Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
May 31, 2020 | Jun. 29, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | May 31, 2020 | |
Entity Registrant Name | SCHNITZER STEEL INDUSTRIES, INC. | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Trading Symbol | SCHN | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000912603 | |
Current Fiscal Year End Date | --08-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity File Number | 000-22496 | |
Entity Tax Identification Number | 93-0341923 | |
Entity Address, Address Line One | 299 SW Clay Street | |
Entity Address, Address Line Two | Suite 350 | |
Entity Address, City or Town | Portland | |
Entity Address, State or Province | OR | |
Entity Address, Postal Zip Code | 97201 | |
City Area Code | 503 | |
Local Phone Number | 224-9900 | |
Entity Incorporation, State or Country Code | OR | |
Title of 12(b) Security | Class A Common Stock, $1.00 par value | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 26,899,467 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 200,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 307,655 | $ 12,377 |
Accounts receivable, net of allowance for doubtful accounts of $1,594 and $1,569 | 134,538 | 145,617 |
Inventories | 161,543 | 187,320 |
Refundable income taxes | 17,305 | 5,867 |
Prepaid expenses and other current assets | 32,186 | 115,107 |
Total current assets | 653,227 | 466,288 |
Property, plant and equipment, net of accumulated depreciation of $800,623 and $766,033 | 459,312 | 456,400 |
Operating lease right-of-use assets | 127,418 | |
Investments in joint ventures | 9,905 | 10,276 |
Goodwill | 168,595 | 169,237 |
Intangibles, net of accumulated amortization of $3,339 and $3,116 | 4,129 | 4,482 |
Deferred income taxes | 26,690 | 28,850 |
Other assets | 24,820 | 25,213 |
Total assets | 1,474,096 | 1,160,746 |
Current liabilities: | ||
Short-term borrowings | 1,401 | 1,321 |
Accounts payable | 68,480 | 110,297 |
Accrued payroll and related liabilities | 26,562 | 27,547 |
Environmental liabilities | 6,009 | 6,030 |
Operating lease liabilities | 18,683 | |
Other accrued liabilities | 44,133 | 123,035 |
Total current liabilities | 165,268 | 268,230 |
Deferred income taxes | 32,666 | 25,466 |
Long-term debt, net of current maturities | 426,791 | 103,775 |
Environmental liabilities, net of current portion | 48,001 | 45,769 |
Operating lease liabilities, net of current maturities | 111,963 | |
Other long-term liabilities | 15,060 | 16,210 |
Total liabilities | 799,749 | 459,450 |
Commitments and contingencies (Note 5) | ||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Preferred stock – 20,000 shares $1.00 par value authorized, none issued | 0 | 0 |
Additional paid-in capital | 33,264 | 33,700 |
Retained earnings | 651,162 | 675,363 |
Accumulated other comprehensive loss | (40,899) | (38,763) |
Total SSI shareholders’ equity | 670,626 | 696,964 |
Noncontrolling interests | 3,721 | 4,332 |
Total equity | 674,347 | 701,296 |
Total liabilities and equity | 1,474,096 | 1,160,746 |
Class A Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Common stock, value | 26,899 | 26,464 |
Class B Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Common stock, value | $ 200 | $ 200 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Current assets: | ||
Accounts receivable, allowance for doubtful accounts | $ 1,594 | $ 1,569 |
Property, plant and equipment, accumulated depreciation | 800,623 | 766,033 |
Intangibles, accumulated amortization | $ 3,339 | $ 3,116 |
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Class A Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 26,899,000 | 26,464,000 |
Common stock, shares outstanding | 26,899,000 | 26,464,000 |
Class B Common Stock | ||
Schnitzer Steel Industries, Inc. (“SSI”) shareholders’ equity: | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 200,000 | 200,000 |
Common stock, shares outstanding | 200,000 | 200,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 402,683 | $ 547,396 | $ 1,247,749 | $ 1,584,981 |
Operating expense: | ||||
Cost of goods sold | 356,217 | 474,598 | 1,101,497 | 1,379,418 |
Selling, general and administrative | 45,544 | 48,575 | 138,744 | 139,483 |
(Income) from joint ventures | (309) | (311) | (698) | (980) |
Asset impairment charges | 2,227 | 4,321 | 63 | |
Restructuring charges and other exit-related activities | 2,710 | 75 | 7,810 | 813 |
Operating (loss) income | (3,706) | 24,459 | (3,925) | 66,184 |
Interest expense | (2,656) | (2,294) | (5,399) | (6,267) |
Other (expense) income, net | (90) | 29 | 18 | 373 |
(Loss) income from continuing operations before income taxes | (6,452) | 22,194 | (9,306) | 60,290 |
Income tax benefit (expense) | 1,804 | (5,762) | 2,568 | (13,733) |
(Loss) income from continuing operations | (4,648) | 16,432 | (6,738) | 46,557 |
(Loss) income from discontinued operations, net of tax | (69) | 8 | (40) | (202) |
Net (loss) income | (4,717) | 16,440 | (6,778) | 46,355 |
Net income attributable to noncontrolling interests | (278) | (750) | (1,329) | (1,585) |
Net (loss) income attributable to SSI shareholders | $ (4,995) | $ 15,690 | $ (8,107) | $ 44,770 |
Net (loss) income per share attributable to SSI shareholders Basic: | ||||
(Loss) income per share from continuing operations | $ (0.18) | $ 0.57 | $ (0.29) | $ 1.63 |
Net (loss) income per share | (0.18) | 0.57 | (0.29) | 1.63 |
Net (loss) income per share attributable to SSI shareholders Diluted: | ||||
(Loss) income per share from continuing operations | (0.18) | 0.56 | (0.29) | 1.60 |
Net (loss) income per share | $ (0.18) | $ 0.56 | $ (0.29) | $ 1.59 |
Weighted average number of common shares: | ||||
Basic | 27,724 | 27,510 | 27,653 | 27,548 |
Diluted | 27,724 | 28,074 | 27,653 | 28,184 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (4,717) | $ 16,440 | $ (6,778) | $ 46,355 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (1,904) | (1,838) | (2,323) | (2,570) |
Pension obligations, net | 45 | 142 | 187 | 384 |
Total other comprehensive loss, net of tax | (1,859) | (1,696) | (2,136) | (2,186) |
Comprehensive (loss) income | (6,576) | 14,744 | (8,914) | 44,169 |
Less comprehensive income attributable to noncontrolling interests | (278) | (750) | (1,329) | (1,585) |
Comprehensive (loss) income attributable to SSI shareholders | $ (6,854) | $ 13,994 | $ (10,243) | $ 42,584 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Class A Common Stock | Class B Common Stock | Common StockClass A Common Stock | Common StockClass B Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total SSI Shareholders’ Equity | Noncontrolling Interests |
Beginning balance at Aug. 31, 2018 | $ 670,110 | $ 26,502 | $ 200 | $ 36,929 | $ 639,684 | $ (37,237) | $ 666,078 | $ 4,032 | ||
Beginning balance (in shares) at Aug. 31, 2018 | 26,502 | 200 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 46,355 | 44,770 | 44,770 | 1,585 | ||||||
Other comprehensive loss, net of tax | (2,186) | (2,186) | (2,186) | |||||||
Distributions to noncontrolling interests | (941) | (941) | ||||||||
Share repurchases | (10,087) | $ (413) | (9,674) | (10,087) | ||||||
Share repurchase (in shares) | (413) | |||||||||
Issuance of restricted stock | $ 765 | (765) | ||||||||
Issuance of restricted stock (in shares) | 765 | |||||||||
Restricted stock withheld for taxes | (7,463) | $ (278) | (7,185) | (7,463) | ||||||
Restricted stock withheld for taxes (in shares) | (278) | |||||||||
Share-based compensation cost | 13,437 | 13,437 | 13,437 | |||||||
Dividends | (15,521) | (15,521) | (15,521) | |||||||
Ending balance at May. 31, 2019 | 693,704 | $ 26,576 | $ 200 | 32,742 | 668,933 | (39,423) | 689,028 | 4,676 | ||
Ending balance (in shares) at May. 31, 2019 | 26,576 | 200 | ||||||||
Beginning balance at Feb. 28, 2019 | 680,847 | $ 26,575 | $ 200 | 29,135 | 658,424 | (37,727) | 676,607 | 4,240 | ||
Beginning balance (in shares) at Feb. 28, 2019 | 26,575 | 200 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 16,440 | 15,690 | 15,690 | 750 | ||||||
Other comprehensive loss, net of tax | (1,696) | (1,696) | (1,696) | |||||||
Distributions to noncontrolling interests | (314) | (314) | ||||||||
Issuance of restricted stock | $ 2 | (2) | ||||||||
Issuance of restricted stock (in shares) | 2 | |||||||||
Restricted stock withheld for taxes | (21) | $ (1) | (20) | (21) | ||||||
Restricted stock withheld for taxes (in shares) | (1) | |||||||||
Share-based compensation cost | 3,629 | 3,629 | 3,629 | |||||||
Dividends | (5,181) | (5,181) | (5,181) | |||||||
Ending balance at May. 31, 2019 | 693,704 | $ 26,576 | $ 200 | 32,742 | 668,933 | (39,423) | 689,028 | 4,676 | ||
Ending balance (in shares) at May. 31, 2019 | 26,576 | 200 | ||||||||
Beginning balance at Aug. 31, 2019 | 701,296 | $ 26,464 | $ 200 | 33,700 | 675,363 | (38,763) | 696,964 | 4,332 | ||
Beginning balance (in shares) at Aug. 31, 2019 | 26,464 | 200 | 26,464 | 200 | ||||||
Cumulative Effect of New Accounting Principle in Period of Adoption (Accounting Standards Update 2016-02) at Aug. 31, 2019 | (463) | (463) | (463) | |||||||
Adjusted beginning balance at Aug. 31, 2019 | 700,833 | $ 26,464 | $ 200 | 33,700 | 674,900 | (38,763) | 696,501 | 4,332 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (6,778) | (8,107) | (8,107) | 1,329 | ||||||
Other comprehensive loss, net of tax | (2,136) | (2,136) | (2,136) | |||||||
Distributions to noncontrolling interests | (1,940) | (1,940) | ||||||||
Share repurchases | (914) | $ (53) | (861) | (914) | ||||||
Share repurchase (in shares) | (53) | |||||||||
Issuance of restricted stock | $ 762 | (762) | ||||||||
Issuance of restricted stock (in shares) | 762 | |||||||||
Restricted stock withheld for taxes | (5,845) | $ (274) | (5,571) | (5,845) | ||||||
Restricted stock withheld for taxes (in shares) | (274) | |||||||||
Share-based compensation cost | 6,758 | 6,758 | 6,758 | |||||||
Dividends | (15,631) | (15,631) | (15,631) | |||||||
Ending balance at May. 31, 2020 | 674,347 | $ 26,899 | $ 200 | 33,264 | 651,162 | (40,899) | 670,626 | 3,721 | ||
Ending balance (in shares) at May. 31, 2020 | 26,899 | 200 | 26,899 | 200 | ||||||
Beginning balance at Feb. 29, 2020 | 684,948 | $ 26,899 | $ 200 | 31,174 | 661,418 | (39,040) | 680,651 | 4,297 | ||
Beginning balance (in shares) at Feb. 29, 2020 | 26,899 | 200 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (4,717) | (4,995) | (4,995) | 278 | ||||||
Other comprehensive loss, net of tax | (1,859) | (1,859) | (1,859) | |||||||
Distributions to noncontrolling interests | (854) | (854) | ||||||||
Share-based compensation cost | 2,090 | 2,090 | 2,090 | |||||||
Dividends | (5,261) | (5,261) | (5,261) | |||||||
Ending balance at May. 31, 2020 | $ 674,347 | $ 26,899 | $ 200 | $ 33,264 | $ 651,162 | $ (40,899) | $ 670,626 | $ 3,721 | ||
Ending balance (in shares) at May. 31, 2020 | 26,899 | 200 | 26,899 | 200 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Statement Of Stockholders Equity [Abstract] | ||||
Dividends per common share | $ 0.1875 | $ 0.1875 | $ 0.5625 | $ 0.5625 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (6,778) | $ 46,355 |
Adjustments to reconcile net (loss) income to cash provided by operating activities: | ||
Asset impairment charges | 4,321 | 63 |
Exit-related asset impairments | 971 | 23 |
Depreciation and amortization | 43,215 | 39,644 |
Inventory write-downs | 775 | |
Deferred income taxes | 8,570 | 9,402 |
Undistributed equity in earnings of joint ventures | (698) | (980) |
Share-based compensation expense | 6,710 | 13,437 |
(Gain) loss on the disposal of assets, net | (19) | 252 |
Unrealized foreign exchange (gain) loss, net | (24) | 86 |
Bad debt expense, net | 53 | 63 |
Changes in assets and liabilities, net of acquisitions: | ||
Accounts receivable | 3,914 | (9,779) |
Inventories | 32,754 | 14,832 |
Income taxes | (11,428) | 689 |
Prepaid expenses and other current assets | (1,209) | (3,258) |
Other long-term assets | 563 | 735 |
Operating lease assets and liabilities | 23 | |
Accounts payable | (32,489) | (19,482) |
Accrued payroll and related liabilities | (1,257) | (25,315) |
Other accrued liabilities | 5,064 | (3,811) |
Environmental liabilities | 2,314 | (2,637) |
Other long-term liabilities | 266 | (4) |
Distributed equity in earnings of joint ventures | 1,000 | 1,942 |
Net cash provided by operating activities | 55,836 | 63,032 |
Cash flows from investing activities: | ||
Capital expenditures | (59,287) | (61,000) |
Acquisition | (1,553) | |
Joint venture receipts, net | 641 | |
Proceeds from sale of assets | 739 | 1,641 |
Deposit on land option | 630 | 1,260 |
Net cash used in investing activities | (57,918) | (59,011) |
Cash flows from financing activities: | ||
Borrowings from long-term debt | 685,527 | 316,676 |
Repayment of long-term debt | (363,470) | (282,932) |
Payment of debt issuance costs | (102) | |
Repurchase of Class A common stock | (914) | (10,087) |
Taxes paid related to net share settlement of share-based payment awards | (5,845) | (7,463) |
Distributions to noncontrolling interests | (1,940) | (941) |
Dividends paid | (15,803) | (15,600) |
Net cash provided by (used in) financing activities | 297,555 | (449) |
Effect of exchange rate changes on cash | (195) | (176) |
Net increase in cash and cash equivalents | 295,278 | 3,396 |
Cash and cash equivalents as of beginning of period | 12,377 | 4,723 |
Cash and cash equivalents as of end of period | 307,655 | 8,119 |
Cash paid during the period for: | ||
Interest | 2,008 | 4,831 |
Income taxes paid, net | 241 | 3,436 |
Schedule of noncash investing and financing transactions: | ||
Purchases of property, plant and equipment included in current liabilities | $ 7,863 | $ 9,839 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
