Schnitzer Steel Industries reported financial results for its fiscal 2016 first quarter ended November 30, 2015. The company reported an adjusted loss per share from continuing operations of $0.13.
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Both operating divisions, Auto and Metals Recycling (AMR) and Steel Manufacturing Business (SMB), generated positive operating income in the first quarter due to contributions from cost reduction and productivity initiatives which offset the margin compression caused by the sharp decline in market selling prices and volumes during the quarter.
The company generated quarterly operating cash flow of $41 million, reduced net debt to its lowest level in the last five years, and returned capital to shareholders through its quarterly dividend and share repurchases.
The company reported an adjusted loss per share from continuing operations of $0.13 for the first quarter which included an estimated adverse impact from average inventory accounting of approximately $7 million, or $0.20 per share.
This compares to first quarter fiscal 2015 adjusted earnings per share from continuing operations of $0.11 which included an estimated adverse impact from average inventory accounting of approximately $9 million, or $0.23 per share.
Adjusted earnings per share in both periods excludes restructuring expense and, for the first quarter of fiscal 2015, also excluded a $0.16 adverse impact from reselling or modifying the terms of certain previously contracted bulk ferrous shipments.
The company reported a loss per share from continuing operations of $0.19 for the first quarter of fiscal 2016 which compares to a $0.06 loss per share from continuing operations in the prior year period.
The company continued to deliver on its previously announced $60 million in annual cost reduction and productivity initiatives and identified further actions and synergies to increase this target by approximately 10%. The company achieved $16 million of benefits from these initiatives in the first quarter. ■