Document_and_Entity_Informatio
Document and Entity Information Document | 3 Months Ended | |
Nov. 30, 2014 | Jan. 05, 2015 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 30-Nov-14 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | SCHNITZER STEEL INDUSTRIES INC | |
Entity Central Index Key | 912603 | |
Current Fiscal Year End Date | -23 | |
Entity Filer Category | Large Accelerated Filer | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 26,478,539 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 305,900 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $14,666 | $25,672 |
Accounts receivable, net of allowance for doubtful accounts of $2,672 and $2,720 | 155,597 | 189,359 |
Inventories | 244,268 | 216,172 |
Deferred income taxes | 10,281 | 6,865 |
Refundable income taxes | 3,871 | 1,756 |
Prepaid expenses and other current assets | 21,915 | 24,108 |
Total current assets | 450,598 | 463,932 |
Property, plant and equipment, net of accumulated depreciation of $669,903 and $659,872 | 507,970 | 523,433 |
Investments in joint venture partnerships | 15,021 | 14,624 |
Goodwill | 322,956 | 325,903 |
Intangibles, net of accumulated amortization of $10,476 and $15,612 | 8,968 | 9,835 |
Other assets | 16,663 | 17,483 |
Total assets | 1,322,176 | 1,355,210 |
Current liabilities: | ||
Short-term borrowings | 471 | 523 |
Accounts payable | 73,558 | 103,453 |
Accrued payroll and related liabilities | 20,302 | 32,127 |
Environmental liabilities | 1,127 | 1,062 |
Accrued income taxes | 42 | 3,202 |
Other accrued liabilities | 39,447 | 36,903 |
Total current liabilities | 134,947 | 177,270 |
Deferred income taxes | 25,911 | 22,746 |
Long-term debt, net of current maturities | 340,355 | 318,842 |
Environmental liabilities, net of current portion | 47,026 | 47,287 |
Other long-term liabilities | 13,090 | 13,088 |
Total liabilities | 561,329 | 579,233 |
Commitments and contingencies (Note 5) | ||
Schnitzer Steel Industries, Inc. (“SSIâ€) shareholders’ equity: | ||
Preferred stock – 20,000 shares $1.00 par value authorized, none issued | ||
Additional paid-in capital | 19,952 | 19,164 |
Retained earnings | 729,971 | 737,571 |
Accumulated other comprehensive loss | -20,785 | -12,641 |
Total SSI shareholders’ equity | 755,921 | 770,784 |
Noncontrolling interests | 4,926 | 5,193 |
Total equity | 760,847 | 775,977 |
Total liabilities and equity | 1,322,176 | 1,355,210 |
Class A Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSIâ€) shareholders’ equity: | ||
Common stock, value | 26,477 | 26,384 |
Class B Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSIâ€) shareholders’ equity: | ||
Common stock, value | $306 | $306 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Current assets: | ||
Accounts receivable, allowance for doubtful accounts | $2,672 | $2,720 |
Property, plant and equipment, accumulated depreciation | 669,903 | 659,872 |
Intangibles, accumulated amortization | $10,476 | $15,612 |
Schnitzer Steel Industries, Inc. (“SSIâ€) shareholders’ equity: | ||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, par value | $1 | $1 |
Preferred stock, shares issued | 0 | 0 |
Class A Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSIâ€) shareholders’ equity: | ||
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, par value | $1 | $1 |
Common stock, shares issued | 26,477,000 | 26,384,000 |
Common stock, shares outstanding | 26,477,000 | 26,384,000 |
Class B Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSIâ€) shareholders’ equity: | ||
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, par value | $1 | $1 |
Common stock, shares issued | 306,000 | 306,000 |
Common stock, shares outstanding | 306,000 | 306,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Income Statement [Abstract] | ||
Revenues | $555,590 | $587,745 |
Operating expense: | ||
Cost of goods sold | 510,022 | 542,417 |
Selling, general and administrative | 45,367 | 47,550 |
Income from joint ventures | -500 | -409 |
Restructuring charges and other exit-related costs | 623 | 1,812 |
Operating income (loss) | 78 | -3,625 |
Interest expense | -2,424 | -2,702 |
Other income, net | 753 | 176 |
Loss before income taxes | -1,593 | -6,151 |
Income tax (expense) benefit | -8 | 784 |
Net loss | -1,601 | -5,367 |
Net income attributable to noncontrolling interests | -871 | -861 |
Net loss attributable to SSI | ($2,472) | ($6,228) |
Net loss per share attributable to SSI: | ||
Basic | ($0.09) | ($0.23) |
Diluted | ($0.09) | ($0.23) |
Weighted average number of common shares: | ||
Basic | 26,944 | 26,755 |
Diluted | 26,944 | 26,755 |
Dividends declared per common share | $0.19 | $0.19 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ||
Net loss | ($1,601) | ($5,367) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | -7,272 | -891 |
Cash flow hedges, net | -908 | 121 |
Pension obligations, net | 36 | 44 |
Total other comprehensive income (loss), net of tax | -8,144 | -726 |
Comprehensive loss | -9,745 | -6,093 |
Less net income attributable to noncontrolling interests | -871 | -861 |
Comprehensive loss attributable to SSI | ($10,616) | ($6,954) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Cash flows from operating activities: | ||
Net loss | ($1,601) | ($5,367) |
Adjustments to reconcile net loss to cash (used in) provided by operating activities: | ||
Depreciation and amortization | 18,883 | 21,019 |
Deferred income taxes | 101 | -317 |
Undistributed equity in earnings of joint ventures | -500 | -409 |
Share-based compensation expense | 2,932 | 3,868 |
Excess tax benefit from share-based payment arrangements | -65 | -20 |
Gain on disposal of assets | -436 | -304 |
Unrealized foreign exchange (gain) loss, net | -454 | 342 |
Bad debt expense (recoveries), net | -19 | 856 |
Changes in assets and liabilities, net of acquisitions: | ||
Accounts receivable | 30,577 | 57,375 |
Inventories | -25,774 | -39,083 |
Income taxes | -6,074 | -1,949 |
Prepaid expenses and other current assets | 2,391 | -181 |
Intangibles and other long-term assets | 179 | 90 |
Accounts payable | -24,851 | -4,404 |
Accrued payroll and related liabilities | -11,722 | -4,284 |
Other accrued liabilities | 260 | -1,730 |
Environmental liabilities | 350 | -306 |
Other long-term liabilities | -376 | 2 |
Distributed equity in earnings of joint ventures | 145 | 645 |
Net cash (used in) provided by operating activities | -16,054 | 25,843 |
Cash flows from investing activities: | ||
Capital expenditures | -10,027 | -14,380 |
Joint venture payments, net | 0 | -63 |
Proceeds from sale of assets | 883 | 673 |
Acquisitions, net of cash acquired | 0 | -2,147 |
Net cash used in investing activities | -9,144 | -15,917 |
Cash flows from financing activities: | ||
Proceeds from line of credit | 48,000 | 147,500 |
Repayment of line of credit | -48,000 | -156,000 |
Borrowings from long-term debt | 70,848 | 119,269 |
Repayment of long-term debt | -49,192 | -98,472 |
Taxes paid related to net share settlement of share-based payment arrangements | -1,343 | -628 |
Excess tax benefit from share-based payment arrangements | 65 | 20 |
Stock options exercised | 0 | 11 |
Distributions to noncontrolling interest | -1,138 | -495 |
Dividends paid | -5,063 | -4,990 |
Net cash provided by financing activities | 14,177 | 6,215 |
Effect of exchange rate changes on cash | 15 | 312 |
Net (decrease) increase in cash and cash equivalents | -11,006 | 16,453 |
Cash and cash equivalents as of beginning of period | 25,672 | 13,481 |
Cash and cash equivalents as of end of period | $14,666 | $29,934 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |
Nov. 30, 2014 | ||
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies | |
Basis of Presentation | ||
The accompanying Unaudited Condensed Consolidated Financial Statements of Schnitzer Steel Industries, Inc. (the “Company”) have been prepared pursuant to generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for Form 10-Q, including Article 10 of Regulation S-X. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, all normal, recurring adjustments considered necessary for a fair statement have been included. Management suggests that these Unaudited Condensed Consolidated Financial Statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2014. The results for the three months ended November 30, 2014 and 2013 are not necessarily indicative of the results of operations for the entire fiscal year. | ||
Accounting Changes | ||
In July 2013, an accounting standards update was issued that clarifies the financial statement presentation of certain unrecognized tax benefits. The amendments require that an unrecognized tax benefit be presented as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent that such carryforwards and losses are not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, in which case the unrecognized tax benefit should be presented in the financial statements as a liability. The Company adopted the new requirement in the first quarter of fiscal 2015 with no significant impact to the Condensed Consolidated Financial Statements. | ||
Cash and Cash Equivalents | ||
Cash and cash equivalents include short-term securities that are not restricted by third parties and have an original maturity date of 90 days or less. Included in accounts payable are book overdrafts representing outstanding checks in excess of funds on deposit of $18 million and $35 million as of November 30, 2014 and August 31, 2014, respectively. | ||
Other Assets | ||
The Company’s other assets, exclusive of prepaid expenses, consist primarily of receivables from insurers, notes and other contractual receivables, and assets held for sale. Other assets are reported within either prepaid expenses and other current assets or other assets in the Condensed Consolidated Balance Sheets based on their expected use either during or beyond the current operating cycle of one year from the reporting date. As of August 31, 2014, other assets were reported net of an allowance for credit losses on notes and other contractual receivables of $8 million. During the first quarter of fiscal 2015, the contractual receivables against which the $8 million allowance for credit losses was recorded were written off. As of November 30, 2014 and August 31, 2014, the Company reported $3 million of assets held for sale within prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets. | ||
Derivative Financial Instruments | ||
The Company records derivative instruments in prepaid expenses and other current assets or other accrued liabilities in the Condensed Consolidated Balance Sheets at fair value, and changes in the fair value are either recognized in other comprehensive income (loss) in the Condensed Consolidated Statements of Comprehensive Loss or net income (loss) in the Condensed Consolidated Statements of Operations, as applicable, depending on the nature of the underlying exposure, whether the derivative has been designated as a hedge and, if designated as a hedge, the extent to which the hedge is effective. Amounts included in accumulated other comprehensive loss are reclassified to earnings in the period in which earnings are impacted by the hedged items, in the period that the hedged transaction is deemed no longer likely to occur, or in the period that the derivative is terminated. For cash flow hedges, a formal assessment is made, both at the hedge’s inception and on an ongoing basis, to determine whether the derivatives that are designated as hedging instruments have been highly effective in offsetting changes in the cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods. To the extent the hedge is determined to be ineffective, the ineffective portion is immediately recognized in earnings. When available, quoted market prices or prices obtained through external sources are used to measure a derivative instrument’s fair value. The fair value of these instruments is a function of underlying forward commodity prices or foreign currency exchange rates, related volatility, counterparty creditworthiness and duration of the contracts. Cash flows from derivatives are recognized in the Condensed Consolidated Statements of Cash Flows in a manner consistent with the underlying transactions. See Note 9 - Derivative Financial Instruments for further detail. | ||
Concentration of Credit Risk | ||
Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, notes and other contractual receivables and derivative financial instruments. The majority of cash and cash equivalents are maintained with two major financial institutions (Bank of America and Wells Fargo Bank, N.A.). Balances with these institutions exceeded the Federal Deposit Insurance Corporation insured amount of $250,000 as of November 30, 2014. Concentration of credit risk with respect to accounts receivable is limited because a large number of geographically diverse customers make up the Company’s customer base. The Company controls credit risk through credit approvals, credit limits, letters of credit or other collateral, cash deposits and monitoring procedures. The Company is exposed to a residual credit risk with respect to open letters of credit by virtue of the possibility of the failure of a bank providing a letter of credit. The Company had $70 million and $74 million of open letters of credit relating to accounts receivable as of November 30, 2014 and August 31, 2014, respectively. The counterparties to the Company's derivative financial instruments are major financial institutions. | ||
