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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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|
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For the Quarterly Period Ended
|
November 30, 2018
|
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_______
|
|
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, Oregon
|
|
97201
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
x
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Accelerated filer
|
o
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Non-accelerated filer
|
o
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Smaller reporting company
|
o
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Emerging growth company
|
o
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PAGE
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ITEM 1.
|
FINANCIAL STATEMENTS (UNAUDITED)
|
|
November 30, 2018
|
|
August 31, 2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
11,216
|
|
|
$
|
4,723
|
|
Accounts receivable, net of allowance for doubtful accounts of $2,573 and $2,586
|
193,439
|
|
|
169,418
|
|
||
Inventories
|
200,562
|
|
|
205,877
|
|
||
Refundable income taxes
|
3,664
|
|
|
4,668
|
|
||
Prepaid expenses and other current assets
|
37,791
|
|
|
63,673
|
|
||
Total current assets
|
446,672
|
|
|
448,359
|
|
||
Property, plant and equipment, net of accumulated depreciation of $741,693 and $731,561
|
422,686
|
|
|
415,711
|
|
||
Investments in joint ventures
|
11,855
|
|
|
11,532
|
|
||
Goodwill
|
167,693
|
|
|
168,065
|
|
||
Intangibles, net of accumulated amortization of $3,647 and $3,476
|
4,187
|
|
|
4,358
|
|
||
Deferred income taxes
|
29,476
|
|
|
30,333
|
|
||
Other assets
|
26,635
|
|
|
26,459
|
|
||
Total assets
|
$
|
1,109,204
|
|
|
$
|
1,104,817
|
|
Liabilities and Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
1,156
|
|
|
$
|
1,139
|
|
Accounts payable
|
110,235
|
|
|
128,495
|
|
||
Accrued payroll and related liabilities
|
19,347
|
|
|
46,410
|
|
||
Environmental liabilities
|
10,812
|
|
|
6,682
|
|
||
Other accrued liabilities
|
52,478
|
|
|
71,951
|
|
||
Total current liabilities
|
194,028
|
|
|
254,677
|
|
||
Deferred income taxes
|
14,470
|
|
|
11,742
|
|
||
Long-term debt, net of current maturities
|
167,394
|
|
|
106,237
|
|
||
Environmental liabilities, net of current portion
|
42,789
|
|
|
47,150
|
|
||
Other long-term liabilities
|
14,540
|
|
|
14,901
|
|
||
Total liabilities
|
$
|
433,221
|
|
|
$
|
434,707
|
|
Commitments and contingencies (Note 5)
|
|
|
|
||||
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, 26,826 and 26,502 shares issued and outstanding
|
26,826
|
|
|
26,502
|
|
||
Class B common stock – 25,000 shares $1.00 par value authorized, 200 and 200 shares issued and outstanding
|
200
|
|
|
200
|
|
||
Additional paid-in capital
|
32,592
|
|
|
36,929
|
|
||
Retained earnings
|
650,695
|
|
|
639,684
|
|
||
Accumulated other comprehensive loss
|
(38,399
|
)
|
|
(37,237
|
)
|
||
Total SSI shareholders’ equity
|
671,914
|
|
|
666,078
|
|
||
Noncontrolling interests
|
4,069
|
|
|
4,032
|
|
||
Total equity
|
675,983
|
|
|
670,110
|
|
||
Total liabilities and equity
|
$
|
1,109,204
|
|
|
$
|
1,104,817
|
|
|
Three Months Ended November 30,
|
||||||
|
2018
|
|
2017
|
||||
Revenues
|
$
|
564,020
|
|
|
$
|
483,279
|
|
