Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) Q1 2023 Earnings Call Transcript

Stefano Gaggini: Yes, good morning, Emily. As we have noted in our prepare remarks, the net debt has increased as you mentioned, but I would want to point out that a reason right for that increase during the quarter obviously was from our working capital increase that we saw from seasonality as well as those delayed shipments and we would expect that to be absorbed and to be a benefit to working capital and therefore leading to a reduction in net debt in the second quarter accordingly. So that that’s one Q1 aspect that would not be expected to continue into Q2 and actually to reverse. While we don’t have a target for debt to EBITDA or overall leverage ratio, we continue to feel that our balance sheet is very strong with net debt reducing as I mentioned, the expectation going forward.

We have a strong track record, multi-year track record of being able to generate strongly positive cash flow, operating cash flow through the cycle. and we would expect that to continue in the current year and certainly targeting free cash flow that would allow us to reduce net debt and use that free cash flow for our capital — balanced capital allocation overall.

Emily Chang: Great. Understood. Thank you, Stefano.

Operator: Alright, ladies and gentlemen, this concludes our Q&A session. I will turn the call back to Tamara Lundgren for final remarks.

Tamara Lundgren: Thank you, Carmen and thank you all for your time today. We look forward to speaking with you again in April when we report our second quarter results. In the interim, stay safe and stay well, thank you.

Operator: And with that, ladies and gentlemen, we thank you for participating in today’s program. You may now disconnect. Have a good day.