1 NASDAQ: SCHN Financial Results Fourth Quarter and Fiscal Year 2022 October 24, 2022 Recycling Today for a Sustainable Tomorrow Safe Harbor Statements and information included in this presentation by Schnitzer Steel Industries, Inc. 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 ...

Schnitzer Steel Industries, Inc. (SCHN) Q4 2022 Earnings Conference Call October 24, 2022 11:30 AM ET Company Participants Michael Bennett - Vice President, Investor Relations Tamara Lundgren - Chairman and Chief Executive Officer Stefano Gaggini - Chief Financial Officer Conference Call Participants Emily Chang - Goldman Sachs Operator Good day, and welcome to the Schnitzer Steel's Conference Call, Fourth Quarter 2022 Earnings Release Call and Webcast. At this time, all participants are in a listen-only mo ...

Financial Data and Key Metrics Changes - The company reported record third quarter adjusted earnings per share of $2.59, nearly double the second quarter and 18% higher year-over-year [14] - Adjusted EBITDA for the third quarter was $119 million, representing $105 per ferrous ton, the highest Q3 in the company's history [39] - Operating cash flow was positive at $45 million, with net debt increasing to $306 million primarily due to the acquisition of Encore Recycling [49][50] Business Line Data and Key Metrics Changes - Non-ferrous sales volumes increased sequentially by 37% and year-over-year by 29%, reflecting contributions from Columbus Recycling and Encore Recycling [46] - Finished steel sales volumes rose by 27% sequentially, driven by strong construction demand, with average selling prices up 41% year-over-year [48] - Ferrous sales volumes increased by 5% sequentially but were down 7% year-over-year due to slower export demand [43] Market Data and Key Metrics Changes - Average selling prices for recycled ferrous metals reached historically high levels exceeding $650 per ton at the start of the quarter but fell to $450-$500 per ton by the end [22][23] - Non-residential and infrastructure projects on the West Coast showed strong growth, with total U.S. construction spending rising by almost 13% year-over-year [19] - The company expects robust demand in construction markets to continue, supported by the U.S. Infrastructure Bill [20] Company Strategy and Development Direction - The company is focused on technology investments in advanced metal recovery systems to enhance non-ferrous metal extraction [29] - Strategic priorities include ferrous volume growth, expansion of products and services, and productivity initiatives to offset inflationary pressures [30][31] - The company is well-positioned to benefit from structural trends in EAF steelmaking capacity and decarbonization efforts [59] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds from China's COVID lockdowns and the Russian war in Ukraine but emphasized strong underlying demand trends for recycled metals [27] - The outlook for the fourth quarter includes expectations for increased ferrous and non-ferrous sales volumes year-over-year, with finished steel sales volumes expected to more than double compared to the previous year [53] - The company highlighted its resilience in various market conditions, supported by a diversified sales platform and integrated operations [56] Other Important Information - The company achieved ISO certification for six sites as part of its environmental management system goals [13] - Capital expenditures for fiscal 2022 are expected to be in the range of $130 million to $150 million, focusing on growth projects and environmental-related initiatives [51] Q&A Session Summary Question: Criteria for M&A Evaluation - Management evaluates acquisitions on a through-the-cycle basis, considering historical multiples and operational synergies [68] Question: Strategy for Southeast Region Expansion - The company targets strong industrial activity in the Southeast and seeks to acquire operations that provide operational leverage and synergies [72] Question: Logistics Constraints and Easing - Management noted improvements in container availability and freight costs, attributing some easing to China's slowdown [74]

NASDAQ: SCHN Financial Results Third Quarter Fiscal 2022 June 29, 2022 Recycling Today for a Sustainable Tomorrow Safe Harbor Statements and information included in this presentation by Schnitzer Steel Industries, Inc. 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 ot ...

