8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):   August 19, 2005

Schnitzer Steel Industries, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Oregon (State or Other Jurisdiction of Incorporation) 0-22496 (Commission File Number) 93-0341923 (IRS Employer Identification No.)

  3200 N.W. Yeon Ave. P.O. Box 10047 Portland, OR (Address of Principal Executive Offices)       97296-0047 (Zip Code)

(503) 224-9900

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

On August 24, 2005, Schnitzer Steel Industries, Inc. (the “Company”) announced that Kelly E. Lang, who served as Acting Chief Financial Officer from June 2, 2005 until August 24, 2005, became Vice President for Asset and Operational Integration. In this new position, Mr. Lang will focus on integrating new acquisitions into the Company’s existing business. On August 23, 2005, Gregory J. Witherspoon was appointed as Interim Chief Financial Officer of the Company, replacing Mr. Lang. Mr. Witherspoon, 58, has been a Managing Director with the financial consulting firm, Plan Bravo Partners, LLC in Los Angeles for the past seven years. Mr. Witherspoon’s financial consulting engagements have included a two-year assignment as President of a chain of hotels and restaurants, and a six-month assignment as Interim President and Chief Financial Officer of an automobile lender. He served as Chief Financial Officer of Aames Financial Corp., a sub-prime mortgage lender, from 1987 to 1998, which became a publicly traded company in 1991. Mr. Witherspoon began his career with Deloitte & Touche as a Certified Public Accountant. A copy of the press release announcing these two appointments is attached hereto as exhibit 99.1 and incorporated by reference herein.

The Company expects to enter into an agreement with Mr. Witherspoon regarding his position including compensation and term. Upon finalization of the agreement, the Company will file an amendment to this Form 8-K describing its material terms.

Item 8.01 Other Events

On August 23, 2005, the Company received from the Securities and Exchange Commission (the “SEC”) a formal order of investigation relating to the Company's previously announced independent investigation of the past practice of paying improper commissions to purchasing managers of customers in Asia in connection with export sales of recycled ferrous metals. The Company had voluntarily notified the Securities and Exchange Commission and the U.S. Department of Justice of the independent investigation; and instructed its outside law firm to provide those agencies with the information obtained as a result of the investigation; and continues to cooperate fully with those agencies. The previously announced investigation is being conducted by an independent law firm working under the supervision of the Audit Committee of the Company's Board of Directors (the “Board”).

On August 19, 2005, the Company signed a letter of intent setting forth the intention of the Company and the Izzo Group, Inc. and certain of its affiliates (“Izzo”) to proceed with a proposed acquisition by the Company of all of the outstanding membership interests in Metals Recycling LLC, a limited liability company organized under the laws of Rhode Island (“MRL”), other than membership interests held by Prolerized New England Company, a New York Partnership (“PNE”), from Izzo (the “Acquisition”). PNE currently owns approximately 60% of the outstanding equity of MRL and Izzo owns approximately 40% of the outstanding equity of MRL. The Company is currently an indirect owner of 50% of PNE, and on June 8, 2005 it entered into an agreement (the “Master Agreement”) with Hugo Neu Corporation and its affiliates to acquire the 50% in PNE it does not currently own. The Company and Izzo intend that the Acquisition would occur as soon as practicable following (and in any event not before) the consummation of the transactions contemplated by the Master Agreement. MRL has scrap metal operations in New England.

On August 24, 2005, the Company issued an e-mail to employees discussing the events disclosed in this Form 8-K as well as other recent events concerning the Company, including commenting on the continuing independent investigation of the Audit Committee of the Board of Directors of the Company of the past practice of paying improper commissions to purchasing managers of customers in Asia in connection with export sales. A copy of the e-mail to employees is attached hereto as Exhibit 99.2 and incorporated by reference herein.

Item 9.01.			Financial Statements and Exhibits
	(d)	Exhibits.

