Fourth Quarter Revenues Up 21% and Diluted EPS from Continuing Operations up 66% to $0.58

Full Year Revenues Up 29% and Diluted EPS from Continuing Operations of $2.86

PORTLAND, Ore.--(BUSINESS WIRE)--October 20, 2010--Schnitzer Steel Industries, Inc. (Nasdaq:SCHN) today reported diluted earnings per share from continuing operations of $0.58 for its fiscal 2010 fourth quarter ended August 31, 2010. This compares with diluted earnings per share from continuing operations of $0.35 for the same quarter of fiscal 2009.

For the 2010 fiscal year, Schnitzer reported full year revenues of $2.3 billion, compared to $1.8 billion in fiscal year 2009, and diluted earnings per share from continuing operations of $2.86, compared to a loss per share from continuing operations of ($0.99) in fiscal 2009.

“We delivered strong financial and operating performance in fiscal 2010 continuing an overall upward trend,” said Tamara Lundgren, President and Chief Executive Officer. “Our dedicated focus on improving our operating efficiencies, enhancing our supply networks and investing in growth capital projects significantly improved our financial and operating performance despite a sluggish domestic economy.”

“While the industry as a whole benefited from higher demand for scrap globally during fiscal year 2010, we achieved significant profit-enhancing milestones within each of our operating segments. The net result was balanced earnings and cash flow generation which enabled us to maintain a strong balance sheet while reinvesting capital in technology and acquisitions, as well as opportunistically returning capital to shareholders through share repurchases,” said Lundgren.

In the fourth quarter, the Metals Recycling Business shipped ferrous volumes of 1.1 million tons and record nonferrous volumes of 139 million pounds while delivering solid revenue and operating income growth over the prior year fourth quarter.

Summary of Metals Recycling Business Results
($ in millions, except selling prices; Fe volumes
000s long tons; NFe volumes Ms lbs)
	Fourth Quarter		Fourth Quarter		Third Quarter		Fiscal Year		Fiscal Year
		2010		2009		2010		2010		2009
Total Revenues	$	556	$	452	$	618	$	1,980	$	1,508
Ferrous Revenues	$	431	$	371	$	496	$	1,559	$	1,249
Ferrous Volumes		1,124		1,290		1,175		4,231		4,189
Avg. Net Ferrous Sales Prices ($/LT)⁽¹⁾	$	342	$	251	$	378	$	328	$	264
Nonferrous Volumes		139		123		124		478		397
Avg. Net Nonferrous Sales Prices ($/lb)⁽¹⁾	$	0.84	$	0.63	$	0.94	$	0.83	$	0.61
Operating Income	$	21	$	21	$	53	$	118	$	13

(1) Sales prices are shown net of freight

“We achieved record quarterly nonferrous volumes following a strong third quarter, driven by continued improvements in joint product recovery due to our steady investments in technology,” said Lundgren. “Ferrous prices declined as expected from the third quarter, but remained at attractive levels driven by solid demand from the emerging markets.”

Sales Volumes: Fourth quarter volumes for ferrous scrap declined slightly from the volumes in the previous quarter. Nonferrous volumes were a quarterly record, reflecting continuing improvements in the separation and extraction of nonferrous metals from the ferrous shredding process.

Export customers accounted for approximately 75% of total ferrous sales volume, including shipments to 12 countries. The top export destinations were China, South Korea and Taiwan.

Pricing: Sales prices for ferrous scrap averaged $342 per ton in the fourth quarter of fiscal 2010, a decline of 10% from the third quarter. Pricing for shipments in the first two months of the fourth quarter reflected the sharp drop in market prices that occurred at the end of the third quarter before the market stabilized for shipments in August. Nonferrous prices in the fourth quarter declined a comparable amount.

Average ferrous and nonferrous prices during the quarter were 36% and 33% higher, respectively, than comparable prices in the fourth quarter of fiscal 2009, despite the decline in prices from the third quarter.

Margins: Operating income margin was $19 per ferrous ton in the fourth quarter of fiscal 2010, compared to $45 per ton in the third quarter, and $16 per ton in the fourth quarter of fiscal 2009. The decline in operating income per ton compared to the third quarter was a result of the sharp drop in selling prices from the peaks during the third quarter and average inventory costs which declined at a slower rate.

The following summary of management’s outlook for the Metals Recycling Business in the first quarter of fiscal 2011 is subject to uncertainty that may affect future results.