Financial Performance - Schnitzer Steel Industries reported a significant increase in demand for recycled metal, which positively impacted operating results during fiscal 2021 and the first three quarters of fiscal 2022[127]. - Total revenues for Q3 fiscal 2022 were $1,010 million, a 23% increase compared to $821 million in the prior year quarter[143]. - Net income in Q3 fiscal 2022 was $76 million, up from $65 million in the prior year quarter, representing a 15% increase[141]. - Adjusted EBITDA for Q3 fiscal 2022 was $119 million, compared to $97 million in the prior year quarter, reflecting a 22% increase[141]. - Selling, general, and administrative expenses increased by 26% in Q3 fiscal 2022, primarily due to higher employee-related expenses and inflation[140]. - Adjusted EBITDA for the three months ended May 31, 2022, was $119.090 million, an increase from $97.254 million in the same period of 2021[190]. - Adjusted income from continuing operations attributable to SSI shareholders for the three months ended May 31, 2022, was $76.653 million, compared to $65.003 million in 2021[194]. - Diluted earnings per share from continuing operations attributable to SSI shareholders for the three months ended May 31, 2022, was $2.59, up from $2.20 in the same period of 2021[194]. Operational Highlights - The company operates 50 retail self-service auto parts stores and 54 metals recycling facilities, enhancing its vertical integration and market reach[124]. - Schnitzer Steel's steel mill produces semi-finished goods and finished products, with a focus on using recycled ferrous metal sourced from its operations[125]. - The company has seven deepwater port locations, facilitating global shipping of recycled ferrous metal to various international markets[126]. - Operating results are influenced by fluctuations in market conditions for recycled metals and finished steel products, as well as the supply of scrap metal[129]. - The ongoing impacts of COVID-19 have introduced uncertainties affecting sales volumes and operating results, although the company has maintained operations throughout the pandemic[130]. - Schnitzer Steel's quarterly results are subject to seasonal variations and external factors such as trade actions and logistical challenges[129]. Market Conditions - In Q3 fiscal 2022, average net selling prices for ferrous products increased by 35% and for nonferrous products by 15% year-over-year[139]. - Nonferrous sales volumes rose by 29% in Q3 fiscal 2022, while ferrous sales volumes decreased by 7% due to slower export demand[139]. - Finished steel average selling prices increased by 41% in Q3 fiscal 2022, while finished steel sales volumes were 12% lower compared to the prior year quarter[139]. - The company expects lower net selling prices for ferrous recycled metal products in Q4 2022 compared to Q3 2022 due to a decline in market selling prices[152]. Financial Position - Debt as of May 31, 2022, was $322 million, significantly higher than $75 million as of August 31, 2021, due to acquisitions and increased working capital needs[142]. - As of May 31, 2022, total debt was $321.872 million, with cash and cash equivalents of $16.125 million, resulting in total debt, net of cash, of $305.747 million[185]. - For the nine months ended May 31, 2022, net borrowings of debt amounted to $239.735 million, compared to $49.019 million for the same period in 2021[187]. - The effective tax rate for continuing operations was 21.0% for Q3 2022 and 21.2% for the first nine months, compared to 18.0% and 20.0% in the prior year periods[153]. - The consolidated fixed charge coverage ratio was 6.67 to 1.00 as of May 31, 2022, exceeding the required minimum of 1.50 to 1.00[168]. Capital Expenditures and Investments - Capital expenditures totaled $98 million for the first nine months of fiscal 2022, an increase from $77 million in the prior year, with plans to invest between $130 million to $150 million in total capital expenditures for fiscal 2022[173]. - The company incurred $114 million for the acquisition of Columbus Recycling assets and $63 million for Encore Recycling assets in the first nine months of fiscal 2022[161]. - The company plans to invest $25 million to $35 million in environmental projects in fiscal 2022, having already invested approximately $13 million in the first nine months of fiscal 2022[174]. Shareholder Actions - The company repurchased 444 thousand shares of Class A common stock totaling $18 million in the first nine months of fiscal 2022[142]. - The Board of Directors declared a dividend of $0.1875 per common share for Q3 fiscal 2022, equating to an annual cash dividend of $0.75 per common share[177]. - As of May 31, 2022, approximately 8.7 million shares were repurchased under the share repurchase program, with an additional 3.0 million shares authorized for repurchase[178]. Environmental and Compliance Issues - The company settled a civil penalty of $1.55 million with the USEPA for environmental violations, effective June 23, 2022[210]. - A civil penalty of $1.85 million was agreed upon in a settlement regarding hazardous materials mishandling in California, along with additional payments totaling $650,000[211]. - The company has implemented an enhanced refrigerant recovery management program at its metals recycling facilities following the USEPA settlement[210]. - The company is currently involved in ongoing litigation regarding environmental compliance and has filed appeals related to regulatory decisions affecting its operations[216][218]. Risk Management - The company actively manages exposure to commodity price risk, adjusting purchase prices in response to market fluctuations[198]. - The company experienced reduced availability of credit insurance due to COVID-19, increasing exposure to customer credit risk[200]. - As of May 31, 2022, 21% of accounts receivable was covered by letters of credit, with 99% of the remaining balance less than 60 days past due[202]. - There were no changes in internal control over financial reporting that materially affected the company during the quarter ended May 31, 2022[206]. - The company did not have any derivative contracts to manage foreign currency exchange rate risk as of May 31, 2022[203].

