PORTLAND, Ore., Jan. 07, 2025 (GLOBE NEWSWIRE) -- Radius Recycling, Inc. (NASDAQ: RDUS) today reported results for the first quarter of fiscal 2025 ended November 30, 2024.
The Company reported a loss per share from continuing operations of $(1.30) and a net loss of $(37) million in the first quarter of fiscal 2025, compared to ($0.64) and ($18) million, respectively, in the prior year first quarter, with the difference substantially driven by a detriment on income tax in the current quarter. Adjusted EBITDA was break-even in the first quarter of fiscal 2025, compared to $1 million in the prior year first quarter. Adjusted loss per share from continuing operations was $(1.33) in the first quarter of fiscal 2025, compared to ($0.64) in the prior year. The Company's adjusted results in the first quarter of fiscal 2025 exclude $2 million in insurance recovery gains related to a legacy environmental matter, which are included in reported results.
The Company's operating results were relatively stable year-over-year, although market conditions for ferrous, nonferrous, and steel diverged materially. Contribution from recycled metals improved year-over-year. This was driven by the benefits from productivity efficiencies implemented over the last year and by stronger nonferrous demand. This demand resulted in 12% higher nonferrous average net selling prices and higher metal margins, which more than offset the impact of softer global ferrous markets, that led to 5% lower average net ferrous prices due in part to elevated levels of Chinese steel exports. Finished steel contribution was lower year-over-year due to weaker domestic steel market conditions, with average net selling prices down 7%, leading to a contraction in metal margin year-over-year. This was further exacerbated by lower mill utilization in the first quarter of fiscal 2025 partly due to a scheduled maintenance outage. Consolidated results benefited from a 10% year-over-year reduction in consolidated Selling, General, and Administrative (SG&A) costs.
On a sequential basis, operating performance declined in significant part due to seasonally lower sales volumes for all of the Company's products. In addition, lower average net selling prices for ferrous and nonferrous metals of 3% and 6%, respectively, led to a compression in metal margins including a detriment from nonferrous price volatility during the period. Reduced contribution from finished steel driven by a 3% sequential decline in average net selling prices and lower mill utilization, further impacted performance.
Tamara Lundgren, Chairman and Chief Executive Officer, said, "While market conditions during the quarter were more challenging than a year ago, our year-over-year consolidated operating results withstood the additional headwinds. The contribution from our recycled metals business improved versus a year ago, driven by benefits realized from our cost reduction and productivity measures and stronger nonferrous demand, which offset the tight scrap environment and the softer global ferrous markets. The contribution from finished steel declined year-over-year due to weaker domestic steel conditions and a scheduled maintenance outage. Our steel mill utilization of 81%, while down sequentially, was still higher than the U.S. average of 75%, reflecting relatively stronger markets for long products.”
Ms. Lundgren continued, "We expect inventory rebuilding and seasonality will drive improved demand in the second half of our fiscal year. In the longer-term, the demand for recycled metals remains positive, underpinned by increased investments in infrastructure, including for energy projects, industrial reshoring, continued growth in U.S. electric arc furnace steelmaking capacity, and the transition to low-carbon technologies. Our strategic initiatives focused on increased metal extraction and 3PRTM are aligned with these structural demand tailwinds and support expanded margins and volumes.”