Operating expense:
|
|
|
|
||||
Cost of goods sold
|
490,132
|
|
|
406,251
|
|
||
Selling, general and administrative
|
51,419
|
|
|
51,043
|
|
||
(Income) from joint ventures
|
(485
|
)
|
|
(450
|
)
|
||
Other asset impairment charges (recoveries), net
|
63
|
|
|
(88
|
)
|
||
Restructuring charges and other exit-related activities
|
202
|
|
|
100
|
|
||
Operating income
|
22,689
|
|
|
26,423
|
|
||
Interest expense
|
(1,906
|
)
|
|
(2,059
|
)
|
||
Other income, net
|
23
|
|
|
849
|
|
||
Income from continuing operations before income taxes
|
20,806
|
|
|
25,213
|
|
||
Income tax expense
|
(4,116
|
)
|
|
(5,957
|
)
|
||
Income from continuing operations
|
16,690
|
|
|
19,256
|
|
||
Loss from discontinued operations, net of tax
|
(72
|
)
|
|
(35
|
)
|
||
Net income
|
16,618
|
|
|
19,221
|
|
||
Net income attributable to noncontrolling interests
|
(430
|
)
|
|
(857
|
)
|
||
Net income attributable to SSI
|
$
|
16,188
|
|
|
$
|
18,364
|
|
|
|
|
|
||||
Net income per share attributable to SSI:
|
|
|
|
||||
Basic:
|
|
|
|
|
|||
Income per share from continuing operations attributable to SSI
|
$
|
0.59
|
|
|
$
|
0.66
|
|
Loss per share from discontinued operations attributable to SSI
|
—
|
|
|
—
|
|
||
Net income per share attributable to SSI
|
$
|
0.59
|
|
|
$
|
0.66
|
|
Diluted:
|
|
|
|
||||
Income per share from continuing operations attributable to SSI
|
$
|
0.57
|
|
|
$
|
0.64
|
|
Loss per share from discontinued operations attributable to SSI
|
—
|
|
|
—
|
|
||
Net income per share attributable to SSI
|
$
|
0.57
|
|
|
$
|
0.64
|
|
Weighted average number of common shares:
|
|
|
|
||||
Basic
|
27,505
|
|
|
27,695
|
|
||
Diluted
|
28,364
|
|
|
28,662
|
|
||
Dividends declared per common share
|
$
|
0.1875
|
|
|
$
|
0.1875
|
|
|
Three Months Ended November 30,
|
||||||
|
2018
|
|
2017
|
||||
Net income
|
$
|
16,618
|
|
|
$
|
19,221
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Foreign currency translation adjustments
|
(1,364
|
)
|
|
(1,709
|
)
|
||
Pension obligations, net
|
202
|
|
|
82
|
|
||
Total other comprehensive loss, net of tax
|
(1,162
|
)
|
|
(1,627
|
)
|
||
Comprehensive income
|
15,456
|
|
|
17,594
|
|
||
Less comprehensive income attributable to noncontrolling interests
|
(430
|
)
|
|
(857
|
)
|
||
Comprehensive income attributable to SSI
|
$
|
15,026
|
|
|
$
|
16,737
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total SSI
Shareholders’ Equity |
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||||||||||||||
Class A
|
|
Class B
|
|
||||||||||||||||||||||||||||||||||
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||
Balance as of August 31, 2017
|
26,859
|
|
|
$
|
26,859
|
|
|
200
|
|
|
$
|
200
|
|
|
$
|
38,050
|
|
|
$
|
503,770
|
|
|
$
|
(35,293
|
)
|
|
$
|
533,586
|
|
|
$
|
3,907
|
|
|
$
|
537,493
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,364
|
|
|
—
|
|
|
18,364
|
|
|
857
|
|
|
19,221
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,627
|
)
|
|
(1,627
|
)
|
|
—
|
|
|
(1,627
|
)
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(331
|
)
|
|
(331
|
)
|
||||||||
Issuance of restricted stock
|
241
|
|
|
241
|
|
|
—
|
|
|
—
|
|
|
(241
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Restricted stock withheld for taxes
|
(97
|
)
|
|
(97
|
)
|
|
—
|
|
|
—
|
|
|
(2,754
|
)
|
|
—
|
|
|
—
|
|
|
(2,851
|
)
|
|
—
|
|
|
(2,851
|
)
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,004
