|
$
|
(1.48
|
)
|
|
$
|
0.35
|
|
|
$
|
(1.67
|
)
|
Loss per share from discontinued operations attributable to SSI
|
—
|
|
|
(0.04
|
)
|
|
(0.01
|
)
|
|
(0.04
|
)
|
||||
Net income (loss) per share attributable to SSI
(1)
|
$
|
0.40
|
|
|
$
|
(1.52
|
)
|
|
$
|
0.35
|
|
|
$
|
(1.71
|
)
|
Weighted average number of common shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
27,524
|
|
|
27,201
|
|
|
27,447
|
|
|
27,178
|
|
||||
Diluted
|
27,864
|
|
|
27,201
|
|
|
27,814
|
|
|
27,178
|
|
||||
Dividends declared per common share
|
$
|
0.1875
|
|
|
$
|
0.1875
|
|
|
$
|
0.3750
|
|
|
$
|
0.3750
|
|
(1)
|
May not foot due to rounding.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2/28/2017
|
|
2/29/2016
|
|
2/28/2017
|
|
2/29/2016
|
||||||||
Net income (loss)
|
$
|
11,699
|
|
|
$
|
(40,970
|
)
|
|
$
|
10,991
|
|
|
$
|
(45,937
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
240
|
|
|
(892
|
)
|
|
(794
|
)
|
|
(1,901
|
)
|
||||
Cash flow hedges, net
|
—
|
|
|
—
|
|
|
—
|
|
|
240
|
|
||||
Pension obligations, net
|
80
|
|
|
64
|
|
|
15
|
|
|
105
|
|
||||
Total other comprehensive income (loss), net of tax
|
320
|
|
|
(828
|
)
|
|
(779
|
)
|
|
(1,556
|
)
|
||||
Comprehensive income (loss)
|
12,019
|
|
|
(41,798
|
)
|
|
10,212
|
|
|
(47,493
|
)
|
||||
Less comprehensive income attributable to noncontrolling interests
|
(662
|
)
|
|
(275
|
)
|
|
(1,280
|
)
|
|
(604
|
)
|
||||
Comprehensive income (loss) attributable to SSI
|
$
|
11,357
|
|
|
$
|
(42,073
|
)
|
|
$
|
8,932
|
|
|
$
|
(48,097
|
)
|
|
Six Months Ended
|
||||||
|
2/28/2017
|
|
2/29/2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
10,991
|
|
|
$
|
(45,937
|
)
|
Adjustments to reconcile net income (loss) to cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
25,141
|
|
|
28,953
|
|
||
Exit-related (gains), asset impairments and accelerated depreciation, net
|
(404
|
)
|
|
3,008
|
|
||
Goodwill impairment charge
|
—
|
|
|
8,845
|
|
||
Other asset impairment charges
|
401
|
|
|
18,458
|
|
||
Share-based compensation expense
|
5,570
|
|
|
2,627
|
|
||
Deferred income taxes
|
529
|
|
|
521
|
|
||
Inventory write-down
|
—
|
|
|
478
|
|
||
Undistributed equity in earnings of joint ventures
|
(2,632
|
)
|
|
319
|
|
||
(Gain) loss on disposal of assets
|
74
|
|
|
(118
|
)
|
||
Unrealized foreign exchange gain, net
|
(55
|
)
|
|
(5
|
)
|
||
Bad debt expense, net
|
56
|
|
|
140
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(24,506
|
)
|
|
26,026
|
|
||
Inventories
|
(30,423
|
)
|
|
12,579
|
|
||
Income taxes
|
(188
|
)
|
|
(4
|
)
|
||
Prepaid expenses and other current assets
|
4,407
|
|
|
2,761
|
|
||
Other long-term assets
|
18
|
|
|
842
|
|
||
Accounts payable
|
17,058
|
|
|
423
|
|
||
Accrued payroll and related liabilities
|
(2,122
|
)
|
|
(8,799
|
)
|
||
Other accrued liabilities
|
(1,021
|
)
|
|
(3,154
|
)
|
||
Environmental liabilities
|
1,274
|
|
|
(916
|
)
|
||
Other long-term liabilities
|
(875
|
)
|
|
86
|
|
||
Distributed equity in earnings of joint ventures
|
2,939
|
|
|
200
|
|
||
Net cash provided by operating activities
|
6,232
|
|
|
47,333
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(21,542
|
)
|
|
(15,611
|
)
|
||
Purchase of cost method investment
|
(6,017
|
)
|
|
—
|
|
||
Joint venture receipts, net
|
273
|
|
|
28
|
|
||
Proceeds from sale of assets
|
1,577
|
|
|
988
|
|
||
Net cash used in investing activities
|
(25,709
|
)
|
|
(14,595
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings from long-term debt
|
245,633
|
|
|
49,160
|
|
||
Repayment of long-term debt
|
(228,673
|
)
|
|
(79,456
|
)
|
||
Proceeds from line of credit
|
—
|
|
|
115,500
|
|
||
Repayment of line of credit
|
—
|
|
|
(115,500
|
)
|
||
Payment of debt issuance costs
|
(109
|
)
|
|
—
|
|
||
Taxes paid related to net share settlement of share-based payment arrangements
|
(3,301
|
)
|
|
(1,895
|
)
|
||
Repurchase of Class A common stock
|
—
|
|
|
(3,479
|
)
|
||
Distributions to noncontrolling interest
|
(852
|
)
|
|
(971
|
)
|
||
Dividends paid
|
(10,122
|
)
|
|
(10,117
|
)
|
||
Net cash provided by (used in) financing activities
|
2,576
|
|
|
(46,758
|
)
|
||
Effect of exchange rate changes on cash
|
(88
|
)
|
|
205
|
|
||
Net decrease in cash and cash equivalents
|
(16,989
|
)
|
|
(13,815
|
)
|
||
Cash and cash equivalents as of beginning of period
|
26,819
|
|
|
22,755
|
|
||
Cash and cash equivalents as of end of period
|
$
|
9,830
|
|
|
$
|
8,940
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2/28/2017
|
|
2/29/2016
|
|
2/28/2017
|
|
2/29/2016
|
||||||||
Reported within other asset impairment charges
(1)
:
|
|
|
|
|
|
|
