Schnitzer Steel Reports 90 Percent Increase in
First Quarter Earnings
Portland, OR - Schnitzer Steel Industries, Inc. reported
first quarter 2003 net income of $3.9 million or $0.41 per diluted share
on revenues of $76.5 million, which compares to net income of $2.0 million
or $0.22 per share on revenues of $76.8 million during the first quarter
of fiscal 2002.
"We are pleased to report significantly higher
operating results in the first quarter of fiscal 2003 as compared to the
first quarter of last year despite lower sales volumes for our core metals
recycling businesses," said Robert W. Philip, president and chief
executive officer. "Margin expansion was primarily driven by the
combination of higher selling prices and improved operating performance
for both our wholly-owned and joint venture metals recycling businesses,
some of which came from the restructuring activity we undertook last year."
Mr. Philip continued, "Sales volumes of ferrous recycled metal were
unusually low during the first quarter of fiscal 2003, driven primarily
by the timing of export customer orders. The delay in orders was initiated
by a sharp rise in the selling prices for ferrous metals that began early
in calendar 2002 brought about by a reduction in the supply of ferrous
recycled metal from the former Soviet Union.
"Specifically, we saw our average net ferrous export price rise by
21 percent between the second and fourth quarters of our fiscal year that
ended August 31, 2002. As a result, during our fiscal 2003 first quarter,
foreign buyers delayed placing orders in an attempt to lower prices,"
he said. "However, by the end of the first quarter we saw customers
placing orders to refill their depleted inventories at price levels that
were at or above prices realized during the last 90 days. The delay in
first quarter orders should result in significantly higher sales volume
for the second quarter of fiscal 2003. Further, total fiscal 2003 ferrous
sales volumes should approximate last year's levels," Mr. Philip
Metals Recycling Business
The Metals Recycling Business reported operating income of $3.1 million
for the first quarter of fiscal 2003 compared to $1 million last year.
The margin improvement was driven primarily by a 17 percent increase in
the average ferrous net selling price coupled with efficiency and cost
improvements throughout this business segment. These benefits were offset
in part by higher buying prices for unprocessed metal and a 15 percent
decline in ferrous sales volumes as compared to last year's first quarter.