Schnitzer Steel Industries, Inc. reported diluted earnings per share from continuing operations of $0.64 and record first-quarter revenues of $675 million for its fiscal 2011 first quarter ended November 30, 2010.
The $0.64 diluted earnings per share compares with $0.23 diluted earnings per share from continuing operations during the year-ago first quarter. The $675 million record first-quarter revenues compare to revenues of $394 million in the year-ago first quarter.
"We generated significant momentum during the first quarter of our fiscal year due to the strong global demand for recycled metals," said Tamara Lundgren, President and CEO. "Each of our operating businesses delivered improved financial performance, and we continued to execute successfully on our strategic growth plan, announcing seven acquisitions since our fiscal year-end. These acquisitions provide us with a strong platform for our Metals Recycling Business in Western Canada and enhance our supply networks in the Northeast and the Southeast, and our Auto Parts Business in Texas, California and Oregon. We also commenced early stage operation of our new separation technologies at our recycling facilities in Oregon and Washington."
"As our record first quarter revenues demonstrate, global demand continues to drive prices and volumes higher," said Lundgren. "Asian economies have maintained steady demand due to strong infrastructure spending, and China's recent announcement of its new 5-year plan suggests increased purchases of recycled metals due to the environmental and economic benefits. We also anticipate stronger demand in the domestic markets in the new year due to inventory replenishment and a slowly improving domestic economy. We believe all these favorable dynamics signal strong long-term demand for our products."
The company identified the following key business drivers during the first quarter fiscal 2011:
· Metals Recycling Business achieved ferrous sales volumes during the last four quarters that approximated the record volumes delivered in fiscal 2008. In addition, prices were driven higher by strong global demand during the quarter. The business was able to increase operating income as compared to both the first and fourth quarters of fiscal 2010 due to significantly higher ferrous volumes and prices.
· Auto Parts Business delivered record first quarter operating income, with a robust operating margin of 21%, and maintained solid car purchase volumes despite not having the benefit of the Cash for Clunkers program that occurred primarily during the first quarter of 2010.
· Steel Manufacturing Business reported improved year-over-year financial performance in the face of continued weak demand, operating at near break-even levels despite very challenging market conditions.
Since the beginning of its fiscal year in September 2010, the company announced seven acquisitions for an aggregate purchase price of approximately $225 million.
· In its Metals Recycling Business, recent acquisitions will provide approximately 550,000 gross ferrous tons, approximately 40% of which will be incremental to existing volumes, as well as approximately 60 million nonferrous pounds, all of which are incremental volumes.
· In its Auto Parts Business, the company is adding new facilities in Waco, Texas and Stockton, California, and expanding its presence in Portland, Ore.
Schnitzer Steel Industries is one of the largest manufacturers and exporters of recycled ferrous metal products in the United States with 52 operating facilities located in 14 states, Puerto Rico and Western Canada. The company has seven export facilities located on both the West and East coasts as well as in Hawaii and Puerto Rico. The Company's vertically integrated operating platform includes the metals recycling business as well as its auto parts and steel manufacturing businesses. With an effective annual production capacity of approximately 800,000 tons, the company's steel manufacturing business — Cascade Steel Rolling Mills — produces finished steel products, including rebar, wire rod and other specialty items. The company commenced its 105th year of operations in fiscal year 2011.