|
||||||||
Long-lived assets
|
$
|
—
|
|
|
$
|
7,336
|
|
|
$
|
—
|
|
|
$
|
7,336
|
|
Accelerated depreciation
(1)
|
—
|
|
|
6,208
|
|
|
401
|
|
|
6,208
|
|
||||
Investment in joint venture
|
—
|
|
|
1,968
|
|
|
—
|
|
|
1,968
|
|
||||
Assets held for sale
|
—
|
|
|
1,659
|
|
|
—
|
|
|
1,659
|
|
||||
Other assets
(1)
|
—
|
|
|
1,287
|
|
|
—
|
|
|
1,287
|
|
||||
|
—
|
|
|
18,458
|
|
|
401
|
|
|
18,458
|
|
||||
Reported within restructuring charges and other exit-related activities:
|
|
|
|
|
|
|
|
||||||||
Long-lived assets
|
—
|
|
|
329
|
|
|
—
|
|
|
329
|
|
||||
Accelerated depreciation
|
—
|
|
|
630
|
|
|
96
|
|
|
630
|
|
||||
Other assets
|
—
|
|
|
1,102
|
|
|
62
|
|
|
1,102
|
|
||||
|
—
|
|
|
2,061
|
|
|
158
|
|
|
2,061
|
|
||||
Reported within discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Long-lived assets
|
—
|
|
|
673
|
|
|
—
|
|
|
673
|
|
||||
Accelerated depreciation
|
—
|
|
|
274
|
|
|
—
|
|
|
274
|
|
||||
|
—
|
|
|
947
|
|
|
—
|
|
|
947
|
|
||||
Total
|
$
|
—
|
|
|
$
|
21,466
|
|
|
$
|
559
|
|
|
$
|
21,466
|
|
(1)
|
Other asset impairment charges were incurred in AMR, except for
$401 thousand
of accelerated depreciation related to the Steel Manufacturing Business ("SMB") reportable segment for the six months ended February 28, 2017, and
$79 thousand
of impairment charges on Other assets related to Corporate for the three and six months ended February 29, 2016.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
•
|
Level 1
– Unadjusted quoted prices in active markets for identical assets and liabilities.
|
•
|
Level 2
– Inputs other than quoted prices included within Level 1 that are observable for the determination of the fair value of the asset or liability, either directly or indirectly.
|
•
|
Level 3
– Unobservable inputs that are significant to the determination of the fair value of the asset or liability.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
February 28, 2017
|
|
August 31, 2016
|
||||
Processed and unprocessed scrap metal
|
$
|
75,188
|
|
|
$
|
49,061
|
|
Semi-finished goods (billets)
|
7,150
|
|
|
8,320
|
|
||
Finished goods
|
53,024
|
|
|
40,646
|
|
||
Supplies
|
33,527
|
|
|
34,945
|
|
||
Inventories
|
$
|
168,889
|
|
|
$
|
132,972
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
AMR
|
||
August 31, 2016
|
$
|
166,847
|
|
Foreign currency translation adjustment
|
(313
|
)
|
|
February 28, 2017
|
$
|
166,534
|
|
Reportable Segment
|
|
Balance as of August 31, 2016
|
|
Liabilities Established (Released), Net
|
|
Payments and Other
|
|
Balance as of February 28, 2017
|
|
Short-Term
|
|
Long-Term
|
||||||||||||
Auto and Metals Recycling
|
|
$
|
46,122
|
|
|
$
|
1,483
|
|
|
$
|
(162
|
)
|
|
$
|
47,443
|
|
|
$
|
1,335
|
|
|
$
|
46,108
|
|
Corporate
|
|
228
|
|
|
—
|
|
|
(101
|
)
|
|
127
|
|
|
7
|
|
|
120
|
|
||||||
Total
|
|
$
|
46,350
|
|
|
$
|
1,483
|
|
|
$
|
(263
|
)
|
|
$
|
47,570
|
|
|
$
|
1,342
|
|
|
$
|
46,228
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Three Months Ended February 28, 2017
|
|
Three Months Ended February 29, 2016
|
||||||||||||||||||||
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
||||||||||||
Restructuring charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance costs
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3,185
|
|
|
$
|
3,185
|
|
Contract termination costs
|
49
|
|
|
61
|
|
|
110
|
|
|
35
|
|
|
12
|
|
|
47
|
|
||||||
Other restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total restructuring charges
|
49
|
|
|
64
|
|
|
113
|
|
|
35
|
|
|
3,197
|
|
|
3,232
|
|
||||||
Other exit-related activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset impairments and accelerated depreciation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,008
|
|
|
3,008
|
|
||||||
Gain on exit-related disposal
|
—
|
|
|
(562
|
)
|
|
(562
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total other exit-related activities
|
—
|
|
|
(562
|
)
|
|
(562
|
)
|
|
—
|
|
|
3,008
|
|
|
3,008
|
|
||||||
Total restructuring charges and other exit-related activities
|
$
|
49
|
|
|
$
|
(498
|
)
|
|
$
|
(449
|
)
|
|
$
|
35
|
|
|
$
|
6,205
|
|
|
$
|
6,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring charges and other exit-related activities included in continuing operations
|
|
$
|
(494
|
)
|
|
|
|
|
|
$
|
5,291
|
|
|||||||||||
Restructuring charges and other exit-related activities included in discontinued operations
|
|
$
|
45
|
|
|
|
|
|
|
$
|
949
|
|
|
Six Months Ended February 28, 2017
|
|
Six Months Ended February 29, 2016
|
||||||||||||||||||||
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