Sales Volumes: Ferrous sales volumes are expected to increase slightly from the volumes in the fourth quarter, reflecting continuing steady export demand. Nonferrous sales volumes are expected to approximate or decline slightly from the record fourth quarter volumes, while remaining higher than the volumes shipped in the first quarter of fiscal 2010. As always, quarterly sales volumes depend heavily on the timing of shipments.

Pricing: Market prices for ferrous scrap are expected to approximate fourth quarter prices, while remaining significantly higher than the prices achieved in the first quarter of fiscal 2010. Nonferrous average prices are expected to improve slightly from the fourth quarter.

Margins: First quarter operating income per ton is expected to approximate the full year average achieved in fiscal 2010.

The Auto Parts Business reported record self-service revenues in fiscal 2010 and completed the year with a fourth consecutive quarter of year-over-year improvement in operating income in the fourth quarter. Revenues for the fourth quarter of FY10 declined slightly from the third quarter due to lower scrap prices for its autobodies. Operating margins were further reduced by average inventory costs which fell more slowly than scrap revenues per car.

“Car purchase volumes, a key driver of the Auto Parts Business, remained strong, increasing 13% over the prior year quarter. While lower commodity prices impacted margins in the last quarter, enhanced supply channels, improved production operating efficiencies and new stores all contributed to our healthy full-year performance,” said Lundgren.

Revenues: Revenues from continuing operations increased $18 million, or 41% year-over-year, while declining $4 million, or 6%, compared to the third quarter of fiscal year 2010. The improvements compared to the fourth quarter of fiscal 2009 reflect higher revenues across all major components of sales: cores, scrap, parts and admissions, and increases in vehicle purchases. The slight decrease compared to the third quarter primarily reflects lower commodity prices.

Margins: Operating profit margins of 15% reflected the impact of average inventory costs which declined at a significantly slower rate than the decline in commodity prices due to the sharp drop in the scrap markets toward the end of the third quarter. Operating profit margins from continuing operations for the full year were 21%, compared to 2% in fiscal 2009.

The following summary of management’s outlook for the Auto Parts Business in the first quarter of fiscal 2011 is subject to uncertainty that may affect future results.

Revenues: Compared with the fourth quarter of fiscal 2010, revenues in the first quarter of fiscal 2011 are expected to increase slightly due to normal seasonal improvements in admissions and parts sales.

Margins: First quarter margins are expected to improve from the fourth quarter due to improved parts sales and lower inventory values relative to commodity prices. Margins for the quarter are expected to approximate the average margins achieved during fiscal 2010.

The Steel Manufacturing Business delivered break-even financial results during the fourth quarter despite continued softness in the markets for long steel products on the West Coast.

Summary of Steel Manufacturing Business Results
($ in millions, except selling prices;
volume in thousands of tons)
	Fourth Quarter			Fourth Quarter		Third Quarter		Fiscal Year			Fiscal Year
	2010			2009		2010		2010*			2009*
Revenues	$	74		$	66	$	86	$	285		$	263
Avg. Net Sales Prices ($/T)⁽¹⁾	$	618		$	509	$	635	$	587		$	617
Finished Goods Sales Volumes⁽¹⁾		116			115		131		444			381
Operating Income (Loss)	$	(0	)	$	1	$	4	$	(6	)	$	(42	)

(1) Excludes billet sales

“Our ability to deliver break-even results in this weak economic environment demonstrates our ability to optimize operating performance and product flexibility,” said Lundgren. “We remain focused on reducing our controllable costs and improving productivity so that we are well-positioned when domestic market demand for finished steel products improves.”

Sales Volumes: Finished goods sales volumes declined 12% over the third quarter, primarily reflecting a slightly weaker environment for steel products used in construction.

Pricing: Average net sales prices for finished steel products declined by 3% to $618 per ton from the third quarter, primarily driven by a change in product mix.

Margins: The slight reduction in margins compared to the third quarter was a result of lower capacity utilization driven by lower sales volumes during the quarter.

The following summary of management’s outlook for the Steel Manufacturing Business in the first quarter of fiscal 2011 is subject to uncertainty that may affect future results.

Sales Volumes: Overall market demand is expected to remain weak in the first quarter of fiscal 2011, resulting in sales volumes slightly below the volumes delivered in the first quarter of fiscal 2010.

Pricing: Average sales prices are expected to approximate the levels from the fourth quarter.

Margins: First quarter fiscal 2011 operating profit margins are expected to be negative but improved from the first quarter of fiscal 2010.

During the quarter, the Company repurchased 413 thousand shares at a cost of $17 million. Under authorities granted by its Board of Directors, the Company may repurchase an additional 3.5 million shares.