|
|
|
—
|
|
|
—
|
|
|
5,004
|
|
|
—
|
|
|
5,004
|
|
||||||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,292
|
)
|
|
—
|
|
|
(5,292
|
)
|
|
—
|
|
|
(5,292
|
)
|
||||||||
Balance as of November 30, 2017
|
27,003
|
|
|
$
|
27,003
|
|
|
200
|
|
|
$
|
200
|
|
|
$
|
40,059
|
|
|
$
|
516,842
|
|
|
$
|
(36,920
|
)
|
|
$
|
547,184
|
|
|
$
|
4,433
|
|
|
$
|
551,617
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total SSI
Shareholders’ Equity |
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||||||||||||||
Class A
|
|
Class B
|
|
||||||||||||||||||||||||||||||||||
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||
Balance as of August 31, 2018
|
26,502
|
|
|
$
|
26,502
|
|
|
200
|
|
|
$
|
200
|
|
|
$
|
36,929
|
|
|
$
|
639,684
|
|
|
$
|
(37,237
|
)
|
|
$
|
666,078
|
|
|
$
|
4,032
|
|
|
$
|
670,110
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,188
|
|
|
—
|
|
|
16,188
|
|
|
430
|
|
|
16,618
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,162
|
)
|
|
(1,162
|
)
|
|
—
|
|
|
(1,162
|
)
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(393
|
)
|
|
(393
|
)
|
||||||||
Share repurchases
|
(150
|
)
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
(3,945
|
)
|
|
—
|
|
|
—
|
|
|
(4,095
|
)
|
|
—
|
|
|
(4,095
|
)
|
||||||||
Issuance of restricted stock
|
750
|
|
|
750
|
|
|
—
|
|
|
—
|
|
|
(750
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Restricted stock withheld for taxes
|
(276
|
)
|
|
(276
|
)
|
|
—
|
|
|
—
|
|
|
(7,046
|
)
|
|
—
|
|
|
—
|
|
|
(7,322
|
)
|
|
—
|
|
|
(7,322
|
)
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,404
|
|
|
—
|
|
|
—
|
|
|
7,404
|
|
|
—
|
|
|
7,404
|
|
||||||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,177
|
)
|
|
—
|
|
|
(5,177
|
)
|
|
—
|
|
|
(5,177
|
)
|
||||||||
Balance as of November 30, 2018
|
26,826
|
|
|
$
|
26,826
|
|
|
200
|
|
|
$
|
200
|
|
|
$
|
32,592
|
|
|
$
|
650,695
|
|
|
$
|
(38,399
|
)
|
|
$
|
671,914
|
|
|
$
|
4,069
|
|
|
$
|
675,983
|
|
|
Three Months Ended November 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
16,618
|
|
|
$
|
19,221
|
|
Adjustments to reconcile net income to cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
13,297
|
|
|
12,522
|
|
||
Other asset impairment charges (recoveries), net
|
63
|
|
|
(88
|
)
|
||
Exit-related asset impairments
|
23
|
|
|
—
|
|
||
Inventory write-down
|
—
|
|
|
38
|
|
||
Share-based compensation expense
|
7,404
|
|
|
5,004
|
|
||
Deferred income taxes
|
(697
|
)
|
|
761
|
|
||
Undistributed equity in earnings of joint ventures
|
(485
|
)
|
|
(450
|
)
|
||
Loss on disposal of assets, net
|
255
|
|
|
51
|
|
||
Unrealized foreign exchange (gain) loss, net
|
—
|
|
|
(407
|
)
|
||
Bad debt recoveries, net
|
(1
|
)
|
|
(14
|
)
|
||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
(28,046
|
)
|
|
(8,640
|
)
|
||
Inventories
|
9,626
|
|
|
(47,267
|
)
|
||
Income taxes
|
4,722
|
|
|
3,842
|
|
||
Prepaid expenses and other current assets
|
(732
|
)
|
|
70
|
|
||
Other long-term assets
|
456
|
|
|
(112
|
)
|
||
Accounts payable
|
(6,881
|
)
|
|
8,548
|
|
||
Accrued payroll and related liabilities
|
(27,046
|
)
|
|
(17,894
|
)
|
||
Other accrued liabilities
|
(224
|
)
|
|
3,504
|
|
||
Environmental liabilities
|
(168
|
)
|
|
4,034
|
|
||
Other long-term liabilities
|
43
|
|
|
1,487
|
|
||
Distributed equity in earnings of joint ventures
|
