Summary of Metals Recycling Business Results
| Item | Q1 '12 | Q1 '11 | Change |
| Total Revenues | 728 | 592 | 23% |
| Ferrous Revenues | 578 | 481 | 20% |
| Ferrous Volumes | 1,232 | 1,231 | - |
| Avg. Net Ferrous Sales Prices ($/LT) | 432 | 353 | 22% |
| Nonferrous Revenues | 142 | 108 | 31% |
| Nonferrous Volumes | 137 | 111 | 23% |
| Avg. Net Nonferrous Sales Prices ($/LB) | 1 | 0.94 | 6% |
| Operating Income | 13 | 26 | -49% |
In USD millions, except selling prices
Fe volumes in '000s long tonnes
NFe volumes in million pounds
Sales Volumes: Ferrous sales volumes of 1.2 million tonnes were in line with the prior year record first quarter but were down from the run rate of the prior two quarters due to the weakening market conditions during the quarter. Nonferrous sales volumes, while up 23% compared to the prior year quarter, were also down from the prior two quarters due to market conditions.
Export customers accounted for 74% of total ferrous sales volumes. Our ferrous and nonferrous products were shipped to 15 countries in the first quarter. The top ferrous export destinations were China and Turkey. The top nonferrous markets were China and the United States.
Pricing: Average ferrous and nonferrous prices increased 22% and 6%, respectively, compared to prices in the first quarter of fiscal 2011. Despite the higher year over year average prices, market weakness during the quarter resulted in a significant slowdown in customer buying patterns which was followed by a sharp decline in sales prices.
Margins: Operating income per ferrous ton was USD 11 in the first quarter of fiscal 2012, a decrease of 49% compared to USD 21 per tonne in the first quarter fiscal 2011. Operating income was primarily impacted by higher average inventory costs which did not decline as fast as cash purchase prices. Conversely, the first quarter of fiscal 2011 experienced a rising price environment which did not result in a similar compression in operating margins. In addition, SG&A costs were higher as compared to the prior year first quarter, including the impact of acquisitions completed in fiscal 2011.
Metals Recycling Business: Outlook
The following summary of management's outlook for the Metals Recycling Business in the second quarter of fiscal 2012 is subject to uncertainty that may affect future results.
Sales Volumes: Ferrous and nonferrous sales volumes are expected to increase slightly from first quarter levels. As always, quarterly sales volumes are highly dependent upon the timing of shipments.
Pricing: Ferrous and nonferrous average net selling prices are expected to approximate average first quarter levels.
Margins: Operating income per ferrous ton is expected to be approximately double the first quarter of fiscal 2012. While the early part of the second quarter will be impacted by lower prices for sales contracted in the first quarter, margins are expected to improve as the second quarter progresses.
