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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
|
|
For the Quarterly Period Ended May 31, 2016
|
o
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Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
|
|
For the Transition Period from _______ to_______
|
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Commission File Number 0-22496
|
OREGON
|
|
93-0341923
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
299 SW Clay Street, Suite 350
Portland, OR
|
|
97201
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
o
|
Accelerated filer
|
x
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Non-accelerated filer
|
o
|
Smaller Reporting company
|
o
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PAGE
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ITEM 1.
|
FINANCIAL STATEMENTS (UNAUDITED)
|
|
May 31, 2016
|
|
August 31, 2015
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
7,018
|
|
|
$
|
22,755
|
|
Accounts receivable, net of allowance for doubtful accounts of $2,340
and $2,496
|
100,001
|
|
|
111,492
|
|
||
Inventories
|
156,946
|
|
|
156,532
|
|
||
Deferred income taxes
|
—
|
|
|
2,792
|
|
||
Refundable income taxes
|
6,682
|
|
|
7,263
|
|
||
Prepaid expenses and other current assets
|
19,087
|
|
|
21,531
|
|
||
Total current assets
|
289,734
|
|
|
322,365
|
|
||
Property, plant and equipment, net of accumulated depreciation of $715,064 and $679,035
|
387,273
|
|
|
427,554
|
|
||
Investments in joint ventures
|
12,793
|
|
|
15,320
|
|
||
Goodwill
|
166,895
|
|
|
175,676
|
|
||
Intangibles, net of accumulated amortization of $3,818 and $6
,918
|
5,145
|
|
|
6,353
|
|
||
Other assets
|
14,603
|
|
|
15,031
|
|
||
Total assets
|
$
|
876,443
|
|
|
$
|
962,299
|
|
Liabilities and Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
648
|
|
|
$
|
584
|
|
Accounts payable
|
56,878
|
|
|
57,105
|
|
||
Accrued payroll and related liabilities
|
22,602
|
|
|
25,478
|
|
||
Environmental liabilities
|
1,721
|
|
|
924
|
|
||
Accrued income taxes
|
—
|
|
|
148
|
|
||
Other accrued liabilities
|
31,441
|
|
|
36,207
|
|
||
Total current liabilities
|
113,290
|
|
|
120,446
|
|
||
Deferred income taxes
|
17,028
|
|
|
19,138
|
|
||
Long-term debt, net of current maturities
|
202,070
|
|
|
227,572
|
|
||
Environmental liabilities, net of current portion
|
44,551
|
|
|
45,869
|
|
||
Other long-term liabilities
|
10,574
|
|
|
10,723
|
|
||
Total liabilities
|
387,513
|
|
|
423,748
|
|
||
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, 26,450 and 26,474 shares issued and outstanding
|
26,450
|
|
|
26,474
|
|
||
Class B common stock – 25,000 shares $1.00 par value authorized, 306 and 306 shares issued and outstanding
|
306
|
|
|
306
|
|
||
Additional paid-in capital
|
27,451
|
|
|
26,211
|
|
||
Retained earnings
|
469,120
|
|
|
520,066
|
|
||
Accumulated other comprehensive loss
|
(38,528
|
)
|
|
(38,522
|
)
|
||
Total SSI shareholders’ equity
|
484,799
|
|
|
534,535
|
|
||
Noncontrolling interests
|
4,131
|
|
|
4,016
|
|
||
Total equity
|
488,930
|
|
|
538,551
|
|
||
Total liabilities and equity
|
$
|
876,443
|
|
|
$
|
962,299
|
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues
|
$
|
351,604
|
|
|
$
|
467,309
|
|
|
$
|
961,880
|
|
|
$
|
1,458,382
|
|
Operating expense:
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
294,738
|
|
|
424,312
|
|
|
839,262
|
|
|
1,338,976
|
|
||||
Selling, general and administrative
|
41,696
|
|
|
39,798
|
|
|
113,713
|
|
|
126,696
|
|
||||
(Income) loss from joint ventures
|
(258
|
)
|
|
(40
|
)
|
|
61
|
|
|
(1,148
|
)
|
||||
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
8,845
|
|
|
141,021
|
|
||||
Other asset impairment charges
|
—
|
|
|
1,281
|
|
|
18,458
|
|
|
45,119
|
|
||||
Restructuring charges and other exit-related costs
|
542
|
|
|
5,978
|
|
|
7,758
|
|
|
11,964
|
|
||||
Operating income (loss)
|
14,886
|
|
|
(4,020
|
)
|
|
(26,217
|
)
|
|
(204,246
|
)
|
||||
Interest expense
|
(2,905
|
)
|
|
(2,375
|
)
|
|
(6,779
|
)
|
|
(7,044
|
)
|
||||
Other income (expense), net
|
(81
|
)
|
|
84
|
|
|
763
|
|
|
3,011
|
|
||||
Income (loss) from continuing operations before income taxes
|
11,900
|
|
|
(6,311
|
)
|
|
(32,233
|
)
|
|
(208,279
|
)
|
||||
Income tax benefit (expense)
|
(95
|
)
|
|
(1,396
|
)
|
|
(810
|
)
|
|
8,171
|
|
||||
Income (loss) from continuing operations
|
11,805
|
|
|
(7,707
|
)
|
|
(33,043
|
)
|
|
(200,108
|
)
|
||||
Loss from discontinued operations, net of tax
|
(116
|
)
|
|
(1,234
|
)
|
|
(1,206
|
)
|
|
(6,314
|
)
|
||||
Net income (loss)
|
11,689
|
|
|
(8,941
|
)
|
|
(34,249
|
)
|
|
(206,422
|
)
|
||||
Net income attributable to noncontrolling interests
|
(689
|
)
|
|
(687
|
)
|
|
(1,294
|
)
|
|
(1,318
|
)
|
||||
Net income (loss) attributable to SSI
|
$
|
11,000
|
|
|
$
|
(9,628
|
)
|
|
$
|
(35,543
|
)
|
|
$
|
(207,740
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to SSI:
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
|
|||||||
Net income (loss) per share from continuing operations attributable to SSI
|
$
|
0.41
|
|
|
$
|
(0.31
|
)
|
|
$
|
(1.26
|
)
|
|
$
|
(7.46
|
)
|
Net loss per share from discontinued operations attributable to SSI
|
—
|
|
|
(0.05
|
)
|
|
(0.04
|
)
|
|
(0.23
|
)
|
||||
Net income (loss) per share attributable to SSI
(1)
|
$
|
0.40
|
|
|
$
|
(0.36
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
(7.69
|
)
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share from continuing operations attributable to SSI
|
$
|
0.41
|
|
|
$
|
(0.31
|
)
|
|
$
|
(1.26
|
)
|
|
$
|
(7.46
|
)
|
Net loss per share from discontinued operations attributable to SSI
|
—
|
|
|
(0.05
|
)
|
|
(0.04
|
)
|
|
(0.23
|
)
|
||||
Net income (loss) per share attributable to SSI
(1)
|
$
|
0.40
|
|
|
$
|
(0.36
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
(7.69
|
)
|
Weighted average number of common shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
27,261
|
|
|
27,043
|
|
|
27,195
|
|
|
27,003
|
|
||||
Diluted
|
27,327
|
|
|
27,043
|
|
|
27,195
|
|
|
27,003
|
|
||||
Dividends declared per common share
|
$
|
0.1875
|
|
|
$
|
0.1875
|
|
|
$
|
0.5625
|
|
|
$
|
0.5625
|
|
(1)
|
May not foot due to rounding.
