Radius Recycling Reports Second Quarter Fiscal 2025 Financial Results
Ferrous and Finished Steel Sales Volumes Up Year-Over-Year
Positive Operating and Free Cash Flow
Radius Board Declares Quarterly Dividend
PORTLAND, Ore., April 04, 2025 (GLOBE NEWSWIRE) -- Radius Recycling, Inc. (NASDAQ:RDUS) ("Radius" or the "Company") today reported results for the second quarter of fiscal 2025 ended February 28, 2025.
The Company reported a loss per share from continuing operations of $(1.15) and a net loss of $(33) million in the second quarter of fiscal 2025, compared to ($1.19) and ($34) million, respectively, in the prior year second quarter. Adjusted EBITDA was approximately break-even in the second quarter of fiscal 2025, compared to $3 million in the prior year second quarter. Adjusted loss per share from continuing operations was $(0.99) in the second quarter of fiscal 2025, compared to ($1.04) in the prior year second quarter.
On a year-over-year basis, operating performance in the second quarter of fiscal 2025 was slightly lower primarily due to lower global ferrous and finished steel prices, including as a result of the dampening effect from elevated levels of Chinese steel exports, partially offset by higher ferrous and finished steel sales volumes, stronger nonferrous demand, and benefits from productivity initiatives:
Ferrous average net selling prices were 14% lower year-over-year. This, together with tight scrap flows exacerbated by particularly challenging winter weather conditions, led to a compression in metal spreads compared to the prior year quarter. Domestic and export market conditions diverged in the latter part of the quarter, as domestic ferrous scrap prices increased sharply and mills began restocking. This surge supported margin expansion on domestic shipments, but also contributed to a temporary spread compression on export sales that had already been contracted for the quarter. The impact of average inventory accounting in the second quarter of fiscal 2025 was approximately neutral, compared to a benefit of approximately $2 per ferrous ton in the second quarter of fiscal 2024.
Ferrous sales volumes were 12% higher compared to the prior year quarter, primarily benefiting from a reduction in inventories due to timing of shipments.
Stronger nonferrous demand led to 10% higher average net selling prices. Nonferrous sales volumes were 1% lower year-over-year primarily due to timing of shipments.
The contribution from finished steel was lower year-over-year primarily due to a decline in average net selling prices of 9%, although finished steel prices began to rise in the latter part of the quarter. This was partially offset by 15% higher finished steel sales volumes year-over-year as demand in the Company's Western markets remained healthy. The mill utilization rate was 88% in the second quarter of fiscal 2025, compared to 81% in the prior year's second quarter.
The second quarter of fiscal 2025 reflected the full contribution from the Company's productivity initiatives implemented over the past year, which were the main drivers of the 12% reduction in consolidated Selling, General, and Administrative (SG&A) costs compared to the prior year quarter. Results for the second quarter of fiscal 2025 also included a $3 million gain from the Company's asset monetization program, while the prior year second quarter had included a $2 million gain from insurance recoveries.
In the second quarter of fiscal 2025, the Company generated positive operating cash flow of $20 million, including a benefit to working capital primarily associated with a reduction in inventories on timing of shipments, and free cash flow of $13 million. Total debt was $430 million at the end of the quarter, and debt, net of cash, was $424 million. Capital expenditures were $11 million in the quarter.
The effective tax rate for the second quarter of fiscal 2025 was a benefit of 11% on a pre-tax loss. While the Company continues to be in a valuation allowance position, the tax rate in the second quarter included a favorable true-up resulting primarily from a change in estimates of projected full year performance used in its annual effective tax rate method.
During the second quarter of fiscal 2025, the Company returned capital to shareholders through its 124th consecutive quarterly dividend.
Declaration of Quarterly DividendThe Board of Directors declared a cash dividend of $0.1875 per common share, payable May 5, 2025 to shareholders of record on April 21, 2025. The Company has paid a dividend every quarter since going public in November 1993.
Merger UpdateOn March 13, 2025, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Toyota Tsusho America, Inc. ("TAI") pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, the Company would become a wholly owned subsidiary of TAI (the "Merger"). The Board of Directors of the Company has approved the Merger Agreement and the transactions contemplated thereby, including the Merger. Subject to the satisfaction of the closing conditions, the Company anticipates the Merger to close in the second half of calendar 2025.
Earnings Conference CallAs a result of the pending Merger with TAI, the Company will not be holding a second quarter earnings conference call or webcast.