May 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 - Summary of Significant Accounting Policies Basis of Presentation The accompanying Unaudited Condensed Consolidated Financial Statements of Schnitzer Steel Industries, Inc. and its majority-owned and wholly-owned subsidiaries (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 fiscal year ended August 31, 2019. The results for the three and nine months ended May 31, 2020 and 2019 are not necessarily indicative of the results of operations for the entire fiscal year. Segments The Company’s internal organizational and reporting structure includes two operating and reportable segments: the Auto and Metals Recycling (“AMR”) business and the Cascade Steel and Scrap (“CSS”) business. Accounting Changes As of the beginning of the first quarter of fiscal 2020, the Company adopted an accounting standards update, initially issued in February 2016, that requires a lessee to recognize a lease liability and a lease right-of-use asset on its balance sheet for all leases greater than 12 months, including those classified as operating leases. The update supersedes the previous lease accounting standard. The Company adopted the new lease accounting standard using the modified retrospective transition method, whereby it applied the new requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings as of September 1, 2019. Such cumulative-effect adjustment for the Company was not material. on of $126 million and $128 million of operating which are presented as separate line items on the balance sheet Adoption also resulted in the reclassification of the Company’s capital lease assets and obligations as finance lease right-of-use assets and liabilities as of September 1, 2019, with such reclassification having no impact on the carrying amounts or financial statement line items within which the leases are reported. 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. The Company’s cash equivalents consist entirely of bank money market funds. Cash and cash equivalents totaled $308 million and $12 million as of May 31, 2020 and August 31, 2019, respectively, with the increase primarily reflecting cash generated from borrowings under the Company’s credit facilities in the third quarter of fiscal 2020. Included in accounts payable are book overdrafts representing outstanding checks in excess of funds on deposit o f August 31, 2019 Accounts Receivable, net Accounts receivable represent amounts primarily due from customers on product and other sales. These accounts receivable, which are reduced by an allowance for doubtful accounts, are recorded at the invoiced amount and do not bear interest. The Company extends credit to customers under contracts containing customary and explicit payment terms, and payment is generally required within 30 to 60 days of shipment. Nonferrous export sales typically require a deposit prior to shipment. Historically, almost all of the Company’s ferrous export sales have been made with letters of credit. Ferrous metal sales, nonferrous metal sales and finished steel sales to domestic customers are generally made on open account, and a near majority of these sales are covered by credit insurance. The Company evaluates the collectibility of its accounts receivable based on a combination of factors, including whether sales were made pursuant to letters of credit or credit insurance is in place. In cases where management is aware of circumstances that may impair a customer’s ability to meet its financial obligations, management records a specific allowance against amounts due and reduces the receivable to the amount the Company believes will be collected. For all other customers, the Company maintains an allowance that considers the total receivables outstanding, historical collection rates and economic trends. Accounts are written off when all efforts to collect have been exhausted. Also included in accounts receivable are short-term advances to scrap metal suppliers used as a mechanism to acquire unprocessed scrap metal. The advances are generally repaid with scrap metal, as opposed to cash. Repayments of advances with scrap metal are treated as noncash operating activities in the Unaudited Condensed Consolidated Statements of Cash Flows and totaled $7 million Prepaid Expenses The Company’s prepaid expenses, reported within prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets, totaled $26 million and $23 million as of May 31, 2020 and August 31, 2019, respectively, and consisted primarily of deposits on capital projects, prepaid insurance, prepaid services and prepaid property taxes. Other Assets The Company’s other assets, exclusive of prepaid expenses, consist primarily of receivables from insurers, spare parts, an equity investment, debt issuance costs, and notes and other contractual receivables. Other assets are reported within either prepaid expenses and other current assets or other assets in the Unaudited Condensed Consolidated Balance Sheets based on their expected use either during or beyond the current operating cycle of one year from the reporting date. Receivables from insurers totaled $5 million and $89 million as of May 31, 2020 and August 31, 2019, respectively, with the decrease in the first nine months of fiscal 2020 resulting primarily from full payment by the Company’s insurers of settlements for lawsuits arising from a 2016 motor vehicle collision. See “Contingencies – Other” in Note 5 – Commitments and Contingencies for further discussion of this matter. The Company invested $6 million in the equity of a privately-held waste and recycling entity in fiscal 2017. The equity investment does not have a readily determinable fair value and, therefore, is carried at cost and adjusted for impairments and observable price changes. The investment is presented as part of the AMR reportable segment and reported within other assets in the Unaudited Condensed Consolidated Balance Sheets. The carrying value of the investment was $6 million Asset Impairment Charges During the nine months ended May 31, 2020, the Company recognized asset impairment charges of $4 million, which are reported separately in the Unaudited Condensed Consolidated Statements of Operations and relate primarily to abandonment of obsolete machinery and equipment assets, accelerated depreciation due to the shortening of the useful lives of certain metals recovery assets and the closure of an auto parts store in the AMR reportable segment. 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, and notes and other contractual receivables. The majority of cash and cash equivalents is maintained with major financial institutions. Balances with these and certain other institutions exceeded the Federal Deposit Insurance Corporation insured amount o f $250,000 had $72 million and $49 Credit Facilities On June 30, 2020, Schnitzer Steel Industries, Inc. (the “Company”) and certain of its subsidiaries entered into the Second Amendment (the “Second Amendment”) to its Third Amended and Restated Credit Agreement, dated as of April 6, 2016, as amended by the First Amendment to Third Amended and Restated Credit Agreement dated as of August 24, 2018, by and among the Company, as the US Borrower, Schnitzer Steel Canada Ltd., as a Canadian borrower, Bank of America, N.A., as administrative agent and the other lenders party thereto (the “Existing Credit Agreement”). The Existing Credit Agreement, as amended pursuant to the Second Amendment, is referred to herein as the “Amended Credit Agreement”. The principal changes to the Existing Credit Agreement effected by the Second Amendment are (i) the reduction of the consolidated fixed charge coverage from a minimum ratio of 1.50 to 1.0 to a minimum ratio of 1.20 to 1.0 for the fiscal quarter ending August 31, 2020, and to a minimum ratio of 1.10 to 1.0 for the fiscal quarters ending November 30, 2020, February 28, 2021 and May 31, 2021, and (ii) the introduction of a minimum consolidated asset coverage ratio of 1.00 to 1.0 for each of the fiscal quarters ending August 31, 2020 through May 31, 2021. The Second Amendment revised the applicable interest rates under the facility which are based, at the Company’s option, on either (i) LIBOR (or the Canadian equivalent for C$ loans) plus a spread of between 1.25% and 3.50%, with the amount of the spread based on a pricing grid tied to the Company’s consolidated funded debt to EBITDA ratio, or (ii) the greater of the prime rate, the federal funds rate plus 0.50% or the daily rate equal to one-month LIBOR plus 1.75%, in each case, plus a spread of between 0.00% and 2.50% based on a pricing grid tied to the Company’s consolidated funded debt to EBITDA ratio. In addition, commitment fees are payable on the unused portion of the credit facilities at rates between 0.20% and 0.50% based on a pricing grid tied to the Company’s consolidated funded debt to EBITDA ratio. The Second Amendment further provides for (i) revisions to the definition of LIBOR to include a 0.50% floor and (ii) mechanics by which the parties may replace the benchmark interest rate used in the agreement from LIBOR to one or more rates based on the secured overnight financing rate (“SOFR”) administered by the Federal Reserve Bank of New York. Unchanged by the Second Amendment, the Amended Credit Agreement provides for $700 million and C$15 million in senior secured revolving credit facilities maturing in August 2023 |
Inventories
Inventories | 9 Months Ended |
May 31, 2020 | |
Inventory Net [Abstract] | |
Inventories | Note 2 - Inventories Inventories consisted of the following (in thousands): May 31, 2020 August 31, 2019 Processed and unprocessed scrap metal $ 63,201 $ 81,313 Semi-finished goods 10,732 8,712 Finished goods 45,351 53,796 Supplies 42,259 43,499 Inventories $ 161,543 $ 187,320 |
Leases
Leases | 9 Months Ended |
May 31, 2020 | |
Leases [Abstract] | |
Leases | Note 3 - Leases The Company enters into leases to obtain access to real property, machinery and equipment assets. Most of the Company’s lease obligations relate to real property leases for AMR operating sites, including the substantial majority of its auto parts stores, and for the Company’s administrative offices. The Company determines whether an arrangement contains a lease at inception by assessing whether it receives the right to direct the use of and obtain substantially all of the economic benefit from use of the underlying asset. Lease classification, measurement, and recognition are determined at lease commencement, which is the date the underlying asset is available for use by the Company. The accounting classification of a lease is based on whether the arrangement is effectively a financed purchase of the underlying asset (finance lease) or not (operating lease). Leases that, at lease commencement, have a non-cancellable lease term of 12 months or less and do not include an option to either purchase the underlying asset or renew the lease beyond 12 months that the Company is reasonably certain to exercise are classified as short-term leases and are not recognized on the balance sheet. For leases other than short-term leases, the Company recognizes right-of-use assets and lease liabilities based primarily on the present value of future minimum lease payments over the lease term at lease commencement. Right-of-use assets represent the Company’s right to use the underlying asset during the lease term, while lease liabilities represent the Company’s obligation to make future lease payments. The lease term is the non-cancellable period of the lease, together with periods covered by renewal (or termination) options which the Company is reasonably certain to exercise (or not to exercise). Lease payments are discounted to present value using the Company’s incremental borrowing rate, unless the discount rate implicit in the lease is readily determinable. The Company’s incremental borrowing rate for each lease is the estimated rate of interest that the Company would have to pay to borrow the aggregate lease payments on a collateralized basis over the lease term. Estimation of the incremental borrowing rate requires judgment by management and reflects an assessment of the Company’s credit standing to derive an implied secured credit rating and corresponding yield curve. The Company used the incremental borrowing rate to recognize all operating lease right-of-use assets and liabilities as of the new lease accounting standard application date. Right-of-use assets and lease liabilities are subject to remeasurement after lease commencement when certain events or changes in circumstances arise, such as a change in the lease term due to reassessment of whether the Company is reasonably certain to exercise a renewal or termination option. For operating leases, lease expense is recognized on a straight-line basis over the lease term. For finance leases, the lease right-of-use asset is amortized on a straight-line basis and interest expense is recognized on the lease liability using the effective interest rate method. Many of the Company’s real property leases contain variable lease payments that depend on an index or a rate, which are included in the measurement of the right-of-use asset and lease liability using the index or rate at lease commencement, or with respect to the Company’s transition to the new lease accounting standard the index or rate at the application date. Subsequent changes in variable lease payments are recorded as variable lease expenses during the period in which they are incurred. The Company elected a practical expedient to not separate lease and related non-lease components for accounting purposes and, thus, costs related to such non-lease components are disclosed as lease expense. Payments for short-term leases are recognized in the income statement on a straight-line basis over the lease term. The Company’s operating leases for real property underlying its auto parts stores, metals recycling facilities, and administrative offices generally have non-cancellable lease terms of 5 to 10 years, and the significant majority, but not all, contain multiple renewal options for a further 5 to 20 years. R The Company’s finance leases and other operating leases involve primarily transportation equipment assets, have non-cancellable lease terms of less than 10 years and usually do not include renewal options. For the three months ended May 31, 2020, the Company’s total lease cost was $7 million, consisting primarily of operating lease expense of $6 million and short-term lease expense of $1 million. For the nine months ended May 31, 2020, the Company’s total lease cost was $21 million, consisting primarily of operating lease expense of $17 million and short-term lease expense of $3 million. The other components of the Company’s total lease cost for the periods presented, including finance lease amortization and interest expense, variable lease expense and sublease income, were not material both individually and in aggregate. The substantial majority of the Company’s total lease cost for the three and nine months ended May 31, 2020 is presented within cost of goods sold in the Unaudited Condensed Consolidated Statements of Operations. Finance lease-related assets and liabilities consisted of the following (in thousands): Balance Sheet Classification May 31, 2020 Assets: Finance lease right-of-use assets (1) Property, plant and equipment, net $ 6,491 Liabilities: Finance lease liabilities - current Short-term borrowings $ 1,356 Finance lease liabilities - non-current Long-term debt, net of current maturities 6,413 Total finance lease liabilities $ 7,769 (1) Presented net of accumulated amortization of $1 million as of May 31, 2020. The weighted average remaining lease terms and weighted average discount rates for the Company’s leases as of May 31, 2020 were as follows: May 31, 2020 Weighted Average Remaining Lease Term (Years) Weighted Average Discount Rate Operating leases 9.8 3.41 % Finance leases 6.3 8.39 % Maturities of lease liabilities by fiscal year as of May 31, 2020 were as follows (in thousands): Year Ending August 31, Finance Leases Operating Leases 2020 (for the remainder of fiscal 2020) $ 514 $ 6,054 2021 1,801 21,992 2022 1,732 21,225 2023 1,663 20,746 2024 1,415 16,692 Thereafter 2,448 69,872 Total lease payments $ 9,573 $ 156,581 Less amounts representing interest (1,804 ) (25,935 ) Total lease liabilities $ 7,769 $ 130,646 Less current maturities (1,356 ) (18,683 ) Lease liabilities, net of current maturities $ 6,413 $ 111,963 Supplemental cash flow information and non-cash activity related to leases are as follows (in thousands): Nine Months Ended May 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 16,715 Operating cash flows for finance leases $ 489 Financing cash flows for finance leases $ 1,003 Lease liabilities arising from obtaining right-of-use assets (1) Operating leases $ 17,267 Finance leases $ 1,104 (1) Amounts include new leases and adjustments to lease balances as a result of remeasurement. As a result of adopting the new lease accounting guidance on September 1, 2019 using the modified retrospective transition method, the Company is required to present future minimum lease commitments for capital leases and operating leases that were previously disclosed in the Company’s 2019 Annual Report on Form 10-K and accounted for under previous lease guidance. Principal payments on capital lease obligations during the next five fiscal years and thereafter as of August 31, 2019 are as follows (in thousands): Year Ending August 31, Capital Lease Obligations 2020 $ 1,917 2021 1,799 2022 1,751 2023 1,622 2024 1,346 Thereafter 1,694 Total 10,129 Amounts representing interest (2,355 ) Total less interest $ 7,774 The table below sets forth the Company’s future minimum obligations under non-cancelable operating leases as of August 31, 2019 (in thousands): Year Ending August 31, Operating Leases 2020 $ 21,286 2021 15,301 2022 12,488 2023 10,419 2024 5,035 Thereafter 16,095 Total $ 80,624 |