The Company completed the sale of its GreenLeaf full-service used auto parts business to LKQ Corporation on October 2, 2009. For comparison purposes, the net losses and losses per share directly attributable to GreenLeaf for prior periods are disclosed separately in the Company's financial statements as "Discontinued Operations."

A conference call and slide presentation to discuss results will be held today, October 20, 2010, at 5:00 p.m. EDT. It will be hosted by Tamara Lundgren, President and Chief Executive Officer, and Richard Peach, Chief Financial Officer. The call and the slides will be webcast and accessible on the Company's website at www.schnitzersteel.com.

Summary financial data provided in the following pages. The slides and related materials will be available prior to the call on the website.

SCHNITZER STEEL INDUSTRIES, INC.
FINANCIAL HIGHLIGHTS
(in thousands, except per share amounts)
(Unaudited)

		For the Three Months Ended									Fiscal year ended
		August 31,			May 31,			August 31,			August 31,			August 31,
		2010 ⁽¹⁾			2010 ⁽¹⁾			2009 ⁽¹⁾			2010 ⁽¹⁾			2009 ⁽¹⁾

REVENUES:

Metals Recycling Business:
	Ferrous sales	$	431,002		$	495,658		$	371,247		$	1,558,664		$	1,249,308
	Nonferrous sales		121,798			120,527			79,452			412,927			251,508
	Other sales		3,012			1,951			1,417			8,179			6,839
	TOTAL MRB SALES		555,812			618,136			452,116			1,979,770			1,507,655

Auto Parts Business			63,589			67,580			45,099			241,233			153,207
Steel Manufacturing Business			74,454			86,407			65,891			285,085			263,269
Intercompany sales eliminations			(54,764	)		(68,584	)		(36,548	)		(204,848	)		(136,901	)
	TOTAL	$	639,091		$	703,539		$	526,558		$	2,301,240		$	1,787,230


INCOME (LOSS) FROM CONTINUING OPERATIONS:

Metals Recycling Business		$	20,808		$	53,061		$	20,505		$	118,449		$	12,552
Auto Parts Business			9,635			18,173			8,072			51,096			3,564
Steel Manufacturing Business			(77	)		3,904			643			(5,862	)		(42,000	)
Corporate expense			(6,896	)		(10,547	)		(12,822	)		(36,223	)		(38,352	)
Intercompany eliminations			833			(816	)		(591	)		(1,563	)		13,112
	OPERATING INCOME (LOSS)		24,303			63,775			15,807			125,897			(51,124	)

(1) Excludes discontinued operations

SCHNITZER STEEL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share amounts)
(Unaudited)

			For the Three Months Ended									Fiscal year ended
			August 31,			May 31,			August 31,			August 31,			August 31,
			2010			2010			2009			2010			2009

Revenues			$	639,091		$	703,539		$	526,558		$	2,301,240		$	1,787,230

Cost of goods sold				573,523			598,721			464,383			2,019,764			1,681,942
Selling, general and administrative				41,919			42,779			45,090			158,805			163,410
Environmental matters				150			141			271			(91	)		(5,809	)
(Income) loss from joint ventures				(804	)		(1,877	)		1,007			(3,135	)		(1,189	)

Operating income (loss)				24,303			63,775			15,807			125,897			(51,124	)

Other income (expense):
		Interest expense		(527	)		(503	)		(519	)		(2,343	)		(3,342	)
		Other income		688			201			620			1,779			7,402
		Other income (expense)		161			(302	)		101			(564	)		4,060

Income from continuing operations before income taxes				24,464			63,473			15,908			125,333			(47,064	)

Income tax (expense) benefit				(7,510	)		(21,715	)		(5,240	)		(40,825	)		19,915

Income (loss) from continuing operations				16,954			41,758			10,668			84,508			(27,149	)

Income (loss) from discontinued operations, net of tax				1,191			23			271			(13,832	)		(4,214	)

Net income (loss)				18,145			41,781			10,939			70,676			(31,363	)

Net income attributable to noncontrolling interests				(738	)		(1,328	)		(673	)		(3,926	)		(866	)

Net income (loss) attributable to SSI			$	17,407		$	40,453		$	10,266		$	66,750		$	(32,229	)

Basic:
		Income (loss) per share from continuing operations attributable to SSI ^{(1) (2)}		0.59			1.45			0.36			2.90			(0.99	)
		Income (loss) per share from discontinued operations attributable to SSI		0.04			0.00			0.01			(0.50	)		(0.15	)
		Net income (loss) per share attributable to SSI	$	0.63		$	1.45		$	0.37		$	2.40		$	(1.14	)