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
$
|
11,689
|
|
|
$
|
(8,941
|
)
|
|
$
|
(34,249
|
)
|
|
$
|
(206,422
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
1,485
|
|
|
250
|
|
|
(416
|
)
|
|
(19,623
|
)
|
||||
Cash flow hedges, net
|
—
|
|
|
1,860
|
|
|
240
|
|
|
(1,833
|
)
|
||||
Pension obligations, net
|
65
|
|
|
301
|
|
|
170
|
|
|
360
|
|
||||
Total other comprehensive income (loss), net of tax
|
1,550
|
|
|
2,411
|
|
|
(6
|
)
|
|
(21,096
|
)
|
||||
Comprehensive income (loss)
|
13,239
|
|
|
(6,530
|
)
|
|
(34,255
|
)
|
|
(227,518
|
)
|
||||
Less net income attributable to noncontrolling interests
|
(689
|
)
|
|
(687
|
)
|
|
(1,294
|
)
|
|
(1,318
|
)
|
||||
Comprehensive income (loss) attributable to SSI
|
$
|
12,550
|
|
|
$
|
(7,217
|
)
|
|
$
|
(35,549
|
)
|
|
$
|
(228,836
|
)
|
|
Nine Months Ended May 31,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(34,249
|
)
|
|
$
|
(206,422
|
)
|
Adjustments to reconcile net loss to cash provided by operating activities:
|
|
|
|
||||
Goodwill impairment charge
|
8,845
|
|
|
141,021
|
|
||
Other asset impairment charges
|
18,458
|
|
|
45,119
|
|
||
Other exit-related asset impairments and accelerated depreciation
|
3,127
|
|
|
6,502
|
|
||
Write-off of debt issuance costs
|
768
|
|
|
—
|
|
||
Depreciation and amortization
|
41,943
|
|
|
52,420
|
|
||
Share-based compensation expense
|
6,636
|
|
|
7,596
|
|
||
Deferred income taxes
|
580
|
|
|
(764
|
)
|
||
Inventory write-down
|
710
|
|
|
3,031
|
|
||
Undistributed equity in earnings of joint ventures
|
61
|
|
|
(1,148
|
)
|
||
Gain on disposal of assets
|
(529
|
)
|
|
(1,752
|
)
|
||
Unrealized foreign exchange gain, net
|
(75
|
)
|
|
(1,623
|
)
|
||
Bad debt expense (recoveries), net
|
154
|
|
|
(112
|
)
|
||
Excess tax benefit from share-based payment arrangements
|
—
|
|
|
(94
|
)
|
||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
5,303
|
|
|
60,639
|
|
||
Inventories
|
3,812
|
|
|
25,833
|
|
||
Income taxes
|
436
|
|
|
(14,095
|
)
|
||
Prepaid expenses and other current assets
|
882
|
|
|
2,844
|
|
||
Intangibles and other long-term assets
|
(465
|
)
|
|
560
|
|
||
Accounts payable
|
3,527
|
|
|
(29,405
|
)
|
||
Accrued payroll and related liabilities
|
(2,880
|
)
|
|
(11,834
|
)
|
||
Other accrued liabilities
|
(5,632
|
)
|
|
(558
|
)
|
||
Environmental liabilities
|
(534
|
)
|
|
(348
|
)
|
||
Other long-term liabilities
|
(88
|
)
|
|
1,481
|
|
||
Distributed equity in earnings of joint ventures
|
400
|
|
|
525
|
|
||
Net cash provided by operating activities
|
51,190
|
|
|
79,416
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(21,442
|
)
|
|
(23,433
|
)
|
||
Joint venture receipts, net
|
7
|
|
|
1
|
|
||
Proceeds from sale of assets
|
2,649
|
|
|
2,403
|
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(150
|
)
|
||
Net cash used in investing activities
|
(18,786
|
)
|
|
(21,179
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from line of credit
|
135,500
|
|
|
189,000
|
|
||
Repayment of line of credit
|
(135,500
|
)
|
|
(189,000
|
)
|
||
Borrowings from long-term debt
|
112,427
|
|
|
114,099
|
|
||
Repayment of long-term debt
|
(137,869
|
)
|
|
(169,511
|
)
|
||
Payment of debt issuance costs
|
(879
|
)
|
|
—
|
|
||
Repurchase of Class A Common Stock
|
(3,479
|
)
|
|
—
|
|
||
Taxes paid related to net share settlement of share-based payment arrangements
|
(1,938
|
)
|
|
(1,360
|
)
|
||
Excess tax benefit from share-based payment arrangements
|
—
|
|
|
94
|
|
||
Distributions to noncontrolling interests
|
(1,179
|
)
|
|
(2,263
|
)
|
||
Contingent consideration paid relating to business acquisitions
|
—
|
|
|
(759
|
)
|
||
Dividends paid
|
(15,275
|
)
|
|
(15,110
|
)
|
||
Net cash used in financing activities
|
(48,192
|
)
|
|
(74,810
|
)
|
||
Effect of exchange rate changes on cash
|
51
|
|
|
(170
|
)
|
||
Net decrease in cash and cash equivalents
|
(15,737
|
)
|
|
(16,743
|
)
|
||
Cash and cash equivalents as of beginning of period
|
22,755
|
|
|
25,672
|
|
||
Cash and cash equivalents as of end of period
|
$
|
7,018
|
|
|
$
|
8,929
|
|
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 May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Reported within other asset impairment charges
(1)
:
|
|
|
|
|
|
|
|
||||||||
Long-lived assets
|
$
|
—
|
|
|
$
|
132
|
|
|
$
|
7,336
|
|
|
$
|
41,676
|
|
Accelerated depreciation
|
—
|
|
|
—
|
|
|
6,208
|
|
|
—
|
|
||||
Investment in joint venture
|
—
|
|
|
—
|
|
|
1,968
|
|
|
—
|
|
||||
Assets held for sale
|
—
|
|
|
1,009
|
|
|
1,659
|
|
|
2,558
|
|
||||
Other assets
(1)
|
—
|
|
|
140
|
|
|
1,287
|
|
|
885
|
|
||||
|
—
|
|
|
1,281
|
|
|
18,458
|
|
|
45,119
|
|
||||
Reported within restructuring charges and other exit-related costs:
|
|
|
|
|
|
|
|
||||||||
Long-lived assets
|
119
|
|
|
—
|
|
|
448
|
|
|
—
|
|
||||
Accelerated depreciation
|
—
|
|
|
150
|
|
|
630
|
|
|
3,836
|
|
||||
Other assets
|
—
|
|
|
—
|
|
|
1,102
|
|
|
—
|
|
||||
|
119
|
|
|
150
|
|
|
2,180
|
|
|
3,836
|
|
||||
Reported within discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Long-lived assets
|
—
|
|
|
—
|
|
|
673
|
|
|
2,666
|
|
||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
274
|
|
|
—
|
|
||||
|
—
|
|
|
—
|
|
|
947
|
|
|
2,666
|
|
||||
Total
|
$
|
119
|
|
|
$
|
1,431
|
|
|
$
|
21,585
|
|
|
$
|
51,621
|
|
(1)
|
Other asset impairment charges were incurred in the AMR reportable segment, except for
$79
thousand and
$745
thousand of impairment charges on Other Assets related to Corporate recorded in the second quarter of fiscal 2016 and 2015, respectively.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
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
|
|
May 31, 2016
|
|
August 31, 2015
|
||||
Processed and unprocessed scrap metal
|
$
|
69,914
|
|
|
$
|
56,860
|
|
Semi-finished goods (billets)