Financial Instruments | ||
The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, debt and derivative contracts. The Company uses the market approach to value its financial assets and liabilities, determined using available market information. The net carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments. For long-term debt, which is primarily at variable interest rates, fair value is estimated using observable inputs (Level 2) and approximates its carrying value. Derivative contracts are reported at fair value. See Note 9 - Derivative Financial Instruments for further detail. | ||
Fair Value Measurements | ||
Fair value is measured using inputs from the three levels of the fair value hierarchy. Classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels are described as follows: | ||
• | Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities. | |
• | Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the determination of the fair value of the asset or liability, either directly or indirectly. | |
• | Level 3 – Unobservable inputs that are significant to the determination of the fair value of the asset or liability. | |
When developing the fair value measurements, the Company uses quoted market prices whenever available or seeks to maximize the use of observable inputs and minimize the use of unobservable inputs when quoted market prices are not available. | ||
Restructuring Charges | ||
Restructuring charges consist of severance, contract termination and other restructuring-related costs. A liability for severance costs is typically recognized when the plan of termination has been communicated to the affected employees and is measured at its fair value at the communication date. Contract termination costs consist primarily of costs that will continue to be incurred under operating leases for their remaining terms without economic benefit to the Company. A liability for contract termination costs is recognized at the date the Company ceases using the rights conveyed by the lease contract and is measured at its fair value, which is determined based on the remaining contractual lease rentals reduced by estimated sublease rentals. A liability for other restructuring-related costs is measured at its fair value in the period in which the liability is incurred. See Note 6 - Restructuring Charges and Other Exit-Related Costs for further detail. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended |
Nov. 30, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In April 2014, an accounting standard update was issued that amends the requirements for reporting discontinued operations, which may include a component of an entity or a group of components of an entity. The amendments limit discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have, or will have, a major effect on an entity's operations and financial results. The amendments require expanded disclosure about the assets, liabilities, revenues and expenses of discontinued operations. Further, the amendments require an entity to disclose the pretax profit or loss of an individually significant component that is being disposed of that does not qualify for discontinued operations reporting. The standard is applicable to the Company and is to be applied prospectively to all disposals or classifications as held for sale of components that occur beginning in the first quarter of fiscal 2016, and interim periods within that fiscal year, and all businesses that, on acquisition, are classified as held for sale that occur beginning in the first quarter of fiscal 2016, and interim periods within that fiscal year. Upon adoption, the standard will impact how the Company assesses and reports discontinued operations. | |
In May 2014, an accounting standard update was issued that clarifies the principles for recognizing revenue. The guidance is applicable to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Further, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The standard is effective for the Company beginning in the first quarter of fiscal 2018, including interim periods within that fiscal year. Early application is not permitted. Upon becoming effective, the Company will apply the amendments in the updated standard either retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. The Company is evaluating the impact of adopting this standard on its consolidated financial position, results of operations and cash flows. |
Inventories
Inventories | 3 Months Ended | |||||||
Nov. 30, 2014 | ||||||||
Inventory, Net [Abstract] | ||||||||
Inventories | Inventories | |||||||
Inventories consisted of the following (in thousands): | ||||||||
November 30, 2014 | 31-Aug-14 | |||||||
Processed and unprocessed scrap metal | $ | 129,294 | $ | 106,877 | ||||
Semi-finished goods (billets) | 11,875 | 12,920 | ||||||
Finished goods | 64,460 | 59,039 | ||||||
Supplies | 38,639 | 37,336 | ||||||
Inventories | $ | 244,268 | $ | 216,172 | ||||
Goodwill
Goodwill | 3 Months Ended | |||||||||||
Nov. 30, 2014 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||
Goodwill | Goodwill | |||||||||||
The Company tests the goodwill in each of its reporting units annually on July 1 and upon the occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of goodwill may be impaired. There were no triggering events identified during the first quarter of fiscal 2015 requiring an interim goodwill impairment test. A lack of recovery of market conditions in the metals recycling industry from current levels, a sustained trend of weaker than anticipated Company financial performance including the pace and extent of operating margin and volume recovery, a lack of recovery or further decline in the Company’s share price from current levels for a sustained period of time, or an increase in the market-based weighted average cost of capital, among other factors, could significantly impact the impairment analysis and may result in future goodwill impairment charges that, if incurred, could have a material adverse effect on the Company’s financial condition and results of operations. | ||||||||||||
The gross changes in the carrying amount of goodwill by reporting segment for the three months ended November 30, 2014 were as follows (in thousands): | ||||||||||||
Metals Recycling Business | Auto Parts Business | Total | ||||||||||
Balance as of August 31, 2014 | $ | 146,108 | $ | 179,795 | 325,903 | |||||||
Foreign currency translation adjustment | (1,717 | ) | (1,230 | ) | (2,947 | ) | ||||||
Balance as of November 30, 2014 | $ | 144,391 | $ | 178,565 | $ | 322,956 | ||||||
Accumulated goodwill impairment charges were $321 million as of November 30, 2014 and August 31, 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies | ||||||||||||||||||||||||
The Company evaluates the adequacy of its environmental liabilities on a quarterly basis. Adjustments to the liabilities are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues or expenditures are made for which liabilities were established. | |||||||||||||||||||||||||
Changes in the Company’s environmental liabilities for the three months ended November 30, 2014 were as follows (in thousands): | |||||||||||||||||||||||||
Reporting Segment | Balance as of August 31, 2014 | Liabilities Established (Released), Net | Payments and Other | Balance as of November 30, 2014 | Short-Term | Long-Term | |||||||||||||||||||
Metals Recycling Business | $ | 30,139 | $ | 195 | $ | (331 | ) | $ | 30,003 | $ | 496 | $ | 29,507 | ||||||||||||
Auto Parts Business | 17,822 | — | (49 | ) | 17,773 | 554 | 17,219 | ||||||||||||||||||
Corporate | 388 | — | (11 | ) | 377 | 77 | 300 | ||||||||||||||||||
Total | $ | 48,349 | $ | 195 | $ | (391 | ) | $ | 48,153 | $ | 1,127 | $ | 47,026 | ||||||||||||
Metals Recycling Business (“MRB”) | |||||||||||||||||||||||||
As of November 30, 2014, MRB had environmental liabilities of $30 million for the potential remediation of locations where it has conducted business and has environmental liabilities from historical or recent activities. | |||||||||||||||||||||||||
Portland Harbor | |||||||||||||||||||||||||
In December 2000, the Company was notified by the United States Environmental Protection Agency (“EPA”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) that it is one of the potentially responsible parties (“PRPs”) that own or operate or formerly owned or operated sites which are part of or adjacent to the Portland Harbor Superfund site (the “Site”). The precise nature and extent of any cleanup of the Site, the parties to be involved, the process to be followed for any cleanup and the allocation of the costs for any cleanup among responsible parties have not yet been determined, but the process of identifying additional PRPs and beginning allocation of costs is underway. It is unclear to what extent the Company will be liable for environmental costs or natural resource damage claims or third party contribution or damage claims with respect to the Site. While the Company participated in certain preliminary Site study efforts, it is not party to the consent order entered into by the EPA with certain other PRPs, referred to as the “Lower Willamette Group” (“LWG”), for a remedial investigation/feasibility study (“RI/FS”). | |||||||||||||||||||||||||
During fiscal 2007, the Company and certain other parties agreed to an interim settlement with the LWG under which the Company made a cash contribution to the LWG RI/FS. The Company has also joined with more than 80 other PRPs, including the LWG, in a voluntary process to establish an allocation of costs at the Site. These parties have selected an allocation team and have entered into an allocation process design agreement. The LWG has also commenced federal court litigation, which has been stayed, seeking to bring additional parties into the allocation process. | |||||||||||||||||||||||||
In January 2008, the Natural Resource Damages Trustee Council (“Trustees”) for Portland Harbor invited the Company and other PRPs to participate in funding and implementing the Natural Resource Injury Assessment for the Site. Following meetings among the Trustees and the PRPs, a funding and participation agreement was negotiated under which the participating PRPs agreed to fund the first phase of the natural resource damage assessment. The Company joined in that Phase I agreement and paid a portion of those costs. The Company did not participate in funding the second phase of the natural resource damage assessment. | |||||||||||||||||||||||||
On March 30, 2012, the LWG submitted to the EPA and made available on its website a draft feasibility study (“draft FS”) for the Site based on approximately ten years of work and $100 million in costs classified by the LWG as investigation related. The draft FS identifies ten possible remedial alternatives which range in estimated cost from approximately $170 million to $250 million (net present value) for the least costly alternative to approximately $1.08 billion to $1.76 billion (net present value) for the most costly and estimates a range of two to 28 years to implement the remedial work, depending on the selected alternative. The draft FS does not determine who is responsible for remediation costs, define the precise cleanup boundaries or select remedies. The draft FS is being revised by the EPA and the revisions may be significant and could materially impact the scope or cost of remediation. While the draft FS is an important step in the EPA’s development of a proposed plan for addressing the Site, a final decision on the nature and extent of the required remediation will occur only after the EPA has prepared a proposed plan for public review and issued a record of decision (“ROD”). Currently available information indicates that the EPA does not expect to issue its final ROD selecting a remedy for the Site until at least 2017 or commence remediation activities until 2024. Responsibility for implementing and funding the EPA’s selected remedy will be determined in a separate allocation process, which is currently underway. | |||||||||||||||||||||||||