About Radius Recycling, Inc.Radius is a leading North American recycler of ferrous and nonferrous metals with 53 operating facilities across 25 states, Puerto Rico, and Western Canada. The Company sells its products to U.S. and export customers from its locations on both the East and West Coasts of the U.S., the Southeast, Hawaii, and Puerto Rico. Radius' integrated operating platform also includes 50 stores operating across the U.S. and Western Canada under its Pick-N-Pull brand which sell serviceable used auto parts from salvaged vehicles and receive over 4 million annual retail visits. The Company's electric arc furnace and rolling mill located in McMinnville, Oregon is vertically integrated with its Pacific Northwest metals recycling operations and produces rebar, wire rod, and other specialty products that are sold to customers primarily in the Western U.S. and Western Canada. Radius began operations in 1906 in Portland, Oregon, where it remains headquartered.
Summary Results
($ in millions, except per share and per ferrous ton amounts)
Quarter
Six Months ended
2Q25
1Q25
2Q24
2025
2024
Revenues
$
643
$
657
$
621
$
1,299
$
1,294
Gross margin (total revenues less cost of goods sold)
$
27
$
33
$
40
$
61
$
80
Selling, general and administrative expense
$
55
$
57
$
62
$
112
$
125
Net income (loss)
$
(33
)
$
(37
)
$
(34
)
$
(70
)
$
(52
)
Net income (loss) per ferrous ton(5)
$
(30
)
$
(33
)
$
(35
)
$
(32
)
$
(24
)
Diluted income (loss) per share from continuing operations attributable to Radius shareholders
Reported
$
(1.15
)
$
(1.30
)
$
(1.19
)
$
(2.45
)
$
(1.83
)
Adjusted(1)
$
(0.99
)
$
(1.33
)
$
(1.04
)
$
(2.32
)
$
(1.68
)
Adjusted EBITDA(1)
$
—
$
—
$
3
$
—
$
4
Adjusted EBITDA per ferrous ton(1) (5)
$
—
$
—
$
3
$
—
$
2
Cash flows from (used in) operating activities
$
20
$
(2
)
$
(55
)
$
18
$
(56
)
Ferrous sales volumes (LT, in thousands)(2)
1,094
1,106
980
2,200
2,132
Avg. net ferrous sales prices ($/LT)(3)
$
330
$
338
$
384
$
334
$
368
Nonferrous sales volumes (pounds, in millions)(2) (4)
174
177
176
352
358
Avg. nonferrous sales prices ($/pound)(3) (4)
$
1.03
$
1.02
$
0.94
$
1.02
$
0.93
Finished steel average net sales price ($/ST)(3)
$
756
$
775
$
832
$
765
$
832
Finished steel sales volumes (ST, in thousands)
131
125
114
256
243
Rolling mill utilization (%)
88
%
81
%
81
%
84
%
88
%
LT = Long Ton, which is equivalent to 2,240 poundsST = Short Ton, which is equivalent to 2,000 pounds
(1) See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.(2) Ferrous and nonferrous volumes sold externally and delivered to our steel mill for finished steel production.(3) Price information is shown after netting the cost of freight incurred to deliver the product to the customer.(4) Nonferrous sales volumes and average nonferrous prices excludes platinum group metals ("PGMs") in catalytic converters.(5) May not foot due to rounding.
RADIUS RECYCLING, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS($ in thousands, except per share amounts)(Unaudited)
Three Months Ended
Six Months ended
February 28,2025
November 30,2024
February 29,2024
February 28,2025
February 29,2024
Revenues
$
642,508
$
656,537
$
621,059
$
1,299,045
$
1,293,956
Cost of goods sold
615,011
623,132
580,996
1,238,143
1,214,416
Selling, general and administrative expense
54,943
56,684
62,160
111,627
125,262
(Income) from joint ventures
(188
)
(448
)
(30
)
(636
)
(703
)
Asset impairment charges
—
184
1,476
184
1,476
Restructuring charges and other exit-related activities
1,422
1,897
3,175
3,319
3,210
Operating income (loss)
(28,680
)
(24,912
)
(26,718
)
(53,592
)
(49,705
)
Interest expense
(8,771
)
(8,862
)
(5,803
)
(17,633
)
(10,613
)
Other income (expense), net
209
636
(263
)
845
(432
)
Income (loss) from continuing operations before income taxes
(37,242
)
(33,138
)
(32,784
)
(70,380
)
(60,750
)
Income tax (expense) benefit
4,277
(3,791
)
(1,195
)
486
8,975
Income (loss) from continuing operations
(32,965
)
(36,929
)
(33,979
)
(69,894
)
(51,775
)
Income (loss) from discontinued operations, net of tax
—
—
(31
)
—
(33
)
Net income (loss)
(32,965
)
(36,929
)
(34,010
)