|
12,927
|
|
|
10,648
|
|
||
Finished goods
|
35,910
|
|
|
50,440
|
|
||
Supplies
|
38,195
|
|
|
38,584
|
|
||
Inventories
|
$
|
156,946
|
|
|
$
|
156,532
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Auto and Metals Recycling
|
||
August 31, 2015
|
$
|
175,676
|
|
Foreign currency translation adjustment
|
64
|
|
|
Goodwill impairment charge
|
(8,845
|
)
|
|
May 31, 2016
|
$
|
166,895
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
Reportable Segment
|
|
Balance as of August 31, 2015
|
|
Liabilities Established (Released), Net
|
|
Payments and Other
|
|
Balance as of May 31, 2016
|
|
Short-Term
|
|
Long-Term
|
||||||||||||
Auto and Metals Recycling
|
|
$
|
46,494
|
|
|
$
|
253
|
|
|
$
|
(732
|
)
|
|
$
|
46,015
|
|
|
$
|
1,584
|
|
|
$
|
44,431
|
|
Corporate
|
|
299
|
|
|
—
|
|
|
(42
|
)
|
|
257
|
|
|
137
|
|
|
120
|
|
||||||
Total
|
|
$
|
46,793
|
|
|
$
|
253
|
|
|
$
|
(774
|
)
|
|
$
|
46,272
|
|
|
$
|
1,721
|
|
|
$
|
44,551
|
|
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 May 31, 2016
|
|
Three Months Ended May 31, 2015
|
||||||||||||||||||||
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
||||||||||||
Restructuring charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance costs
|
$
|
—
|
|
|
$
|
340
|
|
|
$
|
340
|
|
|
$
|
(5
|
)
|
|
$
|
4,040
|
|
|
$
|
4,035
|
|
Contract termination costs
|
76
|
|
|
26
|
|
|
102
|
|
|
26
|
|
|
1,610
|
|
|
1,636
|
|
||||||
Other restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,609
|
|
|
1,609
|
|
||||||
Total restructuring charges
|
76
|
|
|
366
|
|
|
442
|
|
|
21
|
|
|
7,259
|
|
|
7,280
|
|
||||||
Other exit-related costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset impairments and accelerated depreciation
|
—
|
|
|
119
|
|
|
119
|
|
|
—
|
|
|
150
|
|
|
150
|
|
||||||
Total other exit-related costs
|
—
|
|
|
119
|
|
|
119
|
|
|
—
|
|
|
150
|
|
|
150
|
|
||||||
Total restructuring charges and other exit-related costs
|
$
|
76
|
|
|
$
|
485
|
|
|
$
|
561
|
|
|
$
|
21
|
|
|
$
|
7,409
|
|
|
$
|
7,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring charges and other exit-related costs included in continuing operations
|
|
$
|
542
|
|
|
|
|
|
|
$
|
5,978
|
|
|||||||||||
Restructuring charges and other exit-related costs included in discontinued operations
|
|
$
|
19
|
|
|
|
|
|
|
$
|
1,452
|
|
|
Nine Months Ended May 31, 2016
|
|
Nine Months Ended May 31, 2015
|
||||||||||||||||||||
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
||||||||||||
Restructuring charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance costs
|
$
|
—
|
|
|
$
|
4,686
|
|
|
$
|
4,686
|
|
|
$
|
393
|
|
|
$
|
4,580
|
|
|
$
|
4,973
|
|
Contract termination costs
|
201
|
|
|
683
|
|
|
884
|
|
|
335
|
|
|
1,689
|
|
|
2,024
|
|
||||||
Other restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
1,223
|
|
|
1,702
|
|
|
2,925
|
|
||||||
Total restructuring charges
|
201
|
|
|
5,369
|
|
|
5,570
|
|
|
1,951
|
|
|
7,971
|
|
|
9,922
|
|
||||||
Other exit-related costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset impairments and accelerated depreciation
|
—
|
|
|
3,127
|
|
|
3,127
|
|
|
—
|
|
|
6,502
|
|
|
6,502
|
|
||||||
Total other exit-related costs
|
—
|
|
|
3,127
|
|
|
3,127
|
|
|
—
|
|
|
6,502
|
|
|
6,502
|
|
||||||
Total restructuring charges and other exit-related costs
|
$
|
201
|
|
|
$
|
8,496
|
|
|
$
|
8,697
|
|
|
$
|
1,951
|
|
|
$
|
14,473
|
|
|
$
|
16,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring charges and other exit-related costs included in continuing operations
|
|
$
|
7,758
|
|
|
|
|
|
|
$
|
11,964
|
|
|||||||||||
Restructuring charges and other exit-related costs included in discontinued operations
|
|
$
|
939
|
|
|
|
|
|
|
$
|
4,460
|
|
|
All Other Plans
|
|
Q2'15 Plan
|
|
Total
|
||||||
Total restructuring charges to date
|
$
|
7,962
|
|
|
$
|
13,992
|
|
|
$
|
21,954
|
|
Total expected restructuring charges
|
$
|
7,991
|
|
|
$
|
14,408
|
|
|
$
|
22,399
|
|
|
All Other Plans
|
|
Q2’15 Plan
|
|
All Plans
|
||||||||||||||||||||||||||||||||||
|
Balance 8/31/2015
|
|
Charges
|
|
Payments and Other
|
|
Balance 5/31/2016
|
|
Balance 8/31/2015
|
|
Charges
|
|
Payments and Other
|
|
Balance 5/31/2016
|
|
Total Charges to Date
|
|
Total Expected Charges
|
||||||||||||||||||||
Severance costs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,226
|
|
|
$
|
4,686
|
|
|
$
|
(4,819
|
)
|
|
$
|
1,093
|
|
|
$
|
14,922
|
|
|
$
|
14,977
|
|
Contract termination costs
|
362
|
|
|
201
|
|
|
(515
|
)
|
|
48
|
|
|
1,320
|
|
|
683
|
|
|
(786
|
)
|
|
1,217
|
|
|
3,350
|
|
|
3,668
|
|
||||||||||
Other restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,682
|
|
|
3,754
|
|
||||||||||
Total
|
$
|
362
|
|
|
$
|
201
|
|
|
$
|
(515
|
)
|
|
$
|
48
|
|
|
$
|
2,546
|
|
|
$
|
5,369
|
|
|
$
|
(5,605
|
)
|
|
$
|
2,310
|
|
|
$
|
21,954
|
|
|
$
|
22,399
|
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
|
Total Charges
to Date
|
|
Total Expected Charges
|
||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
||||||||||||||
Restructuring charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Auto and Metals Recycling
|
$
|
423
|
|
|
$
|
4,017
|
|
|
$
|
4,766
|
|
|
$
|
6,260
|
|
|
$
|
15,564
|
|
|
$
|
15,937
|
|
Unallocated (Corporate)
|
—
|
|
|
1,811
|
|
|
812
|
|
|
1,868
|
|
|
4,819
|
|
|
4,819
|
|
||||||
Discontinued operations
|
19
|
|
|
1,452
|
|
|
(8
|
)
|
|
1,794
|
|
|
1,571
|
|
|
1,643
|
|
||||||
Total restructuring charges
|
442
|
|
|
7,280
|
|
|
5,570
|
|
|
9,922
|
|
|
21,954
|
|
|
22,399
|
|
||||||
Other exit-related costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Auto and Metals Recycling
|
119
|
|
|
150
|
|
|
2,180
|
|
|
3,836
|
|
|
6,582
|
|
|
|
|||||||
Discontinued operations
|
—
|
|
|
—
|
|
|
947
|
|
|
2,666
|
|
|
3,613
|
|
|
|
|||||||
Total other exit-related costs
|
119