Q1 2022 Results P R E S E N T E D B Y : Radius Health, Inc. May 5, 2022 Safe Harbor Any statements made in this presentation relating to future financial or business performance, guidance, conditions, plans, prospects, trends or strategies and other financial or business matters are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including those regarding the continued commercialization of TYMLOS® (abaloparatide) injection and abaloparatide-SC ex-U.S., ...

Financial Data and Key Metrics Changes - For Q1 2022, the company reported net product revenue of $43 million, a decrease of 5.2% compared to Q1 2021, primarily due to reduced volume shipments and high distributor inventory levels from the previous year [18][19] - Operating expenses were managed effectively, with R&D costs declining by $9 million or 28% year-over-year, while SG&A costs decreased by $4 million or 12% [19][20] - The net loss for Q1 2022 was $18 million, an increase of $3 million from Q1 2021, but adjusted for a regulatory milestone, there was a $7 million improvement [20][21] - The company ended Q1 with $72 million in cash and cash equivalents, reflecting a net cash burn of about $40 million for the quarter [21][22] Business Line Data and Key Metrics Changes - TYMLOS, the core revenue-generating asset, saw a net revenue of $43 million for Q1 2022, with an average active patient number of almost 14,800 monthly, up 4% year-over-year [26][27] - The company is targeting $232 million in net revenue for the year, with approximately 42% expected in the first half [27][28] Market Data and Key Metrics Changes - The company is preparing for the U.S. male osteoporosis market launch, which is expected to have a patient base 10% to 25% larger than the female market [12][28] - The regulatory submission for Abaloparatide in the male indication was submitted in Q1 2022, with expectations for a launch in early Q1 2023 [30][32] Company Strategy and Development Direction - The company is focused on maximizing cash flow generation from TYMLOS and expanding its market presence both in the U.S. and internationally [11][50] - Elacestrant is positioned as a significant asset, with ongoing evaluations and potential market opportunities expanding due to recent failures of competitors [13][36] - The company is also advancing RAD011, with pivotal programs planned for Angelman syndrome and Prader-Willi syndrome, aiming to address significant unmet medical needs [41][44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the competitive landscape and emphasized the importance of maintaining operational efficiencies while managing cash flow [31][64] - The company remains optimistic about the potential for Elacestrant and RAD011, highlighting the lack of competition in certain therapeutic areas [51][64] Other Important Information - The company has a milestone payment structure in place with Menarini, with potential regulatory and sales milestones totaling $320 million [80] - The company plans to return 100% of capital from Elacestrant to stakeholders, which may include share buybacks, debt repayment, or dividends [80][81] Q&A Session Summary Question: What is the overlap between the male and female osteoporosis prescriber base? - Management indicated a significant overlap in the prescriber base, primarily consisting of endocrinologists and rheumatologists, suggesting minimal changes to the sales structure will be needed [54] Question: How is the company managing operating efficiencies? - Management noted that the process of streamlining operations is ongoing, with a focus on re-engineering parts of the business while maintaining a slight downward trend in total headcount [57] Question: What are the sources of capital for development programs? - Management highlighted the importance of integrated cash flow management and indicated that they are comfortable with the current cash position and potential future milestones [61][64] Question: What is the expected patient share gain for TYMLOS sales guidance? - Management stated that they are targeting a moderate 5% growth year-over-year, focusing on increasing active patient numbers and managing the patient journey effectively [74] Question: What is the status of Elacestrant's competitive landscape? - Management acknowledged the improving competitive landscape and emphasized the significant market opportunity, while also noting that the financial arrangement with Menarini remains unchanged [66][68] Question: What is the expected approval timeline for TYMLOS in Canada? - Management confirmed that they expect a milestone payment upon approval in Canada, with potential launches in multiple international markets anticipated in 2023 [92]