Goodwill
Goodwill | 9 Months Ended |
May 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 4 - Goodwill As of May 31, 2020 and August 31, 2019, all but $1 single The gross change in the carrying amount of goodwill for the nine months ended May 31, 2020 was as follows (in thousands): Goodwill August 31, 2019 $ 169,237 Foreign currency translation adjustment (642 ) May 31, 2020 $ 168,595 Accumulated goodwill impairment charges were $471 million as of May 31, 2020 and August 31, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
May 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 5 - Commitments and Contingencies Contingencies - Environmental 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 nine months ended May 31, 2020 were as follows (in thousands): Balance as of September 1, 2019 Liabilities Established (Released), Net Payments and Other Balance as of May 31, 2020 Short-Term Long-Term $ 51,799 $ 5,462 $ (3,251 ) $ 54,010 $ 6,009 $ 48,001 Recycling Operations As of May 31, 2020 and August 31, 2019, the Company’s recycling operations had environmental liabilities of $54 million nder Other Legacy Environmental Loss Contingencies immediately below, such liabilities were not individually material at any site. 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 cleanup of any specific areas within the Site, the parties to be involved, the timing of any specific remedial action and the allocation of the costs for any cleanup among responsible parties have not yet been determined. The process of site investigation, remedy selection, identification of additional PRPs and allocation of costs has been underway for a number of years, but significant uncertainties remain. 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 was 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 LWG has indicated that it had incurred over $155 million in investigation-related costs over an approximately 18 year period working on the RI/FS. Following submittal of draft RI and FS documents which the EPA largely rejected, the EPA took over the RI/FS process. The Company has joined with approximately 100 other PRPs, including the LWG members, in a voluntary process to establish an allocation of costs at the Site, including the costs incurred by the LWG in the RI/FS process. The LWG members have also commenced federal court litigation, which has been stayed, seeking to bring additional parties into the allocation process. In January 2008, the Portland Harbor Natural Resource Trustee Council (“Trustee Council”) invited the Company and other PRPs to participate in funding and implementing the Natural Resource Injury Assessment for the Site. Following meetings among the Trustee Council and the PRPs, funding and participation agreements were negotiated under which the participating PRPs, including the Company, agreed to fund the first phase of the three-phase natural resource damage assessment. Phase 1, which included the development of the Natural Resource Damage Assessment Plan (“AP”) and implementation of several early studies, was substantially completed in 2010. In December 2017, the Company joined with other participating PRPs in agreeing to fund Phase 2 of the natural resource damage assessment, which includes the implementation of the AP to develop information sufficient to facilitate early settlements between the Trustee Council and Phase 2 participants and the identification of restoration projects to be funded by the settlements. In late May 2018, the Trustee Council published notice of its intent to proceed with Phase 3, which will involve the full implementation of the AP and the final injury and damage determination. The Company is proceeding with the process established by the Trustee Council regarding early settlements under Phase 2. It is uncertain whether the Company will enter into an early settlement for natural resource damages or what costs it may incur in any such early settlement. On January 30, 2017, one of the Trustees, the Confederated Tribes and Bands of the Yakama Nation, which withdrew from the council in 2009, filed a suit against approximately 30 parties, including the Company, seeking reimbursement of certain past and future response costs in connection with remedial action at the Site and recovery of assessment costs related to natural resources damages from releases at and from the Site to the Multnomah Channel and the Lower Columbia River. The parties have filed various motions to dismiss or stay this suit, and in August 2019, the court issued an order denying the motions to dismiss and staying the action. The Company intends to defend against the claims in this suit and does not have sufficient information to determine the likelihood of a loss in this matter or to estimate the amount of damages being sought or the amount of such damages that could be allocated to the Company. Estimates of the cost of remedial action for the cleanup of the in-river portion of the Site have varied widely in various drafts of the FS and in the EPA’s final FS issued in June 2016 ranging from approximately $170 million to over $2.5 billion (net present value), depending on the remedial alternative and a number of other factors. In comments submitted to the EPA, the Company and certain other stakeholders identified a number of serious concerns regarding the EPA’s risk and remedial alternatives assessments, cost estimates, scheduling assumptions and conclusions regarding the feasibility and effectiveness of remediation technologies. In January 2017, the EPA issued a Record of Decision (“ROD”) that identified the selected remedy for the Site. The selected remedy is a modified version of one of the alternative remedies evaluated in the EPA’s FS that was expanded to include additional work at a greater cost. The EPA has estimated the total cost of the selected remedy at $1.7 billion with a net present value cost of $1.05 billion (at a 7% discount rate) and an estimated construction period of 13 years following completion of the remedial designs. In the ROD, the EPA stated that the cost estimate is an order-of-magnitude engineering estimate that is expected to be within +50% to -30% of the actual project cost and that changes in the cost elements are likely to occur as a result of new information and data collected during the engineering design. The Company has identified a number of concerns regarding the remedy described in the ROD, which is based on data that is more than a decade old, and the EPA’s estimates for the costs and time required to implement the selected remedy. Because of ongoing questions regarding cost effectiveness, technical feasibility, and the use of stale data, it is uncertain whether the ROD will be implemented as issued. In addition, the ROD did not determine or allocate the responsibility for remediation costs among the PRPs. In the ROD, the EPA acknowledged that much of the data used in preparing the ROD was more than a decade old and would need to be updated with a new round of “baseline” sampling to be conducted prior to the remedial design phase. Accordingly, the ROD provided for additional pre-remedial design investigative work and baseline sampling to be conducted in order to provide a baseline of current conditions and delineate particular remedial actions for specific areas within the Site. This additional sampling was required prior to proceeding with the next phase in the process which is the remedial design. The remedial design phase is an engineering phase during which additional technical information and data will be collected, identified and incorporated into technical drawings and specifications developed for the subsequent remedial action. Moreover, the ROD provided only Site-wide cost estimates and did not provide sufficient detail to estimate costs for specific sediment management areas within the Site. Following issuance of the ROD, EPA proposed that the PRPs, or a subgroup of PRPs, perform the additional investigative work identified in the ROD under a new consent order. In December 2017, the Company and three other PRPs entered into a new Administrative Settlement Agreement and Order on Consent with EPA to perform such pre-remedial design investigation and baseline sampling over a two year period. The Company estimated that its share of the costs of performing such work would be approximately $2 million, which it accrued in fiscal 2018. Such costs were fully covered by existing insurance coverage and, thus, the Company also recorded an insurance receivable for $2 million in fiscal 2018, resulting in no net impact to the Company’s consolidated results of operations. The pre-remedial design investigation and baseline sampling work has been completed, and the report evaluating the data was submitted to EPA on June 17, 2019. The evaluation report concludes that Site conditions have improved substantially since the data forming the basis of the ROD was collected over a decade ago. The analysis contained in the report has significant implications for remedial design and remedial action at the Site. EPA has reviewed the report, finding with a few limited corrections that the data is of suitable quality and generally acceptable and stating that such data will be used, in addition to existing and forthcoming design-level data, to inform implementation of the ROD. However, EPA did not agree that the data or the analysis warrant a change to the remedy at this time and reaffirmed its commitment to proceed with remedial design. The Company and other PRPs disagree with EPA’s position on use of the more recent data and will continue to pursue limited, but critical, changes to the selected remedy for the Site during the remedial design phase. EPA has stated that it wants PRPs to step forward (individually or in groups) to enter into consent agreements to perform remedial design covering the entire Site and has proposed dividing the Site into eight to ten subareas for remedial design. Certain PRPs have since executed consent agreements for remedial design work covering a little more than half of the remedial action areas at the Site. Because of EPA’s refusal to date to modify the remedy to reflect the most current data on Site conditions and because of concerns with the terms of the consent agreement, the Company elected not to enter into a consent agreement for remedial design with respect to any of the subareas at the Site. On March 26, 2020, EPA issued a unilateral administrative order (UAO) to the Company and MMGL, LLC, an unaffiliated company, for the remedial design work in the portion of one of the EPA identified subareas within the Site designated as the River Mile 3.5 East Project Area. Following a conference with the Company to discuss the UAO and written comments submitted by the Company, EPA made limited modifications to the UAO and issued an amendment to the UAO on April 27, 2020 with an effective date of May 4, 2020. As required by the UAO, the Company notified EPA of its intent to comply with the UAO on the effective date while reserving all of its sufficient cause defenses. Failure to comply with a UAO, without sufficient cause, could subject the Company to significant penalties or treble damages. Pursuant to the optimized remedial design timeline set forth in the UAO, EPA’s expected schedule for completion of the remedial design work is four years. EPA has estimated the cost of the work at approximately $4 million. The Company has agreed with the other respondent to the UAO that the Company will lead the performance and be responsible for a portion of the costs of the work for remedial design under the UAO, which agreement is not an allocation of liability or claims associated with the Site as between the respondents or with respect to any third party. The Company estimated that its share of the costs of performing such work under the UAO would be approximately $3 million, which it recorded to environmental liabilities and selling, general and administrative expense in the Unaudited Condensed Consolidated Financial Statements in the third quarter of fiscal 2020. The Company continues to discuss sharing of the costs of the remedial design work under the UAO with other PRPs. The Company has insurance policies that it believes will provide reimbursement for costs it incurs for remedial design, but not for any penalties. An asset relating to recovery of such costs is recognized upon meeting certain accounting requirements, which had not yet been met as of the end of the third quarter of fiscal 2020. Except for certain early action projects in which the Company is not involved, remediation activities are not expected to commence for a number of years. In addition, as discussed above, responsibility for implementing and funding the remedy will be determined in a separate allocation process, which is on-going. The Company would expect the next major stage of the allocation process to proceed in parallel with the remedial design process. Because the final remedial actions have not yet been designed and there has not been a determination of the amount of natural resource damages or of the allocation among the PRPs of costs of the investigations, remedial action costs or natural resource damages , the Company believes it is not possible to reasonably estimate the amount or range of costs which it is likely to or which it is reasonably possible that it will 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 being developed 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, remedial design, remedial action and mitigation for natural resource damages claims 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 Oregon Department of Environmental Quality is separately providing oversight of voluntary investigations and source control activities 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) have not yet been determined. Other Legacy Environmental Loss Contingencies The Company’s environmental loss contingencies as of May 31, 2020 and August 31, 2019, other than Portland Harbor, include actual or possible investigation and cleanup costs from historical contamination at sites currently or formerly owned or formerly operated by the Company or at other sites where the Company may have responsibility for such costs due to past disposal or other activities (“legacy environmental loss contingencies”). These legacy environmental loss contingencies relate to the potential remediation of waterways and soil and groundwater contamination and may also involve natural resource damages, governmental fines and penalties and claims by third parties for personal injury and property damage. The Company