||||||||||||
Restructuring charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance costs
|
$
|
—
|
|
|
$
|
(59
|
)
|
|
$
|
(59
|
)
|
|
$
|
—
|
|
|
$
|
4,346
|
|
|
$
|
4,346
|
|
Contract termination costs
|
137
|
|
|
59
|
|
|
196
|
|
|
125
|
|
|
657
|
|
|
782
|
|
||||||
Other restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total restructuring charges
|
137
|
|
|
—
|
|
|
137
|
|
|
125
|
|
|
5,003
|
|
|
5,128
|
|
||||||
Other exit-related activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset impairments and accelerated depreciation
|
—
|
|
|
158
|
|
|
158
|
|
|
—
|
|
|
3,008
|
|
|
3,008
|
|
||||||
Gain on exit-related disposal
|
—
|
|
|
(562
|
)
|
|
(562
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total other exit-related activities
|
—
|
|
|
(404
|
)
|
|
(404
|
)
|
|
—
|
|
|
3,008
|
|
|
3,008
|
|
||||||
Total restructuring charges and other exit-related activities
|
$
|
137
|
|
|
$
|
(404
|
)
|
|
$
|
(267
|
)
|
|
$
|
125
|
|
|
$
|
8,011
|
|
|
$
|
8,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring charges and other exit-related activities included in continuing operations
|
|
$
|
(293
|
)
|
|
|
|
|
|
$
|
7,216
|
|
|||||||||||
Restructuring charges and other exit-related activities included in discontinued operations
|
|
$
|
26
|
|
|
|
|
|
|
$
|
920
|
|
|
Q2'15 Plan
|
||
Total restructuring charges to date
|
$
|
14,334
|
|
Total expected restructuring charges
|
$
|
14,465
|
|
|
Q2’15 Plan
|
|
Total Charges to Date
(1)
|
|
Total Expected Charges
(1)
|
||||||||||||||||||
|
Balance 8/31/2016
|
|
Charges
|
|
Payments and Other
|
|
Balance 2/28/2017
|
|
|
||||||||||||||
Severance costs
|
$
|
918
|
|
|
$
|
(59
|
)
|
|
$
|
(609
|
)
|
|
$
|
250
|
|
|
$
|
10,216
|
|
|
$
|
10,246
|
|
Contract termination costs
|
1,159
|
|
|
59
|
|
|
(252
|
)
|
|
966
|
|
|
2,069
|
|
|
2,170
|
|
||||||
Other restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,049
|
|
|
2,049
|
|
||||||
Total
|
$
|
2,077
|
|
|
$
|
—
|
|
|
$
|
(861
|
)
|
|
$
|
1,216
|
|
|
$
|
14,334
|
|
|
$
|
14,465
|
|
(1)
|
Total charges to date and total expected charges by major type of cost reflect amounts related to the Q2'15 Plan only. Remaining charges related to prior plans are not material.
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Total Charges to Date
(1)
|
|
Total Expected Charges
(1)
|
||||||||||||||||
|
2/28/2017
|
|
2/29/2016
|
|
2/28/2017
|
|
2/29/2016
|
|
|
||||||||||||||
Restructuring charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Auto and Metals Recycling
|
$
|
68
|
|
|
$
|
2,421
|
|
|
$
|
113
|
|
|
$
|
4,343
|
|
|
$
|
9,469
|
|
|
$
|
9,534
|
|
Unallocated (Corporate)
|
—
|
|
|
809
|
|
|
(2
|
)
|
|
812
|
|
|
3,176
|
|
|
3,206
|
|
||||||
Discontinued operations
|
45
|
|
|
2
|
|
|
26
|
|
|
(27
|
)
|
|
1,689
|
|
|
1,725
|
|
||||||
Total restructuring charges
|
113
|
|
|
3,232
|
|
|
137
|
|
|
5,128
|
|
|
14,334
|
|
|
14,465
|
|
||||||
Other exit-related activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Auto and Metals Recycling
|
(562
|
)
|
|
2,061
|
|
|
(404
|
)
|
|
2,061
|
|
|
4,275
|
|
|
|
|||||||
Discontinued operations
|
—
|
|
|
947
|
|
|
—
|
|
|
947
|
|
|
3,613
|
|
|
|
|||||||
Total other exit-related activities
|
(562
|
)
|
|
3,008
|
|
|
(404
|
)
|
|
3,008
|
|
|
7,888
|
|
|
|
|
||||||
Total restructuring charges and other exit-related activities
|
$
|
(449
|
)
|
|
$
|
6,240
|
|
|
$
|
(267
|
)
|
|
$
|
8,136
|
|
|
$
|
22,222
|
|
|
|
|
(1)
|
Total charges to date and total expected charges by reportable segment and discontinued operations reflect amounts related to the Q2'15 Plan only. Remaining charges related to prior plans are not material.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Six Months Ended February 28, 2017
|
|
Six Months Ended February 29, 2016
|
||||||||||||||||||||
|
SSI Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
SSI Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||
Balance - September 1 (Beginning of period)
|
$
|
497,721
|
|
|
$
|
3,711
|
|
|
$
|
501,432
|
|
|
$
|
534,535
|
|
|
$
|
4,016
|
|
|
$
|
538,551
|
|
Net income (loss)
|
9,711
|
|
|
1,280
|
|
|
10,991
|
|
|
(46,541
|
)
|
|
604
|
|
|
(45,937
|
)
|
||||||
Other comprehensive loss, net of tax
|
(779
|
)
|
|
—
|
|
|
(779
|
)
|
|
(1,556
|
)
|
|
—
|
|
|
(1,556
|
)
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
(852
|
)
|
|
(852
|
)
|
|
—
|
|
|
(971
|
)
|
|
(971
|
)
|
||||||
Share repurchases
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,479
|
)
|
|
—
|
|
|
(3,479
|
)
|
||||||
Restricted stock withheld for taxes
|
(3,301
|
)
|
|
—
|
|
|
(3,301
|
)
|
|
(1,895
|
)
|
|
—
|