[Forward-Looking Statements](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section defines forward-looking statements and outlines their inherent risks and uncertainties [Nature of Forward-Looking Statements](index=3&type=section&id=3.1%20Nature%20of%20Forward-Looking%20Statements) This section defines forward-looking statements as non-historical, made under safe harbor, regarding future events and strategies - Statements in this report that are not purely historical are considered **forward-looking statements** under Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995[9](index=9&type=chunk) - Forward-looking statements address **future events, expectations, intentions, beliefs, and strategies**, including impacts of pandemics, equipment issues, market trends, acquisitions, supply chain disruptions, and regulatory changes[10](index=10&type=chunk) [Risks and Uncertainties](index=3&type=section&id=3.2%20Risks%20and%20Uncertainties) Forward-looking statements involve inherent uncertainties, with actual results differing due to global economic conditions and market risks - Forward-looking statements are **inherently uncertain**, and **actual results may differ materially** due to changes in domestic and global economic conditions and various risks[12](index=12&type=chunk) - Key risks include the impact of **pandemics** (e.g., COVID-19), **equipment failures**, **environmental cleanup costs** (e.g., Portland Harbor Superfund site), **market cyclicality**, **global market changes** (sanctions, tariffs), **economic/geopolitical instability**, **volatile supply/demand**, and **supply chain disruptions**[12](index=12&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents unaudited condensed consolidated financial statements and management's financial discussion [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Schnitzer Steel Industries, Inc.'s unaudited consolidated financial statements and accounting notes [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Balance sheets show total assets increased by **$230 million** and liabilities by **$165 million** from debt and acquisitions | Metric | February 28, 2022 (in thousands) | August 31, 2021 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :------------------------------- | :------------------------------- | :-------------------- | :------- | | Total current assets | $659,305 | $543,114 | $116,191 | 21.4% | | Property, plant and equipment, net | $597,262 | $562,674 | $34,588 | 6.1% | | Goodwill | $232,537 | $170,304 | $62,233 | 36.5% | | Intangibles, net | $23,220 | $3,980 | $19,240 | 483.4% | | Total assets | $1,724,329 | $1,494,363 | $229,966 | 15.4% | | Total current liabilities | $329,171 | $352,850 | $(23,679) | -6.7% | | Long-term debt, net | $254,126 | $71,299 | $182,827 | 256.4% | | Total liabilities | $819,680 | $654,584 | $165,096 | 25.2% | | Total equity | $904,649 | $839,779 | $64,870 | 7.7% | - **Goodwill** increased significantly from **$170,304 thousand** to **$232,537 thousand**, primarily due to the **acquisition of Columbus Recycling business**[14](index=14&type=chunk) - **Long-term debt**, net of current maturities, saw a substantial increase from **$71,299 thousand** to **$254,126 thousand**, reflecting **increased borrowings**[14](index=14&type=chunk) [Unaudited Condensed Consolidated Statements of Income](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) Income statements show significant revenue increases, but net income attributable to SSI shareholders varied across periods | Metric (in thousands) | 3 Months Ended Feb 28, 2022 | 3 Months Ended Feb 28, 2021 | % Change (3 Months) | 6 Months Ended Feb 28, 2022 | 6 Months Ended Feb 28, 2021 | % Change (6 Months) | | :------------------------------------ | :-------------------------- | :-------------------------- | :------------------ | :-------------------------- | :-------------------------- | :------------------ | | Revenues | $783,198 | $600,111 | 30.5% | $1,581,316 | $1,092,218 | 44.8% | | Cost of goods sold | $670,539 | $487,025 | 37.7% | $1,353,783 | $907,119 | 49.2% | | Operating income | $52,165 | $58,584 | -11.0% | $111,986 | $81,354 | 37.7% | | Net income attributable