Because there has not been a determination of the total cost of the investigations, the remediation that will be required, the amount of natural resource damages or how the costs of the ongoing investigations and any remedy and natural resource damages will be allocated among the PRPs, the Company believes it is not possible to reasonably estimate the amount or range of costs which it is likely or reasonably possible that the Company may incur in connection with the Site, although such costs could be material to the Company’s financial position, results of operations, cash flows and liquidity. Among the facts currently not known or available are detailed information on the history of ownership of and the nature of the uses of and activities and operations performed on each property within the Site, which are factors that will play a substantial role in determining the allocation of investigation and remedy costs among the PRPs. The Company has insurance policies that it believes will provide reimbursement for costs it incurs for defense and remediation in connection with the Site, although there is no assurance that those policies will cover all of the costs which the Company may incur. The Company previously recorded a liability for its estimated share of the costs of the investigation of $1 million. | |||||||||||||||||||||||||
The Oregon Department of Environmental Quality is separately providing oversight of voluntary investigations by the Company involving the Company’s sites adjacent to the Portland Harbor which are focused on controlling any current “uplands” releases of contaminants into the Willamette River. No liabilities have been established in connection with these investigations because the extent of contamination (if any) and the Company’s responsibility for the contamination (if any) has not yet been determined. | |||||||||||||||||||||||||
Other MRB Sites | |||||||||||||||||||||||||
As of November 30, 2014, the Company had environmental liabilities related to various MRB sites other than Portland Harbor of $29 million. The liabilities relate to the potential future remediation of soil contamination, groundwater contamination and storm water runoff issues and were not individually material at any site. | |||||||||||||||||||||||||
Auto Parts Business (“APB”) | |||||||||||||||||||||||||
As of November 30, 2014, the Company had environmental liabilities related to various APB sites of $18 million. The liabilities relate to the potential future remediation of soil contamination, groundwater contamination and storm water runoff issues and were not individually material at any site. | |||||||||||||||||||||||||
Steel Manufacturing Business (“SMB”) | |||||||||||||||||||||||||
SMB’s electric arc furnace generates dust (“EAF dust”) that is classified as hazardous waste by the EPA because of its zinc and lead content. As a result, the Company captures the EAF dust and ships it in specialized rail cars to a firm that applies a treatment that allows the EAF dust to be delisted as hazardous waste so it can be disposed of as a non-hazardous solid waste. | |||||||||||||||||||||||||
SMB has an operating permit issued under Title V of the Clean Air Act Amendments of 1990, which governs certain air quality standards. The permit is based on an annual production capacity of 950 thousand tons. The permit was first issued in 1998 and has since been renewed through February 1, 2018. | |||||||||||||||||||||||||
SMB had no environmental liabilities as of November 30, 2014. | |||||||||||||||||||||||||
Other than the Portland Harbor Superfund site, which is discussed above, management currently believes that adequate provision has been made for the potential impact of these issues and that the ultimate outcomes will not have a material adverse effect on the Unaudited Condensed Consolidated Financial Statements of the Company as a whole. Historically, the amounts the Company has ultimately paid for such remediation activities have not been material in any given period. | |||||||||||||||||||||||||
In addition, the Company is party to various legal proceedings arising in the normal course of business. Management believes that adequate provisions have been made for these contingencies. The Company does not anticipate that the resolution of legal proceedings arising in the normal course of business will have a material adverse effect on its results of operations, financial condition, or cash flows. |
Restructuring_Charges_and_Othe
Restructuring Charges and Other Exit-Related Costs | 3 Months Ended | |||||||||||||||||||||||||||||||||||||||
Nov. 30, 2014 | ||||||||||||||||||||||||||||||||||||||||
Restructuring Costs and Asset Impairment Charges [Abstract] | ||||||||||||||||||||||||||||||||||||||||
Restructuring Charges and Other Exit-Related Costs | Restructuring Charges and Other Exit-Related Costs | |||||||||||||||||||||||||||||||||||||||
In the fourth quarter of fiscal 2012, the Company undertook a number of restructuring initiatives designed to extract greater synergies from the significant acquisitions and technology investments made in recent years, achieve further integration between MRB and APB, and realign the Company’s organization to support its future growth and decrease operating expenses by streamlining functions and reducing organizational layers (the “Q4'12 Plan”). | ||||||||||||||||||||||||||||||||||||||||
In the first quarter of fiscal 2014, the Company announced and began implementing additional restructuring initiatives to further reduce its annual operating expenses through headcount reductions, productivity improvements, procurement savings and other operational efficiencies (the “Q1'14 Plan”). | ||||||||||||||||||||||||||||||||||||||||
In the first quarter of fiscal 2015, the Company announced and began implementing additional productivity initiatives at APB to improve profitability through a combination of revenue drivers and cost reduction initiatives (the “Q1'15 Plan”). | ||||||||||||||||||||||||||||||||||||||||
In addition to the restructuring charges recorded in connection with these initiatives, the Company incurred other exit-related costs consisting of asset impairments related to site closures. The Company did not incur other exit-related costs during the three months ended November 30, 2014 and 2013. | ||||||||||||||||||||||||||||||||||||||||
Restructuring charges were comprised of the following (in thousands): | ||||||||||||||||||||||||||||||||||||||||
Three Months Ended November 30, 2014 | Three Months Ended November 30, 2013 | |||||||||||||||||||||||||||||||||||||||
Q1’14 Plan | Q1’15 Plan | Total Charges | Q4’12 Plan | Q1’14 Plan | Total Charges | |||||||||||||||||||||||||||||||||||
Restructuring charges: | ||||||||||||||||||||||||||||||||||||||||
Severance costs | $ | 27 | $ | — | $ | 27 | $ | 26 | $ | 1,076 | $ | 1,102 | ||||||||||||||||||||||||||||
Contract termination costs | 253 | — | 253 | 462 | 38 | 500 | ||||||||||||||||||||||||||||||||||
Other restructuring costs | — | 343 | 343 | — | 210 | 210 | ||||||||||||||||||||||||||||||||||
Total restructuring charges | $ | 280 | $ | 343 | $ | 623 | $ | 488 | $ | 1,324 | $ | 1,812 | ||||||||||||||||||||||||||||
Total Charges | ||||||||||||||||||||||||||||||||||||||||
Q4'12 Plan | Q1’14 Plan | Q1'15 Plan | Total | |||||||||||||||||||||||||||||||||||||
Total restructuring charges to date | $ | 13,549 | $ | 6,050 | $ | 343 | $ | 19,942 | ||||||||||||||||||||||||||||||||
Total expected restructuring charges | $ | 13,550 | $ | 6,150 | $ | 2,200 | $ | 21,900 | ||||||||||||||||||||||||||||||||
The following illustrates the reconciliation of the restructuring liability by major type of costs for the three months ended November 30, 2014 (in thousands): | ||||||||||||||||||||||||||||||||||||||||
Q1’14 Plan | Q1’15 Plan | All Plans | ||||||||||||||||||||||||||||||||||||||
Balance 8/31/2014 | Charges | Payments and Other | Balance 11/30/2014 | Balance 8/31/2014 | Charges | Payments and Other | Balance 11/30/2014 | Total Charges to Date | Total Expected Charges | |||||||||||||||||||||||||||||||
Severance costs | $ | 669 | $ | 27 | $ | (294 | ) | $ | 402 | $ | — | $ | — | $ | — | $ | — | $ | 9,818 | $ | 10,700 | |||||||||||||||||||
Contract termination costs | 500 | 253 | (167 | ) | 586 | — | — | — | — | 5,306 | 5,400 | |||||||||||||||||||||||||||||
Other restructuring costs | — | — | — | — | — | 343 | — | 343 | 4,818 | 5,800 | ||||||||||||||||||||||||||||||
Total | $ | 1,169 | $ | 280 | $ | (461 | ) | $ | 988 | $ | — | $ | 343 | $ | — | $ | 343 | $ | 19,942 | $ | 21,900 | |||||||||||||||||||
The Q4'12 Plan was substantially completed in fiscal 2014 and all further activity is immaterial. As of November 30, 2014 and August 31, 2014, the restructuring liability for the Q4'12 Plan was $1 million and related to contract terminations. | ||||||||||||||||||||||||||||||||||||||||
The amounts of restructuring charges and other exit-related costs relating to each segment were as follows (in thousands): | ||||||||||||||||||||||||||||||||||||||||
Three Months Ended November 30, | Total Charges | Total Expected Charges | ||||||||||||||||||||||||||||||||||||||
2014 | 2013 | to Date | ||||||||||||||||||||||||||||||||||||||
Restructuring charges: | ||||||||||||||||||||||||||||||||||||||||
Metals Recycling Business | $ | 255 | $ | 1,291 | $ | 8,934 | $ | 9,000 | ||||||||||||||||||||||||||||||||
Auto Parts Business | 374 | 61 | 1,903 | 3,750 | ||||||||||||||||||||||||||||||||||||
Unallocated (Corporate) | (6 | ) | 460 | 9,105 | 9,150 | |||||||||||||||||||||||||||||||||||
Total restructuring charges | 623 | 1,812 | 19,942 | 21,900 | ||||||||||||||||||||||||||||||||||||
Other exit-related costs: | ||||||||||||||||||||||||||||||||||||||||
Metals Recycling Business | — | — | 566 | |||||||||||||||||||||||||||||||||||||
Total exit-related costs | — | — | 566 | |||||||||||||||||||||||||||||||||||||
Total restructuring charges and other exit-related costs | $ | 623 | $ | 1,812 | $ | 20,508 | ||||||||||||||||||||||||||||||||||
The Company does not allocate restructuring charges and other exit-related costs to the segments’ operating results because management does not include this information in its measurement of the performance of the operating segments. |
Changes_in_Equity
Changes in Equity | 3 Months Ended | |||||||||||||||||||||||
Nov. 30, 2014 | ||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||
Changes in Equity | Changes in Equity | |||||||||||||||||||||||
The following is a summary of the changes in equity for the three months ended November 30, 2014 and 2013 (in thousands): | ||||||||||||||||||||||||
Fiscal 2015 | Fiscal 2014 | |||||||||||||||||||||||
SSI Shareholders’ | Noncontrolling | Total | SSI Shareholders’ | Noncontrolling | Total | |||||||||||||||||||
Equity | Interests | Equity | Equity | Interests | Equity | |||||||||||||||||||
Balance - September 1 (Beginning of period) | $ | 770,784 | $ | 5,193 | $ | 775,977 | $ | 776,558 | $ | 4,641 | $ | 781,199 | ||||||||||||
Net income (loss) | (2,472 | ) | 871 | (1,601 | ) | (6,228 | ) | 861 | (5,367 | ) | ||||||||||||||
Other comprehensive loss, net of tax | (8,144 | ) | — | (8,144 | ) | (726 | ) | — | (726 | ) | ||||||||||||||
Distributions to noncontrolling interests | — | (1,138 | ) | (1,138 | ) | — | (495 | ) | (495 | ) | ||||||||||||||
Restricted stock withheld for taxes | (1,343 | ) | — | (1,343 | ) | (628 | ) | — | (628 | ) | ||||||||||||||
Stock options exercised | — | — | — | 11 | — | 11 | ||||||||||||||||||
Share-based compensation | 2,932 | — | 2,932 | 3,868 | — | 3,868 | ||||||||||||||||||
Excess tax deficiency from stock options exercised and restricted stock units vested | (708 | ) | — | (708 | ) | (589 | ) | — | (589 | ) | ||||||||||||||
Dividends | (5,128 | ) | — | (5,128 | ) | (5,002 | ) | — | (5,002 | ) | ||||||||||||||
Balance - November 30 (End of period) | $ | 755,921 | $ | 4,926 | $ | 760,847 | $ | 767,264 | $ | 5,007 | $ | 772,271 | ||||||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 3 Months Ended | |||||||||||||||||||||||||||||||
Nov. 30, 2014 | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||
Changes in accumulated other comprehensive loss, net of tax, for the three months ended November 30, 2014 and 2013 were as follows: | ||||||||||||||||||||||||||||||||
Fiscal 2015 | Fiscal 2014 | |||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | Pension Obligations, net | Net Unrealized Gain (Loss) on Cash Flow Hedges | Total | Foreign Currency Translation Adjustments | Pension Obligations, net | Net Unrealized Gain (Loss) on Cash Flow Hedges | Total | |||||||||||||||||||||||||
Balances - September 1 (Beginning of period) | $ | (10,663 | ) | $ | (2,036 | ) | $ | 58 | $ | (12,641 | ) | $ | (6,423 | ) | $ | (2,817 | ) | $ | (121 | ) | $ | (9,361 | ) | |||||||||
Other comprehensive loss before reclassifications | (7,272 | ) | — | (1,712 | ) | (8,984 | ) | (891 | ) | — | — | (891 | ) | |||||||||||||||||||
Income tax benefit | — | — | 428 | 428 | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive loss before reclassifications, net of tax | (7,272 | ) | — | (1,284 | ) | (8,556 | ) | (891 | ) | — | — | (891 | ) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | 49 | 501 | 550 | — | 69 | 98 | 167 | ||||||||||||||||||||||||