has been notified that it is or may be a potentially responsible party at certain of these sites, and investigation and cleanup activities are ongoing or may be required in the future. The Company recognizes a liability for such matters when the loss is probable and can be reasonably estimated. When investigation and cleanup activities are ongoing or where the Company has not yet been identified as having responsibility or the contamination has not yet been identified, it is reasonably possible that the Company may need to recognize additional liabilities in connection with such sites but the Company cannot currently reasonably estimate the possible loss or range of loss absent additional information or developments. Such additional liabilities, individually or in the aggregate, may have a material adverse effect on the Company’s results of operations, financial condition or cash flows. During fiscal 2018, the Company accrued $4 million in expense at Corporate for the estimated costs related to remediation of shredder residue disposed of in or around the 1970s at third-party sites located near each other. Investigation activities have been conducte d under oversight of the applicable state regulatory agency. As of May 31, 2020 and August 31, 2019, the Company had $4 million between zero and $28 million based In addition, the Company’s loss contingencies as of May 31, 2020 and August 31, 2019 incl ude $7 million in the case of costs for installation of wellhead treatment, if incurred, could be in the range of $10 million to $13 million. Steel Manufacturing Operations The Company’s steel manufacturing operations had no known environmental The steel mill’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 firms that apply treatments that allow for the ultimate disposal of the EAF dust. The Company’s steel mill 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 approximately 950 thousand tons. The Company’s permit was first issued in 1998 and has since been renewed through April 1, 2025. Summary - Environmental Contingencies With respect to environmental contingencies other than the Portland Harbor Superfund site and the other legacy environmental loss contingencies, which are discussed separately above, management currently believes that adequate provision has been made for the potential impact of its environmental loss contingencies. Historically, the amounts the Company has ultimately paid for such remediation activities have not been material in any given period, but there can be no assurance that such amounts paid will not be material in the future. Contingencies - Other Schnitzer Southeast, LLC (a wholly-owned subsidiary of the Company, “SSE”), an SSE employee, the Company and one of the Company’s insurance carriers had been named as defendants in five separate wrongful death lawsuits filed in the State of Georgia arising from an accident in 2016 in Alabama involving a tractor trailer driven by the SSE employee and owned by SSE. In fiscal 2019, the Company settled three of the five lawsuits for a total of $35 million. In the first quarter of fiscal 2020, the Company settled the two remaining lawsuits for a total of $68 million. The aggregate settlement amount of $103 million was substantially covered by insurance, resulting in no net impact to the Company’s consolidated results of operations. As of August 31, 2019, the Company had accrued loss contingencies and offsetting insurance receivables related to the lawsuits totaling $83 million. The full amount accrued as of August 31, 2019 was paid by the Company’s insurers in the first quarter of fiscal 2020. There are no further contingencies in relation to this matter. In addition to legal proceedings relating to the contingencies described above, the Company is a party to various legal proceedings arising in the normal course of business. The Company recognizes a liability for such matters when the loss is probable and can be reasonably estimated. The Company does not anticipate that the resolution of such legal proceedings arising in the normal course of business, after taking into consideration expected insurance recoveries, will have a material adverse effect on its results of operations, financial condition, or cash flows. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
May 31, 2020 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Note 6 - Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss, net of tax, comprise the following (in thousands): Three Months Ended May 31, 2020 Three Months Ended May 31, 2019 Foreign Currency Translation Adjustments Pension Obligations, Net Total Foreign Currency Translation Adjustments Pension Obligations, Net Total Balances - March 1 (Beginning of period) $ (36,108 ) $ (2,932 ) $ (39,040 ) $ (34,861 ) $ (2,866 ) $ (37,727 ) Other comprehensive loss before reclassifications (1,904 ) — (1,904 ) (1,838 ) — (1,838 ) Income tax benefit (expense) — — — — — — Other comprehensive loss before reclassifications, net of tax (1,904 ) — (1,904 ) (1,838 ) — (1,838 ) Amounts reclassified from accumulated other comprehensive loss — 58 58 — 184 184 Income tax benefit — (13 ) (13 ) — (42 ) (42 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 45 45 — 142 142 Net periodic other comprehensive (loss) income (1,904 ) 45 (1,859 ) (1,838 ) 142 (1,696 ) Balances - May 31 (End of period) $ (38,012 ) $ (2,887 ) $ (40,899 ) $ (36,699 ) $ (2,724 ) $ (39,423 ) Nine Months Ended May 31, 2020 Nine Months Ended May 31, 2019 Foreign Currency Translation Adjustments Pension Obligations, Net Total Foreign Currency Translation Adjustments Pension Obligations, Net Total Balances - September 1 (Beginning of period) $ (35,689 ) $ (3,074 ) $ (38,763 ) $ (34,129 ) $ (3,108 ) $ (37,237 ) Other comprehensive (loss) income before reclassifications (2,323 ) (17 ) (2,340 ) (2,570 ) 208 (2,362 ) Income tax benefit (expense) — 4 4 — (46 ) (46 ) Other comprehensive (loss) income before reclassifications, net of tax (2,323 ) (13 ) (2,336 ) (2,570 ) 162 (2,408 ) Amounts reclassified from accumulated other comprehensive loss — 258 258 — 288 288 Income tax benefit — (58 ) (58 ) — (66 ) (66 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 200 200 — 222 222 Net periodic other comprehensive (loss) income (2,323 ) 187 (2,136 ) (2,570 ) 384 (2,186 ) Balances - May 31 (End of period) $ (38,012 ) $ (2,887 ) $ (40,899 ) $ (36,699 ) $ (2,724 ) $ (39,423 ) Reclassifications from accumulated other comprehensive loss to earnings, both individually and in the aggregate, were not material to the impacted captions in the Unaudited Condensed Consolidated Statements of Operations for all periods presented . |
Revenue
Revenue | 9 Months Ended |
May 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | Note 7 - Revenue Disaggregation of Revenues The table below illustrates the Company’s revenues disaggregated by major product and sales destination for each reportable segment (in thousands): Three Months Ended May 31, 2020 AMR CSS Intercompany Revenue Eliminations Total Major product information: Ferrous revenues $ 189,783 $ 14,115 $ (1,926 ) $ 201,972 Nonferrous revenues 78,858 6,966 (318 ) 85,506 Steel revenues (1) — 83,414 — 83,414 Retail and other revenues 31,736 55 — 31,791 Total revenues $ 300,377 $ 104,550 $ (2,244 ) $ 402,683 Revenues based on sales destination: Foreign $ 188,203 $ 25,200 $ — $ 213,403 Domestic 112,174 79,350 (2,244 ) 189,280 Total revenues $ 300,377 $ 104,550 $ (2,244 ) $ 402,683 Three Months Ended May 31, 2019 AMR CSS Intercompany Revenue Eliminations Total Major product information: Ferrous revenues $ 280,362 $ 14,208 $ (2,697 ) $ 291,873 Nonferrous revenues 112,785 10,376 (329 ) 122,832 Steel revenues (1) — 96,626 — 96,626 Retail and other revenues 35,876 221 (32 ) 36,065 Total revenues $ 429,023 $ 121,431 $ (3,058 ) $ 547,396 Revenues based on sales destination: Foreign $ 273,128 $ 25,242 $ — $ 298,370 Domestic 155,895 96,189 (3,058 ) 249,026 Total revenues $ 429,023 $ 121,431 $ (3,058 ) $ 547,396 Nine Months Ended May 31, 2020 AMR CSS Intercompany Revenue Eliminations Total Major product information: Ferrous revenues $ 604,720 $ 34,486 $ (5,270 ) $ 633,936 Nonferrous revenues 256,571 22,057 (759 ) 277,869 Steel revenues (1) — 246,278 — 246,278 Retail and other revenues 89,512 154 — 89,666 Total revenues $ 950,803 $ 302,975 $ (6,029 ) $ 1,247,749 Revenues based on sales destination: Foreign $ 589,110 $ 67,278 $ — $ 656,388 Domestic 361,693 235,697 (6,029 ) 591,361 Total revenues $ 950,803 $ 302,975 $ (6,029 ) $ 1,247,749 Nine Months Ended May 31, 2019 AMR CSS Intercompany Revenue Eliminations Total Major product information: Ferrous revenues $ 836,662 $ 41,071 $ (7,846 ) $ 869,887 Nonferrous revenues 316,450 28,522 (856 ) 344,116 Steel revenues (1) — 271,988 — 271,988 Retail and other revenues 98,388 634 (32 ) 98,990 Total revenues $ 1,251,500 $ 342,215 $ (8,734 ) $ 1,584,981 Revenues based on sales destination: Foreign $ 753,696 $ 69,396 $ — $ 823,092 Domestic 497,804 272,819 (8,734 ) 761,889 Total revenues $ 1,251,500 $ 342,215 $ (8,734 ) $ 1,584,981 (1) Steel revenues include primarily sales of finished steel products, semi-finished goods (billets) and manufacturing scrap. Receivables from Contracts with Customers The revenue accounting standard defines a receivable as an entity’s right to consideration that is unconditional, meaning that only the passage of time is required before payment is due. As of May 31, 2020 and August 31, 2019, receivables from contracts with customers, net of an allowance for doubtful accounts, totaled $131 million 97% Contract Liabilities Contract consideration received from a customer prior to revenue recognition is recorded as a contract liability and is recognized as revenue when the Company satisfies the related performance obligation under the terms of the contract. The Company’s contract liabilities consist almost entirely of customer deposits for recycled scrap metal sales contracts, which are reported within accounts payable on the Unaudited Condensed Consolidated Balance Sheets and totaled less than $1 million $3 million |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
May 31, 2020 | |
Share Based Compensation [Abstract] | |
Share-based Compensation | Note 8 - Share-Based Compensation In the first quarter of fiscal 2020, as part of the annual awards under the Company’s Long-Term Incentive Plan, the Compensation Committee of the Company’s Board of Directors (“Compensation Committee”) granted 337,700 performance share awards to the Company’s key employees and officers under the Company’s 1993 Amended and Restated Stock Incentive Plan (“SIP”). Awards vest if the three-year 15 The Company granted 165,834 performance share awards based on its relative TSR metric over a performance period spanning November 14, 2019 to August 31, 2022. The Company estimates the fair value of TSR awards using a Monte-Carlo simulation model utilizing several key assumptions, Percentage Expected share price volatility (SSI) 38.9 % Expected share price volatility (Peer group) 44.5 % Expected correlation to peer group companies 34.3 % Risk-free rate of return 1.58 % The estimated fair value of the TSR awards at the date of grant was $4 million. The TSR award stipulates certain limitations to the payout in the event the payout reaches a defined ceiling level or the Company’s TSR is negative. The compensation expense for the TSR awards based on the grant-date fair value, net of estimated forfeitures, is recognized over the requisite service period (or to the date a qualifying employment termination event entitles the recipient to a prorated award, if before the end of the service period), regardless of whether the market condition has been or will be satisfied. The Company granted 171,936 performance share awards based on its ROCE for the three-year The Company accrues compensation cost for ROCE awards based on the probable outcome of achieving specified performance conditions, net of estimated forfeitures, over the requisite service period (or to the date a qualifying employment termination event entitles the recipient to a prorated award, if before the end of the service period). The Company reassesses whether achievement of the performance conditions is probable at each reporting date. the end of the service period, all related compensation cost previously recognized is reversed. The performance share awards described above will be paid in Class A common stock as soon as practicable after the end of the requisite service period and vesting date of October 31, 2022. In the second quarter of fiscal 2020, the Company granted deferred stock units (“DSUs”) to each of its non-employee directors under the Company’s SIP. Each DSU gives the director the right to receive one share of Class A common stock at a future date. The grant included an aggregate of 41,592 shares that will vest in full on the day before the Company’s 2021 annual meeting of shareholders, subject to continued Board service. The total fair value of these awards at the grant date was $1 million. In the third quarter of fiscal 2020, under the Company’s Long-Term Incentive Plan, the Compensation Committee granted 470,917 restricted stock units (“RSUs”) to the Company’s key employees and officers under the SIP. The RSUs have a five-year five-year |
Income Taxes
Income Taxes | 9 Months Ended |
May 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9 - Income Taxes Effective Tax Rate The Company’s effective tax rate from continuing operations for the third quarter and first nine months of fiscal 2020 was a benefit of 28.0% and 27.6%, respectively, compared to an expense of 26.0% and 22.8%, respectively, for the comparable prior year periods. The Company has historically measured the provision for income taxes for interim reporting periods by applying the projected annual effective tax rate to the quarterly results. Based on the Company’s projection of full-year results, as well as the projected impact of permanent tax differences and other items that are generally not proportional to full-year results, small changes in the projections would lead to significant changes in the projected annual effective tax rate. Therefore, applying the Company’s historical method would not provide a reliable estimate of the provision for income taxes for the fiscal 2020 interim reporting periods presented in this report. Accordingly, the Company measured the year-to-date fiscal 2020 tax benefit based on year-to-date results, referred to as the discrete method, and it measured the third quarter fiscal 2020 tax benefit as the foregoing year-to-date fiscal 2020 tax benefit less the tax benefit recognized previously in the first half of the fiscal year. Coronavirus Aid, Relief and Economic Security Act (CARES Act) On March 27, 2020, the President of the United States signed and enacted into law the Coronavirus Aid, Relief and Economic Security Act (CARES Act), which contains several income tax provisions, as well as other measures, aimed at assisting businesses impacted by the economic effects of the COVID-19 pandemic. Among other provisions, the CARES Act removes certain limitations on utilization of net operating losses (NOLs) and allows for carrybacks of certain past and future NOLs. The Company expects that it will apply the NOL carryback provisions of the CARES Act to its estimated NOL for fiscal 2020, which resulted in the reclassification of a $11 million NOL deferred income tax asset to refundable income taxes and recognition of a $1 million income tax benefit in the third quarter of fiscal 2020. The Company does not anticipate the other income tax provisions of the CARES Act to have a material impact on its financial statements. Valuation Allowances The Company assesses the realizability of its deferred tax assets on a quarterly basis through an analysis of potential sources of future taxable income, including prior year taxable income available to absorb a carryback of tax losses, reversals of existing taxable temporary differences, tax planning strategies and forecasts of taxable income. The Company considers all negative and positive evidence, including the weight of the evidence, to determine if valuation allowances against deferred tax assets are required. The Company maintains valuation allowances against certain U.S. federal, state, Canadian and all Puerto Rican deferred tax assets. 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 2013 to 2019 remain subject to examination under the statute of limitations. |