to SSI shareholders | $37,615 | $44,588 | -15.6% | $83,814 | $58,692 | 42.8% | | Diluted EPS | $1.27 | $1.54 | -17.5% | $2.81 | $2.05 | 37.1% | - **Revenues** increased significantly by **30.5%** for the three months and **44.8%** for the six months, driven by **strong market demand for recycled metals**[16](index=16&type=chunk) - **Net income attributable to SSI shareholders** decreased by **15.6%** for the three-month period but increased by **42.8%** for the six-month period, indicating **stronger performance** in the first fiscal quarter[16](index=16&type=chunk) [Unaudited Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income statements show net income decreased for three months but increased for six, with positive other comprehensive income | Metric (in thousands) | 3 Months Ended Feb 28, 2022 | 3 Months Ended Feb 28, 2021 | % Change (3 Months) | 6 Months Ended Feb 28, 2022 | 6 Months Ended Feb 28, 2021 | % Change (6 Months) | | :------------------------------------ | :-------------------------- | :-------------------------- | :------------------ | :-------------------------- | :-------------------------- | :------------------ | | Net income | $38,165 | $45,679 | -16.4% | $85,441 | $60,743 | 40.7% | | Total other comprehensive income, net of tax | $841 | $1,610 | -47.8% | $116 | $1,589 | -92.7% | | Comprehensive income attributable to SSI shareholders | $38,456 | $46,198 | -16.8% | $83,930 | $60,281 | 39.2% | - Foreign currency translation adjustments contributed **$722 thousand** to other comprehensive income for the three months ended February 28, 2022, but resulted in a loss of **$393 thousand** for the six-month period[19](index=19&type=chunk) - Pension obligations, net, contributed positively to other comprehensive income in both the three-month (**$119 thousand**) and six-month (**$509 thousand**) periods of fiscal 2022[19](index=19&type=chunk) [Unaudited Condensed Consolidated Statements of Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Equity) Equity statements detail changes in shareholders' equity, including net income, repurchases, and dividends, showing an increase to **$900,792 thousand** | Metric (in thousands) | As of Feb 28, 2022 | As of Aug 31, 2021 | Change | | :------------------------------------ | :----------------- | :----------------- | :----- | | Total SSI shareholders' equity | $900,792 | $835,764 | $65,028 | - Net income attributable to SSI shareholders for the six months ended February 28, 2022, was **$83,814 thousand**[26](index=26&type=chunk) - The company repurchased **200,000 shares** of Class A common stock for **$7,865 thousand** during the six months ended February 28, 2022[26](index=26&type=chunk) - Dividends paid for the six months ended February 28, 2022, totaled **$10,750 thousand**[27](index=27&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements show improved operating cash flow, increased investing cash use, and higher financing cash from debt | Metric (in thousands) | 6 Months Ended Feb 28, 2022 | 6 Months Ended Feb 28, 2021 | Change | | :------------------------------------ | :-------------------------- | :-------------------------- | :----- | | Net cash provided by (used in) operating activities | $12,714 | $(2,610) | $15,324 | | Net cash used in investing activities | $(172,299) | $(54,137) | $(118,162) | | Net cash provided by financing activities | $149,631 | $50,011 | $99,620 | | Net decrease in cash and cash equivalents | $(9,995) | $(6,561) | $(3,434) | | Cash and cash equivalents as of end of period | $17,823 | $11,326 | $6,497 | - Cash used in investing activities increased significantly, primarily due to **$113,939 thousand** for **acquisitions (Columbus Recycling business)** in fiscal 2022, compared to none in the prior year[29](index=29&type=chunk) - Borrowings from long-term debt increased to **$405,094 thousand** in fiscal 2022 from **$265,645 thousand** in fiscal 2021, contributing to **higher cash from financing activities**[29](index=29&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations for unaudited financial statements, covering accounting policies, acquisitions, and environmental commitments - The Company's internal organizational and reporting structure includes a **single operating and reportable segment**, encompassing **scrap metal recycling, used auto parts sales, and finished steel long product manufacturing**[36](index=36&type=chunk) - On October 1, 2021, the Company