Schnitzer Steel Industries, Inc. reported Wednesday an adjusted loss per share of $(0.18) and a loss per share of $(0.23) for its fiscal 2014 first quarter ended November 30, 2013. Adjusted results for the first quarter exclude a $2 million, or $0.05 per share, restructuring charge associated with cost reduction initiatives. In the first quarter of fiscal 2013, the Company reported an adjusted loss per share of $(0.02) and a loss per share of $(0.06).
All three business segments generated positive operating income during the first quarter of fiscal 2014. As anticipated, the Metals Recycling Business improved sequentially, delivering results slightly above break-even. The Auto Parts Business also improved compared to the fourth quarter of fiscal 2013, recording operating margins of 9 percent, excluding the impact of new stores added since the first quarter of fiscal 2013. The Steel Manufacturing Business was in line sequentially notwithstanding a bad debt expense of $1 million, or $0.03 per share. The first quarter results also include a charge for deferred tax valuation allowances of $1 million, or $0.04 per share.
Market conditions improved as the quarter progressed. Both prices and demand were relatively weak in the first half of the quarter which impacted shipments in September and October. In the second half of the quarter, demand strengthened which increased prices by approximately $30 per ton. Consequently, performance in the last month of the quarter was significantly better than during the first two months. The softer demand at the start of the quarter resulted in an estimated adverse impact from average inventory costs of approximately $6 per ton in the Metals Recycling Business. Based on current market conditions and the company's cost reduction initiatives, Schnitzer anticipates improved results in each segment in the second quarter.
"We generated $26 million in operating cash flow in the first quarter, our cost reduction initiatives are underway to deliver at least $20 million of savings in fiscal 2014, and we continued to expand our Auto Parts Business platform by acquiring our fourth store in the greater Seattle-Tacoma metropolitan area which provides supply chain synergies with our Metals Recycling Business," said Tamara Lundgren, President and Chief Executive Officer.