167
|
|
|
200
|
|
||
Net cash used in operating activities
|
(11,606
|
)
|
|
(15,590
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(27,209
|
)
|
|
(15,157
|
)
|
||
Joint venture receipts, net
|
641
|
|
|
11
|
|
||
Proceeds from sale of assets
|
1,279
|
|
|
1,534
|
|
||
Net cash used in investing activities
|
(25,289
|
)
|
|
(13,612
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings from long-term debt
|
158,859
|
|
|
189,500
|
|
||
Repayment of long-term debt
|
(97,699
|
)
|
|
(149,713
|
)
|
||
Payment of debt issuance costs
|
(95
|
)
|
|
—
|
|
||
Repurchase of Class A common stock
|
(4,095
|
)
|
|
—
|
|
||
Taxes paid related to net share settlement of share-based payment awards
|
(7,322
|
)
|
|
(2,851
|
)
|
||
Distributions to noncontrolling interests
|
(393
|
)
|
|
(331
|
)
|
||
Dividends paid
|
(5,554
|
)
|
|
(5,478
|
)
|
||
Net cash provided by financing activities
|
43,701
|
|
|
31,127
|
|
||
Effect of exchange rate changes on cash
|
(313
|
)
|
|
(18
|
)
|
||
Net increase in cash and cash equivalents
|
6,493
|
|
|
1,907
|
|
||
Cash and cash equivalents as of beginning of period
|
4,723
|
|
|
7,287
|
|
||
Cash and cash equivalents as of end of period
|
$
|
11,216
|
|
|
$
|
9,194
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
November 30, 2018
|
|
August 31, 2018
|
||||
Processed and unprocessed scrap metal
|
$
|
105,390
|
|
|
$
|
111,658
|
|
Semi-finished goods
|
10,700
|
|
|
15,551
|
|
||
Finished goods
|
43,011
|
|
|
39,809
|
|
||
Supplies
|
41,461
|
|
|
38,859
|
|
||
Inventories
|
$
|
200,562
|
|
|
$
|
205,877
|
|
|
Goodwill
|
||
August 31, 2018
|
$
|
168,065
|
|
Foreign currency translation adjustment
|
(372
|
)
|
|
November 30, 2018
|
$
|
167,693
|
|
Balance as of August 31, 2018
|
|
Liabilities Established (Released), Net
|
|
Payments and Other
|
|
Balance as of November 30, 2018
|
|
Short-Term
|
|
Long-Term
|
||||||||||||
$
|
53,832
|
|
|
$
|
781
|
|
|
$
|
(1,012
|
)
|
|
$
|
53,601
|
|
|
$
|
10,812
|
|
|
$
|
42,789
|
|
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
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Three Months Ended November 30, 2018
|
|
Three Months Ended November 30, 2017
|
||||||||||||||||||||
|
Foreign Currency Translation Adjustments
|
|
Pension Obligations, Net
|
|
Total
|
|
Foreign Currency Translation Adjustments
|
|
Pension Obligations, Net
|
|
Total
|
||||||||||||
Balances - September 1
(Beginning of period)
|
$
|
(34,129
|
)
|
|
$
|
(3,108
|
)
|
|
$
|
(37,237
|
)
|
|
$
|
(31,828
|
)
|
|
$
|
(3,465
|
)
|
|
$
|
(35,293
|
)
|
Other comprehensive income (loss) before reclassifications
|
(1,364
|
)
|
|
208
|
|
|
(1,156
|
)
|
|
(1,709
|
)
|
|
(185
|
)
|
|
(1,894
|
)
|
||||||
Income tax (expense) benefit
|
—
|
|
|
(46
|
)
|
|
(46
|
)
|
|
—
|
|
|
227
|
|
|
227
|
|
||||||
Other comprehensive income (loss) before reclassifications, net of tax
|
(1,364
|
)
|
|
162
|
|
|
(1,202
|
)
|
|
(1,709
|
)
|
|
42
|
|
|
(1,667
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
52
|
|
|
52
|
|
|
—
|
|
|
63
|
|
|
63
|
|
||||||
Income tax benefit
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
|
—
|
|
|
(23
|
)
|
|
(23
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax
|
—
|
|
|
40
|
|
|
40
|
|
|
—
|
|
|
40
|
|
|
40
|
|
||||||
Net periodic other comprehensive income (loss)
|
(1,364
|
)
|
|
202
|
|
|
(1,162
|
)
|
|
(1,709
|
)
|
|
82
|
|
|
(1,627
|
)