Restructuring Charges and Other
Restructuring Charges and Other Exit-Related Activities | 9 Months Ended |
May 31, 2020 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Charges and Other Exit-Related Activities | Note 10 - Restructuring Charges and Other Exit-Related Activities On January 8, 2020, subsequent to the end of the first quarter of fiscal 2020, the Company committed to certain restructuring initiatives aimed at further reducing its annual operating expenses, primarily selling, general and administrative, at Corporate, AMR and CSS, primarily through reductions in non-trade procurement spend, including outside and professional services, lower employee-related expenses and other non-headcount measures. Additionally, in April 2020, the Company announced its intention to modify its internal organizational and reporting structure to a functionally based, integrated model. The Company expects to complete this transition in the first quarter of fiscal 2021. The Company expects to incur aggregate estimated restructuring charges, as defined in ASC 420, Exit or Disposal Cost Obligations |
Net (Loss) Income Per Share
Net (Loss) Income Per Share | 9 Months Ended |
May 31, 2020 | |
Earnings Per Share [Abstract] | |
Net (Loss) Income Per Share | Note 11 - Net (Loss) Income Per Share The following table sets forth the information used to compute basic and diluted net (loss) income per share attributable to SSI shareholders (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 (Loss) income from continuing operations $ (4,648 ) $ 16,432 $ (6,738 ) $ 46,557 Net income attributable to noncontrolling interests (278 ) (750 ) (1,329 ) (1,585 ) (Loss) income from continuing operations attributable to SSI shareholders (4,926 ) 15,682 (8,067 ) 44,972 (Loss) income from discontinued operations, net of tax (69 ) 8 (40 ) (202 ) Net (loss) income attributable to SSI shareholders $ (4,995 ) $ 15,690 $ (8,107 ) $ 44,770 Computation of shares: Weighted average common shares outstanding, basic 27,724 27,510 27,653 27,548 Incremental common shares attributable to dilutive performance share awards, restricted stock units and deferred stock units — 564 — 636 Weighted average common shares outstanding, diluted 27,724 28,074 27,653 28,184 Common stock equivalent shares of 1,228,857 and 887,760 were considered antidilutive and were excluded from the calculation of diluted net (loss) income per share for the three and nine months ended May 31, 2020, respectively, compared to 388,766 and 283,483, respectively, for the comparable prior year periods. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
May 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12 - Related Party Transactions The Company purchases recycled metal from its joint venture operations at prices that approximate fair market value. These purchases totaled $3 million $ 8 |
Segment Information
Segment Information | 9 Months Ended |
May 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Note 13 - Segment Information The accounting standards for reporting information about operating segments define an operating segment as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses 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 internal organizational and reporting structure includes two operating and reportable segments: the Auto and Metals Recycling (“AMR”) business and the Cascade Steel and Scrap (“CSS”) business. AMR acquires and recycles ferrous and nonferrous scrap metal for sale to foreign and domestic metal producers, processors and brokers, and procures salvaged vehicles and sells serviceable used auto parts from these vehicles through a network of self-service auto parts stores. These auto parts stores also supply the Company’s shredding facilities with auto bodies that are processed into saleable recycled scrap metal. CSS operates a steel mini-mill that produces a range of finished steel long products using recycled scrap metal and other raw materials. CSS’s steel mill obtains substantially all of its recycled scrap metal raw material requirements from its integrated metals recycling and joint venture operations. CSS’s metals recycling operations also sell recycled metal to external customers primarily in export markets. The Company holds noncontrolling ownership interests in joint ventures, which are either in the metals recycling business or are suppliers of unprocessed metal. The Company’s allocable portion of the results of these joint ventures is reported within the segment results. As of May 31, 2020 and August 31, 2019, the Company had two 50%-owned joint venture interests, one presented as part of AMR operations, and one presented as part of CSS operations. The joint venture within CSS sells recycled scrap metal to other operations within CSS at prices that approximate local market rates, which produces intercompany Intersegment sales from AMR to CSS are made at prices that approximate local market rates. These intercompany sales tend to produce intercompany profit which is 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 segment operating income to measure segment performance. The Company does not allocate corporate interest income and expense, income taxes and other income and expense to its reportable segments. Certain expenses related to shared services that support operational activities and transactions are allocated from Corporate to the segments. Unallocated Corporate expense consists primarily of expense for management and certain administrative services that benefit both reportable segments. In addition, the Company does not allocate certain items to segment operating income because management does not include the information in its measurement of the performance of the operating segments. Such unallocated items include restructuring charges and other exit-related activities, charges (net of recoveries) related to legacy environmental matters, and provisions for certain legal matters. Because of the unallocated income and expense, the operating income of each reportable segment does not reflect the operating income the reportable segment would report as a stand-alone business. The results of discontinued operations are excluded from segment operating income and are presented separately, net of tax, from the results of ongoing operations for all periods presented. See Note 7 - Revenue in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report for presentation of the Company’s revenues by reportable segment. The table below illustrates the reconciliation of the Company’s segment operating income to (loss) income from continuing operations before income taxes (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 AMR $ 2,503 $ 29,189 $ 19,375 $ 73,947 CSS 6,931 8,116 14,692 25,802 Segment operating income 9,434 37,305 34,067 99,749 Restructuring charges and other exit-related activities (2,710 ) (75 ) (7,810 ) (813 ) Corporate and eliminations (10,430 ) (12,771 ) (30,182 ) (32,752 ) Operating (loss) income (3,706 ) 24,459 (3,925 ) 66,184 Interest expense (2,656 ) (2,294 ) (5,399 ) (6,267 ) Other (expense) income, net (90 ) 29 18 373 (Loss) income from continuing operations before income taxes $ (6,452 ) $ 22,194 $ (9,306 ) $ 60,290 The following is a summary of the Company’s total assets by reportable segment (in thousands): May 31, 2020 August 31, 2019 AMR (1) $ 1,687,000 $ 1,561,267 CSS (1) 783,052 769,930 Total segment assets 2,470,052 2,331,197 Corporate and eliminations (2) (995,956 ) (1,170,451 ) Total assets $ 1,474,096 $ 1,160,746 (1) AMR total assets include $2 million and $3 million for an investment in a joint venture as of May 31, 2020 and August 31, 2019, respectively. CSS total assets include $7 million for an investment in a joint venture as of each of May 31, 2020 and August 31, 2019. (2) The substantial majority of Corporate and eliminations total assets consist of Corporate intercompany payables to the Company’s operating segments and intercompany eliminations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
May 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Unaudited Condensed Consolidated Financial Statements of Schnitzer Steel Industries, Inc. and its majority-owned and wholly-owned subsidiaries (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 fiscal year ended August 31, 2019. The results for the three and nine months ended May 31, 2020 and 2019 are not necessarily indicative of the results of operations for the entire fiscal year. |
Segments | Segments The Company’s internal organizational and reporting structure includes two operating and reportable segments: the Auto and Metals Recycling (“AMR”) business and the Cascade Steel and Scrap (“CSS”) business. |
Accounting Changes | Accounting Changes As of the beginning of the first quarter of fiscal 2020, the Company adopted an accounting standards update, initially issued in February 2016, that requires a lessee to recognize a lease liability and a lease right-of-use asset on its balance sheet for all leases greater than 12 months, including those classified as operating leases. The update supersedes the previous lease accounting standard. The Company adopted the new lease accounting standard using the modified retrospective transition method, whereby it applied the new requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings as of September 1, 2019. Such cumulative-effect adjustment for the Company was not material. on of $126 million and $128 million of operating which are presented as separate line items on the balance sheet Adoption also resulted in the reclassification of the Company’s capital lease assets and obligations as finance lease right-of-use assets and liabilities as of September 1, 2019, with such reclassification having no impact on the carrying amounts or financial statement line items within which the leases are reported. |
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. The Company’s cash equivalents consist entirely of bank money market funds. Cash and cash equivalents totaled $308 million and $12 million as of May 31, 2020 and August 31, 2019, respectively, with the increase primarily reflecting cash generated from borrowings under the Company’s credit facilities in the third quarter of fiscal 2020. Included in accounts payable are book overdrafts representing outstanding checks in excess of funds on deposit o f August 31, 2019 |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable represent amounts primarily due from customers on product and other sales. These accounts receivable, which are reduced by an allowance for doubtful accounts, are recorded at the invoiced amount and do not bear interest. The Company extends credit to customers under contracts containing customary and explicit payment terms, and payment is generally required within 30 to 60 days of shipment. Nonferrous export sales typically require a deposit prior to shipment. Historically, almost all of the Company’s ferrous export sales have been made with letters of credit. Ferrous metal sales, nonferrous metal sales and finished steel sales to domestic customers are generally made on open account, and a near majority of these sales are covered by credit insurance. The Company evaluates the collectibility of its accounts receivable based on a combination of factors, including whether sales were made pursuant to letters of credit or credit insurance is in place. In cases where management is aware of circumstances that may impair a customer’s ability to meet its financial obligations, management records a specific allowance against amounts due and reduces the receivable to the amount the Company believes will be collected. For all other customers, the Company maintains an allowance that considers the total receivables outstanding, historical collection rates and economic trends. Accounts are written off when all efforts to collect have been exhausted. Also included in accounts receivable are short-term advances to scrap metal suppliers used as a mechanism to acquire unprocessed scrap metal. The advances are generally repaid with scrap metal, as opposed to cash. Repayments of advances with scrap metal are treated as noncash operating activities in the Unaudited Condensed Consolidated Statements of Cash Flows and totaled $7 million |
Other Assets | Prepaid Expenses The Company’s prepaid expenses, reported within prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets, totaled $26 million and $23 million as of May 31, 2020 and August 31, 2019, respectively, and consisted primarily of deposits on capital projects, prepaid insurance, prepaid services and prepaid property taxes. Other Assets The Company’s other assets, exclusive of prepaid expenses, consist primarily of receivables from insurers, spare parts, an equity investment, debt issuance costs, and notes and other contractual receivables. Other assets are reported within either prepaid expenses and other current assets or other assets in the Unaudited Condensed Consolidated Balance Sheets based on their expected use either during or beyond the current operating cycle of one year from the reporting date. Receivables from insurers totaled $5 million and $89 million as of May 31, 2020 and August 31, 2019, respectively, with the decrease in the first nine months of fiscal 2020 resulting primarily from full payment by the Company’s insurers of settlements for lawsuits arising from a 2016 motor vehicle collision. See “Contingencies – Other” in Note 5 – Commitments and Contingencies for further discussion of this matter. The Company invested $6 million in the equity of a privately-held waste and recycling entity in fiscal 2017. The equity investment does not have a readily determinable fair value and, therefore, is carried at cost and adjusted for impairments and observable price changes. The investment is presented as part of the AMR reportable segment and reported within other assets in the Unaudited Condensed Consolidated Balance Sheets. The carrying value of the investment was $6 million |
Asset Impairment Charges | Asset Impairment Charges During the nine months ended May 31, 2020, the Company recognized asset impairment charges of $4 million, which are reported separately in the Unaudited Condensed Consolidated Statements of Operations and relate primarily to abandonment of obsolete machinery and equipment assets, accelerated depreciation due to the shortening of the useful lives of certain metals recovery assets and the closure of an auto parts store in the AMR reportable segment. |