acquired eight metals recycling facilities from Columbus Recycling for approximately **$114 million**, resulting in **$62.3 million** in **provisional goodwill** and **$19.7 million** in **identifiable intangible assets** (supplier and customer relationships)[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - Environmental liabilities totaled **$68 million** as of February 28, 2022, with **$5 million** related to **Portland Harbor matters** and additional amounts for other legacy environmental loss contingencies, including a **$4 million** accrual for **shredder residue remediation** and **$8 million** for a closed facility's environmental matters[66](index=66&type=chunk)[82](index=82&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition and operational results, including business overview, COVID-19, and liquidity [General Business Overview](index=26&type=section&id=26.1%20General%20Business%20Overview) Schnitzer Steel Industries, Inc. is a vertically integrated recycler and steel manufacturer, highly dependent on market demand and prices - Schnitzer Steel Industries, Inc. operates as one of North America's largest recyclers of ferrous and nonferrous metal and a manufacturer of finished steel products, with a network of **50 retail self-service auto parts stores**, **52 metals recycling facilities**, and an **EAF steel mill**[115](index=115&type=chunk) - The company's financial performance is largely driven by **demand and prices for recycled metal and finished steel**, raw material supply, and operating leverage from processing higher volumes[118](index=118&type=chunk) - Quarterly results fluctuate due to **market conditions**, **scrap metal supply**, **auto parts demand**, **supply chain efficiency**, **production costs**, and **seasonal factors**, as well as **sanctions, trade actions, and regulatory requirements**[120](index=120&type=chunk) [Impact of COVID-19 and Facility Fires](index=27&type=section&id=27.1%20Impact%20of%20COVID-19%20and%20Facility%20Fires) COVID-19 impacts and facility fires caused operational disruptions and losses, partially offset by **$15 million** and **$10 million** insurance recoveries - COVID-19 continues to impact the business through **labor shortages**, **logistical challenges** (e.g., port congestion), and **increased costs** for goods and services, negatively affecting sales volumes and operating results[121](index=121&type=chunk) - A fire at the McMinnville steel mill in May 2021 caused a shutdown and ramp-up, leading to **$15 million** in insurance recovery gains recognized in the first half of fiscal 2022[122](index=122&type=chunk) - A fire at the Everett metals recycling facility in December 2021 halted shredding operations, resulting in **$10 million** in initial insurance recovery gains recognized in the second quarter of fiscal 2022[123](index=123&type=chunk) [Financial Highlights and Operating Performance](index=29&type=section&id=29.1%20Financial%20Highlights%20and%20Operating%20Performance) Strong market demand led to higher revenues and sales volumes, but net income attributable to SSI shareholders decreased, while Adjusted EBITDA increased | Metric | 3 Months Ended Feb 28, 2022 | 3 Months Ended Feb 28, 2021 | % Change (3 Months) | 6 Months Ended Feb 28, 2022 | 6 Months Ended Feb 28, 2021 | % Change (6 Months) | | :------------------------------------ | :-------------------------- | :-------------------------- | :------------------ | :-------------------------- | :-------------------------- | :------------------ | | Revenues | $783,198 | $600,111 | 30.5% | $1,581,316 | $1,092,218 | 44.8% | | Net income attributable to SSI shareholders | $37,615 | $44,588 | -15.6% | $83,814 | $58,692 | 42.8% | | Diluted EPS | $1.27 | $1.54 | -17.5% | $2.81 | $2.05 | 37.1% | | Adjusted EBITDA | $75,259 | $71,411 | 5.4% | $153,345 | $111,666 | 37.3% | | Average ferrous sales prices ($/LT) | $445 | $387 | 15.0% | $446 | $326 | 36.8% | | Total ferrous volumes (LT, in thousands) | 1,071 | 977 | 9.6% | 2,219 | 2,030 | 9.3% | | Average nonferrous sales price ($/pound) | $1.10 | $0.83 | 32.5% | $1.08 | $0.74 | 45.9% | | Nonferrous volumes (pounds, in thousands) | 147,145 | 135,899 | 8.3% | 300,373 | 274,135 | 9.6% | | Finished steel average sales price ($/ST) | $1,045 | $690 | 51.5% | $1,013 | $656 | 54.4% | | Finished steel sales volumes (ST, in thousands) | 106 | 136 | -22.1% | 205 | 270 | -24.1% | - Selling, general, and administrative