|
||||||
Balances - November 30
(End of period)
|
$
|
(35,493
|
)
|
|
$
|
(2,906
|
)
|
|
$
|
(38,399
|
)
|
|
$
|
(33,537
|
)
|
|
$
|
(3,383
|
)
|
|
$
|
(36,920
|
)
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Three Months Ended November 30, 2018
|
||||||||||||||
|
AMR
|
|
CSS
|
|
Intersegment Revenues
|
|
Total
|
||||||||
Revenues by major product:
|
|
|
|
|
|
|
|
||||||||
Ferrous
|
$
|
298,812
|
|
|
$
|
19,743
|
|
|
$
|
(2,508
|
)
|
|
$
|
316,047
|
|
Nonferrous
|
104,181
|
|
|
9,031
|
|
|
(270
|
)
|
|
112,942
|
|
||||
Steel
|
—
|
|
|
101,337
|
|
|
—
|
|
|
101,337
|
|
||||
Retail and other
|
33,419
|
|
|
275
|
|
|
—
|
|
|
33,694
|
|
||||
Total revenues
|
$
|
436,412
|
|
|
$
|
130,386
|
|
|
$
|
(2,778
|
)
|
|
$
|
564,020
|
|
Revenues based on sales destination:
|
|
|
|
|
|
|
|
||||||||
Foreign
|
$
|
263,511
|
|
|
$
|
28,131
|
|
|
$
|
—
|
|
|
$
|
291,642
|
|
Domestic
|
172,901
|
|
|
102,255
|
|
|
(2,778
|
)
|
|
272,378
|
|
||||
Total revenues
|
$
|
436,412
|
|
|
$
|
130,386
|
|
|
$
|
(2,778
|
)
|
|
$
|
564,020
|
|
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 November 30,
|
||||||
|
2018
|
|
2017
|
||||
Income from continuing operations
|
$
|
16,690
|
|
|
$
|
19,256
|
|
Net income attributable to noncontrolling interests
|
(430
|
)
|
|
(857
|
)
|
||
Income from continuing operations attributable to SSI
|
16,260
|
|
|
18,399
|
|
||
Loss from discontinued operations, net of tax
|
(72
|
)
|
|
(35
|
)
|
||
Net income attributable to SSI
|
$
|
16,188
|
|
|
$
|
18,364
|
|
Computation of shares:
|
|
|
|
||||
Weighted average common shares outstanding, basic
|
27,505
|
|
|
27,695
|
|
||
Incremental common shares attributable to dilutive performance share, RSU and DSU awards
|
859
|
|
|
967
|
|
||
Weighted average common shares outstanding, diluted
|
28,364
|
|
|
28,662
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Three Months Ended November 30,
|
||||||
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
||||
AMR:
|
|
|
|
||||
Revenues
|
$
|
436,412
|
|
|
$
|
398,054
|
|
Less: Intersegment revenues
|
(2,778
|
)
|
|
(4,759
|
)
|
||
AMR external customer revenues
|
433,634
|
|
|
393,295
|
|
||
CSS:
|
|
|
|
||||
Revenues
|
130,386
|
|
|
89,984
|
|
||
Total revenues
|
$
|
564,020
|
|
|
$
|
483,279
|
|
|
Three Months Ended November 30,
|
||||||
|
2018
|
|
2017
|
||||
AMR
|
$
|
23,017
|
|
|
$
|
35,172
|
|
CSS
|
11,918
|
|
|
8,476
|
|
||
Segment operating income
|
34,935
|
|
|
43,648
|
|
||
Restructuring charges and other exit-related activities
|
(202
|
)
|
|
(100
|
)
|
||
Corporate and eliminations
|
(12,044
|
)
|
|
(17,125
|
)
|
||
Operating income
|
22,689
|
|
|
26,423
|
|
||
Interest expense
|
(1,906
|
)
|
|
(2,059
|
)
|
||
Other income, net
|
23
|
|
|
849
|
|
||
Income from continuing operations before income taxes
|
$
|
20,806
|
|
|
$
|
25,213
|
|
|
November 30, 2018
|
|
August 31, 2018
|
||||
AMR(1)
|
$
|
1,485,182
|
|
|
$
|
1,485,626
|
|
CSS(1)
|
750,163
|
|
|
740,967
|
|
||
Total segment assets
|
2,235,345
|
|
|
2,226,593
|
|
||
Corporate and eliminations(2)
|
(1,126,141
|
)
|
|
(1,121,776
|
)
|
||
Total assets
|
$
|
1,109,204
|
|
|
$
|
1,104,817
|
|
(1)
|
AMR total assets include $4 million for an investment in a joint venture as of November 30, 2018 and August 31, 2018. CSS total assets include $8 million for an investment in a joint venture as of November 30, 2018 and August 31, 2018.