|
|
(1,895
|
)
|
||||||
Share-based compensation
|
5,570
|
|
|
—
|
|
|
5,570
|
|
|
2,627
|
|
|
—
|
|
|
2,627
|
|
||||||
Dividends
|
(10,377
|
)
|
|
—
|
|
|
(10,377
|
)
|
|
(10,268
|
)
|
|
—
|
|
|
(10,268
|
)
|
||||||
Balance - February 28, 2017 and February 29, 2016 (End of period)
|
$
|
498,545
|
|
|
$
|
4,139
|
|
|
$
|
502,684
|
|
|
$
|
473,423
|
|
|
$
|
3,649
|
|
|
$
|
477,072
|
|
|
Three Months Ended February 28, 2017
|
|
Three Months Ended February 29, 2016
|
||||||||||||||||||||||||
|
Foreign Currency Translation Adjustments
|
|
Pension Obligations, net
|
|
Total
|
|
Foreign Currency Translation Adjustments
|
|
Pension Obligations, net
|
|
Net Unrealized Gain (Loss) on Cash Flow Hedges
|
|
Total
|
||||||||||||||
Balances - December 1
(Beginning of period)
|
$
|
(35,573
|
)
|
|
$
|
(5,641
|
)
|
|
$
|
(41,214
|
)
|
|
$
|
(35,018
|
)
|
|
$
|
(4,232
|
)
|
|
$
|
—
|
|
|
$
|
(39,250
|
)
|
Other comprehensive income (loss) before reclassifications
|
240
|
|
|
—
|
|
|
240
|
|
|
(892
|
)
|
|
—
|
|
|
—
|
|
|
(892
|
)
|
|||||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other comprehensive income (loss) before reclassifications, net of tax
|
240
|
|
|
—
|
|
|
240
|
|
|
(892
|
)
|
|
—
|
|
|
—
|
|
|
(892
|
)
|
|||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
125
|
|
|
125
|
|
|
—
|
|
|
101
|
|
|
—
|
|
|
101
|
|
|||||||
Income tax benefit
|
—
|
|
|
(45
|
)
|
|
(45
|
)
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
(37
|
)
|
|||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax
|
—
|
|
|
80
|
|
|
80
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
64
|
|
|||||||
Net periodic other comprehensive income (loss)
|
240
|
|
|
80
|
|
|
320
|
|
|
(892
|
)
|
|
64
|
|
|
—
|
|
|
(828
|
)
|
|||||||
Balances - February 28, 2017 and February 29, 2016
(End of period)
|
$
|
(35,333
|
)
|
|
$
|
(5,561
|
)
|
|
$
|
(40,894
|
)
|
|
$
|
(35,910
|
)
|
|
$
|
(4,168
|
)
|
|
$
|
—
|
|
|
$
|
(40,078
|
)
|
|
Six Months Ended February 28, 2017
|
|
Six Months Ended February 29, 2016
|
||||||||||||||||||||||||
|
Foreign Currency Translation Adjustments
|
|
Pension Obligations, net
|
|
Total
|
|
Foreign Currency Translation Adjustments
|
|
Pension Obligations, net
|
|
Net Unrealized Gain (Loss) on Cash Flow Hedges
|
|
Total
|
||||||||||||||
Balances - September 1
(Beginning of period)
|
$
|
(34,539
|
)
|
|
$
|
(5,576
|
)
|
|
$
|
(40,115
|
)
|
|
$
|
(34,009
|
)
|
|
$
|
(4,273
|
)
|
|
$
|
(240
|
)
|
|
$
|
(38,522
|
)
|
Other comprehensive income (loss) before reclassifications
|
(794
|
)
|
|
49
|
|
|
(745
|
)
|
|
(1,901
|
)
|
|
—
|
|
|
—
|
|
|
(1,901
|
)
|
|||||||
Income tax expense
|
—
|
|
|
(194
|
)
|
|
(194
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other comprehensive income (loss) before reclassifications, net of tax
|
(794
|
)
|
|
(145
|
)
|
|
(939
|
)
|
|
(1,901
|
)
|
|
—
|
|
|
—
|
|
|
(1,901
|
)
|
|||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
250
|
|
|
250
|
|
|
—
|
|
|
165
|
|
|
312
|
|
|
477
|
|
|||||||
Income tax benefit
|
—
|
|
|
(90
|
)
|
|
(90
|
)
|
|
—
|
|
|
(60
|
)
|
|
(72
|
)
|
|
(132
|
)
|
|||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax
|
—
|
|
|
160
|
|
|
160
|
|
|
—
|
|
|
105
|
|
|
240
|
|
|
345
|
|
|||||||
Net periodic other comprehensive income (loss)
|
(794
|
)
|
|
15
|
|
|
(779
|
)
|
|
(1,901
|
)
|
|
105
|
|
|
240
|
|
|
(1,556
|
)
|
|||||||
Balances - February 28, 2017 and February 29, 2016
(End of period)
|
$
|
(35,333
|
)
|
|
$
|
(5,561
|
)
|
|
$
|
(40,894
|
)
|
|
$
|
(35,910
|
)
|
|
$
|
(4,168
|
)
|
|
$
|
—
|
|
|
$
|
(40,078
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2/28/2017
|
|
2/29/2016
|
|
2/28/2017
|
|
2/29/2016
|
||||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations before income taxes
|
$
|
(109
|
)
|
|
$
|
(1,015
|
)
|
|
$
|
(158
|
)
|
|
$
|
(1,094
|
)
|
Income tax (expense) benefit
|
14
|
|
|
(9
|
)
|
|
10
|
|
|
5
|
|
||||
Loss from discontinued operations, net of tax
|
$
|
(95
|
)
|
|
$
|
(1,024
|
)
|
|
$
|
(148
|
)
|
|
$
|
(1,089
|
)
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
2/28/2017
|
|
2/29/2016
|
|
2/28/2017
|
|
2/29/2016
|
||||
Federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State taxes, net of credits
|
2.1
|
|
|
1.6
|
|
|
2.0
|
|
|
1.5
|
|
Foreign income taxed at different rates
|
(2.0
|
)
|
|
(4.5
|
)
|
|
(1.9
|
)
|
|
(5.1
|
)
|
Non-deductible officers’ compensation
|
1.6
|
|
|
(1.1
|
)
|
|
1.5
|
|
|
(0.7
|
)
|
Noncontrolling interests
|
(3.8
|
)
|
|
2.6
|
|
|
(3.7
|
)
|
|
1.8
|
|
Research and development credits
|
(0.8
|
)
|
|
0.8
|
|
|
(0.8
|
)
|
|
0.6
|
|
Valuation allowance on deferred tax assets