Income tax (benefit) expense | — | (13 | ) | (125 | ) | (138 | ) | — | (25 | ) | 23 | (2 | ) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | — | 36 | 376 | 412 | — | 44 | 121 | 165 | ||||||||||||||||||||||||
Net periodic other comprehensive income (loss) | (7,272 | ) | 36 | (908 | ) | (8,144 | ) | (891 | ) | 44 | 121 | (726 | ) | |||||||||||||||||||
Balances - November 30 (End of period | $ | (17,935 | ) | $ | (2,000 | ) | $ | (850 | ) | $ | (20,785 | ) | $ | (7,314 | ) | $ | (2,773 | ) | $ | — | $ | (10,087 | ) | |||||||||
Reclassifications from accumulated other comprehensive loss, both individually and in the aggregate, were immaterial to the impacted captions in the Unaudited Condensed Consolidated Statements of Operations. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 3 Months Ended | |||||||||
Nov. 30, 2014 | ||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||
Derivative Financial Instruments | Derivative Financial Instruments | |||||||||
The Company entered into a series of foreign currency exchange forward contracts to sell U.S. dollars in order to hedge a portion of its exposure to fluctuating rates of exchange on anticipated U.S. dollar-denominated sales by its Canadian subsidiary with a functional currency of the Canadian dollar. The Company utilized intercompany foreign currency derivatives and offsetting derivatives with external counterparties in order to designate the intercompany derivatives as hedging instruments. Once the U.S. dollar-denominated sales have been recognized and the corresponding receivables collected, the Company utilized foreign currency exchange forward contracts to sell Canadian dollars, achieving a result similar to net settling the contracts to sell U.S. dollars. The foreign currency exchange forward contracts to sell Canadian dollars are not designated as hedging instruments. | ||||||||||
As of November 30, 2014, the Company had foreign currency exchange forward contracts with external counterparties to buy Canadian Dollars for a total notional amount of $51 million, which have various settlement dates through September 30, 2015, and foreign currency exchange forward contracts with external counterparties to sell Canadian Dollars for a total notional amount of $6 million, all of which have a settlement date of December 31, 2014. The contracts with external counterparties are reported at fair value in the Condensed Consolidated Balance Sheets measured using quoted foreign currency exchange rates. | ||||||||||
The fair value of derivative instruments in the Condensed Consolidated Balance Sheets is as follows (in thousands): | ||||||||||
Asset (Liability) Derivatives | ||||||||||
Fair Value - Level 2 | ||||||||||
Balance Sheet Location | 30-Nov-14 | 31-Aug-14 | ||||||||
Foreign currency exchange forward contracts | Prepaid expenses and other current assets | $ | 76 | $ | 202 | |||||
Foreign currency exchange forward contracts | Other accrued liabilities | $ | (1,304 | ) | $ | (46 | ) | |||
The following tables summarizes the results of foreign currency exchange derivatives for the three months ended November 30, 2014 (in thousands): | ||||||||||
Derivative Gain (Loss) Recognized | ||||||||||
Three Months Ended November 30, 2014 | ||||||||||
Other Comprehensive Income (Loss) | Revenues - Effective Portion | Other Income (Expense), net | ||||||||
Foreign currency exchange forward contracts - designated as cash flow hedges | (1,712 | ) | (501 | ) | 54 | |||||
Foreign currency exchange forward contracts - not designated as cash flow hedges | — | — | (5 | ) | ||||||
The Company did not have any material derivatives activity for the three months ended November 30, 2013. There was no hedge ineffectiveness with respect to the forward currency exchange cash flow hedges for the three months ended November 30, 2014. |
ShareBased_Compensation
Share-Based Compensation | 3 Months Ended |
Nov. 30, 2014 | |
Share-based Compensation [Abstract] | |
Share-Based Compensation | Share-Based Compensation |
In the first quarter of fiscal 2015, as part of the annual awards under the Company’s Long-Term Incentive Plan, the Compensation Committee of the Company's Board of Directors granted 268,988 restricted stock units (“RSUs”) and 268,988 performance share awards to the Company's key employees and officers under the Company’s 1993 Amended and Restated Stock Incentive Plan. | |
The RSUs have a five-year term and vest 20% per year commencing October 31, 2015. The fair value of the RSUs granted was based on the market closing price of the underlying Class A common stock on the grant date and totaled $6 million. The compensation expense associated with the RSUs is recognized over the requisite service period of the awards, net of forfeitures. | |
The performance-based awards have a two-year performance period consisting of the Company’s fiscal 2015 and fiscal 2016. The performance targets are based on the Company's EBITDA (weighted at 50%) and return on equity (weighted at 50%) for the two years of the performance period, with award payouts ranging from a threshold of 50% to a maximum of 200% for each portion of the awards. Awards will be paid in Class A common stock as soon as practicable after October 31 following the end of the performance period. The estimated fair value of the performance-based awards at the date of grant was $6 million. |
Income_Taxes
Income Taxes | 3 Months Ended | |||||
Nov. 30, 2014 | ||||||
Income Tax Disclosure [Abstract] | ||||||
Income Taxes | Income Taxes | |||||
The effective tax rate for the Company’s operations for the three months ended November 30, 2014 was an expense of 0.5% compared to a benefit of 12.7% for the three months ended November 30, 2013. | ||||||
A reconciliation of the difference between the federal statutory rate and the Company’s effective rate is as follows: | ||||||
Three Months Ended November 30, | ||||||
2014(1) | 2013(1) | |||||
Federal statutory rate | 35 | % | 35 | % | ||
State taxes, net of credits | — | 2.5 | ||||
Foreign income taxed at different rates | (28.5 | ) | (6.5 | ) | ||
Section 199 deduction | 0.1 | (1.0 | ) | |||
Non-deductible officers’ compensation | — | 0.3 | ||||
Noncontrolling interests | 0.1 | (0.9 | ) | |||
Research and development credits | — | (0.1 | ) | |||
Valuation allowance on deferred tax assets | (7.0 | ) | (17.0 | ) | ||
Unrecognized tax benefits | (0.2 | ) | — | |||
Other | — | 0.4 | ||||
Effective tax rate | (0.5 | )% | 12.7 | % | ||
_____________________________ | ||||||
-1 | For periods with reported pre-tax losses, the effect of reconciling items with positive signs is tax benefit in excess of the benefit calculated by applying the federal statutory rate to the pre-tax loss. | |||||
The effective tax rate for the first quarter of fiscal 2015 and 2014 was lower than the statutory rate primarily due to the impact of the financial performance of certain foreign operations, which are taxed at more favorable rates, and the impact of recording a full valuation allowance on the current period benefit associated with certain foreign operations losses. | ||||||
The Company files federal and state income tax returns in the U.S. and foreign tax returns in Puerto Rico and Canada. For U.S. federal income tax returns, fiscal years 2011 to 2014 remain subject to examination and the income tax return for fiscal year 2012 is currently under examination. Canada and multiple state tax authorities are currently examining the Company's tax returns for fiscal years 2009 to 2012. |
Net_Loss_Per_Share
Net Loss Per Share | 3 Months Ended | |||||||
Nov. 30, 2014 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Net Loss Per Share | Net Loss Per Share | |||||||
The following table sets forth the information used to compute basic and diluted net loss per share attributable to SSI (in thousands): | ||||||||
Three Months Ended November 30, | ||||||||
2014 | 2013 | |||||||
Net loss | $ | (1,601 | ) | $ | (5,367 | ) | ||
Net income attributable to noncontrolling interests | (871 | ) | (861 | ) | ||||
Net loss attributable to SSI | $ | (2,472 | ) | $ | (6,228 | ) | ||
Computation of shares: | ||||||||
Weighted average common shares outstanding, basic | 26,944 | 26,755 | ||||||
Incremental common shares attributable to dilutive stock options, performance share awards, DSUs and RSUs | — | — | ||||||
Weighted average common shares outstanding, diluted | 26,944 | 26,755 | ||||||
Common stock equivalent shares of 1,365,414 and 1,106,990 were considered antidilutive and were excluded from the calculation of diluted net loss per share for the three months ended November 30, 2014 and 2013, respectively. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Nov. 30, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions |
The Company purchases recycled metal from its joint venture operations at prices that approximate fair market value. These purchases totaled $7 million for the three months ended November 30, 2014 and 2013. Amounts receivable from joint venture partners were $1 million as of November 30, 2014 and August 31, 2014. | |
Thomas D. Klauer, Jr., who had been President of the Company’s Auto Parts Business, prior to his retirement on January 5, 2015, is the sole shareholder of a corporation that is the 25% minority partner in a partnership in which the Company is the 75% partner and which operates five self-service stores in Northern California. Mr. Klauer’s 25% share of the profits of this partnership totaled $1 million and less than $1 million for the three months ended November 30, 2014 and 2013, respectively. The partnership leases properties from entities in which Mr. Klauer has ownership interests under agreements that expire in March 2016 with options to renew the leases, upon expiration, for multiple periods. The rent paid by the partnership to the entities in which Mr. Klauer has ownership interests was less than $1 million for the three months ended November 30, 2014 and 2013. | |
Certain members of the Schnitzer family own significant interests in, or are related to owners of, MMGL Corp, (“MMGL,” formerly known as Schnitzer Investment Corp.), which is engaged in the real estate business and was a subsidiary of the Company prior to 1989. MMGL is considered a related party for financial reporting purposes. The Company and MMGL are both potentially responsible parties with respect to Portland Harbor, which has been designated as a Superfund site since December 2000. The Company and MMGL have worked together in response to Portland Harbor matters, and the Company has paid all of the legal and consulting fees for the joint defense, in part due to its environmental indemnity obligation to MMGL with respect to the Portland scrap metal operations property. The Company and MMGL have agreed to an equitable cost sharing arrangement with respect to defense costs under which MMGL will pay 50% of the legal and consulting costs, net of insurance recoveries. The amounts receivable from (payable to) MMGL vary from period to period because of the timing of incurring legal and consulting fees, payments for cost reimbursements and insurance recoveries. Amounts receivable from MMGL under this agreement were less than $1 million and $1 million as of November 30, 2014 and August 31, 2014. |
Segment_Information
Segment Information | 3 Months Ended | |||||||
Nov. 30, 2014 | ||||||||
Segment Reporting [Abstract] | ||||||||
Segment Information | Segment Information | |||||||
The accounting standards for reporting information about operating segments define operating segments as components of an enterprise that engages in business activities from which it may earn revenues and incur expenses and for which discrete financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company is organized by line of business. While the Chief Executive Officer evaluates results in a number of different ways, the line of business management structure is the primary basis for which the allocation of resources and financial results are assessed. Under the aforementioned criteria, the Company operates in three operating and reporting segments: metal purchasing, processing, recycling and selling (MRB), used auto parts (APB) and mini-mill steel manufacturing (SMB). Additionally, the Company is a noncontrolling partner in joint ventures, which are either in the metals recycling business or are suppliers of unprocessed metal. | ||||||||
MRB buys and processes ferrous and nonferrous metal for sale to foreign and other domestic steel producers or their representatives and to SMB. MRB also purchases ferrous metal from other processors for shipment directly to SMB. | ||||||||
APB purchases used and salvaged vehicles, sells parts from those vehicles through its retail facilities and wholesale operations, and sells the remaining portion of the vehicles to metal recyclers, including MRB. | ||||||||