99.1	Press Release of Schnitzer Steel Industries, Inc. issued on August 24, 2005
99.2	E-mail to employees issued on August 24, 2005

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Forward-looking statements

Certain statements in this Form 8-K are "forward-looking statements" within the meaning of U.S. federal securities laws. The Company intends that these statements be covered by the safe harbors created under these laws. These forward-looking statements include, but are not limited to, statements about the Company’s expectation that the Acquisition and the transactions contemplated by the Master Agreement will be consummated. These forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from the information set forth in these forward-looking statements include the satisfaction of the conditions to closing under the Master Agreement and unexpected delays in the completion of the Acquisition, any inability to satisfy any closing conditions to the Acquisition, actions or inactions of government regulators and other third parties and other factors, some of which are discussed in the Company’s most recent annual report on Form 10-K and its most recent quarterly report on Form 10-Q. Many of these factors and events are beyond the Company’s ability to control or predict. Given these uncertainties, readers are cautioned not to place undue reliance on the forward-looking statements, which only speak as of the date of this Form 8-K. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this Form 8-K or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

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SIGNATURE

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SCHNITZER STEEL INDUSTRIES, INC. (Registrant)
Dated:   August 24, 2005	By:	/s/ John D. Carter
		Name: John D. Carter
		Title: President and Chief Executive Officer

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Exhibit Index

Exhibit No. Description

99.1	Press Release of Schnitzer Steel Industries, Inc. issued on August 24, 2005
99.2	E-mail to employees issued on August 24, 2005

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EX-99.1

WWW.EXFILE.COM, INC. -- 13792 -- SCHNITZER STEEL INDUSTRIES, INC. -- EXHIBIT 99.1 TO FORM 8-K

EXHIBIT 99.1

Schnitzer Steel Announces Appointments to Facilitate the Integration of Acquisitions; Announces SEC Order Relating to Previously Announced Independent Investigation

PORTLAND, Ore. – August 24, 2005 – Schnitzer Steel Industries, Inc. (Nasdaq: SCHN) today announced that it has taken an important step to facilitate the integration of acquisitions by appointing Kelly E. Lang, who has served as Acting Chief Financial Officer since June 2, 2005, to the new position of Vice President for Asset and Operational Integration. Mr. Lang will help manage the integration into Schnitzer Steel of acquired businesses.

The Company also announced the appointment of Gregory J. Witherspoon as Interim Chief Financial Officer. He will serve until the completion of the search for a Chief Financial Officer, which is being led by Korn Ferry International.

“Kelly is ideally prepared to lead our efforts to smoothly and efficiently meld the businesses we are acquiring. He has deep familiarity with our businesses, and he has been directly involved in negotiating our recent acquisitions,” said John D. Carter, President and Chief Executive Officer. “We appreciate Kelly's willingness to take on this important assignment and we are pleased that Greg, a talented financial manager with extensive public company experience, has agreed to take on the CFO position, which enables us to move Kelly to the Asset and Operational Integration post described above. Greg will add strength in the near term to our management team.”

Mr. Witherspoon’s financial consulting engagements have included a two-year assignment as President of a chain of hotels and restaurants, and a six-month assignment as Interim President and Chief Financial Officer of an automobile lender. He served as Chief Financial Officer of Aames Financial Corp., a sub-prime mortgage lender, from 1987 to 1998. Aames Financial Corp. became a publicly traded company in 1991 and by 1998 had a market capitalization in excess of $1 billion. Mr. Witherspoon began his career with Deloitte & Touche as a Certified Public Accountant.

On August 23, 2005, the Company received from the Securities and Exchange Commission (the “SEC”) a formal order of investigation relating to the Company's previously announced independent investigation of the past practice of paying improper commissions to purchasing managers of customers in Asia in connection with export sales of recycled ferrous metals. The Company had voluntarily notified the Securities and Exchange Commission and the U.S. Department of Justice of the independent investigation; and instructed its outside law firm to provide those agencies with the information obtained as a result of the investigation; and continues to cooperate fully with those agencies. The previously announced investigation is being conducted by an independent law firm working under the supervision of the Audit Committee of the Company's Board of Directors (the “Board”).