|
(28.8
|
)
|
|
(35.2
|
)
|
|
(29.1
|
)
|
|
(32.9
|
)
|
Non-deductible goodwill
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
Unrecognized tax benefits
|
1.1
|
|
|
(0.9
|
)
|
|
1.1
|
|
|
(0.7
|
)
|
Other non-deductible expenses
|
0.9
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
Other
|
(0.2
|
)
|
|
(1.2
|
)
|
|
—
|
|
|
(0.7
|
)
|
Effective tax rate
(1)
|
5.1
|
%
|
|
(3.3
|
)%
|
|
4.9
|
%
|
|
(1.6
|
)%
|
(1)
|
For periods with reported pre-tax losses, the effect of reconciling items with positive signs is a tax benefit in excess of applying the federal statutory rate to the pre-tax loss.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2/28/2017
|
|
2/29/2016
|
|
2/28/2017
|
|
2/29/2016
|
||||||||
Income (loss) from continuing operations
|
$
|
11,794
|
|
|
$
|
(39,946
|
)
|
|
$
|
11,139
|
|
|
$
|
(44,848
|
)
|
Net income attributable to noncontrolling interests
|
(662
|
)
|
|
(275
|
)
|
|
(1,280
|
)
|
|
(604
|
)
|
||||
Income (loss) from continuing operations attributable to SSI
|
11,132
|
|
|
(40,221
|
)
|
|
9,859
|
|
|
(45,452
|
)
|
||||
Loss from discontinued operations, net of tax
|
(95
|
)
|
|
(1,024
|
)
|
|
(148
|
)
|
|
(1,089
|
)
|
||||
Net income (loss) attributable to SSI
|
$
|
11,037
|
|
|
$
|
(41,245
|
)
|
|
$
|
9,711
|
|
|
$
|
(46,541
|
)
|
Computation of shares:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, basic
|
27,524
|
|
|
27,201
|
|
|
27,447
|
|
|
27,178
|
|
||||
Incremental common shares attributable to dilutive stock options, performance share awards, DSUs, and RSUs
|
340
|
|
|
—
|
|
|
367
|
|
|
—
|
|
||||
Weighted average common shares outstanding, diluted
|
27,864
|
|
|
27,201
|
|
|
27,814
|
|
|
27,178
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2/28/2017
|
|
2/29/2016
|
|
2/28/2017
|
|
2/29/2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Auto and Metals Recycling:
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
349,369
|
|
|
$
|
249,812
|
|
|
$
|
654,307
|
|
|
$
|
522,777
|
|
Less: Intersegment revenues
|
(25,576
|
)
|
|
(19,126
|
)
|
|
(48,949
|
)
|
|
(42,794
|
)
|
||||
AMR external customer revenues
|
323,793
|
|
|
230,686
|
|
|
605,358
|
|
|
479,983
|
|
||||
Steel Manufacturing Business:
|
|
|
|
|
|
|
|
||||||||
Revenues
|
58,291
|
|
|
58,391
|
|
|
110,887
|
|
|
130,292
|
|
||||
Total revenues
|
$
|
382,084
|
|
|
$
|
289,077
|
|
|
$
|
716,245
|
|
|
$
|
610,275
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2/28/2017
|
|
2/29/2016
|
|
2/28/2017
|
|
2/29/2016
|
||||||||
Auto and Metals Recycling
|
$
|
26,359
|
|
|
$
|
(26,350
|
)
|
|
$
|
38,778
|
|
|
$
|
(24,314
|
)
|
Steel Manufacturing Business
|
(1,746
|
)
|
|
(1,202
|
)
|
|
(4,827
|
)
|
|
1,552
|
|
||||
Segment operating income (loss)
|
24,613
|
|
|
(27,552
|
)
|
|
33,951
|
|
|
(22,762
|
)
|
||||
Restructuring charges and other exit-related activities
|
494
|
|
|
(5,291
|
)
|
|
293
|
|
|
(7,216
|
)
|
||||
Corporate and eliminations
|
(10,936
|
)
|
|
(4,233
|
)
|
|
(19,486
|
)
|
|
(11,126
|
)
|
||||
Operating income (loss)
|
14,171
|
|
|
(37,076
|
)
|
|
14,758
|
|
|
(41,104
|
)
|
||||
Interest expense
|
(2,097
|
)
|
|
(2,015
|
)
|
|
(3,838
|
)
|
|
(3,874
|
)
|
||||
Other income, net
|
357
|
|
|
438
|
|
|
794
|
|
|
845
|
|
||||
Income (loss) from continuing operations before income taxes
|
$
|
12,431
|
|
|
$
|
(38,653
|
)
|
|
$
|
11,714
|
|
|
$
|
(44,133
|
)
|
|
February 28, 2017
|
|
August 31, 2016
|
||||
Auto and Metals Recycling
(1)
|
$
|
1,552,147
|
|
|
$
|
1,510,688
|
|
Steel Manufacturing Business
|
359,728
|
|
|
373,130
|
|
||
Total segment assets
|
1,911,875
|
|
|
1,883,818
|
|
||
Corporate and eliminations
(2)
|
(991,425
|
)
|
|
(992,389
|
)
|
||
Total assets
|
$
|
920,450
|
|
|
$
|
891,429
|
|
(1)
|
AMR total assets include
$13 million
and
$14 million
as of
February 28, 2017
and
August 31, 2016
, respectively, for investments in joint ventures.
|
(2)
|
The substantial majority of Corporate and eliminations total assets is comprised of Corporate intercompany payables to the Company's operating segments and intercompany eliminations.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
•
|
For the first six months of fiscal
2017
, net cash provided by operating activities of
$6 million
, compared to
$47 million
in the prior year period;
|
•
|
Debt of
$209 million
as of
February 28, 2017
, compared to
$193 million
as of August 31, 2016; and
|
•
|
Debt, net of cash, of
$200 million
as of
February 28, 2017
, compared to
$166 million
as of August 31, 2016 (see the reconciliation of debt, net of cash, in Non-GAAP Financial Measures at the end of this Item 2).