SMB operates a steel mini-mill that produces a wide range of finished steel products using recycled metal and other raw materials. | ||||||||
Intersegment sales from MRB to SMB are made at rates that approximate market prices for shipments from the West Coast of the U.S. In addition, the Company has intersegment sales of autobodies from APB to MRB at rates that approximate market prices. These intercompany sales tend to produce intercompany profits which are not recognized until the finished products are ultimately sold to third parties. | ||||||||
The information provided below is obtained from internal information that is provided to the Company’s chief operating decision maker for the purpose of corporate management. The Company uses operating income to measure segment performance. The Company does not allocate corporate interest income and expense, income taxes, other income and expenses related to corporate activity or corporate expense for management and administrative services that benefit all three segments. In addition, the Company does not allocate restructuring charges and other exit-related costs to the segment operating income because management does not include this information in its measurement of the performance of the operating segments. Because of this unallocated income and expense, the operating income of each reporting segment does not reflect the operating income the reporting segment would report as a stand-alone business. | ||||||||
The table below illustrates the Company’s operating results by reporting segment (in thousands): | ||||||||
Three Months Ended November 30, | ||||||||
2014 | 2013 | |||||||
Revenues: | ||||||||
Metals Recycling Business: | ||||||||
Revenues | $ | 456,278 | $ | 490,309 | ||||
Less: Intersegment revenues | (55,282 | ) | (49,751 | ) | ||||
MRB external customer revenues | 400,996 | 440,558 | ||||||
Auto Parts Business: | ||||||||
Revenues | 80,921 | 79,635 | ||||||
Less: Intersegment revenues | (21,545 | ) | (20,571 | ) | ||||
APB external customer revenues | 59,376 | 59,064 | ||||||
Steel Manufacturing Business: | ||||||||
Revenues | 95,218 | 88,123 | ||||||
Total revenues | $ | 555,590 | $ | 587,745 | ||||
The table below illustrates the reconciliation of the Company’s segment operating income to loss before income taxes (in thousands): | ||||||||
Three Months Ended November 30, | ||||||||
2014 | 2013 | |||||||
Metals Recycling Business | $ | 1,922 | $ | 590 | ||||
Auto Parts Business | 1,961 | 5,609 | ||||||
Steel Manufacturing Business | 6,207 | 1,744 | ||||||
Segment operating income | 10,090 | 7,943 | ||||||
Restructuring charges and other exit-related costs | (623 | ) | (1,812 | ) | ||||
Corporate and eliminations | (9,389 | ) | (9,756 | ) | ||||
Operating income (loss) | 78 | (3,625 | ) | |||||
Interest expense | (2,424 | ) | (2,702 | ) | ||||
Other income, net | 753 | 176 | ||||||
Loss before income taxes | $ | (1,593 | ) | $ | (6,151 | ) | ||
The following is a summary of the Company’s total assets by reporting segment (in thousands): | ||||||||
November 30, 2014 | August 31, 2014 | |||||||
Metals Recycling Business(1) | $ | 1,331,320 | $ | 1,343,771 | ||||
Auto Parts Business | 359,260 | 361,411 | ||||||
Steel Manufacturing Business | 356,348 | 350,344 | ||||||
Total segment assets | 2,046,928 | 2,055,526 | ||||||
Corporate and eliminations | (724,752 | ) | (700,316 | ) | ||||
Total assets | $ | 1,322,176 | $ | 1,355,210 | ||||
_____________________________ | ||||||||
-1 | MRB total assets include $15 million as of November 30, 2014 and August 31, 2014 for investments in joint venture partnerships. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |
Nov. 30, 2014 | ||
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation | |
The accompanying Unaudited Condensed Consolidated Financial Statements of Schnitzer Steel Industries, Inc. (the “Company”) have been prepared pursuant to generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for Form 10-Q, including Article 10 of Regulation S-X. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, all normal, recurring adjustments considered necessary for a fair statement have been included. Management suggests that these Unaudited Condensed Consolidated Financial Statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2014. The results for the three months ended November 30, 2014 and 2013 are not necessarily indicative of the results of operations for the entire fiscal year. | ||
Accounting Changes | Accounting Changes | |
In July 2013, an accounting standards update was issued that clarifies the financial statement presentation of certain unrecognized tax benefits. The amendments require that an unrecognized tax benefit be presented as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except to the extent that such carryforwards and losses are not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, in which case the unrecognized tax benefit should be presented in the financial statements as a liability. The Company adopted the new requirement in the first quarter of fiscal 2015 with no significant impact to the Condensed Consolidated Financial Statements. | ||
Cash and Cash Equivalents | Cash and Cash Equivalents | |
Cash and cash equivalents include short-term securities that are not restricted by third parties and have an original maturity date of 90 days or less. Included in accounts payable are book overdrafts representing outstanding checks in excess of funds on deposit of $18 million and $35 million as of November 30, 2014 and August 31, 2014, respectively. | ||
Other Assets | Other Assets | |
The Company’s other assets, exclusive of prepaid expenses, consist primarily of receivables from insurers, notes and other contractual receivables, and assets held for sale. Other assets are reported within either prepaid expenses and other current assets or other assets in the Condensed Consolidated Balance Sheets based on their expected use either during or beyond the current operating cycle of one year from the reporting date. As of August 31, 2014, other assets were reported net of an allowance for credit losses on notes and other contractual receivables of $8 million. During the first quarter of fiscal 2015, the contractual receivables against which the $8 million allowance for credit losses was recorded were written off. As of November 30, 2014 and August 31, 2014, the Company reported $3 million of assets held for sale within prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets. | ||
Derivatives Financial Instruments | Derivative Financial Instruments | |
The Company records derivative instruments in prepaid expenses and other current assets or other accrued liabilities in the Condensed Consolidated Balance Sheets at fair value, and changes in the fair value are either recognized in other comprehensive income (loss) in the Condensed Consolidated Statements of Comprehensive Loss or net income (loss) in the Condensed Consolidated Statements of Operations, as applicable, depending on the nature of the underlying exposure, whether the derivative has been designated as a hedge and, if designated as a hedge, the extent to which the hedge is effective. Amounts included in accumulated other comprehensive loss are reclassified to earnings in the period in which earnings are impacted by the hedged items, in the period that the hedged transaction is deemed no longer likely to occur, or in the period that the derivative is terminated. For cash flow hedges, a formal assessment is made, both at the hedge’s inception and on an ongoing basis, to determine whether the derivatives that are designated as hedging instruments have been highly effective in offsetting changes in the cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods. To the extent the hedge is determined to be ineffective, the ineffective portion is immediately recognized in earnings. When available, quoted market prices or prices obtained through external sources are used to measure a derivative instrument’s fair value. The fair value of these instruments is a function of underlying forward commodity prices or foreign currency exchange rates, related volatility, counterparty creditworthiness and duration of the contracts. Cash flows from derivatives are recognized in the Condensed Consolidated Statements of Cash Flows in a manner consistent with the underlying transactions. See Note 9 - Derivative Financial Instruments for further detail. | ||
Concentration Of Credit Risk | Concentration of Credit Risk | |
Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, notes and other contractual receivables and derivative financial instruments. The majority of cash and cash equivalents are maintained with two major financial institutions (Bank of America and Wells Fargo Bank, N.A.). Balances with these institutions exceeded the Federal Deposit Insurance Corporation insured amount of $250,000 as of November 30, 2014. Concentration of credit risk with respect to accounts receivable is limited because a large number of geographically diverse customers make up the Company’s customer base. The Company controls credit risk through credit approvals, credit limits, letters of credit or other collateral, cash deposits and monitoring procedures. The Company is exposed to a residual credit risk with respect to open letters of credit by virtue of the possibility of the failure of a bank providing a letter of credit. The Company had $70 million and $74 million of open letters of credit relating to accounts receivable as of November 30, 2014 and August 31, 2014, respectively. The counterparties to the Company's derivative financial instruments are major financial institutions. | ||
Financial Instruments | Financial Instruments | |
The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, debt and derivative contracts. The Company uses the market approach to value its financial assets and liabilities, determined using available market information. The net carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments. For long-term debt, which is primarily at variable interest rates, fair value is estimated using observable inputs (Level 2) and approximates its carrying value. Derivative contracts are reported at fair value. See Note 9 - Derivative Financial Instruments for further detail. | ||
Fair Value Measurements | Fair Value Measurements | |
Fair value is measured using inputs from the three levels of the fair value hierarchy. Classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels are described as follows: | ||
• | Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities. | |
• | Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the determination of the fair value of the asset or liability, either directly or indirectly. | |
• | Level 3 – Unobservable inputs that are significant to the determination of the fair value of the asset or liability. | |
When developing the fair value measurements, the Company uses quoted market prices whenever available or seeks to maximize the use of observable inputs and minimize the use of unobservable inputs when quoted market prices are not available. | ||
Restructuring Charges | Restructuring Charges | |
Restructuring charges consist of severance, contract termination and other restructuring-related costs. A liability for severance costs is typically recognized when the plan of termination has been communicated to the affected employees and is measured at its fair value at the communication date. Contract termination costs consist primarily of costs that will continue to be incurred under operating leases for their remaining terms without economic benefit to the Company. A liability for contract termination costs is recognized at the date the Company ceases using the rights conveyed by the lease contract and is measured at its fair value, which is determined based on the remaining contractual lease rentals reduced by estimated sublease rentals. A liability for other restructuring-related costs is measured at its fair value in the period in which the liability is incurred. See Note 6 - Restructuring Charges and Other Exit-Related Costs for further detail. |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Nov. 30, 2014 | ||||||||
Inventory, Net [Abstract] | ||||||||
Schedule of Inventory, Current | Inventories consisted of the following (in thousands): | |||||||
November 30, 2014 | 31-Aug-14 | |||||||
Processed and unprocessed scrap metal | $ | 129,294 | $ | 106,877 | ||||
Semi-finished goods (billets) | 11,875 | 12,920 | ||||||
Finished goods | 64,460 | 59,039 | ||||||
Supplies | 38,639 | 37,336 | ||||||
Inventories | $ | 244,268 | $ | 216,172 | ||||
Goodwill_Tables
Goodwill (Tables) | 3 Months Ended | |||||||||||
Nov. 30, 2014 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||
Schedule of Goodwill | The gross changes in the carrying amount of goodwill by reporting segment for the three months ended November 30, 2014 were as follows (in thousands): | |||||||||||