|
(2)
|
The substantial majority of Corporate and eliminations total assets consist 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 quarter of fiscal 2019, net cash used in operating activities of $12 million, compared to $16 million in the prior year comparable period;
|
•
|
Debt of $169 million as of November 30, 2018, compared to $107 million as of August 31, 2018;
|
•
|
Debt, net of cash, of $157 million as of November 30, 2018, compared to $103 million as of August 31, 2018 (see the reconciliation of debt, net of cash, in Non-GAAP Financial Measures at the end of this Item 2); and
|
•
|
Share repurchases totaling $4 million in the first three months of fiscal 2019, compared to none in the prior year comparable period.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended November 30,
|
|||||||||
($ in thousands)
|
2018
|
|
2017
|
|
% Change
|
|||||
Revenues:
|
|
|
|
|
|
|||||
Auto and Metals Recycling
|
$
|
436,412
|
|
|
$
|
398,054
|
|
|
10
|
%
|
Cascade Steel and Scrap
|
130,386
|
|
|
89,984
|
|
|
45
|
%
|
||
Intercompany revenue eliminations(1)
|
(2,778
|
)
|
|
(4,759
|
)
|
|
(42
|
)%
|
||
Total revenues
|
564,020
|
|
|
483,279
|
|
|
17
|
%
|
||
Cost of goods sold:
|
|
|
|
|
|
|||||
Auto and Metals Recycling
|
378,736
|
|
|
331,949
|
|
|
14
|
%
|
||
Cascade Steel and Scrap
|
114,335
|
|
|
78,580
|
|
|
46
|
%
|
||
Intercompany cost of goods sold eliminations(1)
|
(2,939
|
)
|
|
(4,278
|
)
|
|
(31
|
)%
|
||
Total cost of goods sold
|
490,132
|
|
|
406,251
|
|
|
21
|
%
|
||
Selling, general and administrative expense:
|
|
|
|
|
|
|||||
Auto and Metals Recycling
|
34,766
|
|
|
30,933
|
|
|
12
|
%
|
||
Cascade Steel and Scrap
|
4,448
|
|
|
3,466
|
|
|
28
|
%
|
||
Corporate(2)
|
12,205
|
|
|
16,644
|
|
|
(27
|
)%
|
||
Total selling, general and administrative expense
|
51,419
|
|
|
51,043
|
|
|
1
|
%
|
||
(Income) from joint ventures:
|
|
|
|
|
|
|||||
Auto and Metals Recycling
|
(170
|
)
|
|
—
|
|
|
NM
|
|
||
Cascade Steel and Scrap
|
(315
|
)
|
|
(450
|
)
|
|
(30
|
)%
|
||
Total (income) from joint ventures
|
(485
|
)
|
|
(450
|
)
|
|
8
|
%
|
||
Other asset impairment charges (recoveries), net:
|
|
|
|
|
|
|||||
Auto and Metals Recycling
|
63
|
|
|
—
|
|
|
NM
|
|
||
Cascade Steel and Scrap
|
—
|
|
|
(88
|
)
|
|
(100
|
)%
|
||
Total other asset impairment charges (recoveries), net
|
63
|
|
|
(88
|
)
|
|
(172
|
)%
|
||
Operating income:
|
|
|
|
|
|
|||||
Auto and Metals Recycling
|
23,017
|
|
|
35,172
|
|
|
(35
|
)%
|
||
Cascade Steel and Scrap
|
11,918
|
|
|
8,476
|
|
|
41
|
%
|
||
Segment operating income
|
34,935
|
|
|
43,648
|
|
|
(20
|
)%
|
||
Restructuring charges and other exit-related activities(3)
|
(202
|
)
|
|
(100
|
)
|
|
102
|
%
|
||
Corporate expense(2)
|
(12,205
|
)
|
|
(16,644
|
)
|
|
(27
|
)%
|
||
Change in intercompany profit elimination(4)
|
161
|
|
|
(481
|
)
|
|
(133
|
)%
|
||
Total operating income
|
$
|
22,689
|
|
|
$
|
26,423
|
|
|
(14
|
)%
|
(1)
|
AMR sells a small portion of its recycled ferrous metal to CSS at prices that approximate local market rates. 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)
|
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 primarily of asset impairments and accelerated depreciation, net of gains on exit-related disposals, related to site closures.