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, and notes and other contractual receivables. The majority of cash and cash equivalents is maintained with major financial institutions. Balances with these and certain other institutions exceeded the Federal Deposit Insurance Corporation insured amount o f $250,000 had $72 million and $49 |
Credit Facilities | Credit Facilities On June 30, 2020, Schnitzer Steel Industries, Inc. (the “Company”) and certain of its subsidiaries entered into the Second Amendment (the “Second Amendment”) to its Third Amended and Restated Credit Agreement, dated as of April 6, 2016, as amended by the First Amendment to Third Amended and Restated Credit Agreement dated as of August 24, 2018, by and among the Company, as the US Borrower, Schnitzer Steel Canada Ltd., as a Canadian borrower, Bank of America, N.A., as administrative agent and the other lenders party thereto (the “Existing Credit Agreement”). The Existing Credit Agreement, as amended pursuant to the Second Amendment, is referred to herein as the “Amended Credit Agreement”. The principal changes to the Existing Credit Agreement effected by the Second Amendment are (i) the reduction of the consolidated fixed charge coverage from a minimum ratio of 1.50 to 1.0 to a minimum ratio of 1.20 to 1.0 for the fiscal quarter ending August 31, 2020, and to a minimum ratio of 1.10 to 1.0 for the fiscal quarters ending November 30, 2020, February 28, 2021 and May 31, 2021, and (ii) the introduction of a minimum consolidated asset coverage ratio of 1.00 to 1.0 for each of the fiscal quarters ending August 31, 2020 through May 31, 2021. The Second Amendment revised the applicable interest rates under the facility which are based, at the Company’s option, on either (i) LIBOR (or the Canadian equivalent for C$ loans) plus a spread of between 1.25% and 3.50%, with the amount of the spread based on a pricing grid tied to the Company’s consolidated funded debt to EBITDA ratio, or (ii) the greater of the prime rate, the federal funds rate plus 0.50% or the daily rate equal to one-month LIBOR plus 1.75%, in each case, plus a spread of between 0.00% and 2.50% based on a pricing grid tied to the Company’s consolidated funded debt to EBITDA ratio. In addition, commitment fees are payable on the unused portion of the credit facilities at rates between 0.20% and 0.50% based on a pricing grid tied to the Company’s consolidated funded debt to EBITDA ratio. The Second Amendment further provides for (i) revisions to the definition of LIBOR to include a 0.50% floor and (ii) mechanics by which the parties may replace the benchmark interest rate used in the agreement from LIBOR to one or more rates based on the secured overnight financing rate (“SOFR”) administered by the Federal Reserve Bank of New York. Unchanged by the Second Amendment, the Amended Credit Agreement provides for $700 million and C$15 million in senior secured revolving credit facilities maturing in August 2023 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
May 31, 2020 | |
Inventory Net [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): May 31, 2020 August 31, 2019 Processed and unprocessed scrap metal $ 63,201 $ 81,313 Semi-finished goods 10,732 8,712 Finished goods 45,351 53,796 Supplies 42,259 43,499 Inventories $ 161,543 $ 187,320 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
May 31, 2020 | |
Leases [Abstract] | |
Schedule of Finance Lease-Related Assets and Liabilities | Finance lease-related assets and liabilities consisted of the following (in thousands): Balance Sheet Classification May 31, 2020 Assets: Finance lease right-of-use assets (1) Property, plant and equipment, net $ 6,491 Liabilities: Finance lease liabilities - current Short-term borrowings $ 1,356 Finance lease liabilities - non-current Long-term debt, net of current maturities 6,413 Total finance lease liabilities $ 7,769 (1) Presented net of accumulated amortization of $1 million as of May 31, 2020. |
Schedule of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates | The weighted average remaining lease terms and weighted average discount rates for the Company’s leases as of May 31, 2020 were as follows: May 31, 2020 Weighted Average Remaining Lease Term (Years) Weighted Average Discount Rate Operating leases 9.8 3.41 % Finance leases 6.3 8.39 % |
Schedule of Maturities of Leases Liabilities | Maturities of lease liabilities by fiscal year as of May 31, 2020 were as follows (in thousands): Year Ending August 31, Finance Leases Operating Leases 2020 (for the remainder of fiscal 2020) $ 514 $ 6,054 2021 1,801 21,992 2022 1,732 21,225 2023 1,663 20,746 2024 1,415 16,692 Thereafter 2,448 69,872 Total lease payments $ 9,573 $ 156,581 Less amounts representing interest (1,804 ) (25,935 ) Total lease liabilities $ 7,769 $ 130,646 Less current maturities (1,356 ) (18,683 ) Lease liabilities, net of current maturities $ 6,413 $ 111,963 |
Summary of Supplemental Cash Flow Information and Non-Cash Activity Related to Leases | Supplemental cash flow information and non-cash activity related to leases are as follows (in thousands): Nine Months Ended May 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 16,715 Operating cash flows for finance leases $ 489 Financing cash flows for finance leases $ 1,003 Lease liabilities arising from obtaining right-of-use assets (1) Operating leases $ 17,267 Finance leases $ 1,104 (1) Amounts include new leases and adjustments to lease balances as a result of remeasurement. |
Summary of Principal Payments on Capital Lease Obligations | Principal payments on capital lease obligations during the next five fiscal years and thereafter as of August 31, 2019 are as follows (in thousands): Year Ending August 31, Capital Lease Obligations 2020 $ 1,917 2021 1,799 2022 1,751 2023 1,622 2024 1,346 Thereafter 1,694 Total 10,129 Amounts representing interest (2,355 ) Total less interest $ 7,774 |
Schedule of Future Minimum Operating Lease Obligations | The table below sets forth the Company’s future minimum obligations under non-cancelable operating leases as of August 31, 2019 (in thousands): Year Ending August 31, Operating Leases 2020 $ 21,286 2021 15,301 2022 12,488 2023 10,419 2024 5,035 Thereafter 16,095 Total $ 80,624 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
May 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Gross Change in Carrying Amount of Goodwill | The gross change in the carrying amount of goodwill for the nine months ended May 31, 2020 was as follows (in thousands): Goodwill August 31, 2019 $ 169,237 Foreign currency translation adjustment (642 ) May 31, 2020 $ 168,595 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
May 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule Of Reserves For Environmental Liabilities | Changes in the Company’s environmental liabilities for the nine months ended May 31, 2020 were as follows (in thousands): Balance as of September 1, 2019 Liabilities Established (Released), Net Payments and Other Balance as of May 31, 2020 Short-Term Long-Term $ 51,799 $ 5,462 $ (3,251 ) $ 54,010 $ 6,009 $ 48,001 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
May 31, 2020 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss, net of tax, comprise the following (in thousands): Three Months Ended May 31, 2020 Three Months Ended May 31, 2019 Foreign Currency Translation Adjustments Pension Obligations, Net Total Foreign Currency Translation Adjustments Pension Obligations, Net Total Balances - March 1 (Beginning of period) $ (36,108 ) $ (2,932 ) $ (39,040 ) $ (34,861 ) $ (2,866 ) $ (37,727 ) Other comprehensive loss before reclassifications (1,904 ) — (1,904 ) (1,838 ) — (1,838 ) Income tax benefit (expense) — — — — — — Other comprehensive loss before reclassifications, net of tax (1,904 ) — (1,904 ) (1,838 ) — (1,838 ) Amounts reclassified from accumulated other comprehensive loss — 58 58 — 184 184 Income tax benefit — (13 ) (13 ) — (42 ) (42 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 45 45 — 142 142 Net periodic other comprehensive (loss) income (1,904 ) 45 (1,859 ) (1,838 ) 142 (1,696 ) Balances - May 31 (End of period) $ (38,012 ) $ (2,887 ) $ (40,899 ) $ (36,699 ) $ (2,724 ) $ (39,423 ) Nine Months Ended May 31, 2020 Nine Months Ended May 31, 2019 Foreign Currency Translation Adjustments Pension Obligations, Net Total Foreign Currency Translation Adjustments Pension Obligations, Net Total Balances - September 1 (Beginning of period) $ (35,689 ) $ (3,074 ) $ (38,763 ) $ (34,129 ) $ (3,108 ) $ (37,237 ) Other comprehensive (loss) income before reclassifications (2,323 ) (17 ) (2,340 ) (2,570 ) 208 (2,362 ) Income tax benefit (expense) — 4 4 — (46 ) (46 ) Other comprehensive (loss) income before reclassifications, net of tax (2,323 ) (13 ) (2,336 ) (2,570 ) 162 (2,408 ) Amounts reclassified from accumulated other comprehensive loss — 258 258 — 288 288 Income tax benefit — (58 ) (58 ) — (66 ) (66 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 200 200 — 222 222 Net periodic other comprehensive (loss) income (2,323 ) 187 (2,136 ) (2,570 ) 384 (2,186 ) Balances - May 31 (End of period) $ (38,012 ) $ (2,887 ) $ (40,899 ) $ (36,699 ) $ (2,724 ) $ (39,423 ) |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
May 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Revenues Disaggregated by Major Product and Sales Destination for Each Reportable Segment | The table below illustrates the Company’s revenues disaggregated by major product and sales destination for each reportable segment (in thousands): Three Months Ended May 31, 2020 AMR CSS Intercompany Revenue Eliminations Total Major product information: Ferrous revenues $ 189,783 $ 14,115 $ (1,926 ) $ 201,972 Nonferrous revenues 78,858 6,966 (318 ) 85,506 Steel revenues (1) — 83,414 — 83,414 Retail and other revenues 31,736 55 — 31,791 Total revenues $ 300,377 $ 104,550 $ (2,244 ) $ 402,683 Revenues based on sales destination: Foreign $ 188,203 $ 25,200 $ — $ 213,403 Domestic 112,174 79,350 (2,244 ) 189,280 Total revenues $ 300,377 $ 104,550 $ (2,244 ) $ 402,683 Three Months Ended May 31, 2019 AMR CSS Intercompany Revenue Eliminations Total Major product information: Ferrous revenues $ 280,362 $ 14,208 $ (2,697 ) $ 291,873 Nonferrous revenues 112,785 10,376 (329 ) 122,832 Steel revenues (1) — 96,626 — 96,626 Retail and other revenues 35,876 221 (32 ) 36,065 Total revenues $ 429,023 $ 121,431 $ (3,058 ) $ 547,396 Revenues based on sales destination: Foreign $ 273,128 $ 25,242 $ — $ 298,370 Domestic 155,895 96,189 (3,058 ) 249,026 Total revenues $ 429,023 $ 121,431 $ (3,058 ) $ 547,396 Nine Months Ended May 31, 2020 AMR CSS Intercompany Revenue Eliminations Total Major product information: Ferrous revenues $ 604,720 $ 34,486 $ (5,270 ) $ 633,936 Nonferrous revenues 256,571 22,057 (759 ) 277,869 Steel revenues (1) — 246,278 — 246,278 Retail and other revenues 89,512 154 — 89,666 Total revenues $ 950,803 $ 302,975 $ (6,029 ) $ 1,247,749 Revenues based on sales destination: Foreign $ 589,110 $ 67,278 $ — $ 656,388 Domestic 361,693 235,697 (6,029 ) 591,361 Total revenues $ 950,803 $ 302,975 $ (6,029 ) $ 1,247,749 Nine Months Ended May 31, 2019 AMR CSS Intercompany Revenue Eliminations Total Major product information: Ferrous revenues $ 836,662 $ 41,071 $ (7,846 ) $ 869,887 Nonferrous revenues 316,450 28,522 (856 ) 344,116 Steel revenues (1) — 271,988 — 271,988 Retail and other revenues 98,388 634 (32 ) 98,990 Total revenues $ 1,251,500 $ 342,215 $ (8,734 ) $ 1,584,981 Revenues based on sales destination: Foreign $ 753,696 $ 69,396 $ — $ 823,092 Domestic 497,804 272,819 (8,734 ) 761,889 Total revenues $ 1,251,500 $ 342,215 $ (8,734 ) $ 1,584,981 (1) Steel revenues include primarily sales of finished steel products, semi-finished goods (billets) and manufacturing scrap. |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
May 31, 2020 | |
Share Based Compensation [Abstract] | |
Key Assumptions for a Monte-Carlo Simulation Model Utilized to Estimate the Fair Value of TSR awards | The Company estimates the fair value of TSR awards using a Monte-Carlo simulation model utilizing several key assumptions, Percentage Expected share price volatility (SSI) 38.9 % Expected share price volatility (Peer group) 44.5 % Expected correlation to peer group companies 34.3 % Risk-free rate of return 1.58 % |
Net (Loss) Income Per Share (Ta
Net (Loss) Income Per Share (Tables) | 9 Months Ended |
May 31, 2020 | |
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) income per share attributable to SSI shareholders (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 (Loss) income from continuing operations $ (4,648 ) $ 16,432 $ (6,738 ) $ 46,557 Net income attributable to noncontrolling interests (278 ) (750 ) (1,329 ) (1,585 ) (Loss) income from continuing operations attributable to SSI shareholders (4,926 ) 15,682 (8,067 ) 44,972 (Loss) income from discontinued operations, net of tax (69 ) 8 (40 ) (202 ) Net (loss) income attributable to SSI shareholders $ (4,995 ) $ 15,690 $ (8,107 ) $ 44,770 Computation of shares: Weighted average common shares outstanding, basic 27,724 27,510 27,653 27,548 Incremental common shares attributable to dilutive performance share awards, restricted stock units and deferred stock units — 564 — 636 Weighted average common shares outstanding, diluted 27,724 28,074 27,653 28,184 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
May 31, 2020 | |
Segment Reporting [Abstract] | |
Reconciliation of Operating (Loss) Income from Segments to Consolidated | The table below illustrates the reconciliation of the Company’s segment operating income to (loss) income from continuing operations before income taxes (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2020 2019 2020 2019 AMR $ 2,503 $ 29,189 $ 19,375 $ 73,947 CSS 6,931 8,116 14,692 25,802 Segment operating income 9,434 37,305 34,067 99,749 Restructuring charges and other exit-related activities (2,710 ) (75 ) (7,810 ) (813 ) Corporate and eliminations (10,430 ) (12,771 ) (30,182 ) (32,752 ) Operating (loss) income (3,706 ) 24,459 (3,925 ) 66,184 Interest expense (2,656 ) (2,294 ) (5,399 ) (6,267 ) Other (expense) income, net (90 ) 29 18 373 (Loss) income from continuing operations before income taxes $ (6,452 ) $ 22,194 $ (9,306 ) $ 60,290 |
Summary of Total Assets from Segments to Consolidated | The following is a summary of the Company’s total assets by reportable segment (in thousands): May 31, 2020 August 31, 2019 AMR (1) $ 1,687,000 $ 1,561,267 CSS (1) 783,052 769,930 Total segment assets 2,470,052 2,331,197 Corporate and eliminations (2) (995,956 ) (1,170,451 ) Total assets $ 1,474,096 $ 1,160,746 (1) AMR total assets include $2 million and $3 million for an investment in a joint venture as of May 31, 2020 and August 31, 2019, respectively. CSS total assets include $7 million for an investment in a joint venture as of each of May 31, 2020 and August 31, 2019. (2) The substantial majority of Corporate and eliminations total assets consist of Corporate intercompany payables to the Company’s operating segments and intercompany eliminations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||||
May 31, 2020USD ($) | May 31, 2020USD ($)segment | May 31, 2019USD ($) | Sep. 01, 2019USD ($) | Aug. 31, 2019USD ($) | Aug. 31, 2017USD ($) | |
Significant Accounting Policies [Line Items] | ||||||