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
($ in thousands)
|
2/28/2017
|
|
2/29/2016
|
|
% Change
|
|
2/28/2017
|
|
2/29/2016
|
|
% Change
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
$
|
349,369
|
|
|
$
|
249,812
|
|
|
40
|
%
|
|
$
|
654,307
|
|
|
$
|
522,777
|
|
|
25
|
%
|
Steel Manufacturing Business
|
58,291
|
|
|
58,391
|
|
|
—
|
%
|
|
110,887
|
|
|
130,292
|
|
|
(15
|
)%
|
||||
Intercompany revenue eliminations
(1)
|
(25,576
|
)
|
|
(19,126
|
)
|
|
34
|
%
|
|
(48,949
|
)
|
|
(42,794
|
)
|
|
14
|
%
|
||||
Total revenues
|
382,084
|
|
|
289,077
|
|
|
32
|
%
|
|
716,245
|
|
|
610,275
|
|
|
17
|
%
|
||||
Cost of goods sold:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
293,403
|
|
|
222,728
|
|
|
32
|
%
|
|
559,414
|
|
|
465,120
|
|
|
20
|
%
|
||||
Steel Manufacturing Business
|
58,458
|
|
|
58,195
|
|
|
—
|
%
|
|
112,167
|
|
|
125,674
|
|
|
(11
|
)%
|
||||
Intercompany cost of goods sold eliminations
(1)
|
(25,057
|
)
|
|
(21,253
|
)
|
|
18
|
%
|
|
(48,885
|
)
|
|
(46,270
|
)
|
|
6
|
%
|
||||
Total cost of goods sold
|
326,804
|
|
|
259,670
|
|
|
26
|
%
|
|
622,696
|
|
|
544,524
|
|
|
14
|
%
|
||||
Selling, general and administrative expense:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
31,814
|
|
|
25,886
|
|
|
23
|
%
|
|
58,757
|
|
|
54,335
|
|
|
8
|
%
|
||||
Steel Manufacturing Business
|
1,579
|
|
|
1,398
|
|
|
13
|
%
|
|
3,146
|
|
|
3,066
|
|
|
3
|
%
|
||||
Corporate
(2)
|
10,430
|
|
|
6,315
|
|
|
65
|
%
|
|
19,412
|
|
|
14,616
|
|
|
33
|
%
|
||||
Total selling, general and administrative expense
|
43,823
|
|
|
33,599
|
|
|
30
|
%
|
|
81,315
|
|
|
72,017
|
|
|
13
|
%
|
||||
(Income) loss from joint ventures:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
(2,207
|
)
|
|
324
|
|
|
NM
|
|
|
(2,642
|
)
|
|
412
|
|
|
NM
|
|
||||
Change in intercompany profit elimination
(3)
|
(13
|
)
|
|
(34
|
)
|
|
(62
|
)%
|
|
10
|
|
|
(93
|
)
|
|
NM
|
|
||||
Total (income) loss from joint ventures
|
(2,220
|
)
|
|
290
|
|
|
NM
|
|
|
(2,632
|
)
|
|
319
|
|
|
NM
|
|
||||
Goodwill impairment charge:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
—
|
|
|
8,845
|
|
|
NM
|
|
|
—
|
|
|
8,845
|
|
|
NM
|
|
||||
Other asset impairment charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
—
|
|
|
18,379
|
|
|
NM
|
|
|
—
|
|
|
18,379
|
|
|
NM
|
|
||||
Steel Manufacturing Business
|
—
|
|
|
—
|
|
|
NM
|
|
|
401
|
|
|
—
|
|
|
NM
|
|
||||
Corporate
|
—
|
|
|
79
|
|
|
NM
|
|
|
—
|
|
|
79
|
|
|
NM
|
|
||||
Total other asset impairment charges
|
—
|
|
|
18,458
|
|
|
NM
|
|
|
401
|
|
|
18,458
|
|
|
(98
|
)%
|
||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
26,359
|
|
|
(26,350
|
)
|
|
NM
|
|
|
38,778
|
|
|
(24,314
|
)
|
|
NM
|
|
||||
Steel Manufacturing Business
|
(1,746
|
)
|
|
(1,202
|
)
|
|
45
|
%
|
|
(4,827
|
)
|
|
1,552
|
|
|
NM
|
|
||||
Segment operating income (loss)
|
24,613
|
|
|
(27,552
|
)
|
|
NM
|
|
|
33,951
|
|
|
(22,762
|
)
|
|
NM
|
|
||||
Restructuring charges and other exit-related activities
(4)
|
494
|
|
|
(5,291
|
)
|
|
NM
|
|
|
293
|
|
|
(7,216
|
)
|
|
NM
|
|
||||
Corporate expense
(2)
|
(10,430
|
)
|
|
(6,394
|
)
|
|
63
|
%
|
|
(19,412
|
)
|
|
(14,695
|
)
|
|
32
|
%
|
||||
Change in intercompany profit elimination
(5)
|
(506
|
)
|
|
2,161
|
|
|
NM
|
|
|
(74
|
)
|
|
3,569
|
|
|
NM
|
|
||||
Total operating income (loss)
|
$
|
14,171
|
|
|
$
|
(37,076
|
)
|
|
NM
|
|
|
$
|
14,758
|
|
|
$
|
(41,104
|
)
|
|
NM
|
|
(1)
|
AMR sells recycled ferrous metal to SMB at rates per ton that approximate West Coast U.S. market prices. These intercompany revenues and cost of goods sold are eliminated in consolidation.
|
(2)
|
Corporate expense consists primarily of unallocated expenses for management and certain administrative services that benefit both reportable segments.
|
(3)
|
The joint ventures sell recycled metal to AMR and to SMB at prices that approximate local market rates, which produces intercompany profit. This intercompany profit is eliminated while the products remain in inventory and is not recognized until the finished products are sold to third parties.
