During the second quarter, market selling prices for recycled metals experienced the steepest drop since 2008 with ferrous sales prices falling as much as $100 per ton, or approximately 30%, from first quarter levels. This drop in market selling prices continued the decline that began in the Company’s first fiscal quarter when ferrous sales prices dropped approximately 20%. These significantly lower prices have been driven by softer global steel markets due to overproduction, the strong dollar, lower iron ore prices, and weaker demand in end-markets, including the energy, agriculture and mining sectors. In addition, during the quarter our business activity was impacted by harsh winter weather in the Northeast and Midwest which impacted retail sales in our Auto Parts Business and supply flows in our Metals Recycling Business, and by a labor slowdown at the West Coast ports. As a result of all of these factors, year-over-year ferrous sales volumes in Metals Recycling declined by 27% and nonferrous sales volumes declined by 20%. In our Steel Manufacturing Business, second quarter sales volumes, utilization and operating income were higher compared to the same period last year as a result of improved demand in West Coast construction markets and continuing benefits from productivity improvements.

Consolidated Financial Performance

For the second quarter, the Company reported an adjusted loss per share of $0.33, excluding charges for non-cash goodwill and other asset impairments, and restructuring and exit-related activities. This compares to second quarter fiscal 2014 adjusted earnings per share of $0.13, excluding charges attributed to restructuring. Approximately $0.39 per share, or $16 million, of the adjusted operating loss is attributable to the estimated adverse impact of sharply falling prices on average inventory accounting which primarily impacted our Metals Recycling and Auto Parts Businesses.

The Company reported a second quarter fiscal 2015 loss per share of $7.24, compared to a reported earnings per share of $0.07 in the prior year second quarter. This includes the effects of actions the Company took at the end of the second quarter to idle or close certain operations in the Metals Recycling and Auto Parts Businesses, including $44 million in non-cash asset impairment charges and $8 million in restructuring and exit-related costs, representing a combined $1.95 per share. The Company also recorded a non-cash impairment charge of $141 million, or $4.86 per share, to the carrying value of the goodwill in the Metals Recycling Business in the second quarter.

Positive Operating Cash Flow Enables Debt Reduction, Continuation of the Dividend

The Company generated positive operating cash flow in the second quarter of $32 million which the Company used to reduce total debt by $27 million to $314 million, the lowest level since the first quarter of fiscal 2011, and to maintain the Company's quarterly dividend. The Company has paid a quarterly dividend every quarter since going public 21 years ago.

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