|
|
|
150
|
|
|
3,127
|
|
|
6,502
|
|
|
10,195
|
|
|
|
|
||||||
Total restructuring charges and other exit-related costs
|
$
|
561
|
|
|
$
|
7,430
|
|
|
$
|
8,697
|
|
|
$
|
16,424
|
|
|
$
|
32,149
|
|
|
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Nine Months Ended May 31, 2016
|
|
Nine Months Ended May 31, 2015
|
||||||||||||||||||||
|
SSI Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
SSI Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||
Balance - September 1 (Beginning of period)
|
$
|
534,535
|
|
|
$
|
4,016
|
|
|
$
|
538,551
|
|
|
$
|
770,784
|
|
|
$
|
5,193
|
|
|
$
|
775,977
|
|
Net income (loss)
|
(35,543
|
)
|
|
1,294
|
|
|
(34,249
|
)
|
|
(207,740
|
)
|
|
1,318
|
|
|
(206,422
|
)
|
||||||
Other comprehensive loss, net of tax
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|
(21,096
|
)
|
|
—
|
|
|
(21,096
|
)
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
(1,179
|
)
|
|
(1,179
|
)
|
|
—
|
|
|
(2,263
|
)
|
|
(2,263
|
)
|
||||||
Share repurchases
|
(3,479
|
)
|
|
—
|
|
|
(3,479
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restricted stock withheld for taxes
|
(1,938
|
)
|
|
—
|
|
|
(1,938
|
)
|
|
(1,360
|
)
|
|
—
|
|
|
(1,360
|
)
|
||||||
Share-based compensation
|
6,636
|
|
|
—
|
|
|
6,636
|
|
|
7,596
|
|
|
—
|
|
|
7,596
|
|
||||||
Excess tax deficiency from stock options exercised and restricted stock units vested
|
—
|
|
|
—
|
|
|
—
|
|
|
(703
|
)
|
|
—
|
|
|
(703
|
)
|
||||||
Dividends
|
(15,406
|
)
|
|
—
|
|
|
(15,406
|
)
|
|
(15,415
|
)
|
|
—
|
|
|
(15,415
|
)
|
||||||
Balance - May 31
(End of period)
|
$
|
484,799
|
|
|
$
|
4,131
|
|
|
$
|
488,930
|
|
|
$
|
532,066
|
|
|
$
|
4,248
|
|
|
$
|
536,314
|
|
|
Three Months Ended May 31, 2016
|
|
Three Months Ended May 31, 2015
|
||||||||||||||||||||||||||||
|
Foreign Currency Translation Adjustments
|
|
Pension Obligations, net
|
|
Net Unrealized Gain (Loss) on Cash Flow Hedges
|
|
Total
|
|
Foreign Currency Translation Adjustments
|
|
Pension Obligations, net
|
|
Net Unrealized Gain (Loss) on Cash Flow Hedges
|
|
Total
|
||||||||||||||||
Balances - March 1
(Beginning of period)
|
$
|
(35,910
|
)
|
|
$
|
(4,168
|
)
|
|
$
|
—
|
|
|
$
|
(40,078
|
)
|
|
$
|
(30,536
|
)
|
|
$
|
(1,977
|
)
|
|
$
|
(3,635
|
)
|
|
$
|
(36,148
|
)
|
Other comprehensive income before reclassifications
|
1,485
|
|
|
|
|
|
—
|
|
|
1,485
|
|
|
250
|
|
|
—
|
|
|
215
|
|
|
465
|
|
||||||||
Income tax benefit
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other comprehensive income before reclassifications, net of tax
|
1,485
|
|
|
—
|
|
|
—
|
|
|
1,485
|
|
|
250
|
|
|
—
|
|
|
215
|
|
|
465
|
|
||||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
102
|
|
|
—
|
|
|
102
|
|
|
—
|
|
|
473
|
|
|
1,645
|
|
|
2,118
|
|
||||||||
Income tax benefit
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
(172
|
)
|
|
—
|
|
|
(172
|
)
|
||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax
|
—
|
|
|
65
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
301
|
|
|
1,645
|
|
|
1,946
|
|
||||||||
Net periodic other comprehensive income
|
1,485
|
|
|
65
|
|
|
—
|
|
|
1,550
|
|
|
250
|
|
|
301
|
|
|
1,860
|
|
|
2,411
|
|
||||||||
Balances - May 31
(End of period)
|
$
|
(34,425
|
)
|
|
$
|
(4,103
|
)
|
|
$
|
—
|
|
|
$
|
(38,528
|
)
|
|
$
|
(30,286
|
)
|
|
$
|
(1,676
|
)
|
|
$
|
(1,775
|
)
|
|
$
|
(33,737
|
)
|
|
Nine Months Ended May 31, 2016
|
|
Nine Months Ended May 31, 2015
|
||||||||||||||||||||||||||||
|
Foreign Currency Translation Adjustments
|
|
Pension Obligations, net
|
|
Net Unrealized Gain (Loss) on Cash Flow Hedges
|
|
Total
|
|
Foreign Currency Translation Adjustments
|
|
Pension Obligations, net
|
|
Net Unrealized Gain (Loss) on Cash Flow Hedges
|
|
Total
|
||||||||||||||||
Balances - September 1
(Beginning of period)
|
$
|
(34,009
|
)
|
|
$
|
(4,273
|
)
|
|
$
|
(240
|
)
|
|
$
|
(38,522
|
)
|
|
$
|
(10,663
|
)
|
|
$
|
(2,036
|
)
|
|
$
|
58
|
|
|
$
|
(12,641
|
)
|
Other comprehensive loss before reclassifications
|
(416
|
)
|
|
—
|
|
|
—
|
|
|
(416
|
)
|
|
(19,623
|
)
|
|
—
|
|
|
(4,921
|
)
|
|
(24,544
|
)
|
||||||||
Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
428
|
|
|
428
|
|
||||||||
Other comprehensive loss before reclassifications, net of tax
|
(416
|
)
|
|
—
|
|
|
—
|
|
|
(416
|
)
|
|
(19,623
|
)
|
|
—
|
|
|
(4,493
|
)
|
|
(24,116
|
)
|
||||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
268
|
|
|
312
|
|
|
580
|
|
|
—
|
|
|
560
|
|
|
2,999
|
|
|
3,559
|
|
||||||||
Income tax benefit
|
—
|
|
|
(98
|
)
|
|
(72
|
)
|
|
(170
|
)
|
|
—
|
|
|
(200
|
)
|
|
(339
|
)
|
|
(539
|
)
|
||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax
|
—
|
|
|
170
|
|
|
240
|
|
|
410
|
|
|
—
|
|
|
360
|
|
|
2,660
|
|
|
3,020
|
|
||||||||
Net periodic other comprehensive income (loss)
|
(416
|
)
|
|
170
|
|
|
240
|
|
|
(6
|
)
|
|
(19,623
|
)
|
|
360
|
|
|
(1,833
|
)
|
|
(21,096
|
)
|
||||||||
Balances - May 31
(End of period)
|
$
|
(34,425
|
)
|
|
$
|
(4,103
|
)
|
|
$
|
—
|
|
|
$
|
(38,528
|
)
|
|
$
|
(30,286
|
)
|
|
$
|
(1,676
|
)
|
|
$
|
(1,775
|
)
|
|
$
|
(33,737
|
)
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,440
|
|
|
$
|
—
|
|
|
$
|
8,210
|
|
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations before income taxes
|
$
|
(130
|
)
|
|
$
|
(1,812
|
)
|
|
$
|
(1,225
|
)
|
|
$
|
(7,070
|
)
|
Income tax benefit
|
14
|
|
|
578
|
|
|
19
|
|
|
756
|
|
||||
Loss from discontinued operations, net of tax
|
$
|
(116
|
)
|
|
$
|
(1,234
|
)
|
|
$
|
(1,206
|
)
|
|
$
|
(6,314
|
)
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Asset (Liability) Derivatives
|
|||
|
Balance Sheet Location
|
August 31, 2015
|
||
Foreign currency exchange forward contracts
|
Prepaid expenses and other current assets
|
$
|
—
|
|
Foreign currency exchange forward contracts
|
Other accrued liabilities
|
$
|
(751
|
