Schnitzer Steel Industries Inc (SCHN) swung to a net profit for the quarter ended Feb. 28, 2017. The company has made a net profit of $11.04 million, or $ 0.40 a share in the quarter, against a net loss of $41.24 million, or $1.52 a share in the last year period. On an adjusted basis, net profit from continuing operations for the quarter stood at $10 million, or $0.37 a share compared with a net loss of $7 million, or $0.25 a share in the last year period. Revenue during the quarter surged 32.17 percent to $382.08 million from $289.08 million in the previous year period. Gross margin for the quarter expanded 430 basis points over the previous year period to 14.47 percent. Operating margin for the quarter period stood at positive 3.71 percent as compared to a negative 12.83 percent for the previous year period.
Operating income for the quarter was $14.17 million, compared with an operating loss of $37.08 million in the previous year period.
However, the adjusted operating profit for the quarter stood at $13 million compared to operating loss of $4 million in prior year period.
"Our second quarter results benefited from improved export and domestic markets and from the operating leverage created within AMR as a result of our productivity initiatives, cost reductions, and internally generated operating synergies. These factors contributed to AMR’s strongest second quarter and half-year results in the last five years," commented Tamara Lundgren, president and chief executive officer. "While SMB continued to face challenging market conditions due to a combination of pressure from lower priced imports and seasonally slower demand, we expect SMB to see benefits from recent productivity initiatives and the onset of seasonally stronger construction activity."
Working capital increases sharply
Schnitzer Steel Industries Inc has recorded an increase in the working capital over the last year. It stood at $196.48 million as at Feb. 28, 2017, up 26.24 percent or $40.84 million from $155.64 million on Feb. 29, 2016. Current ratio was at 2.46 as on Feb. 28, 2017, down from 2.48 on Feb. 29, 2016. Days sales outstanding went up to 16 days for the quarter compared with 14 days for the same period last year.
Days inventory outstanding has decreased to 23 days for the quarter compared with 26 days for the previous year period.
Debt moves up
Schnitzer Steel Industries Inc has witnessed an increase in total debt over the last one year. It stood at $209.48 million as on Feb. 28, 2017, up 5.88 percent or $11.64 million from $197.84 million on Feb. 29, 2016. Total debt was 22.76 percent of total assets as on Feb. 28, 2017, compared with 23.22 percent on Feb. 29, 2016. Debt to equity ratio was almost stable at 0.42 as on Feb. 28, 2017, when compared with the last year.
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