|
(4)
|
Restructuring charges consist of expense for severance, contract termination and other restructuring costs that management does not include in its measurement of the performance of the reportable segments. Other exit-related activities consist of asset impairments and accelerated depreciation, net of gains on exit-related disposals, related to site closures.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
(5)
|
Intercompany profits are not recognized until the finished products are sold to third parties; therefore, intercompany profit is eliminated while the products remain in inventory.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
($ in thousands, except for prices)
|
2/28/2017
|
|
2/29/2016
|
|
% Change
|
|
2/28/2017
|
|
2/29/2016
|
|
% Change
|
||||||||||
Ferrous revenues
|
$
|
230,177
|
|
|
$
|
140,126
|
|
|
64
|
%
|
|
$
|
413,931
|
|
|
$
|
303,539
|
|
|
36
|
%
|
Nonferrous revenues
(1)
|
91,512
|
|
|
80,068
|
|
|
14
|
%
|
|
182,448
|
|
|
157,658
|
|
|
16
|
%
|
||||
Retail and other revenues
(1)
|
27,680
|
|
|
29,618
|
|
|
(7
|
)%
|
|
57,928
|
|
|
61,580
|
|
|
(6
|
)%
|
||||
Total segment revenues
|
349,369
|
|
|
249,812
|
|
|
40
|
%
|
|
$
|
654,307
|
|
|
522,777
|
|
|
25
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating income (loss)
|
$
|
26,359
|
|
|
$
|
(26,350
|
)
|
|
NM
|
|
|
$
|
38,778
|
|
|
$
|
(24,314
|
)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average ferrous recycled metal sales prices ($/LT):
(2)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
$
|
241
|
|
|
$
|
161
|
|
|
50
|
%
|
|
$
|
213
|
|
|
$
|
170
|
|
|
25
|
%
|
Foreign
|
$
|
252
|
|
|
$
|
174
|
|
|
45
|
%
|
|
$
|
227
|
|
|
$
|
177
|
|
|
28
|
%
|
Average
|
$
|
248
|
|
|
$
|
169
|
|
|
47
|
%
|
|
$
|
222
|
|
|
$
|
175
|
|
|
27
|
%
|
Ferrous sales volume (LT, in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
310
|
|
|
282
|
|
|
10
|
%
|
|
598
|
|
|
572
|
|
|
5
|
%
|
||||
Foreign
|
542
|
|
|
455
|
|
|
19
|
%
|
|
1,088
|
|
|
970
|
|
|
12
|
%
|
||||
Total ferrous sales volume (LT, in thousands)
|
852
|
|
|
737
|
|
|
16
|
%
|
|
1,686
|
|
|
1,542
|
|
|
9
|
%
|
||||
Average nonferrous sales price ($/pound)
(2)(3)
|
$
|
0.65
|
|
|
$
|
0.59
|
|
|
10
|
%
|
|
$
|
0.61
|
|
|
$
|
0.61
|
|
|
—
|
%
|
Nonferrous sales volumes (pounds, in thousands)
(3)
|
122,554
|
|
|
123,675
|
|
|
(1
|
)%
|
|
258,611
|
|
|
234,753
|
|
|
10
|
%
|
||||
Cars purchased (in thousands)
(4)
|
96
|
|
|
70
|
|
|
37
|
%
|
|
190
|
|
|
147
|
|
|
29
|
%
|
||||
Number of auto parts stores at period end
|
52
|
|
|
55
|
|
|
(5
|
)%
|
|
52
|
|
|
55
|
|
|
(5
|
)%
|
||||
Outbound freight in cost of goods sold
|
$
|
22,501
|
|
|
$
|
19,196
|
|
|
17
|
%
|
|
$
|
46,837
|
|
|
$
|
41,353
|
|
|
13
|
%
|
(1)
|
An adjustment of certain intrasegment items was made between nonferrous revenues and retail and other revenues for the three and six months ended February 29, 2016 to conform to the presentation for the three and six months ended February 28, 2017. The adjustment had no impact on previously reported total revenues or earnings.
|
(2)
|
Price information is shown after netting the cost of freight incurred to deliver the product to the customer.
|
(3)
|
Average sales price and volume information excludes platinum group metals ("PGMs") in catalytic converters.
|
(4)
|
Cars purchased by auto parts stores only.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
($ in thousands, except for price)
|
2/28/2017
|
|
2/29/2016
|
|
% Change
|
|
2/28/2017
|
|
2/29/2016
|
|
% Change
|
||||||||||
Revenues
(1)
|
$
|
58,291
|
|
|
$
|
58,391
|
|
|
—
|
%
|
|
$
|
110,887
|
|
|
$
|
130,292
|
|
|
(15
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating income (loss)
|
$
|
(1,746
|
)
|
|
$
|
(1,202
|
)
|
|
45
|
%
|
|
$
|
(4,827
|
)
|
|
$
|
1,552
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finished steel average sales price ($/ST)
(2)
|
$
|
517
|
|
|
$
|
504
|
|
|
3
|
%
|
|
$
|
505
|
|
|
$
|
530
|
|
|
(5
|
)%
|
Finished steel products sold (tons, in thousands)
|
106
|
|
|
110
|
|
|
(4
|
)%
|
|
207
|
|
|
233
|
|
|
(11
|
)%
|
||||
Rolling mill utilization
(3)
|
89
|
%
|
|
61
|
%
|
|
46
|
%
|
|
77
|
%
|
|
64
|
%
|
|
20
|
%
|
(1)
|
Revenues include sales of semi-finished goods (billets) and finished steel products.
|
(2)
|
Price information is shown after netting the cost of freight incurred to deliver the product to the customer.