)
|
|
Derivative Gain (Loss) Recognized
|
||||||||||
|
Three Months Ended May 31, 2015
|
||||||||||
|
Other Comprehensive Income
|
|
Revenues - Effective Portion
|
|
Other Income (Expense), net
|
||||||
Foreign currency exchange forward contracts
- designated as cash flow hedges
|
$
|
215
|
|
|
$
|
(1,645
|
)
|
|
$
|
27
|
|
Foreign currency exchange forward contracts
- not designated as cash flow hedges
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(143
|
)
|
|
Derivative Gain (Loss) Recognized
|
||||||||||
|
Nine Months Ended May 31, 2015
|
||||||||||
|
Other Comprehensive Loss
|
|
Revenues - Effective Portion
|
|
Other Income (Expense), net
|
||||||
Foreign currency exchange forward contracts
- designated as cash flow hedges |
$
|
(4,921
|
)
|
|
$
|
(2,999
|
)
|
|
$
|
202
|
|
Foreign currency exchange forward contracts
- not designated as cash flow hedges |
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(265
|
)
|
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 May 31,
|
|
Nine Months Ended May 31,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State taxes, net of credits
|
1.7
|
|
|
4.7
|
|
|
1.4
|
|
|
1.2
|
|
Foreign income taxed at different rates
|
(2.4
|
)
|
|
(0.5
|
)
|
|
(6.1
|
)
|
|
(7.4
|
)
|
Non-deductible officers’ compensation
|
0.7
|
|
|
(0.6
|
)
|
|
(1.3
|
)
|
|
(0.2
|
)
|
Noncontrolling interests
|
(1.6
|
)
|
|
(0.8
|
)
|
|
3.0
|
|
|
0.4
|
|
Research and development credits
|
(2.1
|
)
|
|
7.4
|
|
|
1.6
|
|
|
0.3
|
|
Tax return to provision adjustment
|
(1.1
|
)
|
|
(6.5
|
)
|
|
0.4
|
|
|
(0.2
|
)
|
Valuation allowance on deferred tax assets
|
(31.2
|
)
|
|
(54.3
|
)
|
|
(33.5
|
)
|
|
(21.5
|
)
|
Non-deductible goodwill
|
0.3
|
|
|
(5.0
|
)
|
|
(0.6
|
)
|
|
(2.8
|
)
|
Unrecognized tax benefits
|
1.4
|
|
|
(4.0
|
)
|
|
(1.4
|
)
|
|
(0.6
|
)
|
Other non-deductible expenses
|
0.7
|
|
|
2.7
|
|
|
(1.8
|
)
|
|
(0.4
|
)
|
Other
|
(0.6
|
)
|
|
(0.2
|
)
|
|
0.8
|
|
|
0.1
|
|
Effective tax rate
|
0.8
|
%
|
|
(22.1
|
)%
|
|
(2.5
|
)%
|
|
3.9
|
%
|
(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 May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Income (loss) from continuing operations
|
$
|
11,805
|
|
|
$
|
(7,707
|
)
|
|
$
|
(33,043
|
)
|
|
$
|
(200,108
|
)
|
Net income attributable to noncontrolling interests
|
(689
|
)
|
|
(687
|
)
|
|
(1,294
|
)
|
|
(1,318
|
)
|
||||
Income (loss) from continuing operations attributable to SSI
|
11,116
|
|
|
(8,394
|
)
|
|
(34,337
|
)
|
|
(201,426
|
)
|
||||
Loss from discontinued operations, net of tax
|
(116
|
)
|
|
(1,234
|
)
|
|
(1,206
|
)
|
|
(6,314
|
)
|
||||
Net income (loss) attributable to SSI
|
$
|
11,000
|
|
|
$
|
(9,628
|
)
|
|
$
|
(35,543
|
)
|
|
$
|
(207,740
|
)
|
Computation of shares:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, basic
|
27,261
|
|
|
27,043
|
|
|
27,195
|
|
|
27,003
|
|
||||
Incremental common shares attributable to dilutive stock options, performance share awards, DSUs, and RSUs
|
66
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average common shares outstanding, diluted
|
27,327
|
|
|
27,043
|
|
|
27,195
|
|
|
27,003
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Auto and Metals Recycling:
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
306,851
|
|
|
$
|
410,269
|
|
|
$
|
829,628
|
|
|
$
|
1,313,014
|
|
Less: Intersegment revenues
|
(26,171
|
)
|
|
(37,899
|
)
|
|
(68,965
|
)
|
|
(137,916
|
)
|
||||
AMR external customer revenues
|
280,680
|
|
|
372,370
|
|
|
760,663
|
|
|
1,175,098
|
|
||||
Steel Manufacturing Business:
|
|
|
|
|
|
|
|
||||||||
Revenues
|
70,924
|
|
|
94,939
|
|
|
201,217
|
|
|
283,284
|
|
||||
Total revenues
|
$
|
351,604
|
|
|
$
|
467,309
|
|
|
$
|
961,880
|
|
|
$
|
1,458,382
|
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Auto and Metals Recycling
|
$
|
26,870
|
|
|
$
|
4,261
|
|
|
$
|
2,555
|
|
|
$
|
(179,650
|
)
|
Steel Manufacturing Business
|
1,246
|
|
|
4,343
|
|
|
2,799
|
|
|
14,350
|
|
||||
Segment operating income (loss)
|
28,116
|
|
|
8,604
|
|
|
5,354
|
|
|
(165,300
|
)
|
||||
Restructuring charges and other exit-related costs
|
(542
|
)
|
|
(5,978
|
)
|
|
(7,758
|
)
|
|
(11,964
|
)
|
||||
Corporate and eliminations
|
(12,688
|
)
|
|
(6,646
|
)
|
|
(23,813
|
)
|
|
(26,982
|
)
|
||||
Operating income (loss)
|
14,886
|
|
|
(4,020
|
)
|
|
(26,217
|
)
|
|
(204,246
|
)
|
||||
Interest expense
|
(2,905
|
)
|
|
(2,375
|
)
|
|
(6,779
|
)
|
|
(7,044
|
)
|
||||
Other income (expense), net
|
(81
|
)
|
|
84
|
|
|
763
|
|
|
3,011
|
|
||||
Income (loss) from continuing operations before income taxes
|
$
|
11,900
|
|
|
$
|
(6,311
|
)
|
|
$
|
(32,233
|
)
|
|
$
|
(208,279
|
)
|
|
May 31, 2016
|
|
August 31, 2015
|
||||
Auto and Metals Recycling
(1)
|
$
|
1,482,857
|
|
|
$
|
1,492,906
|
|
Steel Manufacturing Business
|
368,431
|
|
|
370,955
|
|
||
Total segment assets
|
1,851,288
|
|
|
1,863,861
|
|
||
Corporate and eliminations
|
(974,845
|
)
|
|
(901,562
|
)
|
||
Total assets
|
$
|
876,443
|
|
|
$
|
962,299
|
|
(1)
|
AMR total assets include
$13 million
and
$15 million
as of
May 31, 2016
and
August 31, 2015
, respectively, for investments in joint ventures.
|
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
nine
months of fiscal
2016
, net cash provided by operating activities of
$51 million
, compared to
$79 million
in the prior year period; and
|
•
|
Debt of $203 million as of
May 31, 2016
, compared to $228 million as of August 31, 2015. Debt, net of cash, of
$196 million
as of
May 31, 2016
, compared to
$205 million
as of
August 31, 2015
(see the reconciliation of debt, net of cash in Non-GAAP Financial Measures at the end of Item 2).
|
•
|
AMR revenues and operating income of
$307 million
and
$27 million
, respectively, compared to
$410 million
and
$4 million
, respectively, in the
third
quarter of fiscal
2015
.