Metals Recycling Business | Auto Parts Business | Total | ||||||||||
Balance as of August 31, 2014 | $ | 146,108 | $ | 179,795 | 325,903 | |||||||
Foreign currency translation adjustment | (1,717 | ) | (1,230 | ) | (2,947 | ) | ||||||
Balance as of November 30, 2014 | $ | 144,391 | $ | 178,565 | $ | 322,956 | ||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||
Schedule Of Reserves For Environmental Liabilities | Changes in the Company’s environmental liabilities for the three months ended November 30, 2014 were as follows (in thousands): | ||||||||||||||||||||||||
Reporting Segment | Balance as of August 31, 2014 | Liabilities Established (Released), Net | Payments and Other | Balance as of November 30, 2014 | Short-Term | Long-Term | |||||||||||||||||||
Metals Recycling Business | $ | 30,139 | $ | 195 | $ | (331 | ) | $ | 30,003 | $ | 496 | $ | 29,507 | ||||||||||||
Auto Parts Business | 17,822 | — | (49 | ) | 17,773 | 554 | 17,219 | ||||||||||||||||||
Corporate | 388 | — | (11 | ) | 377 | 77 | 300 | ||||||||||||||||||
Total | $ | 48,349 | $ | 195 | $ | (391 | ) | $ | 48,153 | $ | 1,127 | $ | 47,026 | ||||||||||||
Restructuring_Charges_and_Othe1
Restructuring Charges and Other Exit-Related Costs (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||||||||||||
Nov. 30, 2014 | ||||||||||||||||||||||||||||||||||||||||
Restructuring Costs and Asset Impairment Charges [Abstract] | ||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | Restructuring charges were comprised of the following (in thousands): | |||||||||||||||||||||||||||||||||||||||
Three Months Ended November 30, 2014 | Three Months Ended November 30, 2013 | |||||||||||||||||||||||||||||||||||||||
Q1’14 Plan | Q1’15 Plan | Total Charges | Q4’12 Plan | Q1’14 Plan | Total Charges | |||||||||||||||||||||||||||||||||||
Restructuring charges: | ||||||||||||||||||||||||||||||||||||||||
Severance costs | $ | 27 | $ | — | $ | 27 | $ | 26 | $ | 1,076 | $ | 1,102 | ||||||||||||||||||||||||||||
Contract termination costs | 253 | — | 253 | 462 | 38 | 500 | ||||||||||||||||||||||||||||||||||
Other restructuring costs | — | 343 | 343 | — | 210 | 210 | ||||||||||||||||||||||||||||||||||
Total restructuring charges | $ | 280 | $ | 343 | $ | 623 | $ | 488 | $ | 1,324 | $ | 1,812 | ||||||||||||||||||||||||||||
Total Charges | ||||||||||||||||||||||||||||||||||||||||
Q4'12 Plan | Q1’14 Plan | Q1'15 Plan | Total | |||||||||||||||||||||||||||||||||||||
Total restructuring charges to date | $ | 13,549 | $ | 6,050 | $ | 343 | $ | 19,942 | ||||||||||||||||||||||||||||||||
Total expected restructuring charges | $ | 13,550 | $ | 6,150 | $ | 2,200 | $ | 21,900 | ||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | The following illustrates the reconciliation of the restructuring liability by major type of costs for the three months ended November 30, 2014 (in thousands): | |||||||||||||||||||||||||||||||||||||||
Q1’14 Plan | Q1’15 Plan | All Plans | ||||||||||||||||||||||||||||||||||||||
Balance 8/31/2014 | Charges | Payments and Other | Balance 11/30/2014 | Balance 8/31/2014 | Charges | Payments and Other | Balance 11/30/2014 | Total Charges to Date | Total Expected Charges | |||||||||||||||||||||||||||||||
Severance costs | $ | 669 | $ | 27 | $ | (294 | ) | $ | 402 | $ | — | $ | — | $ | — | $ | — | $ | 9,818 | $ | 10,700 | |||||||||||||||||||
Contract termination costs | 500 | 253 | (167 | ) | 586 | — | — | — | — | 5,306 | 5,400 | |||||||||||||||||||||||||||||
Other restructuring costs | — | — | — | — | — | 343 | — | 343 | 4,818 | 5,800 | ||||||||||||||||||||||||||||||
Total | $ | 1,169 | $ | 280 | $ | (461 | ) | $ | 988 | $ | — | $ | 343 | $ | — | $ | 343 | $ | 19,942 | $ | 21,900 | |||||||||||||||||||
Schedule of Restructuring and Related Activities By Segment | The amounts of restructuring charges and other exit-related costs relating to each segment were as follows (in thousands): | |||||||||||||||||||||||||||||||||||||||
Three Months Ended November 30, | Total Charges | Total Expected Charges | ||||||||||||||||||||||||||||||||||||||
2014 | 2013 | to Date | ||||||||||||||||||||||||||||||||||||||
Restructuring charges: | ||||||||||||||||||||||||||||||||||||||||
Metals Recycling Business | $ | 255 | $ | 1,291 | $ | 8,934 | $ | 9,000 | ||||||||||||||||||||||||||||||||
Auto Parts Business | 374 | 61 | 1,903 | 3,750 | ||||||||||||||||||||||||||||||||||||
Unallocated (Corporate) | (6 | ) | 460 | 9,105 | 9,150 | |||||||||||||||||||||||||||||||||||
Total restructuring charges | 623 | 1,812 | 19,942 | 21,900 | ||||||||||||||||||||||||||||||||||||
Other exit-related costs: | ||||||||||||||||||||||||||||||||||||||||
Metals Recycling Business | — | — | 566 | |||||||||||||||||||||||||||||||||||||
Total exit-related costs | — | — | 566 | |||||||||||||||||||||||||||||||||||||
Total restructuring charges and other exit-related costs | $ | 623 | $ | 1,812 | $ | 20,508 | ||||||||||||||||||||||||||||||||||
Changes_in_Equity_Tables
Changes in Equity (Tables) | 3 Months Ended | |||||||||||||||||||||||
Nov. 30, 2014 | ||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||
Schedule of Stockholders Equity | The following is a summary of the changes in equity for the three months ended November 30, 2014 and 2013 (in thousands): | |||||||||||||||||||||||
Fiscal 2015 | Fiscal 2014 | |||||||||||||||||||||||
SSI Shareholders’ | Noncontrolling | Total | SSI Shareholders’ | Noncontrolling | Total | |||||||||||||||||||
Equity | Interests | Equity | Equity | Interests | Equity | |||||||||||||||||||
Balance - September 1 (Beginning of period) | $ | 770,784 | $ | 5,193 | $ | 775,977 | $ | 776,558 | $ | 4,641 | $ | 781,199 | ||||||||||||
Net income (loss) | (2,472 | ) | 871 | (1,601 | ) | (6,228 | ) | 861 | (5,367 | ) | ||||||||||||||
Other comprehensive loss, net of tax | (8,144 | ) | — | (8,144 | ) | (726 | ) | — | (726 | ) | ||||||||||||||
Distributions to noncontrolling interests | — | (1,138 | ) | (1,138 | ) | — | (495 | ) | (495 | ) | ||||||||||||||
Restricted stock withheld for taxes | (1,343 | ) | — | (1,343 | ) | (628 | ) | — | (628 | ) | ||||||||||||||
Stock options exercised | — | — | — | 11 | — | 11 | ||||||||||||||||||
Share-based compensation | 2,932 | — | 2,932 | 3,868 | — | 3,868 | ||||||||||||||||||
Excess tax deficiency from stock options exercised and restricted stock units vested | (708 | ) | — | (708 | ) | (589 | ) | — | (589 | ) | ||||||||||||||
Dividends | (5,128 | ) | — | (5,128 | ) | (5,002 | ) | — | (5,002 | ) | ||||||||||||||
Balance - November 30 (End of period) | $ | 755,921 | $ | 4,926 | $ | 760,847 | $ | 767,264 | $ | 5,007 | $ | 772,271 | ||||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||||
Nov. 30, 2014 | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||
Reclassification out of Accumulated Other Comprehensive Income | Changes in accumulated other comprehensive loss, net of tax, for the three months ended November 30, 2014 and 2013 were as follows: | |||||||||||||||||||||||||||||||
Fiscal 2015 | Fiscal 2014 | |||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | Pension Obligations, net | Net Unrealized Gain (Loss) on Cash Flow Hedges | Total | Foreign Currency Translation Adjustments | Pension Obligations, net | Net Unrealized Gain (Loss) on Cash Flow Hedges | Total | |||||||||||||||||||||||||
Balances - September 1 (Beginning of period) | $ | (10,663 | ) | $ | (2,036 | ) | $ | 58 | $ | (12,641 | ) | $ | (6,423 | ) | $ | (2,817 | ) | $ | (121 | ) | $ | (9,361 | ) | |||||||||
Other comprehensive loss before reclassifications | (7,272 | ) | — | (1,712 | ) | (8,984 | ) | (891 | ) | — | — | (891 | ) | |||||||||||||||||||
Income tax benefit | — | — | 428 | 428 | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive loss before reclassifications, net of tax | (7,272 | ) | — | (1,284 | ) | (8,556 | ) | (891 | ) | — | — | (891 | ) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | 49 | 501 | 550 | — | 69 | 98 | 167 | ||||||||||||||||||||||||
Income tax (benefit) expense | — | (13 | ) | (125 | ) | (138 | ) | — | (25 | ) | 23 | (2 | ) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | — | 36 | 376 | 412 | — | 44 | 121 | 165 | ||||||||||||||||||||||||
Net periodic other comprehensive income (loss) | (7,272 | ) | 36 | (908 | ) | (8,144 | ) | (891 | ) | 44 | 121 | (726 | ) | |||||||||||||||||||
Balances - November 30 (End of period | $ | (17,935 | ) | $ | (2,000 | ) | $ | (850 | ) | $ | (20,785 | ) | $ | (7,314 | ) | $ | (2,773 | ) | $ | — | $ | (10,087 | ) | |||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 3 Months Ended | |||||||||
Nov. 30, 2014 | ||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position | The fair value of derivative instruments in the Condensed Consolidated Balance Sheets is as follows (in thousands): | |||||||||
Asset (Liability) Derivatives | ||||||||||
Fair Value - Level 2 | ||||||||||
Balance Sheet Location | 30-Nov-14 | 31-Aug-14 | ||||||||
Foreign currency exchange forward contracts | Prepaid expenses and other current assets | $ | 76 | $ | 202 | |||||
Foreign currency exchange forward contracts | Other accrued liabilities | $ | (1,304 | ) | $ | (46 | ) | |||
The following tables summarizes the results of foreign currency exchange derivatives for the three months ended November 30, 2014 (in thousands): | ||||||||||
Derivative Gain (Loss) Recognized | ||||||||||
Three Months Ended November 30, 2014 | ||||||||||
Other Comprehensive Income (Loss) | Revenues - Effective Portion | Other Income (Expense), net | ||||||||
Foreign currency exchange forward contracts - designated as cash flow hedges | (1,712 | ) | (501 | ) | 54 | |||||
Foreign currency exchange forward contracts - not designated as cash flow hedges | — | — | (5 | ) | ||||||
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | |||||
Nov. 30, 2014 | ||||||
Income Tax Disclosure [Abstract] | ||||||
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the difference between the federal statutory rate and the Company’s effective rate is as follows: | |||||
Three Months Ended November 30, | ||||||
2014(1) | 2013(1) | |||||
Federal statutory rate | 35 | % | 35 | % | ||
State taxes, net of credits | — | 2.5 | ||||
Foreign income taxed at different rates | (28.5 | ) | (6.5 | ) | ||
Section 199 deduction | 0.1 | (1.0 | ) | |||
Non-deductible officers’ compensation | — | 0.3 | ||||
Noncontrolling interests | 0.1 | (0.9 | ) | |||
Research and development credits | — | (0.1 | ) | |||
Valuation allowance on deferred tax assets | (7.0 | ) | (17.0 | ) | ||
Unrecognized tax benefits | (0.2 | ) | — | |||
Other | — | 0.4 | ||||
Effective tax rate | (0.5 | )% | 12.7 | % | ||
_____________________________ | ||||||
-1 | For periods with reported pre-tax losses, the effect of reconciling items with positive signs is tax benefit in excess of the benefit calculated by applying the federal statutory rate to the pre-tax loss. |
Net_Loss_Per_Share_Tables
Net Loss Per Share (Tables) | 3 Months Ended | |||||||
Nov. 30, 2014 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | The following table sets forth the information used to compute basic and diluted net loss per share attributable to SSI (in thousands): | |||||||
Three Months Ended November 30, | ||||||||
2014 | 2013 | |||||||
Net loss | $ | (1,601 | ) | $ | (5,367 | ) | ||
Net income attributable to noncontrolling interests | (871 | ) | (861 | ) | ||||
Net loss attributable to SSI | $ | (2,472 | ) | $ | (6,228 | ) | ||
Computation of shares: | ||||||||
Weighted average common shares outstanding, basic | 26,944 | 26,755 | ||||||
Incremental common shares attributable to dilutive stock options, performance share awards, DSUs and RSUs | — | — | ||||||
Weighted average common shares outstanding, diluted | 26,944 | 26,755 | ||||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||
Nov. 30, 2014 | ||||||||
Segment Reporting [Abstract] | ||||||||
Schedule of Segment Reporting Information, by Segment | The table below illustrates the Company’s operating results by reporting segment (in thousands): | |||||||
Three Months Ended November 30, | ||||||||
2014 | 2013 | |||||||
Revenues: | ||||||||
Metals Recycling Business: | ||||||||
Revenues | $ | 456,278 | $ | 490,309 | ||||
Less: Intersegment revenues | (55,282 | ) | (49,751 | ) | ||||
MRB external customer revenues | 400,996 | 440,558 | ||||||
Auto Parts Business: | ||||||||
Revenues | 80,921 | 79,635 | ||||||
Less: Intersegment revenues | (21,545 | ) | (20,571 | ) | ||||
APB external customer revenues | 59,376 | 59,064 | ||||||
Steel Manufacturing Business: | ||||||||
Revenues | 95,218 | 88,123 | ||||||
Total revenues | $ | 555,590 | $ | 587,745 | ||||
Reconciliation of Operating Income from Segments to Consolidated | The table below illustrates the reconciliation of the Company’s segment operating income to loss before income taxes (in thousands): | |||||||
Three Months Ended November 30, | ||||||||
2014 | 2013 | |||||||
Metals Recycling Business | $ | 1,922 | $ | 590 | ||||
Auto Parts Business | 1,961 | 5,609 | ||||||