Schnitzer Steel Industries, Inc. is one of the nation’s largest recyclers of ferrous metals, a leading self-service used auto parts retailer with 30 locations in the U.S. and Canada, and manufacturer of finished steel products. The Company, with its joint venture partners, process approximately 5.4 million tons of recycled ferrous metals per year as well as trades nearly 3.0 million tons. In addition, the Company’s steel mill has an annual production capacity of approximately 700,000 tons of finished steel products. The Company and its joint venture partners operate primarily along the West Coast and Northeastern seaboard of the United States.

CONTACT:	Schnitzer Steel Industries, Inc.
	Tom Zelenka, 503-323-2821
	www.schnitzersteel.com
	ir@schn.com

EX-99.2

EXHIBIT 99.2

SCHNITZER STEEL INDUSTRIES, INC.

To: Employees of Schnitzer Steel Industries, Inc.

From: John Carter

Date: August 24, 2005

Thanks to the efforts of so many of you at Schnitzer Steel (SSI), we have remained steadily profitable despite today’s changing markets. Our businesses are running smoothly. What’s more, as I have looked beneath the organizational surface of our company during my first months as chief executive, I have been impressed by the depth and quality of our teams of operating people.

In this note to all employees, I wanted to look beyond everyone’s day-to-day focus to offer my perspective to you on where our company is headed and to address questions about the investigation that began last year.

We are already taking important steps to strengthen our company. One step, which we recently announced, was our agreement to purchase a great addition to our auto parts business, assuming that the due diligence we are undertaking goes smoothly. The acquisition of Greenleaf will substantially increase the size and geographic footprint of our Pick–N–Pull business operations. As I’ve said from the start, I am a believer in the potential of our auto parts business. After seeing first hand how well our teams of people can run these businesses and how well they fit with the rest of our metals recycling operations, I am even more convinced of their potential for continuing growth. As we begin working to integrate these operations into our business, I believe they will be able to teach us new things about the business — and I know their leaders are looking forward to applying our systems to improve their business.

Also in a few weeks, a sizable group of people will join Schnitzer Steel as a result of our separation of the Hugo Neu / Schnitzer joint venture. They run the successful scrap processing businesses in New England and Hawaii, as well as global trading businesses. When they and their operations become a part of Schnitzer Steel, we will have a strong presence on both U.S. coasts, and we will extend our reach from the four export markets we serve today to multiple major, world markets on both the Pacific and the Atlantic.

We have also recently been working on a smaller transaction, but one we consider important, that will result in the buy-out of our partners in Metals Recycling LLC, a company in which we now own a significant share. When this deal closes, we will add strong management leadership and a clear alignment of interests among our New England operations.

All of these developments will present us with challenges in appropriately integrating the new business organizations with SSI, and we are addressing those challenges directly. Kelly Lang, who has been serving as our Acting CFO, has agreed to take on the post of Vice President for Asset and Operational Integration, in order to give us the benefit of his experience and knowledge of our business and achieve a smooth and efficient melding of these new pieces into our existing businesses. We are grateful for Kelly’s willingness to take on this operational challenge, and thank him for his long service on the financial side of the business. Kelly has been directly involved in the negotiations for the aforementioned additions to our business, and his in-depth knowledge of the deals will serve us well.

We are introducing today a new interim Chief Financial Officer, Greg Witherspoon, who will take on that post during our search for a permanent Chief Financial Officer. Greg has had extensive public company experience. He has agreed to take on the Chief Financial Officer position, which enables us to move Kelly to the Asset and Operational Integration post described above. We would like to extend a warm welcome to Greg, and look forward to working with him at SSI. We are fortunate to have someone of his talent and experience step into this job.

You will notice that I bring to SSI a philosophy from my previous experience that emphasizes the importance of the senior management team’s strength and diversity of experience. I believe in moving people around to different parts of the business(where it makes sense) to better learn the fundamentals of the business, and believe firmly that the management team works better with improved knowledge of all the parts of our company operations, including the central services. We will continue to add strength and depth to the team, and broaden their experience base in our businesses.