|
•
|
AMR adjusted operating income of
$27 million
, compared to
$6 million
in the
third
quarter of fiscal
2015
(see reconciliation of adjusted AMR operating income (loss) in Non-GAAP Financial Measures at the end of Item 2);
|
•
|
SMB revenues and operating income of
$71 million
and
$1 million
, respectively, compared to
$95 million
and
$4 million
, respectively, in the
third
quarter of fiscal
2015
.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||||||||
($ in thousands)
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
$
|
306,851
|
|
|
$
|
410,269
|
|
|
(25
|
)%
|
|
$
|
829,628
|
|
|
$
|
1,313,014
|
|
|
(37
|
)%
|
Steel Manufacturing Business
|
70,924
|
|
|
94,939
|
|
|
(25
|
)%
|
|
201,217
|
|
|
283,284
|
|
|
(29
|
)%
|
||||
Intercompany revenue eliminations
(1)
|
(26,171
|
)
|
|
(37,899
|
)
|
|
(31
|
)%
|
|
(68,965
|
)
|
|
(137,916
|
)
|
|
(50
|
)%
|
||||
Total revenues
|
351,604
|
|
|
467,309
|
|
|
(25
|
)%
|
|
961,880
|
|
|
1,458,382
|
|
|
(34
|
)%
|
||||
Cost of goods sold:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
251,008
|
|
|
373,991
|
|
|
(33
|
)%
|
|
716,128
|
|
|
1,211,245
|
|
|
(41
|
)%
|
||||
Steel Manufacturing Business
|
67,892
|
|
|
89,111
|
|
|
(24
|
)%
|
|
193,565
|
|
|
264,413
|
|
|
(27
|
)%
|
||||
Intercompany cost of goods sold eliminations
(1)
|
(24,162
|
)
|
|
(38,790
|
)
|
|
(38
|
)%
|
|
(70,431
|
)
|
|
(136,682
|
)
|
|
(48
|
)%
|
||||
Total cost of goods sold
|
294,738
|
|
|
424,312
|
|
|
(31
|
)%
|
|
839,262
|
|
|
1,338,976
|
|
|
(37
|
)%
|
||||
Selling, general and administrative expense:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
29,241
|
|
|
30,759
|
|
|
(5
|
)%
|
|
83,577
|
|
|
97,140
|
|
|
(14
|
)%
|
||||
Steel Manufacturing Business
|
1,786
|
|
|
1,485
|
|
|
20
|
%
|
|
4,853
|
|
|
4,521
|
|
|
7
|
%
|
||||
Corporate
(2)
|
10,669
|
|
|
7,554
|
|
|
41
|
%
|
|
25,283
|
|
|
25,035
|
|
|
1
|
%
|
||||
Total selling, general and administrative expense
|
41,696
|
|
|
39,798
|
|
|
5
|
%
|
|
113,713
|
|
|
126,696
|
|
|
(10
|
)%
|
||||
(Income) loss from joint ventures:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
(268
|
)
|
|
(23
|
)
|
|
1,065
|
%
|
|
144
|
|
|
(1,116
|
)
|
|
NM
|
|
||||
Change in intercompany profit elimination
(3)
|
10
|
|
|
(17
|
)
|
|
NM
|
|
|
(83
|
)
|
|
(32
|
)
|
|
159
|
%
|
||||
Total (income) loss from joint ventures
|
(258
|
)
|
|
(40
|
)
|
|
545
|
%
|
|
61
|
|
|
(1,148
|
)
|
|
NM
|
|
||||
Goodwill impairment charge:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
—
|
|
|
—
|
|
|
NM
|
|
|
8,845
|
|
|
141,021
|
|
|
(94
|
)%
|
||||
Other asset impairment charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
—
|
|
|
1,281
|
|
|
NM
|
|
|
18,379
|
|
|
44,374
|
|
|
(59
|
)%
|
||||
Corporate
|
—
|
|
|
—
|
|
|
NM
|
|
|
79
|
|
|
745
|
|
|
(89
|
)%
|
||||
Total other asset impairment charges
|
—
|
|
|
1,281
|
|
|
NM
|
|
|
18,458
|
|
|
45,119
|
|
|
(59
|
)%
|
||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Auto and Metals Recycling
|
26,870
|
|
|
4,261
|
|
|
531
|
%
|
|
2,555
|
|
|
(179,650
|
)
|
|
NM
|
|
||||
Steel Manufacturing Business
|
1,246
|
|
|
4,343
|
|
|
(71
|
)%
|
|
2,799
|
|
|
14,350
|
|
|
(80
|
)%
|
||||
Segment operating income (loss)
|
28,116
|
|
|
8,604
|
|
|
227
|
%
|
|
5,354
|
|
|
(165,300
|
)
|
|
NM
|
|
||||
Restructuring charges and other exit-related costs
(4)
|
(542
|
)
|
|
(5,978
|
)
|
|
(91
|
)%
|
|
(7,758
|
)
|
|
(11,964
|
)
|
|
(35
|
)%
|
||||
Corporate expense
(2)
|
(10,669
|
)
|
|
(7,554
|
)
|
|
41
|
%
|
|
(25,362
|
)
|
|
(25,780
|
)
|
|
(2
|
)%
|
||||
Change in intercompany profit elimination
(5)
|
(2,019
|
)
|
|
908
|
|
|
NM
|
|
|
1,549
|
|
|
(1,202
|
)
|
|
NM
|
|
||||
Total operating income (loss)
|
$
|
14,886
|
|
|
$
|
(4,020
|
)
|
|
NM
|
|
|
$
|
(26,217
|
)
|
|
$
|
(204,246
|
)
|
|
(87
|
)%
|
(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 certain shared services management and 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.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
(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 operating segments. Other exit-related costs consist of asset impairments and accelerated depreciation related to site closures.
|
(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.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Reported within other asset impairment charges
(1)
:
|
|
|
|
|
|
|
|
||||||||
Long-lived assets
|
$
|
—
|
|
|
$
|
132
|
|
|
$
|
7,336
|
|
|
$
|
41,676
|
|
Accelerated depreciation
|
—
|
|
|
—
|
|
|
6,208
|
|
|
—
|
|
||||
Investment in joint venture
|
—
|
|
|
—
|
|
|
1,968
|
|
|
—
|
|
||||
Assets held for sale
|
—
|
|
|
1,009
|
|
|
1,659
|
|
|
2,558
|
|
||||
Other assets
(1)
|
—
|
|
|
140
|
|
|
1,287
|
|
|
885
|
|
||||
|
—
|
|
|
1,281
|
|
|
18,458
|
|
|
45,119
|
|
||||
Reported within restructuring charges and other exit-related costs:
|
|
|
|
|
|
|
|
||||||||
Long-lived assets
|
119
|
|
|
—
|
|
|
448
|
|
|
—
|
|
||||
Accelerated depreciation
|
—
|
|
|
150
|
|
|
630
|
|
|
3,836
|
|
||||
Other assets
|
—
|
|
|
—
|
|
|
1,102
|
|
|
—
|
|
||||
|
119
|
|
|
150
|
|
|
2,180
|
|
|
3,836
|
|
||||
Reported within discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Long-lived assets
|
—
|
|
|
—
|
|
|
673
|
|
|
2,666
|
|
||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
274
|
|
|
—
|
|
||||
|
—
|
|
|
—
|
|
|
947
|
|
|
2,666
|
|
||||
Total
|
$
|
119
|
|
|
$
|
1,431
|
|
|
$
|
21,585
|
|
|
$
|
51,621
|
|
(1)
|
Other asset impairment charges were incurred in the AMR operating segment, except for $79 thousand and $745 thousand of impairment charges on Other Assets related to Corporate recorded in the second quarter of fiscal 2016 and 2015, respectively.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended May 31, 2016
|
|
Three Months Ended May 31, 2015
|
||||||||||||||||||||
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
||||||||||||