Steel Manufacturing Business | 6,207 | 1,744 | ||||||
Segment operating income | 10,090 | 7,943 | ||||||
Restructuring charges and other exit-related costs | (623 | ) | (1,812 | ) | ||||
Corporate and eliminations | (9,389 | ) | (9,756 | ) | ||||
Operating income (loss) | 78 | (3,625 | ) | |||||
Interest expense | (2,424 | ) | (2,702 | ) | ||||
Other income, net | 753 | 176 | ||||||
Loss before income taxes | $ | (1,593 | ) | $ | (6,151 | ) | ||
Reconciliation of Assets from Segment to Consolidated | The following is a summary of the Company’s total assets by reporting segment (in thousands): | |||||||
November 30, 2014 | August 31, 2014 | |||||||
Metals Recycling Business(1) | $ | 1,331,320 | $ | 1,343,771 | ||||
Auto Parts Business | 359,260 | 361,411 | ||||||
Steel Manufacturing Business | 356,348 | 350,344 | ||||||
Total segment assets | 2,046,928 | 2,055,526 | ||||||
Corporate and eliminations | (724,752 | ) | (700,316 | ) | ||||
Total assets | $ | 1,322,176 | $ | 1,355,210 | ||||
_____________________________ | ||||||||
-1 | MRB total assets include $15 million as of November 30, 2014 and August 31, 2014 for investments in joint venture partnerships. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | |
Nov. 30, 2014 | Aug. 31, 2014 | |
Accounting Policies [Abstract] | ||
Financing Receivable, Allowance for Credit Losses | $8,000,000 | |
Number of Days Used To Determine Short Term Highly Liquid Investments Treatment As Cash Equivalents | 90 days | |
Book Overdrafts | 18,000,000 | 35,000,000 |
Assets Held for Sale | 3,000,000 | 3,000,000 |
Cash, FDIC Insured Amount | 250,000 | |
Customer Issued Letters Of Credit | $70,000,000 | $74,000,000 |
Inventories_Details
Inventories (Details) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory, Net [Abstract] | ||
Processed and unprocessed scrap metal | $129,294 | $106,877 |
Semi-finished goods (billets) | 11,875 | 12,920 |
Finished goods | 64,460 | 59,039 |
Supplies | 38,639 | 37,336 |
Inventories | $244,268 | $216,172 |
Goodwill_Details
Goodwill (Details) (USD $) | 3 Months Ended | |
Nov. 30, 2014 | Aug. 31, 2014 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | $325,903,000 | |
Foreign currency translation adjustment | -2,947,000 | |
Goodwill, end of period | 322,956,000 | |
Accumulated impairment loss | 321,000,000 | 321,000,000 |
Metals Recycling Business | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | 146,108,000 | |
Foreign currency translation adjustment | -1,717,000 | |
Goodwill, end of period | 144,391,000 | |
Auto Parts Business | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | 179,795,000 | |
Foreign currency translation adjustment | -1,230,000 | |
Goodwill, end of period | $178,565,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
Nov. 30, 2014 | Mar. 30, 2012 | Aug. 31, 2014 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Beginning balance | $48,349,000 | ||
Liabilities Established (Released), Net | 195,000 | ||
Payments and Other | -391,000 | ||
Ending balance | 48,153,000 | ||
Short-Term | 1,127,000 | 1,062,000 | |
Long-Term | 47,026,000 | 47,287,000 | |
Corporate | |||
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Beginning balance | 388,000 | ||
Liabilities Established (Released), Net | 0 | ||
Payments and Other | -11,000 | ||
Ending balance | 377,000 | ||
Short-Term | 77,000 | ||
Long-Term | 300,000 | ||
Metals Recycling Business | |||
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Beginning balance | 30,139,000 | ||
Liabilities Established (Released), Net | 195,000 | ||
Payments and Other | -331,000 | ||
Ending balance | 30,003,000 | ||
Short-Term | 496,000 | ||
Long-Term | 29,507,000 | ||
Auto Parts Business | |||
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Beginning balance | 17,822,000 | ||
Liabilities Established (Released), Net | 0 | ||
Payments and Other | -49,000 | ||
Ending balance | 17,773,000 | ||
Short-Term | 554,000 | ||
Long-Term | 17,219,000 | ||
Steel Manufacturing Business | |||
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Ending balance | 0 | ||
Annual production capacity | 950,000 | ||
Permit Expiration Date | 1-Feb-18 | ||
Portland Harbor Superfund Site [Member] | |||
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Ending balance | 1,000,000 | ||
Site Contingency Number of Remedial Alternatives | 10 | ||
Other Metals Recycling Business Sites [Member] | |||
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Ending balance | 29,000,000 | ||
Minimum | Portland Harbor Superfund Site [Member] | |||
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Number Of Potentially Responsible Parties | 80 | ||
Site Contingency, Estimated Time Frame to Remediate | 2 years | ||
Maximum | Portland Harbor Superfund Site [Member] | |||
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Site Contingency, Estimated Time Frame to Remediate | 28 years | ||
Lower Willamette Group [Member] | Portland Harbor Superfund Site [Member] | |||
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Site Contingency Period Of Feasibility Study | 10 years | ||
Feasibility Study Investigation Costs | 100,000,000 | ||
Potential Responsible Parties [Member] | Minimum | Portland Harbor Superfund Site [Member] | |||
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Site Contingency Least Costly Remediation Plan | 170,000,000 | ||
Site Contingency Most Costly Remediation Plan | 1,080,000,000 | ||
Potential Responsible Parties [Member] | Maximum | Portland Harbor Superfund Site [Member] | |||
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Site Contingency Least Costly Remediation Plan | 250,000,000 | ||
Site Contingency Most Costly Remediation Plan | 1,760,000,000 |
Restructuring_Charges_and_Othe2
Restructuring Charges and Other Exit-Related Costs Restructuring and Related Costs (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $623 | $1,812 |
Total restructuring charges to date | 19,942 | |
Total expected restructuring charges | 21,900 | |
Q1’14 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 280 | 1,324 |
Total restructuring charges to date | 6,050 | |
Total expected restructuring charges | 6,150 | |
Q1’15 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 343 | |
Total restructuring charges to date | 343 | |
Total expected restructuring charges | 2,200 | |
Q4’12 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 488 | |
Total restructuring charges to date | 13,549 | |
Total expected restructuring charges | 13,550 | |
Severance costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 27 | 1,102 |
Total restructuring charges to date | 9,818 | |
Total expected restructuring charges | 10,700 | |
Severance costs | Q1’14 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 27 | 1,076 |
Severance costs | Q1’15 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | |
Severance costs | Q4’12 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 26 | |
Contract termination costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 253 | 500 |
Total restructuring charges to date | 5,306 | |
Total expected restructuring charges | 5,400 | |
Contract termination costs | Q1’14 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 253 | 38 |
Contract termination costs | Q1’15 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | |
Contract termination costs | Q4’12 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 462 | |
Other restructuring costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 343 | 210 |
Total restructuring charges to date | 4,818 | |
Total expected restructuring charges | 5,800 | |
Other restructuring costs | Q1’14 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | 210 |
Other restructuring costs | Q1’15 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 343 | |
Other restructuring costs | Q4’12 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $0 |
Restructuring_Charges_and_Othe3
Restructuring Charges and Other Exit-Related Costs Restructuring Reserve Rollforward (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Aug. 31, 2014 |
Restructuring Reserve [Roll Forward] | |||
Charges | $623 | $1,812 | |
Total restructuring charges to date | 19,942 | ||
Total expected restructuring charges | 21,900 | ||
Q1’14 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 1,169 | ||
Charges | 280 | 1,324 | |
Payments and Other | -461 | ||
Restructuring reserve, ending balance | 988 | ||
Total restructuring charges to date | 6,050 | ||
Total expected restructuring charges | 6,150 | ||
Q1’15 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 0 | ||
Charges | 343 | ||
Payments and Other | 0 | ||
Restructuring reserve, ending balance | 343 | ||
Total restructuring charges to date | 343 | ||
Total expected restructuring charges | 2,200 | ||
Q4’12 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Charges | 488 | ||
Total restructuring charges to date | 13,549 | ||
Total expected restructuring charges | 13,550 | ||
Severance costs | |||
Restructuring Reserve [Roll Forward] | |||
Charges | 27 | 1,102 | |
Total restructuring charges to date | 9,818 | ||
Total expected restructuring charges | 10,700 | ||
Severance costs | Q1’14 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 669 | ||
Charges | 27 | 1,076 | |
Payments and Other | -294 | ||
Restructuring reserve, ending balance | 402 | ||
Severance costs | Q1’15 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 0 | ||
Charges | 0 | ||
Payments and Other | 0 | ||
Restructuring reserve, ending balance | 0 | ||
Severance costs | Q4’12 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Charges | 26 | ||
Contract termination costs | |||
Restructuring Reserve [Roll Forward] | |||
Charges | 253 | 500 | |
Total restructuring charges to date | 5,306 | ||
Total expected restructuring charges | 5,400 | ||
Contract termination costs | Q1’14 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 500 | ||
Charges | 253 | 38 | |
Payments and Other | -167 | ||
Restructuring reserve, ending balance | 586 | ||
Contract termination costs | Q1’15 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 0 | ||
Charges | 0 | ||
Payments and Other | 0 | ||
Restructuring reserve, ending balance | 0 | ||
Contract termination costs | Q4’12 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 1,000 | ||
Charges | 462 | ||
Restructuring reserve, ending balance | 1,000 | 1,000 | |
Other restructuring costs | |||
Restructuring Reserve [Roll Forward] | |||
Charges | 343 | 210 | |
Total restructuring charges to date | 4,818 | ||
Total expected restructuring charges | 5,800 | ||
Other restructuring costs | Q1’14 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 0 | ||
Charges | 0 | 210 | |
Payments and Other | 0 | ||
Restructuring reserve, ending balance | 0 | ||
Other restructuring costs | Q1’15 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 0 | ||
Charges | 343 | ||
Payments and Other | 0 | ||
Restructuring reserve, ending balance | 343 | ||
Other restructuring costs | Q4’12 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Charges | $0 |
Restructuring_Charges_and_Othe4
Restructuring Charges and Other Exit-Related Costs Restructuring Charges and Other Exit-Related Costs by Segment (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $623 | $1,812 |
Restructuring charges and other exit-related costs | 623 | 1,812 |
Total restructuring charges to date | 19,942 | |
Total expected restructuring charges | 21,900 | |
Total restructuring charges and other exit-related costs, incurred to date | 20,508 | |
Segment Reconciling Items | Total exit-related costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges and other exit-related costs | 0 | 0 |
Total restructuring charges to date | 566 | |
Segment Reconciling Items | Metals Recycling Business | Asset impairments | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges and other exit-related costs | 0 | 0 |
Total restructuring charges to date | 566 | |
Operating Segments | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges and other exit-related costs | 623 | 1,812 |
Operating Segments | Metals Recycling Business | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 255 | 1,291 |
Total restructuring charges to date | 8,934 | |
Total expected restructuring charges | 9,000 | |
Operating Segments | Auto Parts Business | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 374 | 61 |
Total restructuring charges to date | 1,903 | |
Total expected restructuring charges | 3,750 | |
Unallocated (Corporate) | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | -6 | 460 |
Total restructuring charges to date | 9,105 | |
Total expected restructuring charges | $9,150 |
Changes_in_Equity_Details
Changes in Equity (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance - September 1 (Beginning of period) | $775,977 | $781,199 |
Net income (loss) | -1,601 | -5,367 |
Other comprehensive loss, net of tax | -8,144 | -726 |
Distributions to noncontrolling interests | -1,138 | -495 |
Restricted stock withheld for taxes | -1,343 | -628 |