Number of operating segments | segment | 2 | |||||
Number of reportable segments | segment | 2 | |||||
Operating lease right-of-use assets | $ 127,418,000 | $ 127,418,000 | ||||
Operating lease liabilities | 130,646,000 | 130,646,000 | ||||
Cash and cash equivalents | 307,655,000 | 307,655,000 | $ 12,377,000 | |||
Bank Overdrafts | 27,000,000 | |||||
Repayment of Advances with Scrap Metal | 7,000,000 | $ 12,000,000 | ||||
Insurance receivable | 5,000,000 | 5,000,000 | 89,000,000 | |||
Investment, Original Cost | $ 6,000,000 | |||||
Asset impairment charges | 2,227,000 | 4,321,000 | $ 63,000 | |||
Cash, FDIC Insured Amount | 250,000 | 250,000 | ||||
Customer Issued Letters Of Credit | 72,000,000 | 72,000,000 | 49,000,000 | |||
Prepaid Expenses and Other Current Assets | ||||||
Significant Accounting Policies [Line Items] | ||||||
Prepaid Expense | 26,000,000 | 26,000,000 | 23,000,000 | |||
Other Assets | AMR | ||||||
Significant Accounting Policies [Line Items] | ||||||
Investment, Carrying Value | 6,000,000 | 6,000,000 | $ 6,000,000 | |||
Maximum | ||||||
Significant Accounting Policies [Line Items] | ||||||
Bank Overdrafts | $ 1,000,000 | $ 1,000,000 | ||||
Accounting Standards Update 2016-02 | ||||||
Significant Accounting Policies [Line Items] | ||||||
Operating lease right-of-use assets | $ 126,000,000 | |||||
Operating lease liabilities | $ 128,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information 1 (Details) | Jun. 30, 2020 | Aug. 24, 2018USD ($) | May 31, 2021 | Feb. 28, 2021 | Nov. 30, 2020 | Aug. 31, 2020 | May 31, 2020USD ($) | Aug. 31, 2019USD ($) | Aug. 24, 2018CAD ($) |
Senior Secured Revolving Credit Facility | Bank of America NA And Other Lenders | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Line of credit facility, Maximum borrowing capacity | $ 700,000,000 | $ 15,000,000 | |||||||
Debt instrument, Maturity date | Aug. 31, 2023 | ||||||||
Secured Revolving Credit Facility | Bank of America NA And Other Lenders | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Bank revolving credit facilities, interest primarily at LIBOR plus a spread | $ 420,000,000 | $ 97,000,000 | |||||||
Line of Credit | Subsequent Event | Amended Credit Agreement, Interest Rate Option 1 | London Interbank Offered Rate (LIBOR) | Senior Secured Revolving Credit Facility | Bank of America NA And Other Lenders | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Debt instrument, floor rate | 0.50% | ||||||||
Line of Credit | Subsequent Event | Amended Credit Agreement, Interest Rate Option 2 | London Interbank Offered Rate (LIBOR) | Senior Secured Revolving Credit Facility | Bank of America NA And Other Lenders | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Debt instrument, Variable rate | 1.75% | ||||||||
Line of Credit | Subsequent Event | Amended Credit Agreement, Interest Rate Option 2 | Federal Funds Effective Swap Rate | Senior Secured Revolving Credit Facility | Bank of America NA And Other Lenders | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Debt instrument, Variable rate | 0.50% | ||||||||
Line of Credit | Minimum | Subsequent Event | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Fixed charge coverage ratio | 1.50 | ||||||||
Line of Credit | Minimum | Subsequent Event | Senior Secured Revolving Credit Facility | Bank of America NA And Other Lenders | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Commitment fee percentage | 0.20% | ||||||||
Line of Credit | Minimum | Subsequent Event | Amended Credit Agreement, Interest Rate Option 1 | London Interbank Offered Rate (LIBOR) | Senior Secured Revolving Credit Facility | Bank of America NA And Other Lenders | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Debt instrument, Variable rate | 1.25% | ||||||||
Line of Credit | Minimum | Subsequent Event | Amended Credit Agreement, Interest Rate Option 2 | London Interbank Offered Rate (LIBOR) | Senior Secured Revolving Credit Facility | Bank of America NA And Other Lenders | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Debt instrument, Variable rate | 0.00% | ||||||||
Line of Credit | Minimum | Forecast | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Fixed charge coverage ratio | 1.10 | 1.10 | 1.10 | 1.20 | |||||
Consolidated asset coverage ratio | 1 | 1 | 1 | 1 | |||||
Line of Credit | Maximum | Subsequent Event | Senior Secured Revolving Credit Facility | Bank of America NA And Other Lenders | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Commitment fee percentage | 0.50% | ||||||||
Line of Credit | Maximum | Subsequent Event | Amended Credit Agreement, Interest Rate Option 1 | London Interbank Offered Rate (LIBOR) | Senior Secured Revolving Credit Facility | Bank of America NA And Other Lenders | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Debt instrument, Variable rate | 3.50% | ||||||||
Line of Credit | Maximum | Subsequent Event | Amended Credit Agreement, Interest Rate Option 2 | London Interbank Offered Rate (LIBOR) | Senior Secured Revolving Credit Facility | Bank of America NA And Other Lenders | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Debt instrument, Variable rate | 2.50% |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Inventory Net [Abstract] | ||
Processed and unprocessed scrap metal | $ 63,201 | $ 81,313 |
Semi-finished goods | 10,732 | 8,712 |
Finished goods | 45,351 | 53,796 |
Supplies | 42,259 | 43,499 |
Inventories | $ 161,543 | $ 187,320 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
May 31, 2020USD ($) | May 31, 2020USD ($) | |
Lessee Lease Description [Line Items] | ||
Lease cost | $ 7 | $ 21 |
Operating lease expense | 6 | 17 |
Short-term lease expense | $ 1 | $ 3 |
Minimum | ||
Lessee Lease Description [Line Items] | ||
Operating lease non-cancellable lease term | 5 years | 5 years |
Operating lease renewal option, years | 5 years | |
Maximum | ||
Lessee Lease Description [Line Items] | ||
Short-term election non-cancellable lease term | 12 months | |
Short-term election lease term renewal option | 12 months | |
Operating lease non-cancellable lease term | 10 years | 10 years |
Operating lease renewal option, years | 20 years | |
Maximum | Machinery and Equipment | ||
Lessee Lease Description [Line Items] | ||
Finance lease and other operating leases non-cancellable lease term | 10 years |
Leases - Schedule of Finance Le
Leases - Schedule of Finance Lease-Related Assets and Liabilities (Details) $ in Thousands | May 31, 2020USD ($) |
Assets: | |
Finance lease right-of-use assets | $ 6,491 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet |
Liabilities: | |
Finance lease liabilities - current | $ 1,356 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:DebtCurrent |
Finance lease liabilities - non-current | $ 6,413 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtAndCapitalLeaseObligations |
Total finance lease liabilities | $ 7,769 |
Leases - Schedule of Finance _2
Leases - Schedule of Finance Lease-Related Assets and Liabilities (Parenthetical) (Details) $ in Millions | 9 Months Ended |
May 31, 2020USD ($) | |
Maximum | |
Leases [Line Items] | |
Finance lease, accumulated amortization | $ 1 |
Leases - Schedule of Weighted A
Leases - Schedule of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates (Details) | May 31, 2020 |
Weighted Average Remaining Lease Term (Years) | |
Operating leases | 9 years 9 months 18 days |
Finance leases | 6 years 3 months 18 days |
Weighted average discount rate | |
Operating leases | 3.41% |
Finance leases | 8.39% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands | May 31, 2020USD ($) |
Finance Leases | |
2020 (for the remainder of fiscal 2020) | $ 514 |
2021 | 1,801 |
2022 | 1,732 |
2023 | 1,663 |
2024 | 1,415 |
Thereafter | 2,448 |
Total lease payments | 9,573 |
Less amounts representing interest | (1,804) |
Total finance lease liabilities | 7,769 |
Less current maturities | (1,356) |
Lease liabilities, net of current maturities | 6,413 |
Operating Leases | |
2020 (for the remainder of fiscal 2020) | 6,054 |
2021 | 21,992 |
2022 | 21,225 |
2023 | 20,746 |
2024 | 16,692 |
Thereafter | 69,872 |
Total lease payments | 156,581 |
Less amounts representing interest | (25,935) |
Total operating lease liabilities | 130,646 |
Less current maturities | (18,683) |
Operating lease liabilities, net of current maturities | $ 111,963 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information and Non-Cash Activity Related to Leases (Details) $ in Thousands | 9 Months Ended |
May 31, 2020USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows for operating leases | $ 16,715 |
Operating cash flows for finance leases | 489 |
Financing cash flows for finance leases | 1,003 |
Lease liabilities arising from obtaining right-of-use assets: | |
Operating leases | 17,267 |
Finance leases | $ 1,104 |
Leases - Summary of Principal P
Leases - Summary of Principal Payments on Capital Lease Obligations (Details) $ in Thousands | Aug. 31, 2019USD ($) |
Capital Leases, Future Minimum Payments, Net Minimum Payments [Abstract] | |
2020 | $ 1,917 |
2021 | 1,799 |
2022 | 1,751 |
2023 | 1,622 |
2024 | 1,346 |
Thereafter | 1,694 |
Total | 10,129 |
Amounts representing interest | (2,355) |
Total less interest | $ 7,774 |
Leases - Future Minimum Obligat
Leases - Future Minimum Obligations Non-Cancelable Operating Leases (Details) $ in Thousands | Aug. 31, 2019USD ($) |
Future minimum obligations under non-cancelable operating leases: | |
2020 | $ 21,286 |
2021 | 15,301 |
2022 | 12,488 |
2023 | 10,419 |
2024 | 5,035 |
Thereafter | 16,095 |
Total | $ 80,624 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
May 31, 2020USD ($)reporting_unit | Aug. 31, 2019USD ($)reporting_unit | |
Goodwill [Line Items] | ||
Goodwill | $ 168,595 | $ 169,237 |
Goodwill, impaired, accumulated impairment loss | 471,000 | 471,000 |
AMR | ||
Goodwill [Line Items] | ||
Goodwill | $ 168,595 | $ 169,237 |
Number of reporting units | reporting_unit | 1 | 1 |
AMR | Single Reporting Unit Carried Out | ||
Goodwill [Line Items] | ||
Goodwill | $ 1,000 | $ 1,000 |
Goodwill - Schedule of Gross Ch
Goodwill - Schedule of Gross Change in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
May 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | $ 169,237 |
Goodwill, end of period | 168,595 |
AMR | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | 169,237 |
Foreign currency translation adjustment | (642) |
Goodwill, end of period | $ 168,595 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Environmental Liabilities (Details) $ in Thousands | 9 Months Ended | |
May 31, 2020USD ($) | Aug. 31, 2019USD ($) | |
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Beginning Balance | $ 51,799 | |
Liabilities Established (Released), Net | 5,462 | |
Payments and Other | (3,251) | |
Ending Balance | 54,010 | |
Short-Term | 6,009 | $ 6,030 |
Long-Term | $ 48,001 | $ 45,769 |
Commitments and Contingencies_2
Commitments and Contingencies - Recycling Operations and Other Legacy (Details) | May 04, 2020USD ($) | Dec. 31, 2017potentially_responsible_party | Jan. 31, 2017USD ($) | May 31, 2020USD ($) | May 31, 2020USD ($)Subarea | Aug. 31, 2018USD ($) | Aug. 31, 2007USD ($) | Aug. 31, 2019USD ($) | Jan. 30, 2017potentially_responsible_partyparty | Aug. 31, 2016USD ($) |
Loss Contingencies [Line Items] | ||||||||||
Accrual for Environmental Loss Contingencies | $ 54,010,000 | $ 54,010,000 | $ 51,799,000 | |||||||
Parties named in Litigation | party | 30 | |||||||||
Liabilities Established | 5,462,000 | |||||||||
Insurance Receivable | 5,000,000 | 5,000,000 | 89,000,000 | |||||||
Other Auto and Metals Recycling Business Sites | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Accrual for Environmental Loss Contingencies | 54,000,000 | $ 54,000,000 | 52,000,000 | |||||||
Portland Harbor Superfund Site | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Number Of Potentially Responsible Parties Joining Allocation Process | potentially_responsible_party | 100 | |||||||||
Number Of Other Potentially Responsible Parties Signing Settlement Agreement and Order on Consent | potentially_responsible_party | 3 | |||||||||
Number of Years for Pre-Remedial Design | 2 years | |||||||||
Liabilities Established | 3,000,000 | $ 2,000,000 | ||||||||
Insurance Receivable | 2,000,000 | |||||||||
Site contingency expected completion term for remedial design | 4 years | |||||||||
Site contingency EPA estimated completion cost for remedial design | $ 4,000,000 | |||||||||
Portland Harbor Superfund Site | Minimum | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Site contingency proposed subareas for remedial design | Subarea | 8 | |||||||||
Portland Harbor Superfund Site | Maximum | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Site contingency proposed subareas for remedial design | Subarea | 10 | |||||||||
Portland Harbor Superfund Site | Lower Willamette Group | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Remedial Investigation and Feasibility Study Costs | $ 155,000,000 | |||||||||
Number of Years for Remedial Investigation and Feasibility Study | 18 years | |||||||||
Portland Harbor Superfund Site | Potential Responsible Parties | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Estimated Cost of Selected Remedy Undiscounted | $ 1,700,000,000 | |||||||||
Estimated Cost of Selected Remedy Discounted | $ 1,050,000,000 | |||||||||
Estimated Cost of Selected Remedy, Discount Rate | 7.00% | |||||||||
Site Contingency, Estimated Construction Time Frame | 13 years | |||||||||
Portland Harbor Superfund Site | Potential Responsible Parties | Minimum | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Site Contingency, Least Costly Remediation Plan Discounted | $ 170,000,000 | |||||||||
Estimated Cost of Selected Remedy, Range | (30.00%) | |||||||||
Portland Harbor Superfund Site | Potential Responsible Parties | Maximum | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Site Contingency, Most Costly Remediation Plan Discounted | $ 2,500,000,000 | |||||||||
Estimated Cost of Selected Remedy, Range | 50.00% | |||||||||
Legacy Environmental Site 1 - Remediation of Shredder Residue | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Accrual for Environmental Loss Contingencies | 4,000,000 | $ 4,000,000 | 4,000,000 | |||||||
Environmental remediation expense accrued in the period | $ 4,000,000 | |||||||||
Legacy Environmental Site 1 - Remediation of Shredder Residue | Minimum | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Loss contingency, range of possible loss | 0 | 0 | ||||||||
Legacy Environmental Site 1 - Remediation of Shredder Residue | Maximum | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Loss contingency, range of possible loss | 28,000,000 | 28,000,000 | ||||||||
Legacy Environmental Site 2 - Remediation of Soil and Groundwater Conditions | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Accrual for Environmental Loss Contingencies | $ 7,000,000 | 7,000,000 | $ 8,000,000 | |||||||
Legacy Environmental Site 2 - Installation of Wellhead Treatment | Minimum | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Environmental remediation expense accrued in the period | 10,000,000 | |||||||||
Legacy Environmental Site 2 - Installation of Wellhead Treatment | Maximum | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Environmental remediation expense accrued in the period | $ 13,000,000 |
Commitments and Contingencies_3
Commitments and Contingencies - Steel Manufacturing Operations (Details) T in Thousands | May 31, 2020USD ($)T | Aug. 31, 2019USD ($) |
