Second Quarter Fiscal 2022 Preliminary Results and Announcement of Earnings Date
Schnitzer Steel Industries announced preliminary results for its fiscal 2022 second quarter, expecting diluted earnings per share between $1.22 and $1.27, with net income projected at $36 million to $38 million. Adjusted earnings per share are anticipated to reach $1.33 to $1.38, excluding charges related to legacy environmental matters. Average selling prices are at multi-year highs, with expected year-over-year increases of 15% for ferrous and 33% for nonferrous metals. Operating cash flow is estimated at $45 million. A conference call is scheduled for April 6, 2022, for detailed results discussion.
- Expected diluted EPS between $1.22 and $1.27.
- Projected net income of $36 million to $38 million.
- Adjusted EBITDA estimated at $73 million to $75 million.
- Year-over-year increase in average selling prices: 15% for ferrous and 33% for nonferrous metals.
- Operating cash flow expected at $45 million.
- Supply chain disruptions impacted finished steel sales volumes.
- Compression of metal spreads due to surging market prices.
- Lower PGM prices and inflationary pressures on operating costs.
- Second Quarter Earnings Conference Call Scheduled for
Second Quarter Fiscal 2022 Expected Highlights
The Company anticipates:
-
Second quarter diluted earnings per share from continuing operations to be in the range of
-$1.22 . Net income to be in the range of$1.27 -$36 million .$38 million -
Adjusted earnings per share from continuing operations to be in the range of
-$1.33 , which excludes expected charges of$1.38 or$5 million per share related primarily to legacy environmental matters.$0.11 -
Adjusted EBITDA to be in the range of
-$73 million .$75 million - Higher year-over-year average net selling prices at or near multi-year highs for ferrous and nonferrous metals and finished steel products.
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Higher year-over-year sales volumes for ferrous and nonferrous metals despite significant impact from a nearly two-month pause in shredding operations at our
Everett, MA facility and supply chain disruptions. Finished steel sales volumes were lower year-over-year also due to supply chain disruptions, including delays to construction projects related to the concrete industry strike in thePacific Northwest . -
Positive operating cash flow in the range of
.$45 million
Average net ferrous and nonferrous selling prices in the second quarter are expected to increase year-over-year by
This strong performance reflects benefits from higher year-over-year sales volumes for recycled metals, increased average net selling prices and recognition of insurance recoveries. These benefits are expected to be offset by compressed metal spreads on contracted ferrous sales for February shipments due to the surge in market prices in the second half of the quarter as well as from the effect of the supply chain disruptions, lower PGM prices, inflationary pressure on operating costs, and the detriment associated with the
The Company expects to generate operating cash flow of approximately
The preliminary information provided above is based on the Company’s current estimates of its financial results for the quarter ended
Earnings Call Date
The Company will report financial results for its second quarter of fiscal year 2022 ended
Replay Information
Conference ID: 5691134
Replay Available:
About
Non-GAAP Financial Measures
This press release contains expected performance based on adjusted diluted earnings per share from continuing operations attributable to SSI shareholders and adjusted EBITDA which are non-GAAP financial measures as defined under
Reconciliation of adjusted diluted earnings per share from continuing operations attributable to SSI shareholders |
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($ per share) |
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2Q22 |
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High |
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Low |
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As reported |
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$ |
1.27 |
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$ |
1.22 |
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Charges for legacy environmental matters, net, per share(1) |
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0.13 |
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0.13 |
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Business development costs, per share |
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0.02 |
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0.02 |
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Income tax benefit allocated to adjustments, per share(2) |
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(0.04 |
) |
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(0.04 |
) |
Adjusted(3) |
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$ |
1.38 |
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$ |
1.33 |
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Reconciliation of adjusted EBITDA |
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($ in millions) |
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2Q22 |
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High |
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Low |
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Net income |
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$ |
38 |
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$ |
36 |
Plus interest expense |
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2 |
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2 |
Plus tax expense |
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12 |
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12 |
Plus depreciation and amortization |
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19 |
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19 |
Plus charges for legacy environmental matters, net(1) |
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4 |
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4 |
Plus business development costs |
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1 |
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1 |
Adjusted EBITDA(3) |
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$ |
75 |
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$ |
73 |
(1) |
Legal and environmental charges, net of recoveries, for legacy environmental matters including those related to the Portland Harbor Superfund site and to other legacy environmental loss contingencies. |
(2) |
Income tax allocated to the aggregate adjustments reconciling reported and adjusted diluted earnings per share from continuing operations attributable to SSI shareholders is determined based on a tax provision calculated with and without the adjustments. |
(3) |
May not foot due to rounding. |
Reconciliation of debt, net of cash |
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($ in thousands) |
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Total debt |
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261,577 |
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259,716 |
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74,953 |
Less: cash and cash equivalents |
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17,823 |
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19,081 |
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27,818 |
Total debt, net of cash |
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$ |
243,754 |
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$ |
240,635 |
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$ |
47,135 |
Forward Looking Statements
Statements and information included in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Except as noted herein or as the context may otherwise require, all references in this press release to “we,” “our,” “us,” “the Company,” and “SSI” refer to
Forward-looking statements in this press release include statements regarding future events or our expectations, intentions, beliefs, and strategies regarding the future, which may include statements regarding the impact of pandemics, epidemics, or other public health emergencies, such as the coronavirus disease 2019 (“COVID-19”) pandemic; the impact of equipment upgrades, equipment failures, and facility damage on production, including timing of repairs and resumption of operations; the realization of insurance recoveries; the Company’s outlook, growth initiatives, or expected results or objectives, including pricing, margins, sales volumes, and profitability; completion of acquisitions and integration of acquired businesses; the impacts of supply chain disruptions and inflation; liquidity positions; our ability to generate cash from continuing operations; trends, cyclicality, and changes in the markets we sell into; strategic direction or goals; targets; changes to manufacturing and production processes; the realization of deferred tax assets; planned capital expenditures; the cost of and the status of any agreements or actions related to our compliance with environmental and other laws; expected tax rates, deductions, and credits; the impact of sanctions and tariffs, quotas, and other trade actions and import restrictions; the potential impact of adopting new accounting pronouncements; the impact of labor shortages or increased labor costs; obligations under our retirement plans; benefits, savings, or additional costs from business realignment, cost containment, and productivity improvement programs; and the adequacy of accruals.
Forward-looking statements by their nature address matters that are, to different degrees, uncertain, and often contain words such as “outlook,” “target,” “aim,” “believes,” “expects,” “anticipates,” “intends,” “assumes,” “estimates,” “evaluates,” “may,” “will,” “should,” “could,” “opinions,” “forecasts,” “projects,” “plans,” “future,” “forward,” “potential,” “probable,” and similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking.
We may make other forward-looking statements from time to time, including in reports filed with the
View source version on businesswire.com: https://www.businesswire.com/news/home/20220317005940/en/
Investor Relations:
(503) 323-2811
mcbennett@schn.com
Company Info:
www.schnitzersteel.com
ir@schn.com
Source:
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