expense increased by **13%** for the second quarter and **12%** for the first six months of fiscal 2022, driven by **higher legacy environmental charges, employee expenses, and professional services**, partially offset by lower incentive compensation accruals[139](index=139&type=chunk) - The effective tax rate from continuing operations for the second quarter of fiscal 2022 was **24.0%**, higher than the U.S. federal statutory rate of **21%**, primarily due to state taxes and permanent differences from non-deductible expenses[141](index=141&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=32.1%20Liquidity%20and%20Capital%20Resources) The company relies on operating cash flows and credit facilities, with net debt increasing to **$244 million** and projected capital expenditures of **$130-$160 million** | Metric (in thousands) | February 28, 2022 | August 31, 2021 | Change | | :------------------------------------ | :---------------- | :---------------- | :----- | | Total debt | $261,577 | $74,953 | $186,624 | | Cash and cash equivalents | $17,823 | $27,818 | $(9,995) | | Total debt, net of cash | $243,754 | $47,135 | $196,619 | - Net cash provided by operating activities was **$13 million** for the first six months of fiscal 2022, a significant improvement from net cash used of **$3 million** in the prior year[144](index=144&type=chunk) - Capital expenditures totaled **$69 million** for the first six months of fiscal 2022, with a full-year projection of **$130 million to $160 million**, including **$30 million to $40 million** for environmental projects[161](index=161&type=chunk)[162](index=162&type=chunk) - The company repurchased **200,000 shares** of Class A common stock for **$8 million** in the second quarter of fiscal 2022, with approximately **506,000 shares** remaining authorized under the program[166](index=166&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) [Non-GAAP Financial Measures](index=36&type=section&id=36.1%20Non-GAAP%20Financial%20Measures) This section reconciles non-GAAP financial measures like Debt, net of cash, Adjusted EBITDA, and Adjusted diluted EPS for performance evaluation | Metric (in thousands) | 3 Months Ended Feb 28, 2022 | 3 Months Ended Feb 28, 2021 | 6 Months Ended Feb 28, 2022 | 6 Months Ended Feb 28, 2021 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income | $38,165 | $45,679 | $85,441 | $60,743 | | Adjusted EBITDA | $75,259 | $71,411 | $153,345 | $111,666 | | Adjusted diluted EPS | $1.38 | $1.51 | $2.96 | $2.09 | | Metric (in thousands) | 6 Months Ended Feb 28, 2022 | 6 Months Ended Feb 28, 2021 | | :------------------------------------ | :-------------------------- | :-------------------------- | | Net borrowings (repayments) of debt | $179,699 | $66,416 | - Adjusted EBITDA for the second quarter of fiscal 2022 was **$75,259 thousand**, an increase of **5.4%** from **$71,411 thousand** in the prior year quarter[176](index=176&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details the company's exposure to market risks, including commodity price, interest rate, credit, and foreign currency - The company is exposed to **commodity price risk** from variations in market prices for ferrous and nonferrous metals, finished steel products, and other commodities, which are managed by adjusting purchase prices in response to forward selling prices[181](index=181&type=chunk) - **Credit risk** is managed through letters of credit for ferrous scrap metal exports, deposits for nonferrous exports, credit limits, credit insurance, and collateral for advances, though COVID-19 has reduced credit insurance availability[183](index=183&type=chunk) - As of February 28, 2022, **40%** of accounts receivable were covered by letters of credit, and **99%** of the remaining balance was less than 60 days past due[185](index=185&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, excluding Columbus Recycling (8% of assets, 4% of revenues), with no material internal control changes - The company's disclosure controls and procedures were deemed **effective** at the reasonable assurance level as of February 28, 2022[187](index=187&type=chunk) - The assessment of internal controls excluded the acquired Columbus Recycling business, which represented approximately **8%** of consolidated total assets and **4%** of consolidated total revenues for the six months ended February 28, 2022[187](index=187&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter ended February 28, 2022[188](index=188&type=chunk) [PART II. OTHER INFORMATION](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and other disclosures [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) Information on legal proceedings is incorporated by reference from previous filings and Note 5, detailing environmental contingencies - Information regarding reportable legal proceedings is **incorporated by reference** from the Annual Report on Form 10-K for fiscal year ended August 31, 2021, and the Quarterly Report on Form 10-Q for the period ended November 30, 2021, as well as **Note 5 - Commitments and Contingencies**[191](index=191&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported, except for new risks from economic and geopolitical instability, specifically the Russia-Ukraine conflict - **No material changes** to risk factors were reported, except for new risks related to **economic and geopolitical instability**, specifically the **Russia-Ukraine conflict**[192](index=192&type=chunk) - The Russia-Ukraine conflict and associated sanctions could **materially impact** the company's **operating results, financial condition, and cash flows** through lost sales, supply shortages, commodity price fluctuations, increased manufacturing costs, transportation challenges, and customer credit issues[193](index=193&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **200,000 shares** for **$8 million**, with **506,000 shares** remaining authorized for repurchase - The company repurchased **200,000 shares** of Class A common stock for **$8 million** in open-market transactions during the second quarter of fiscal 2022[194](index=194&type=chunk)[195](index=195&type=chunk) - As of February 28, 2022, approximately **506,000 shares** remained authorized for repurchase under the program, which has no stated expiration date and can be suspended or terminated at any time[194](index=194&type=chunk)[195](index=195&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including deferred compensation plans and CEO/CFO certifications - Exhibits include **Deferred Compensation Plan** for Non-Employee Directors, Summary Sheet of 2022 Non-Employee Director Compensation, and **certifications from the CEO and CFO** as required by the Sarbanes-Oxley Act[197](index=197&type=chunk) - The filing also includes various **Inline XBRL documents** for financial data tagging[197](index=197&type=chunk) [SIGNATURES](index=43&type=section&id=SIGNATURES) This section contains the required signatures for the Form 10-Q, confirming its submission [Signatures](index=43&type=section&id=43.1%20Signatures) This section contains the required signatures for the Form 10-Q, signed by the CEO and CFO on **April 6, 2022** - The report was duly signed on **April 6, 2022**, by **Tamara L. Lundgren**, Chairman, President and Chief Executive Officer, and **Richard D. Peach**, Executive Vice President, Chief Financial Officer and Chief Strategy Officer[202](index=202&type=chunk)

Schnitzer Steel Industries, Inc. (SCHN) Q2 2022 Results Conference Call April 6, 2022 11:30 AM ET Company Participants Michael Bennett - Vice President of Investor Relations Tamara Lundgren - Chairman and Chief Executive Officer Richard Peach - Chief Financial Officer and Chief Strategy Officer Operator Thank you for standing by, and welcome to the Schnitzer Steel Second Quarter 2022 Earnings Release Call and Webcast. At this time, all participants are in a listen-only mode. After the speakers' presentation ...

Financial Performance - Adjusted EBITDA reached $75 million, marking the best Q2 in the company's history[21, 24] - Adjusted EPS from continuing operations was $1.38[24] - Adjusted EBITDA per ferrous ton was $70[24, 43] Volume and Sales - Ferrous sales volumes increased year-over-year by 10%, reaching 1,071,000 long tons[21, 24] - Nonferrous sales volumes increased year-over-year by 8%, totaling 147 million pounds[21, 24] - Finished steel sales volumes were 106,000 short tons[24] Strategic Initiatives and Sustainability - The company achieved 100% net carbon-free electricity use in FY21[10, 14] - Scope 1 & 2 emissions are 19% below the FY19 base[10] - The company is targeting a ferrous sales volume of 53 million tons by the end of FY23[33] Market Dynamics - The company's steel mill operated at an average utilization rate of 86% in 2Q22[21, 57] - Twitch now accounts for 14% of total nonferrous volumes in 2Q22[51]