Loss Contingencies [Line Items] | ||
Accrual for Environmental Loss Contingencies | $ 54,010,000 | $ 51,799,000 |
Steel Manufacturing Operations | ||
Loss Contingencies [Line Items] | ||
Accrual for Environmental Loss Contingencies | $ 0 | $ 0 |
Permitted Annual Production Capacity | T | 950 |
Commitments and Contingencies_4
Commitments and Contingencies - Other (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Nov. 30, 2019USD ($)lawsuit | May 31, 2020USD ($)lawsuit | Aug. 31, 2019USD ($)lawsuit | |
Loss Contingencies [Line Items] | |||
Insurance receivable | $ 5,000,000 | $ 89,000,000 | |
GEORGIA | Wrongful Death Lawsuits | |||
Loss Contingencies [Line Items] | |||
Amount Awarded | $ 103,000,000 | ||
GEORGIA | Wrongful Death Lawsuits | Settled Litigation | |||
Loss Contingencies [Line Items] | |||
Claims Settled | lawsuit | 2 | 3 | |
Amount Awarded | $ 68,000,000 | $ 35,000,000 | |
GEORGIA | Wrongful Death Lawsuits | Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Claims Filed | lawsuit | 5 | ||
Accrual loss contingencies amount | $ 0 | 83,000,000 | |
Accrual loss contingencies paid amount | $ 83,000,000 | ||
Insurance receivable | $ 83,000,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | $ 684,948 | $ 680,847 | $ 701,296 | $ 670,110 |
Total other comprehensive loss, net of tax | (1,859) | (1,696) | (2,136) | (2,186) |
Ending balance | 674,347 | 693,704 | 674,347 | 693,704 |
Foreign Currency Translation Adjustments | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | (36,108) | (34,861) | (35,689) | (34,129) |
Other comprehensive (loss) income before reclassifications | (1,904) | (1,838) | (2,323) | (2,570) |
Income tax benefit (expense) | 0 | 0 | 0 | 0 |
Other comprehensive (loss) income before reclassifications, net of tax | (1,904) | (1,838) | (2,323) | (2,570) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Income tax benefit | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 0 | 0 | 0 | 0 |
Total other comprehensive loss, net of tax | (1,904) | (1,838) | (2,323) | (2,570) |
Ending balance | (38,012) | (36,699) | (38,012) | (36,699) |
Pension Obligations, net | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | (2,932) | (2,866) | (3,074) | (3,108) |
Other comprehensive (loss) income before reclassifications | 0 | 0 | (17) | 208 |
Income tax benefit (expense) | 0 | 0 | 4 | (46) |
Other comprehensive (loss) income before reclassifications, net of tax | 0 | 0 | (13) | 162 |
Amounts reclassified from accumulated other comprehensive loss | 58 | 184 | 258 | 288 |
Income tax benefit | (13) | (42) | (58) | (66) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 45 | 142 | 200 | 222 |
Total other comprehensive loss, net of tax | 45 | 142 | 187 | 384 |
Ending balance | (2,887) | (2,724) | (2,887) | (2,724) |
Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | (39,040) | (37,727) | (38,763) | (37,237) |
Other comprehensive (loss) income before reclassifications | (1,904) | (1,838) | (2,340) | (2,362) |
Income tax benefit (expense) | 0 | 0 | 4 | (46) |
Other comprehensive (loss) income before reclassifications, net of tax | (1,904) | (1,838) | (2,336) | (2,408) |
Amounts reclassified from accumulated other comprehensive loss | 58 | 184 | 258 | 288 |
Income tax benefit | (13) | (42) | (58) | (66) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 45 | 142 | 200 | 222 |
Total other comprehensive loss, net of tax | (1,859) | (1,696) | (2,136) | (2,186) |
Ending balance | $ (40,899) | $ (39,423) | $ (40,899) | $ (39,423) |
Revenue - Summary of Revenues D
Revenue - Summary of Revenues Disaggregated by Major Product and Sales Destination for Each Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 402,683 | $ 547,396 | $ 1,247,749 | $ 1,584,981 |
Ferrous Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 201,972 | 291,873 | 633,936 | 869,887 |
Nonferrous Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 85,506 | 122,832 | 277,869 | 344,116 |
Steel Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 83,414 | 96,626 | 246,278 | 271,988 |
Retail and Other Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 31,791 | 36,065 | 89,666 | 98,990 |
Operating Segments | AMR | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 300,377 | 429,023 | 950,803 | 1,251,500 |
Operating Segments | CSS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 104,550 | 121,431 | 302,975 | 342,215 |
Operating Segments | Ferrous Revenues | AMR | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 189,783 | 280,362 | 604,720 | 836,662 |
Operating Segments | Ferrous Revenues | CSS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 14,115 | 14,208 | 34,486 | 41,071 |
Operating Segments | Nonferrous Revenues | AMR | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 78,858 | 112,785 | 256,571 | 316,450 |
Operating Segments | Nonferrous Revenues | CSS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6,966 | 10,376 | 22,057 | 28,522 |
Operating Segments | Steel Revenues | AMR | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segments | Steel Revenues | CSS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 83,414 | 96,626 | 246,278 | 271,988 |
Operating Segments | Retail and Other Revenues | AMR | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 31,736 | 35,876 | 89,512 | 98,388 |
Operating Segments | Retail and Other Revenues | CSS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 55 | 221 | 154 | 634 |
Intersegment Revenue Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (2,244) | (3,058) | (6,029) | (8,734) |
Intersegment Revenue Eliminations | Ferrous Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (1,926) | (2,697) | (5,270) | (7,846) |
Intersegment Revenue Eliminations | Nonferrous Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (318) | (329) | (759) | (856) |
Intersegment Revenue Eliminations | Steel Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Intersegment Revenue Eliminations | Retail and Other Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | (32) | 0 | (32) |
Foreign | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 213,403 | 298,370 | 656,388 | 823,092 |
Foreign | Operating Segments | AMR | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 188,203 | 273,128 | 589,110 | 753,696 |
Foreign | Operating Segments | CSS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 25,200 | 25,242 | 67,278 | 69,396 |
Foreign | Intersegment Revenue Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Domestic | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 189,280 | 249,026 | 591,361 | 761,889 |
Domestic | Operating Segments | AMR | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 112,174 | 155,895 | 361,693 | 497,804 |
Domestic | Operating Segments | CSS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 79,350 | 96,189 | 235,697 | 272,819 |
Domestic | Intersegment Revenue Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ (2,244) | $ (3,058) | $ (6,029) | $ (8,734) |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
May 31, 2021 | May 31, 2020 | Aug. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Receivables from contracts with customers, net of allowance for doubtful accounts | $ 131 | $ 142 | |
Percentage of receivables from contracts with customers of accounts receivable | 97.00% | 97.00% | |
Contract liabilities | $ 3 | $ 3 | |
Customer deposits reclassified to revenue | $ 3 | ||
Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Customer deposits reclassified to revenue | $ 1 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Details) $ in Millions | 3 Months Ended | ||
May 31, 2020USD ($)shares | Feb. 29, 2020USD ($)shares | Nov. 30, 2019USD ($)companyshares | |
Performance Shares (PSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 337,700 | ||
Share-based compensation arrangement by share-based payment award, award requisite performance period | 3 years | ||
Performance Shares (PSUs) | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance based awards award payouts threshold | 50.00% | ||
Performance Shares (PSUs) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance based awards award payouts threshold | 200.00% | ||
Performance Shares (PSUs) | Total Shareholder Return (TSR) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 165,834 | ||
Total shareholder return designated peer group | company | 15 | ||
Shares granted, fair value | $ | $ 4 | ||
Performance Shares (PSUs) | Return on Capital Employed (ROCE) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 171,936 | ||
Share-based compensation arrangement by share-based payment award, award requisite performance period | 3 years | ||
Shares granted, fair value | $ | $ 4 | ||
Deferred stock units (“DSUs”) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total fair value of share awards at grant date | $ | $ 1 | ||
Deferred stock units (“DSUs”) | Non-employee Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 41,592 | ||
Deferred stock units (“DSUs”) | Non-employee Directors | Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, number of shares per stock unit | 1 | ||
Restricted stock units (“RSUs”) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 470,917 | ||
Shares granted, fair value | $ | $ 7 | ||
Vesting term | 5 years | ||
Vesting percentage per year | 20.00% | ||
Shares granted, vesting commencement date | Apr. 30, 2021 | ||
Restricted stock units (“RSUs”) | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for retirement eligibility for expense to be recognized | 2 years | ||
Restricted stock units (“RSUs”) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for retirement eligibility for expense to be recognized | 5 years |
Share-based Compensation - Summ
Share-based Compensation - Summary of Fair Value using Monte-Carlo Simulation Model Utilizing Several Key Assumptions (Details) - Total Shareholder Return (TSR) | 3 Months Ended |
Nov. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected share price volatility | 38.90% |
Risk-free rate of return | 1.58% |
Peer Group | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected share price volatility | 44.50% |
Expected correlation | 34.30% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | (28.00%) | 26.00% | (27.60%) | 22.80% |
Estimated reclassification of NOL deferred income tax asset to refundable income taxes, CARES Act | $ 11 | $ 11 | ||
Estimated income tax benefit recognition during third quarter of fiscal year 2020, CARES Act | $ 1 | $ 1 |
Restructuring Charges and Oth_2
Restructuring Charges and Other Exit-Related Activities - Additional Information (Details) $ in Millions | 9 Months Ended |
May 31, 2020USD ($) | |
Restructuring And Related Activities [Abstract] | |
Estimated restructuring charges and other exit-related costs | $ 9 |
Severance costs | 2 |
Exit-related costs | 1 |
Professional services costs | $ 5 |
Net (Loss) Income Per Share - S
Net (Loss) Income Per Share - Schedule of Basic and Diluted Net (Loss) Income Per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Earnings Per Share [Abstract] | ||||
(Loss) income from continuing operations | $ (4,648) | $ 16,432 | $ (6,738) | $ 46,557 |
Net income attributable to noncontrolling interests | (278) | (750) | (1,329) | (1,585) |
(Loss) income from continuing operations attributable to SSI shareholders | (4,926) | 15,682 | (8,067) | 44,972 |
(Loss) income from discontinued operations, net of tax | (69) | 8 | (40) | (202) |
Net (loss) income attributable to SSI shareholders | $ (4,995) | $ 15,690 | $ (8,107) | $ 44,770 |
Computation of shares: | ||||
Weighted average common shares outstanding, basic | 27,724 | 27,510 | 27,653 | 27,548 |
Incremental common shares attributable to dilutive performance share awards, restricted stock units and deferred stock units | 564 | 636 | ||
Weighted average common shares outstanding, diluted | 27,724 | 28,074 | 27,653 | 28,184 |
Net (Loss) Income Per Share - A
Net (Loss) Income Per Share - Additional Information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 1,228,857 | 388,766 | 887,760 | 283,483 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Corporate Joint Venture | ||||
Related Party Transaction [Line Items] | ||||
Purchases from joint ventures | $ 3 | $ 4 | $ 8 | $ 11 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended | |
May 31, 2020segmentjointventureinterest | Aug. 31, 2019jointventureinterest | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 2 | |
Number of reportable segments | segment | 2 | |
Number of equity method investments | 2 | 2 |
Equity method investment, ownership percentage | 50.00% | 50.00% |
AMR | ||
Segment Reporting Information [Line Items] | ||
Number of joint venture investments | 1 | 1 |
CSS | ||
Segment Reporting Information [Line Items] | ||
Number of joint venture investments | 1 | 1 |
Segment Information - Reconcili
Segment Information - Reconciliation of Operating (Loss) Income from Segments to Consolidated (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Segment Reporting Information [Line Items] | ||||
Operating (loss) income | $ (3,706) | $ 24,459 | $ (3,925) | $ 66,184 |
Restructuring charges and other exit-related activities | (2,710) | (75) | (7,810) | (813) |
Interest expense | (2,656) | (2,294) | (5,399) | (6,267) |
Other (expense) income, net | (90) | 29 | 18 | 373 |
(Loss) income from continuing operations before income taxes | (6,452) | 22,194 | (9,306) | 60,290 |
Continuing Operations | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring charges and other exit-related activities | (2,710) | (75) | (7,810) | (813) |
Interest expense | (2,656) | (2,294) | (5,399) | (6,267) |
Other (expense) income, net | (90) | 29 | 18 | 373 |
(Loss) income from continuing operations before income taxes | (6,452) | 22,194 | (9,306) | 60,290 |
Continuing Operations | AMR | ||||
Segment Reporting Information [Line Items] | ||||
Operating (loss) income | 2,503 | 29,189 | 19,375 | 73,947 |
Continuing Operations | CSS | ||||
Segment Reporting Information [Line Items] | ||||
Operating (loss) income | 6,931 | 8,116 | 14,692 | 25,802 |
Continuing Operations | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating (loss) income | 9,434 | 37,305 | 34,067 | 99,749 |
Continuing Operations | Corporate and eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Operating (loss) income | $ (10,430) | $ (12,771) | $ (30,182) | $ (32,752) |
Segment Information - Summary o
Segment Information - Summary of Total Assets from Segments to Consolidated (Details) - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Assets | $ 1,474,096 | $ 1,160,746 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 2,470,052 | 2,331,197 |
Operating Segments | AMR | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,687,000 | 1,561,267 |
Operating Segments | CSS | ||
Segment Reporting Information [Line Items] | ||
Assets | 783,052 | 769,930 |
Corporate and eliminations | ||
Segment Reporting Information [Line Items] | ||
Assets | $ (995,956) | $ (1,170,451) |
Segment Information - Summary_2
Segment Information - Summary of Total Assets from Segments to Consolidated (Parenthetical) (Details) - USD ($) $ in Thousands | May 31, 2020 | Aug. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Investments in joint ventures | $ 9,905 | $ 10,276 |
AMR | ||
Segment Reporting Information [Line Items] | ||
Investments in joint ventures | 2,000 | 3,000 |
CSS | ||
Segment Reporting Information [Line Items] | ||
Investments in joint ventures | $ 7,000 | $ 7,000 |