Stock options exercised | 0 | 11 |
Share-based compensation | 2,932 | 3,868 |
Excess tax deficiency from stock options exercised and restricted stock units vested | -708 | -589 |
Dividends | -5,128 | -5,002 |
Balance - November 30 (End of period) | 760,847 | 772,271 |
SSI Shareholders’ Equity | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance - September 1 (Beginning of period) | 770,784 | 776,558 |
Net income (loss) | -2,472 | -6,228 |
Other comprehensive loss, net of tax | -8,144 | -726 |
Distributions to noncontrolling interests | 0 | 0 |
Restricted stock withheld for taxes | -1,343 | -628 |
Stock options exercised | 0 | 11 |
Share-based compensation | 2,932 | 3,868 |
Excess tax deficiency from stock options exercised and restricted stock units vested | -708 | -589 |
Dividends | -5,128 | -5,002 |
Balance - November 30 (End of period) | 755,921 | 767,264 |
Noncontrolling Interests | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance - September 1 (Beginning of period) | 5,193 | 4,641 |
Net income (loss) | 871 | 861 |
Other comprehensive loss, net of tax | 0 | 0 |
Distributions to noncontrolling interests | -1,138 | -495 |
Restricted stock withheld for taxes | 0 | 0 |
Stock options exercised | 0 | 0 |
Share-based compensation | 0 | 0 |
Excess tax deficiency from stock options exercised and restricted stock units vested | 0 | 0 |
Dividends | 0 | 0 |
Balance - November 30 (End of period) | $4,926 | $5,007 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward} | ||
Beginning balance | ($12,641) | ($9,361) |
Other comprehensive loss before reclassifications | -8,984 | -891 |
Income tax benefit | 428 | 0 |
Other comprehensive loss before reclassifications, net of tax | -8,556 | -891 |
Amounts reclassified from accumulated other comprehensive loss | 550 | 167 |
Income tax (benefit) expense | -138 | -2 |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 412 | 165 |
Total other comprehensive income (loss), net of tax | -8,144 | -726 |
Ending balance | -20,785 | -10,087 |
Foreign Currency Translation Adjustments | ||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward} | ||
Beginning balance | -10,663 | -6,423 |
Other comprehensive loss before reclassifications | -7,272 | -891 |
Income tax benefit | 0 | 0 |
Other comprehensive loss before reclassifications, net of tax | -7,272 | -891 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Income tax (benefit) expense | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 0 | 0 |
Total other comprehensive income (loss), net of tax | -7,272 | -891 |
Ending balance | -17,935 | -7,314 |
Pension Obligations, net | ||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward} | ||
Beginning balance | -2,036 | -2,817 |
Other comprehensive loss before reclassifications | 0 | 0 |
Income tax benefit | 0 | 0 |
Other comprehensive loss before reclassifications, net of tax | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 49 | 69 |
Income tax (benefit) expense | -13 | -25 |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 36 | 44 |
Total other comprehensive income (loss), net of tax | 36 | 44 |
Ending balance | -2,000 | -2,773 |
Net Unrealized Gain (Loss) on Cash Flow Hedges | ||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward} | ||
Beginning balance | 58 | -121 |
Other comprehensive loss before reclassifications | -1,712 | 0 |
Income tax benefit | 428 | 0 |
Other comprehensive loss before reclassifications, net of tax | -1,284 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 501 | 98 |
Income tax (benefit) expense | -125 | 23 |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 376 | 121 |
Total other comprehensive income (loss), net of tax | -908 | 121 |
Ending balance | ($850) | $0 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (Not Designated as Hedging Instrument, USD $) | Nov. 30, 2014 |
In Millions, unless otherwise specified | |
Foreign Exchange Forward To Buy Canadian Currency | |
Derivative [Line Items] | |
Derivative, Notional Amount | $51 |
Foreign Exchange Forward to Sell Canadian Currency | |
Derivative [Line Items] | |
Derivative, Notional Amount | $6 |
Derivative_Financial_Instrumen3
Derivative Financial Instruments Derivative Instruments in Statement of Financial Position and Statement of Financial Performance, Fair Value (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Aug. 31, 2014 |
Derivative [Line Items] | ||
Derivative Gain (Loss) Recognized in Other Income (Expense), net - Not Designated as Cash Flow Hedges | ($5) | |
Cash Flow Hedging | Foreign currency exchange forward contracts | ||
Derivative [Line Items] | ||
Derivative Gain (Loss) Recognized in Other Comprehensive Income | -1,712 | |
Derivative Gain (Loss) Recognized in Revenues - Effective Portion | -501 | |
Derivative Gain (Loss) Recognized in Other Income (Expense), net - Designated as Cash Flow Hedges | 54 | |
Not Designated as Hedging Instrument | Prepaid expenses and other current assets | Foreign currency exchange forward contracts | ||
Derivative [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 76 | 202 |
Not Designated as Hedging Instrument | Other accrued liabilities | Foreign currency exchange forward contracts | ||
Derivative [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | ($1,304) | ($46) |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (USD $) | 3 Months Ended |
In Millions, except Share data, unless otherwise specified | Nov. 30, 2014 |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity Instruments Other than Options, Grants in Period | 268,988 |
Award Vesting Period | 5 years |
Annual Vesting Percent | 20.00% |
Equity Instruments Other Than Options Grants In Period Total Fair Value | $6 |
Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity Instruments Other than Options, Grants in Period | 268,988 |
Award Vesting Period | 2 years |
Equity Instruments Other Than Options Grants In Period Total Fair Value | $6 |
Weight Based on the Company's EBITDA Used In Calculation Of Performance Targets | 50.00% |
Weight Based on Return on Equity Used In Calculation Of Performance Targets | 50.00% |
Performance Shares | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance Based Awards Award Payouts Threshold | 50.00% |
Performance Shares | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance Based Awards Award Payouts Threshold | 200.00% |
Income_Taxes_Details
Income Taxes (Details) | 3 Months Ended | |||
Nov. 30, 2014 | Nov. 30, 2013 | |||
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||
Federal statutory rate | 35.00% | [1] | 35.00% | [1] |
State taxes, net of credits | 0.00% | 2.50% | ||
Foreign income taxed at different rates | -28.50% | -6.50% | ||
Section 199 deduction | 0.10% | -1.00% | ||
Non-deductible officers’ compensation | 0.00% | 0.30% | ||
Noncontrolling interests | 0.10% | -0.90% | ||
Research and development credits | 0.00% | -0.10% | ||
Valuation allowance on deferred tax assets | -7.00% | -17.00% | ||
Unrecognized tax benefits | -0.20% | 0.00% | ||
Other | 0.00% | 0.40% | ||
Effective tax rate | -0.50% | 12.70% | ||
[1] | For periods with reported pre-tax losses, the effect of reconciling items with positive signs is tax benefit in excess of the benefit calculated by applying the federal statutory rate to the pre-tax loss. |
Net_Loss_Per_Share_Details
Net Loss Per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Earnings Per Share [Abstract] | ||
Net loss | ($1,601) | ($5,367) |
Net income attributable to noncontrolling interests | -871 | -861 |
Net loss attributable to SSI | ($2,472) | ($6,228) |
Computation of shares: | ||
Weighted average common shares outstanding, basic | 26,944,000 | 26,755,000 |
Incremental common shares attributable to dilutive stock options, performance share awards, DSUs and RSUs | 0 | 0 |
Weighted average common shares outstanding, diluted | 26,944,000 | 26,755,000 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,365,414 | 1,106,990 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Aug. 31, 2014 | |
Corporate Joint Venture | |||
Related Party Transaction [Line Items] | |||
Purchases from joint ventures | $7,000,000 | $7,000,000 | |
Accounts Receivable, Related Parties (MMGL - Immediate Family Member of Management or Principal, Less Than $1 Million as of November 30, 2014) | 1,000,000 | 1,000,000 | |
Auto Parts Business Segment President | Partnership Interest | |||
Related Party Transaction [Line Items] | |||
Related Party Noncontrolling Ownership Percentage By Noncontrolling Owners | 25.00% | ||
Related Party Noncontrolling Ownership Percentage By Parent | 75.00% | ||
Related Party Number Of Stores | 5 | ||
Related Party Transaction Related Party Share Of Profit (Less Than $1 Million For The Three Month Period Ended November 30, 2013) | 1,000,000 | 1,000,000 | |
Lease Expiration Date | 31-Mar-16 | ||
Related Party Transaction Rent Expense (Less Than $1 Million For the Three Month Periods Ended November 30, 2014 and 2013) | 1,000,000 | 1,000,000 | |
Immediate Family Member of Management or Principal Owner | |||
Related Party Transaction [Line Items] | |||
Accounts Receivable, Related Parties (MMGL - Immediate Family Member of Management or Principal, Less Than $1 Million as of November 30, 2014) | $1,000,000 | $1,000,000 | |
Related Party Transaction Percentage Of Shared Legal And Consulting Costs | 50.00% |
Segment_Information_Details
Segment Information (Details) | 3 Months Ended |
Nov. 30, 2014 | |
segments | |
Segment Reporting [Abstract] | |
Number of Operating Segments | 3 |
Number of Reportable Segments | 3 |
Segment_Information_Segment_Re
Segment Information Segment Revenue Reconciliation to Consolidated (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Segment Reporting Information [Line Items] | ||
Revenues | $555,590 | $587,745 |
Metals Recycling Business | ||
Segment Reporting Information [Line Items] | ||
Revenues | 400,996 | 440,558 |
Auto Parts Business | ||
Segment Reporting Information [Line Items] | ||
Revenues | 59,376 | 59,064 |
Steel Manufacturing Business | ||
Segment Reporting Information [Line Items] | ||
Revenues | 95,218 | 88,123 |
Operating Segments | Metals Recycling Business | ||
Segment Reporting Information [Line Items] | ||
Revenues | 456,278 | 490,309 |
Operating Segments | Auto Parts Business | ||
Segment Reporting Information [Line Items] | ||
Revenues | 80,921 | 79,635 |
Less: Intersegment revenues | Metals Recycling Business | ||
Segment Reporting Information [Line Items] | ||
Revenues | -55,282 | -49,751 |
Less: Intersegment revenues | Auto Parts Business | ||
Segment Reporting Information [Line Items] | ||
Revenues | ($21,545) | ($20,571) |
Segment_Information_Segment_Op
Segment Information Segment Operating Income Reconciliation to Consolidated (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Segment Reporting Information [Line Items] | ||
Operating income | $78 | ($3,625) |
Restructuring charges and other exit-related costs | -623 | -1,812 |
Interest expense | -2,424 | -2,702 |
Other income, net | 753 | 176 |
Loss before income taxes | -1,593 | -6,151 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating income | 10,090 | 7,943 |
Restructuring charges and other exit-related costs | -623 | -1,812 |
Operating Segments | Metals Recycling Business | ||
Segment Reporting Information [Line Items] | ||
Operating income | 1,922 | 590 |
Operating Segments | Auto Parts Business | ||
Segment Reporting Information [Line Items] | ||
Operating income | 1,961 | 5,609 |
Operating Segments | Steel Manufacturing Business | ||
Segment Reporting Information [Line Items] | ||
Operating income | 6,207 | 1,744 |
Corporate and eliminations | ||
Segment Reporting Information [Line Items] | ||
Operating income | ($9,389) | ($9,756) |
Segment_Information_Segment_As
Segment Information Segment Assets Reconciliation to Consolidated (Details) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Segment Reporting Information [Line Items] | ||||
Assets | $1,322,176 | $1,355,210 | ||
Investments in joint venture partnerships | 15,021 | 14,624 | ||
Metals Recycling Business | ||||
Segment Reporting Information [Line Items] | ||||
Investments in joint venture partnerships | 15,000 | 15,000 | ||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Assets | 2,046,928 | 2,055,526 | ||
Operating Segments | Metals Recycling Business | ||||
Segment Reporting Information [Line Items] | ||||
Assets | 1,331,320 | [1] | 1,343,771 | [1] |
Operating Segments | Auto Parts Business | ||||
Segment Reporting Information [Line Items] | ||||
Assets | 359,260 | 361,411 | ||
Operating Segments | Steel Manufacturing Business | ||||
Segment Reporting Information [Line Items] | ||||
Assets | 356,348 | 350,344 | ||
Corporate and eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Assets | ($724,752) | ($700,316) | ||
[1] | MRB total assets include $15 million as of November 30, 2014 and August 31, 2014 for investments in joint venture partnerships. |