Restructuring charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance costs
|
$
|
—
|
|
|
$
|
340
|
|
|
$
|
340
|
|
|
$
|
(5
|
)
|
|
$
|
4,040
|
|
|
$
|
4,035
|
|
Contract termination costs
|
76
|
|
|
26
|
|
|
102
|
|
|
26
|
|
|
1,610
|
|
|
1,636
|
|
||||||
Other restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,609
|
|
|
1,609
|
|
||||||
Total restructuring charges
|
76
|
|
|
366
|
|
|
442
|
|
|
21
|
|
|
7,259
|
|
|
7,280
|
|
||||||
Other exit-related costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset impairments and accelerated depreciation
|
—
|
|
|
119
|
|
|
119
|
|
|
—
|
|
|
150
|
|
|
150
|
|
||||||
Total other exit-related costs
|
—
|
|
|
119
|
|
|
119
|
|
|
—
|
|
|
150
|
|
|
150
|
|
||||||
Total restructuring charges and other exit-related costs
|
$
|
76
|
|
|
$
|
485
|
|
|
$
|
561
|
|
|
$
|
21
|
|
|
$
|
7,409
|
|
|
$
|
7,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring charges and other exit-related costs included in continuing operations
|
|
$
|
542
|
|
|
|
|
|
|
$
|
5,978
|
|
|||||||||||
Restructuring charges and other exit-related costs included in discontinued operations
|
|
$
|
19
|
|
|
|
|
|
|
$
|
1,452
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Nine Months Ended May 31, 2016
|
|
Nine Months Ended May 31, 2015
|
||||||||||||||||||||
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
|
All Other Plans
|
|
Q2’15 Plan
|
|
Total Charges
|
||||||||||||
Restructuring charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance costs
|
$
|
—
|
|
|
$
|
4,686
|
|
|
$
|
4,686
|
|
|
$
|
393
|
|
|
$
|
4,580
|
|
|
$
|
4,973
|
|
Contract termination costs
|
201
|
|
|
683
|
|
|
884
|
|
|
335
|
|
|
1,689
|
|
|
2,024
|
|
||||||
Other restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
1,223
|
|
|
1,702
|
|
|
2,925
|
|
||||||
Total restructuring charges
|
201
|
|
|
5,369
|
|
|
5,570
|
|
|
1,951
|
|
|
7,971
|
|
|
9,922
|
|
||||||
Other exit-related costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset impairments and accelerated depreciation
|
—
|
|
|
3,127
|
|
|
3,127
|
|
|
—
|
|
|
6,502
|
|
|
6,502
|
|
||||||
Total other exit-related costs
|
—
|
|
|
3,127
|
|
|
3,127
|
|
|
—
|
|
|
6,502
|
|
|
6,502
|
|
||||||
Total restructuring charges and other exit-related costs
|
$
|
201
|
|
|
$
|
8,496
|
|
|
$
|
8,697
|
|
|
$
|
1,951
|
|
|
$
|
14,473
|
|
|
$
|
16,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring charges and other exit-related costs included in continuing operations
|
|
$
|
7,758
|
|
|
|
|
|
|
$
|
11,964
|
|
|||||||||||
Restructuring charges and other exit-related costs included in discontinued operations
|
|
$
|
939
|
|
|
|
|
|
|
$
|
4,460
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,440
|
|
|
$
|
—
|
|
|
$
|
8,210
|
|
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations before income taxes
|
$
|
(130
|
)
|
|
$
|
(1,812
|
)
|
|
$
|
(1,225
|
)
|
|
$
|
(7,070
|
)
|
Income tax benefit
|
14
|
|
|
578
|
|
|
19
|
|
|
756
|
|
||||
Loss from discontinued operations, net of tax
|
$
|
(116
|
)
|
|
$
|
(1,234
|
)
|
|
$
|
(1,206
|
)
|
|
$
|
(6,314
|
)
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||||||||
($ in thousands, except for prices)
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
Ferrous revenues
|
$
|
194,961
|
|
|
$
|
262,940
|
|
|
(26
|
)%
|
|
$
|
498,500
|
|
|
$
|
862,811
|
|
|
(42
|
)%
|
Nonferrous revenues
|
84,132
|
|
|
113,433
|
|
|
(26
|
)%
|
|
249,157
|
|
|
348,043
|
|
|
(28
|
)%
|
||||
Retail and other revenues
|
27,758
|
|
|
33,896
|
|
|
(18
|
)%
|
|
81,971
|
|
|
102,160
|
|
|
(20
|
)%
|
||||
Total segment revenues
|
306,851
|
|
|
410,269
|
|
|
(25
|
)%
|
|
829,628
|
|
|
1,313,014
|
|
|
(37
|
)%
|
||||
Cost of goods sold
|
251,008
|
|
|
373,991
|
|
|
(33
|
)%
|
|
716,128
|
|
|
1,211,245
|
|
|
(41
|
)%
|
||||
Selling, general and administrative expense
|
29,241
|
|
|
30,759
|
|
|
(5
|
)%
|
|
83,577
|
|
|
97,140
|
|
|
(14
|
)%
|
||||
(Income) loss from joint ventures
|
(268
|
)
|
|
(23
|
)
|
|
1,065
|
%
|
|
144
|
|
|
(1,116
|
)
|
|
NM
|
|
||||
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
NM
|
|
|
8,845
|
|
|
141,021
|
|
|
(94
|
)%
|
||||
Other asset impairment charges
|
—
|
|
|
1,281
|
|
|
NM
|
|
|
18,379
|
|
|
44,374
|
|
|
(59
|
)%
|
||||
Segment operating income (loss)
|
$
|
26,870
|
|
|
$
|
4,261
|
|
|
531
|
%
|
|
$
|
2,555
|
|
|
$
|
(179,650
|
)
|
|
(101
|
)%
|
Average ferrous recycled metal sales prices ($/LT):
(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Domestic
|
$
|
210
|
|
|
$
|
235
|
|
|
(11
|
)%
|
|
$
|
185
|
|
|
$
|
288
|
|
|
(36
|
)%
|
Foreign
|
$
|
218
|
|
|
$
|
236
|
|
|
(8
|
)%
|
|
$
|
191
|
|
|
$
|
278
|
|
|
(31
|
)%
|
Average
|
$
|
215
|
|
|
$
|
235
|
|
|
(9
|
)%
|
|
$
|
189
|
|
|
$
|
282
|
|
|
(33
|
)%
|
Ferrous sales volume (LT, in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
322
|
|
|
343
|
|
|
(6
|
)%
|
|
895
|
|
|
1,095
|
|
|
(18
|
)%
|
||||
Foreign
|
510
|
|
|
663
|
|
|
(23
|
)%
|
|
1,480
|
|
|
1,684
|
|
|
(12
|
)%
|
||||
Total ferrous sales volume (LT, in thousands)
|
832
|
|
|
1,006
|
|
|
(17
|
)%
|
|
2,375
|
|
|
2,779
|
|
|
(15
|
)%
|
||||
Average nonferrous sales price ($/pound)
(1)(3)
|
$
|
0.59
|
|
|
$
|
0.71
|
|
|
(17
|
)%
|
|
$
|
0.60
|
|
|
$
|
0.76
|
|
|
(21
|
)%
|
Nonferrous sales volumes (pounds, in thousands)
(3)
|
122,244
|
|
|
143,073
|
|
|
(15
|
)%
|
|
356,996
|
|
|
409,406
|
|
|
(13
|
)%
|
||||
Cars purchased (in thousands)
(2)
|
79
|
|
|
79
|
|
|
—
|
%
|
|
226
|
|
|
249
|
|
|
(9
|
)%
|
||||
Auto parts stores at period end
(4)
|
53
|
|
|
55
|
|
|
(4
|
)%
|
|
53
|
|
|
55
|
|
|
(4
|
)%
|
||||
Outbound freight in cost of goods sold
|
$
|
19,523
|
|
|
$
|
31,362
|
|
|
(38
|
)%
|
|
$
|
60,876
|
|
|
$
|
93,279
|
|
|
(35
|
)%
|
(1)
|
Price information is shown net of freight cost incurred to deliver the product to the customer.
|
(2)
|
Cars purchased by auto parts stores only.
