Schnitzer Reports Drop in Auto Recycling Business
Wed, 17 Dec 2008
Auto recycler Schnitzer Steel Industries said that market conditions weakened enough in November that it needed to update its expectations for financial and operating results for its first fiscal quarter ended November 30, 2008.
The company said that, in November, market conditions weakened in all three of the company's businesses: metals recycling, steel manufacturing, and auto salvage. As a result, the company expects to report a net loss for the quarter.
Commenting on the current business environment, Tamara L. Lundgren, President and Chief Executive Officer, stated, "While we continue to face weak demand, we have undertaken actions announced previously to adjust our costs and production levels to meet this reduced demand. We have adjusted our buy prices for raw materials to maintain positive cash metal spreads while reducing our production output to match end demand. We have implemented a cost containment program and have reduced headcount, reduced operating hours and eliminated non-essential overtime. Current production output in all three of our businesses, on average, has declined from average 2008 levels by approximately 40 percent. We have been able to undertake these cost reductions while preserving our ability to quickly increase production when stronger, sustainable demand returns to the market."
"As expected, our Auto Parts Business will report an operating loss due to weak demand and the impact of inventory costs not falling as rapidly as sales prices," added Lundgren.
Schnitzer Steel Industries, Inc. owns 39 operating facilities located in 12 states throughout the country, including six export facilities located on both the East and West Coasts and in Hawaii. The Company's vertically integrated operating platform also includes its auto parts and steel manufacturing businesses. The Company's auto parts business sells used auto parts through its 38 self-service facilities and 18 full-service facilities located in 16 states and in western Canada.
©2008 by All rights reserved. No part of this publication may be reproduced or transmitted by any means without permission in writing from the publisher.