Diluted:
		Income (loss) per share from continuing operations attributable to SSI ^{(1) (2)}		0.58			1.43			0.35			2.86			(0.99	)
		Income (loss) per share from discontinued operations attributable to SSI		0.04			0.00			0.01			(0.49	)		(0.15	)
		Net income (loss) per share attributable to SSI	$	0.62		$	1.43		$	0.36		$	2.37		$	(1.14	)

Weighted average number of common shares:
		Basic		27,760			27,898			28,098			27,832			28,159
		Diluted		28,082			28,211			28,415			28,147			28,159

Dividends declared per common share			$	0.017		$	0.017		$	0.017		$	0.068		$	0.068

(1	)	Excludes income attributable to noncontrolling interests
(2	)	Net income (loss) used in EPS calculation:
		Income (loss) from continuing operations	$	16,954		$	41,758		$	10,668		$	84,508		$	(27,149	)
		Net income attributable to noncontrolling interests		(738	)		(1,328	)		(673	)		(3,926	)		(866	)
		Income (loss) from continuing operations attributable to SSI		16,216			40,430			9,995			80,582			(28,015	)
		Income (loss) from discontinued operations, net of tax		1,191			23			271			(13,832	)		(4,214	)
		Net income (loss) attributable to SSI	$	17,407		$	40,453		$	10,266		$	66,750		$	(32,229	)

SCHNITZER STEEL INDUSTRIES, INC.
SELECTED OPERATING STATISTICS
(Unaudited)

			Q1 FY10		Q2 FY10		Q3 FY10		Q4 FY10			Fiscal Year 2010	Q1 FY09		Q2 FY09		Q3 FY09		Q4 FY09			Fiscal Year 2009
Metals Recycling Business
	Ferrous Processing Selling Prices ($/LT)⁽¹⁾
		Domestic⁽²⁾	$	271	$	294	$	368	$	339	$	322	$	371	$	209	$	186	$	250	$	275
		Exports		280		298		382		343		330		353		259		228		251		262
		Average		277		297		378		342		328		359		253		223		251		264


	Ferrous Processing Sales Volume (LT)⁽²⁾
		SMB		122,171		80,728		139,404		115,869		458,172		145,493		29,761		55,162		104,428		334,844
		Domestic		134,595		160,424		197,226		158,487		650,732		129,620		99,275		86,555		101,972		417,422
		Export		499,899		933,123		838,766		849,863		3,121,651		503,635		954,003		895,167		1,083,472		3,436,277
		Total Processed		756,665		1,174,275		1,175,396		1,124,219		4,230,555		778,748		1,083,039		1,036,884		1,289,872		4,188,543


	Nonferrous Average Price ($/LB)⁽¹⁾		$	0.73	$	0.80	$	0.94	$	0.84	$	0.83	$	0.78	$	0.45	$	0.51	$	0.63	$	0.61

	Nonferrous Sales Volume (LB, in 000s)			110,247		104,892		124,283		139,063		478,485		107,359		76,822		90,226		122,649		397,056


Steel Manufacturing Business
	Sales Prices ($/NT)⁽¹⁾⁽³⁾
		Average	$	520	$	556	$	635	$	618	$	587	$	864	$	570	$	524	$	509	$	617

	Sales Volume (NT)⁽³⁾
		Rebar		55,875		42,588		52,792		66,047		217,302		46,917		56,588		52,749		70,542		226,796
		Coiled Products		38,051		47,660		70,738		44,233		200,682		45,051		19,332		25,798		36,949		127,130
		Merchant Bar and Other		6,249		6,147		7,840		5,296		25,532		6,235		6,783		6,820		7,343		27,181
		Total		100,175		96,395		131,370		115,576		443,516		98,203		82,703		85,367		114,834		381,107

Auto Parts Business
	Total self-service locations at end of quarter			43		45		45		45		45		38		40		39		39		39
	Total full-service sites at end of quarter			0		0		0		0		0		18		18		18		18		18

(1) Price information is shown after a reduction for the cost of freight incurred to deliver the product to the customer.
(2) Includes sales to the Steel Manufacturing Business (SMB) for all quarters.
(3) Excludes billet sales.