|
(3)
|
Rolling mill utilization for the second quarter and first six months of fiscal 2017 is based on effective annual production capacity under current conditions of 580 thousand tons of finished steel products, reflecting a decrease in the effective finished steel production capacity resulting from the decommissioning of the older rolling mill during the first quarter of fiscal 2017.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2/28/2017
|
|
2/29/2016
|
|
2/28/2017
|
|
2/29/2016
|
||||||||
Reported within other asset impairment charges
(1)
:
|
|
|
|
|
|
|
|
||||||||
Long-lived assets
|
$
|
—
|
|
|
$
|
7,336
|
|
|
$
|
—
|
|
|
$
|
7,336
|
|
Accelerated depreciation
(1)
|
—
|
|
|
6,208
|
|
|
401
|
|
|
6,208
|
|
||||
Investment in joint venture
|
—
|
|
|
1,968
|
|
|
—
|
|
|
1,968
|
|
||||
Assets held for sale
|
—
|
|
|
1,659
|
|
|
—
|
|
|
1,659
|
|
||||
Other assets
(1)
|
—
|
|
|
1,287
|
|
|
—
|
|
|
1,287
|
|
||||
|
—
|
|
|
18,458
|
|
|
401
|
|
|
18,458
|
|
||||
Reported within restructuring charges and other exit-related activities:
|
|
|
|
|
|
|
|
||||||||
Long-lived assets
|
—
|
|
|
329
|
|
|
—
|
|
|
329
|
|
||||
Accelerated depreciation
|
—
|
|
|
630
|
|
|
96
|
|
|
630
|
|
||||
Other assets
|
—
|
|
|
1,102
|
|
|
62
|
|
|
1,102
|
|
||||
|
—
|
|
|
2,061
|
|
|
158
|
|
|
2,061
|
|
||||
Reported within discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Long-lived assets
|
—
|
|
|
673
|
|
|
—
|
|
|
673
|
|
||||
Accelerated depreciation
|
—
|
|
|
274
|
|
|
—
|
|
|
274
|
|
||||
|
—
|
|
|
947
|
|
|
—
|
|
|
947
|
|
||||
Total
|
$
|
—
|
|
|
$
|
21,466
|
|
|
$
|
559
|
|
|
$
|
21,466
|
|
(1)
|
Other asset impairment charges were incurred in AMR, except for $401 thousand of accelerated depreciation related to SMB for the six months ended February 28, 2017, and $79 thousand of impairment charges on Other assets related to Corporate for the three and six months ended February 29, 2016.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended February 28, 2017
|
|
Three Months Ended February 29, 2016
|
||||||||||||||||||||
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
||||||||||||
Restructuring charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance costs
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3,185
|
|
|
$
|
3,185
|
|
Contract termination costs
|
49
|
|
|
61
|
|
|
110
|
|
|
35
|
|
|
12
|
|
|
47
|
|
||||||
Other restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total restructuring charges
|
49
|
|
|
64
|
|
|
113
|
|
|
35
|
|
|
3,197
|
|
|
3,232
|
|
||||||
Other exit-related activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset impairments and accelerated depreciation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,008
|
|
|
3,008
|
|
||||||
Gain on exit-related disposal
|
—
|
|
|
(562
|
)
|
|
(562
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total other exit-related activities
|
—
|
|
|
(562
|
)
|
|
(562
|
)
|
|
—
|
|
|
3,008
|
|
|
3,008
|
|
||||||
Total restructuring charges and other exit-related activities
|
$
|
49
|
|
|
$
|
(498
|
)
|
|
$
|
(449
|
)
|
|
$
|
35
|
|
|
$
|
6,205
|
|
|
$
|
6,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring charges and other exit-related activities included in continuing operations
|
|
$
|
(494
|
)
|
|
|
|
|
|
$
|
5,291
|
|
|||||||||||
Restructuring charges and other exit-related activities included in discontinued operations
|
|
$
|
45
|
|
|
|
|
|
|
$
|
949
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Six Months Ended February 28, 2017
|
|
Six Months Ended February 29, 2016
|
||||||||||||||||||||
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
||||||||||||
Restructuring charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance costs
|
$
|
—
|
|
|
$
|
(59
|
)
|
|
$
|
(59
|
)
|
|
$
|
—
|
|
|
$
|
4,346
|
|
|
$
|
4,346
|
|
Contract termination costs
|
137
|
|
|
59
|
|
|
196
|
|
|
125
|
|
|
657
|
|
|
782
|
|
||||||
Other restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total restructuring charges
|
137
|
|
|
—
|
|
|
137
|
|
|
125
|
|
|
5,003
|
|
|
5,128
|
|
||||||
Other exit-related activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset impairments and accelerated depreciation
|
—
|
|
|
158
|
|
|
158
|
|
|
—
|
|
|
3,008
|
|
|
3,008
|
|
||||||
Gain on exit-related disposal
|
—
|
|
|
(562
|
)
|
|
(562
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total other exit-related activities
|
—
|
|
|
(404
|
)
|
|
(404
|
)
|
|
—
|
|
|
3,008
|
|
|
3,008
|
|
||||||
Total restructuring charges and other exit-related activities
|
$
|
137
|
|
|
$
|
(404
|
)
|
|
$
|
(267
|
)
|
|
$
|
125
|
|
|
$
|
8,011
|
|
|
$
|
8,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring charges and other exit-related activities included in continuing operations
|
|
$
|
(293
|
)
|
|
|
|
|
|
$
|
7,216
|
|
|||||||||||
Restructuring charges and other exit-related activities included in discontinued operations
|
|
$
|
26
|
|
|
|
|
|
|
$
|
920
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
February 28, 2017
|
|
August 31, 2016
|
||||
Short-term borrowings
|
$
|
676
|
|
|
$
|
8,374
|
|
Long-term debt, net of current maturities
|
208,801
|
|
|
184,144
|
|
||
Total debt
|
209,477
|
|
|
192,518
|
|
||
Less: cash and cash equivalents
|
9,830
|
|
|
26,819
|
|
||
Total debt, net of cash
|
$
|
199,647
|
|
|
$
|
165,699
|
|
|
Six Months Ended
|
||||||
|
2/28/2017
|
|
2/29/2016
|
||||
Borrowings from long-term debt
|
$
|
245,633
|
|
|
$
|
49,160
|
|
Repayment of long-term debt
|
(228,673
|
)
|
|
(79,456
|
)
|
||
Proceeds from line of credit
|
—
|
|
|
115,500
|
|
||
Repayment of line of credit
|
—
|
|
|
(115,500
|
)
|
||
Net borrowings (repayments) of debt
|
$
|
16,960
|
|
|
$
|
(30,296
|
)
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
(1)
|
Income tax allocated to the aggregate adjustments reconciling reported and adjusted income (loss) from continuing operations attributable to SSI and diluted earnings (loss) per share from continuing operations attributable to SSI is determined based on a tax provision calculated with and without the adjustments.
|
(2)
|
May not foot due to rounding.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
ITEM 6.
|
EXHIBITS
|
Exhibit Number
|
|
Exhibit Description
|
|
|
|
10.1*
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101
|
|
The following financial information from Schnitzer Steel Industries, Inc.’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Unaudited Condensed Consolidated Statements of Operations for the three and six months ended February 28, 2017 and February 29, 2016, (ii) Unaudited Condensed Consolidated Balance Sheets as of February 28, 2017 and August 31, 2016, (iii) Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended February 28, 2017 and February 29, 2016, (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended February 28, 2017 and February 29, 2016, and (v) the Notes to Unaudited Condensed Consolidated Financial Statements.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
April 6, 2017
|
By:
|
/s/ Tamara L. Lundgren
|
|
|
|
Tamara L. Lundgren
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Date:
|
April 6, 2017
|
By:
|
/s/ Richard D. Peach
|
|
|
|
Richard D. Peach
|
|
|
|
Senior Vice President, Chief Financial Officer and Chief of Corporate Operations
|
1 Year Schnitzer Steel Industries Chart |
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