|
(4)
|
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 November 30,
|
|||||||||
($ in thousands, except for prices)
|
2018
|
|
2017
|
|
% Change
|
|||||
Ferrous revenues
|
$
|
298,812
|
|
|
$
|
254,983
|
|
|
17
|
%
|
Nonferrous revenues
|
104,181
|
|
|
110,343
|
|
|
(6
|
)%
|
||
Retail and other revenues
|
33,419
|
|
|
32,728
|
|
|
2
|
%
|
||
Total segment revenues
|
436,412
|
|
|
398,054
|
|
|
10
|
%
|
||
Segment operating income
|
$
|
23,017
|
|
|
$
|
35,172
|
|
|
(35
|
)%
|
Average ferrous recycled metal sales prices ($/LT):(1)
|
|
|
|
|
|
|||||
Domestic
|
$
|
290
|
|
|
$
|
259
|
|
|
12
|
%
|
Foreign
|
$
|
314
|
|
|
$
|
306
|
|
|
3
|
%
|
Average
|
$
|
306
|
|
|
$
|
292
|
|
|
5
|
%
|
Ferrous sales volume (LT, in thousands):
|
|
|
|
|
|
|||||
Domestic
|
340
|
|
|
238
|
|
|
43
|
%
|
||
Foreign
|
579
|
|
|
559
|
|
|
4
|
%
|
||
Total ferrous sales volume (LT, in thousands)
|
919
|
|
|
797
|
|
|
15
|
%
|
||
Average nonferrous sales price ($/pound)(1)(2)
|
$
|
0.59
|
|
|
$
|
0.73
|
|
|
(19
|
)%
|
Nonferrous sales volumes (pounds, in thousands)(2)
|
152,869
|
|
|
129,137
|
|
|
18
|
%
|
||
Cars purchased (in thousands)(3)
|
94
|
|
|
108
|
|
|
(13
|
)%
|
||
Number of auto parts stores at period end
|
51
|
|
|
53
|
|
|
(4
|
)%
|
||
Outbound freight in cost of goods sold
|
34,581
|
|
|
25,745
|
|
|
34
|
%
|
(1)
|
Price information is shown after netting the cost of freight incurred to deliver the product to the customer.
|
(2)
|
Average sales price and volume information excludes platinum group metals (“PGMs”) in catalytic converters.
|
(3)
|
Cars purchased by auto parts stores only.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended November 30,
|
|||||||||
($ in thousands, except for price)
|
2018
|
|
2017
|
|
% Change
|
|||||
Steel revenues(1)
|
$
|
101,337
|
|
|
$
|
80,446
|
|
|
26
|
%
|
Recycling revenues(2)
|
29,049
|
|
|
9,538
|
|
|
205
|
%
|
||
Total segment revenues
|
130,386
|
|
|
89,984
|
|
|
45
|
%
|
||
Segment operating income
|
$
|
11,918
|
|
|
$
|
8,476
|
|
|
41
|
%
|
Finished steel average sales price ($/ST)(3)
|
$
|
747
|
|
|
$
|
599
|
|
|
25
|
%
|
Finished steel products sold (ST, in thousands)
|
119
|
|
|
127
|
|
|
(6
|
)%
|
||
Rolling mill utilization(4)
|
87
|
%
|
|
95
|
%
|
|
(8
|
)%
|
(1)
|
Steel revenues include primarily sales of finished steel products, semi-finished goods (billets) and steel manufacturing scrap.
|
(2)
|
Recycling revenues include primarily sales of ferrous and nonferrous recycled scrap metal to export markets.
|
(3)
|
Price information is shown after netting the cost of freight incurred to deliver the product to the customer.
|
(4)
|
Rolling mill utilization is based on effective annual production capacity under current conditions of 580 thousand tons of finished steel products.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
November 30, 2018
|
|
August 31, 2018
|
||||
Short-term borrowings
|
$
|
1,156
|
|
|
$
|
1,139
|
|
Long-term debt, net of current maturities
|
167,394
|
|
|
106,237
|
|
||
Total debt
|
168,550
|
|
|
107,376
|
|
||
Less: cash and cash equivalents
|
11,216
|
|
|
4,723
|
|
||
Total debt, net of cash
|
$
|
157,334
|
|
|
$
|
102,653
|
|
|
Three Months Ended November 30,
|
||||||
|
2018
|
|
2017
|
||||
Borrowings from long-term debt
|
$
|
158,859
|
|
|
$
|
189,500
|
|
Repayments of long-term debt
|
(97,699
|
)
|
|
(149,713
|
)
|
||
Net borrowings (repayments) of debt
|
$
|
61,160
|
|
|
$
|
39,787
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
Three Months Ended November 30,
|
||||||
|
2018
|
|
2017
|
||||
Consolidated operating income:
|
|||||||
As reported
|
$
|
22,689
|
|
|
$
|
26,423
|
|
Other asset impairment charges (recoveries), net
|
63
|
|
|
(88
|
)
|
||
Restructuring charges and other exit-related activities
|
202
|
|
|
100
|
|
||
Recoveries related to the resale or modification of previously contracted shipments