SCHNITZER STEEL INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except per share amounts)


		August 31, 2010		August 31, 2009
Assets
Current assets:
	Cash and cash equivalents	$	30,342	$	41,026
	Accounts receivable, net		126,156		117,666
	Inventories, net		268,103		184,455
	Other current assets		36,193		67,867
	Total current assets		460,794		411,014

Property, plant and equipment, net			460,810		447,228

Goodwill and other assets			421,814		409,991

	Total assets	$	1,343,418	$	1,268,233

Liabilities and Shareholders’ Equity
Current liabilities:
	Short-term borrowings	$	1,189	$	1,317
	Other current liabilities		158,924		138,812
	Total current liabilities		160,113		140,129

Long-term debt and capital lease obligations			99,240		110,414

Other long-term liabilities			104,433		94,940

Equity:
	Total Schnitzer Steel Industries, Inc. (“SSI”) Shareholders’ equity		975,326		919,367
Noncontrolling interests			4,306		3,383
	Total equity		979,632		922,750
	Total liabilities and shareholders’ equity	$	1,343,418	$	1,268,233

Schnitzer Steel Industries, Inc. is one of the largest manufacturers and exporters of recycled ferrous metal products in the United States with 44 operating facilities located in 14 states and Puerto Rico, including seven export facilities located on both the East and West Coasts and in Hawaii and Puerto Rico. The Company's vertically integrated operating platform also includes its auto parts and steel manufacturing businesses. The Company's auto parts business sells used auto parts through its 45 self-service facilities located in 14 states and in western Canada. With an effective annual production capacity of approximately 800,000 tons, the Company's steel manufacturing business produces finished steel products, including rebar, wire rod and other specialty products. The Company commenced its 105^th year of operations in fiscal 2011.

This news release, particularly the Outlook sections, contains forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding the Company's outlook for the business and statements as to expected product demand, pricing, sales volumes, revenues, operating margins, operating income and benefits of cost containment measures. Such statements can generally be identified because they contain "expect," "believe," "anticipate," "estimate" and other words that convey a similar meaning. One can also identify these statements as statements that do not relate strictly to historical or current facts. Examples of factors affecting the Company that could cause actual results to differ materially from current expectations are the following: volatile supply and demand conditions affecting prices and volumes in the markets for both the Company's products and the raw materials it purchases; world economic conditions; world political conditions; the Company's ability to match output with demand; changes in federal and state income tax laws; government regulations and environmental matters; impact of pending or new laws and regulations regarding imports and exports into the United States and other countries; foreign currency fluctuations; competition; seasonality, including weather; energy supplies; freight rates and availability of transportation; loss of key personnel; the inability to obtain sufficient quantities of scrap metal to support current orders; purchase price estimates made during acquisitions; business integration issues relating to acquisitions of businesses; new accounting pronouncements; availability of capital resources; creditworthiness of and availability of credit to suppliers and customers; adverse impact of climate change, including as a result of treaties, legislation or regulations; and business disruptions resulting from installation or replacement of major capital assets, as discussed in more detail in "Management's Discussion and Analysis of Financial Condition and Results of Operations" or "Risk Factors" in the Company's most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q. One should understand that it is not possible to predict or identify all factors that could cause actual results to differ from the Company's forward-looking statements. Consequently, the reader should not consider any such list to be a complete statement of all potential risks or uncertainties. The Company does not assume any obligation to update any forward-looking statement, except as may be required by law.

CONTACT:
Schnitzer Steel Industries, Inc.
Investor Relations:
Alexandra Deignan
646-278-9711
adeignan@schn.com
or
Media Relations:
Chip Terhune
503-265-6370
cterhune@schn.com
or
Company Info:
www.schnitzersteel.com
ir@schn.com

			Schnitzer Steel Industries, Inc.
			(Registrant)


Dated:	October 20, 2010	By:	/s/ Richard D. Peach
			Name:	Richard D. Peach
			Title:	Sr. V.P. and Chief Financial Officer

Exhibit No.	Description

99.1	Press Release of Schnitzer Steel Industries, Inc. issued on October 20, 2010.

	Fourth		Fourth		Third
	Quarter		Quarter		Quarter		Fiscal		Fiscal
	2010*		2009*		2010*		2010*		2009*
Revenues	$	639	$	527	$	704	$	2,301	$	1,787
Operating Income (Loss)	$	24	$	16	$	64	$	126	$	(51	)
Income (Loss) from Continuing Operations Attributable to SSI**
	$	16	$	10	$	40	$	81	$	(28	)

* Excludes results from discontinued operations
** Excludes the income (loss) attributable to noncontrolling interests

Summary of Auto Parts Business Results
($ in millions, except locations)
	Fourth		Fourth		Third		Fiscal		Fiscal
	Quarter		Quarter		Quarter		Year		Year
	2010*		2009*		2010*		2010*		2009*
Revenues	$	64	$	45	$	68	$	241	$	153
Operating Income	$	10	$	8	$	18	$	51	$	4
Locations (end of quarter)		45		39		45		45		39

* Excludes results from discontinued operations