You probably have noticed that we have launched efforts to improve the business where you work. These include efforts to make small but important, system-wide improvements in our business — because we know that constant attention to better execution is one way to win in the marketplace. We have added a new Chief Information Officer, Larry Luck, who is already making a positive impact on our strategy and approach to IT issues. Larry has an excellent background in sophisticated information systems, and how to better make the investments we have made in those systems work for us. We will have another new employee, Tamara Adler, join us in September to assist us as Vice President of Strategy and Market Development. In her functional position she will effectively become our Chief Strategic Officer, and will provide us with significant depth in evaluating new market issues and opportunities. Tamara has a wealth of experience in financial and banking areas, which will serve us well as we look at growth opportunities in the markets we serve. We are fortunate to be able to attract both of them, and they will make a measurable difference in our capabilities in house. In addition, we are making sizeable investments in several facilities; the largest, which was begun under the old joint venture, is the major rebuilding of the metals recycling facility in Boston harbor. We are installing new shredders in Oakland and Portland, and are rebuilding our dock in Portland. We continue to make significant investments in Cascade Steel.

At the same time, the Board of Directors and our team in Portland continue to look for other opportunities to put to good use our financial resources and know-how. We have identified a number of possible additional investments that might expand our businesses—of course investments always involve risks, and it’s our intention to move forward with care and discipline. We have commented earlier on our desire to make all of our assets work harder to build shareholder value, and our willingness to look at a variety of ways to achieve that objective. We look forward to keeping you updated on the progress of these efforts to grow our businesses and create new opportunities for everyone at SSI.

As I speak with people around the company, I sometimes am asked about the investigation that began last year. Let me focus briefly on that matter as well. An independent law firm working under the supervision of the Audit Committee of the Board of Directors is continuing its investigation of the past practice of paying improper commissions to purchasing managers of

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customers in Asia in connection with our export sales. The Company recently received from the Securities and Exchange Commission (SEC) a formal order of investigation relating to the independent investigation. The Company had voluntarily notified the Securities and Exchange Commission and the U.S. Department of Justice of the independent investigation; and instructed its outside law firm to provide those agencies with the information obtained as a result of the investigation; and continues to cooperate fully with those agencies. The Board has authorized the disclosure to the pertinent authorities of all facts obtained in the investigation and the company recognizes the seriousness of the issue raised by the conduct that has been disclosed. The conduct uncovered by the investigation is not consistent with the company’s commitment to comply with the law and to conduct its business in an upright and ethical manner. My first note to you centered on that point, and it will always be a part of our communications to you. The Board and management are firmly committed to finding any past wrongdoing and putting in place the systems, controls and commitment aimed at preventing such conduct from recurring in the future.

I hope you agree with me that our company is on the right path, and its prospects are excellent. As I look at all our recent news and progress around our company, I am certain we have strategies and momentum to create new opportunities in the future – and we have the people and resources and desire to build on our leadership. I want to thank everyone for your efforts, dedication and commitment so far. And I look forward to working with all of you in the coming months as we build on Schnitzer Steel’s strength.

Certain statements in this correspondence are “forward-looking statements" within the meaning of U.S. federal securities laws. The Company intends that these statements be covered by the safe harbors created under these laws. These forward-looking statements include, but are not limited to, statements about the expectations regarding the Greenleaf acquisition, the Metals Recycling LLC buy-out and the separation of the Hugo Neu / Schnitzer joint venture and our strategy and future investments. These forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from the information set forth in these forward-looking statements include the inability to satisfy any closing conditions to the Greenleaf acquisition, the Metals Recycling LLC buy-out or the separation of the Hugo Neu joint venture, actions or inactions of government regulators and other third parties, our ability to successfully implement our strategy and our liquidity needs exceeding expected levels and other factors, some of which are discussed in the Company’s most recent annual report on Form 10-K and its most recent quarterly report on Form 10-Q. Many of these factors and events are beyond the Company's ability to control or predict. Given these uncertainties, readers are cautioned not to place undue reliance on the forward-looking statements, which only speak as of the date of this correspondence. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this correspondence or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

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