Manufacturing Close-Up

Schnitzer Steel Reports 2Q Results.(Financial report)

Schnitzer Steel Industries, Inc. has reported revenues of $434 million and a net loss of $7 million, or $0.25 per diluted share, for the fiscal 2008 second quarter ended February 28.

In a release on April 2, the company noted that despite the quarterly net loss, the Company generated $91 million in cash from operations.

"The markets in the second quarter remained extremely challenging," said Tamara Lundgren, President and Chief Executive Officer. "The global economic downturn continued, and the demand for finished steel products and the raw materials used in making steel remained weak. However, our export platform, which allows us to sell to the regions of the world where demand is greatest, continued to provide a benefit as we were able to take advantage of overseas markets which offered better net pricing than the domestic markets.

"We reduced our production output to match lower demand and, through our cost containment program, we have adjusted our cost structure accordingly. Controllable production and SG&A costs have been significantly reduced, including headcount reductions of nearly 500 employees, or 13 percent of the full-time workforce, and approximately 350 contractors. By controlling costs, reducing inventory levels and actively managing the cash spreads between our selling prices for recycled metal and steel products and the cost of purchasing raw materials, we were able to generate positive operating cash flows during the quarter of $91 million, a $21 million increase over the first quarter. …

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