|
—
|
|
|
(417
|
)
|
||
Adjusted
|
$
|
22,954
|
|
|
$
|
26,018
|
|
|
|
|
|
||||
AMR operating income:
|
|||||||
As reported
|
$
|
23,017
|
|
|
$
|
35,172
|
|
Other asset impairment charges (recoveries), net
|
63
|
|
|
—
|
|
||
Recoveries related to the resale or modification of previously contracted shipments
|
—
|
|
|
(417
|
)
|
||
Adjusted
|
$
|
23,080
|
|
|
$
|
34,755
|
|
|
|
|
|
||||
CSS operating income:
|
|||||||
As reported
|
$
|
11,918
|
|
|
$
|
8,476
|
|
Other asset impairment charges (recoveries), net
|
—
|
|
|
(88
|
)
|
||
Adjusted
|
$
|
11,918
|
|
|
$
|
8,388
|
|
|
|
|
|
||||
Net income from continuing operations attributable to SSI:
|
|||||||
As reported
|
$
|
16,260
|
|
|
$
|
18,399
|
|
Other asset impairment charges (recoveries), net
|
63
|
|
|
(88
|
)
|
||
Restructuring charges and other exit-related activities
|
202
|
|
|
100
|
|
||
Recoveries related to the resale or modification of previously contracted shipments
|
—
|
|
|
(417
|
)
|
||
Income tax expense (benefit) allocated to adjustments(1)
|
(60
|
)
|
|
131
|
|
||
Adjusted
|
$
|
16,465
|
|
|
$
|
18,125
|
|
|
|
|
|
||||
Diluted earnings per share from continuing operations attributable to SSI:
|
|||||||
As reported
|
$
|
0.57
|
|
|
$
|
0.64
|
|
Other asset impairment charges (recoveries), net, per share
|
—
|
|
|
—
|
|
||
Restructuring charges and other exit-related activities, per share
|
0.01
|
|
|
—
|
|
||
Recoveries related to the resale or modification of previously contracted shipments, per share
|
—
|
|
|
(0.01
|
)
|
||
Income tax expense (benefit) allocated to adjustments, per share(1)
|
—
|
|
|
—
|
|
||
Adjusted
|
$
|
0.58
|
|
|
$
|
0.63
|
|
(1)
|
Income tax allocated to the aggregate adjustments reconciling reported and adjusted net income 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.
|
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.
|
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or Programs
|
|
Maximum Number
of Shares that may
yet be Purchased
under the Plans or
Programs
|
|||||
September 1 – September 30, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
1,286,313
|
|
|
October 1 – October 31, 2018
|
150,000
|
|
|
$
|
27.30
|
|
|
150,000
|
|
|
1,136,313
|
|
November 1 – November 30, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
1,136,313
|
|
|
Total first quarter 2019
|
150,000
|
|
|
|
|
150,000
|
|
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
ITEM 6.
|
EXHIBITS
|
Exhibit Number
|
|
Exhibit Description
|
|
|
|
10.1*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
January 9, 2019
|
By:
|
/s/ Tamara L. Lundgren
|
|
|
|
Tamara L. Lundgren
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Date:
|
January 9, 2019
|
By:
|
/s/ Richard D. Peach
|
|
|
|
Richard D. Peach
|
|
|
|
Senior Vice President, Chief Financial Officer and Chief of Corporate Operations
|
Average
TSR Percentile Rank
|
|
TSR Payout Factor
|
|
|
|
less than 25%
|
|
0%
|
25%
|
|
50%
|
50%
|
|
100%
|
90% or more
|
|
200%
|
Average ROCE
|
|
ROCE
Payout Factor
|
|
|
|
Less than ___%
|
|
0%
|
___%
|
|
50%
|
___%
|
|
100%
|
___% or more
|
|
200%
|
|
SCHNITZER STEEL INDUSTRIES, INC.
|
|
|
|
By_________________________________________
|
|
Title________________________________________
|
|
% of RSUs Vested
|
|
|
Prior to first anniversary of the Vesting Reference Date
|
0%
|
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
|
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):
|
(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/ Richard D. Peach
|
Richard D. Peach
Senior Vice President, Chief Financial Officer and Chief of Corporate Operations
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Tamara L. Lundgren
|
Tamara L. Lundgren
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Richard D. Peach
|
Richard D. Peach
Senior Vice President, Chief Financial Officer and Chief of Corporate Operations
|