|
(3)
|
Average sales price and volume information excludes PGM metals in catalytic converters.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
(4)
|
In the third quarter of fiscal 2016, we consolidated the operations of two auto parts stores into the operations of two nearby stores.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||||||||
($ in thousands, except for price)
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
Revenues
(1)
|
$
|
70,924
|
|
|
$
|
94,939
|
|
|
(25
|
)%
|
|
$
|
201,217
|
|
|
$
|
283,284
|
|
|
(29
|
)%
|
Cost of goods sold
|
67,892
|
|
|
89,111
|
|
|
(24
|
)%
|
|
193,565
|
|
|
264,413
|
|
|
(27
|
)%
|
||||
Selling, general and administrative expense
|
1,786
|
|
|
1,485
|
|
|
20
|
%
|
|
4,853
|
|
|
4,521
|
|
|
7
|
%
|
||||
Segment operating income (loss)
|
$
|
1,246
|
|
|
$
|
4,343
|
|
|
(71
|
)%
|
|
$
|
2,799
|
|
|
$
|
14,350
|
|
|
(80
|
)%
|
Finished steel products average sales price ($/ST)
(2)
|
$
|
501
|
|
|
$
|
618
|
|
|
(19
|
)%
|
|
$
|
520
|
|
|
$
|
653
|
|
|
(20
|
)%
|
Finished steel products sold (tons, in thousands)
|
133
|
|
|
141
|
|
|
(6
|
)%
|
|
366
|
|
|
395
|
|
|
(7
|
)%
|
||||
Rolling mill utilization
|
53
|
%
|
|
69
|
%
|
|
|
|
|
61
|
%
|
|
73
|
%
|
|
|
|
(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.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
May 31, 2016
|
|
August 31, 2015
|
||||
Short-term borrowings
|
$
|
648
|
|
|
$
|
584
|
|
Long-term debt, net of current maturities
|
202,070
|
|
|
227,572
|
|
||
Total debt
|
202,718
|
|
|
228,156
|
|
||
Less: cash and cash equivalents
|
7,018
|
|
|
22,755
|
|
||
Total debt, net of cash
|
$
|
195,700
|
|
|
$
|
205,401
|
|
|
Nine Months Ended May 31,
|
||||||
|
2016
|
|
2015
|
||||
Borrowings from long-term debt
|
$
|
112,427
|
|
|
$
|
114,099
|
|
Proceeds from line of credit
|
135,500
|
|
|
189,000
|
|
||
Repayment of long-term debt
|
(137,869
|
)
|
|
(169,511
|
)
|
||
Repayment of line of credit
|
(135,500
|
)
|
|
(189,000
|
)
|
||
Net repayments of debt
|
$
|
(25,442
|
)
|
|
$
|
(55,412
|
)
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended May 31,
|
|
Nine Months Ended May 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Consolidated operating income (loss):
|
|
|
|
|
|||||||||||
As reported
|
$
|
14,886
|
|
|
$
|
(4,020
|
)
|
|
$
|
(26,217
|
)
|
|
$
|
(204,246
|
)
|
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
8,845
|
|
|
141,021
|
|
||||
Other asset impairment charges
|
—
|
|
|
1,281
|
|
|
18,458
|
|
|
45,119
|
|
||||
Restructuring charges and other exit-related costs
|
542
|
|
|
5,978
|
|
|
7,758
|
|
|
11,964
|
|
||||
Resale or modification of certain previously contracted shipments, net of recoveries
|
(139
|
)
|
|
—
|
|
|
(139
|
)
|
|
6,928
|
|
||||
Adjusted
|
$
|
15,289
|
|
|
$
|
3,239
|
|
|
$
|
8,705
|
|
|
$
|
786
|
|
|
|
|
|
|
|
|
|
||||||||
AMR operating income (loss):
|
|
|
|
|
|||||||||||
As reported
|
$
|
26,870
|
|
|
$
|
4,261
|
|
|
$
|
2,555
|
|
|
$
|
(179,650
|
)
|
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
8,845
|
|
|
141,021
|
|
||||
Other asset impairment charges
|
—
|
|
|
1,281
|
|
|
18,379
|
|
|
44,374
|
|
||||
Resale or modification of certain previously contracted shipments, net of recoveries
|
(139
|
)
|
|
—
|
|
|
(139
|
)
|
|
6,928
|
|
||||
Adjusted
|
$
|
26,731
|
|
|
$
|
5,542
|
|
|
$
|
29,640
|
|
|
$
|
12,673
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations attributable to SSI:
|
|
|
|
|
|||||||||||
As reported
|
$
|
11,116
|
|
|
$
|
(8,394
|
)
|
|
$
|
(34,337
|
)
|
|
$
|
(201,426
|
)
|
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
8,845
|
|
|
141,021
|
|
||||
Other asset impairment charges
|
—
|
|
|
1,281
|
|
|
18,458
|
|
|
45,119
|
|
||||
Restructuring charges and other exit-related costs
|
542
|
|
|
5,978
|
|
|
7,758
|
|
|
11,964
|
|
||||
Resale or modification of certain previously contracted shipments, net of recoveries
|
(139
|
)
|
|
—
|
|
|
(139
|
)
|
|
6,928
|
|
||||
Non-cash write-off of debt issuance costs
|
768
|
|
|
—
|
|
|
768
|
|
|
—
|
|
||||
Income tax expense (benefit) allocated to adjustments
(1)
|
273
|
|
|
1,044
|
|
|
829
|
|
|
(8,522
|
)
|
||||
Adjusted
|
$
|
12,560
|
|
|
$
|
(91
|
)
|
|
$
|
2,182
|
|
|
$
|
(4,916
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share from continuing operations attributable to SSI:
|
|
|
|
|
|||||||||||
As reported
|
$
|
0.41
|
|
|
$
|
(0.31
|
)
|
|
$
|
(1.26
|
)
|
|
$
|
(7.46
|
)
|
Goodwill impairment charge, per share
|
—
|
|
|
—
|
|
|
0.33
|
|
|
5.22
|
|
||||
Other asset impairment charges, per share
|
—
|
|
|
0.05
|
|
|
0.68
|
|
|
1.67
|
|
||||
Restructuring charges and other exit-related costs, per share
|
0.02
|
|
|
0.22
|
|
|
0.29
|
|
|
0.44
|
|
||||
Resale or modification of certain previously contracted shipments, net of recoveries, per share
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
|
0.26
|
|
||||
Non-cash write-off of debt issuance costs, per share
|
0.03
|
|
|
—
|
|
|
0.03
|
|
|
—
|
|
||||
Income tax expense (benefit) allocated to adjustments, per share
(1)
|
0.01
|
|
|
0.04
|
|
|
0.03
|
|
|
(0.32
|
)
|
||||
Adjusted
(2)
|
$
|
0.46
|
|
|
$
|
(0.00
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.18
|
)
|
(1)
|
Income tax allocated to the aggregate adjustments reconciling reported and adjusted net income (loss) from continuing operations attributable to SSI and diluted earnings 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.
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
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*
|
|
Form of Restricted Stock Unit Award Agreement under the 1993 Stock Incentive Plan used for awards granted in second half of fiscal 2016.
|
|
|
|
10.2*
|
|
Form of Long-Term Incentive Award Agreement under the 1993 Stock Incentive Plan used for awards granted in second half of fiscal 2016.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
The following financial information from Schnitzer Steel Industries, Inc.’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended May 31, 2016 and 2015, (ii) Unaudited Condensed Consolidated Balance Sheets as of May 31, 2016, and August 31, 2015, (iii) Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended May 31, 2016 and 2015, (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended May 31 2016 and 2015, and (v) the Notes to Unaudited Condensed Consolidated Financial Statements.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
June 30, 2016
|
By:
|
/s/ Tamara L. Lundgren
|
|
|
|
Tamara L. Lundgren
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Date:
|
June 30, 2016
|
By:
|
/s/ Richard D. Peach
|
|
|
|
Richard D. Peach
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
% of RSUs Vested
|
|
|
|
|
|
|
Prior to first anniversary of the Vesting Reference Date
|
—%
|
|
|
First anniversary of the Vesting Reference Date
|
20%
|
|
|
Second anniversary of the Vesting Reference Date
|
40%
|
|
|
Third anniversary of the Vesting Reference Date
|
60%
|
|
|
Fourth anniversary of the Vesting Reference Date
|
80%
|
|
|
Fifth anniversary of the Vesting Reference Date
|
100%
|
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
||
|
|
||
|
By:
|
|
|
|
|
Authorized Officer
|
|
CFROI Payout
|
|
|
|
Average CFROI
|
Factor
|
|
|
|
|
|
|
Less than 3.7%
|
—%
|
|
|
3.7%
|
50%
|
|
|
7.0%
|
100%
|
|
|
9.0% or more
|
200%
|
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
||
|
|
|
|
|
By:
|
|
|
|
|
Authorized Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Schnitzer Steel Industries, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Tamara L. Lundgren
|
Tamara L. Lundgren
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Schnitzer Steel Industries, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Richard D. Peach
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Richard D. Peach
Senior Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Tamara L. Lundgren
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Tamara L. Lundgren
President and Chief Executive Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Richard D. Peach
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Richard D. Peach
Senior Vice President and Chief Financial Officer
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