| Summary Results | |||||||||||
| ($ in millions, except per share and per ferrous ton amounts) | |||||||||||
| Quarter | |||||||||||
| 1Q25 | 4Q24 | 1Q24 | |||||||||
| Revenues | $ | 657 | $ | 771 | $ | 673 | |||||
| Gross margin (total revenues less cost of goods sold) | $ | 33 | $ | 52 | $ | 39 | |||||
| Selling, general and administrative expense | $ | 57 | $ | 61 | $ | 63 | |||||
| Net income (loss) | $ | (37 | ) | $ | (16 | ) | $ | (18 | ) | ||
| Net income (loss) per ferrous ton(5) | $ | (33 | ) | $ | (13 | ) | $ | (15 | ) | ||
| Diluted income (loss) per share from continuing operations attributable to Radius shareholders | |||||||||||
| Reported | $ | (1.30 | ) | $ | (0.56 | ) | $ | (0.64 | ) | ||
| Adjusted(1) | $ | (1.33 | ) | $ | (0.41 | ) | $ | (0.64 | ) | ||
| Adjusted EBITDA(1) | $ | - | $ | 17 | $ | 1 | |||||
| Adjusted EBITDA per ferrous ton(1)(5) | $ | - | $ | 13 | $ | 1 | |||||
| Cash flows from (used in) operating activities | $ | (2 | ) | $ | 4 | $ | (1 | ) | |||
| Ferrous sales volumes (LT, in thousands)(2) | 1,106 | 1,249 | 1,152 | ||||||||
| Avg. net ferrous sales prices ($/LT)(3) | $ | 338 | $ | 348 | $ | 354 | |||||
| Nonferrous sales volumes (pounds, in millions)(2) (4) | 177 | 207 | 182 | ||||||||
| Avg. nonferrous sales prices ($/pound)(3) (4) | $ | 1.02 | $ | 1.08 | $ | 0.91 | |||||
| Finished steel average net sales price ($/ST)(3) | $ | 775 | $ | 795 | $ | 831 | |||||
| Finished steel sales volumes (ST, in thousands) | 125 | 140 | 129 | ||||||||
| Rolling mill utilization (%) | 81 | % | 97 | % | 95 | % | |||||
ST = 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.
First Quarter Fiscal 2025 Financial Review and Analysis
Results for the first quarter of fiscal 2025 included a detriment from average inventory accounting of approximately $1 per ferrous ton, similar to both the first and the fourth quarters of fiscal 2024.
The Company's mill utilization rate was 81% in the first quarter of fiscal 2025, including the impact of a scheduled maintenance outage taken during the quarter, compared to 95% and 97% in the prior year's first and fourth quarters, respectively.
Operating cash flow was nearly break-even in the first quarter of fiscal 2025. Total debt was $445 million at the end of the quarter, and debt, net of cash, was $430 million (for a reconciliation of adjusted results and debt, net of cash, to U.S. GAAP, see the table provided in the Non-GAAP Financial Measures section). Capital expenditures were $12 million in the quarter.
The effective tax rate for the first quarter of fiscal 2025 was an expense of approximately 11%, which compared to a benefit of 36% in the prior year's first quarter, primarily driven by the Company's valuation allowance position on its deferred tax assets. During the first quarter of fiscal 2025, the Company returned capital to shareholders through its 123rd consecutive quarterly dividend.
Declaration of Quarterly Dividend
The Board of Directors declared a cash dividend of $0.1875 per common share, payable February 18, 2025 to shareholders of record on February 3, 2025. The Company has paid a dividend every quarter since going public in November 1993.
Analysts' Conference Call: First Quarter Fiscal 2025 Results
A conference call and slide presentation to discuss results will be held on January 8, 2025, at 11:30 a.m. Eastern and will be hosted by Tamara Lundgren, Chairman and Chief Executive Officer, and Stefano Gaggini, Senior Vice President and Chief Financial Officer. The call and accompanying slide presentation will be webcast and accessible under the Events Calendar on the Company's website at: www.radiusrecycling.com/company/investors. Summary financial data is provided in the following pages. The slide presentation and related materials will be available prior to the call on the Company's website.
About Radius Recycling, Inc.
Radius Recycling, Inc. (formerly Schnitzer Steel Industries, Inc.) is one of the largest manufacturers and exporters of recycled metal products in North America with operating facilities located in 25 states, Puerto Rico, and Western Canada. Radius has seven deep water export facilities located on both the East and West Coasts and in Hawaii and Puerto Rico. The Company's integrated operating platform also includes 50 stores which sell serviceable used auto parts from salvaged vehicles and receive over 4 million annual retail visits. The Company's steel manufacturing operations produce finished steel products, including rebar, wire rod, and other specialty products. The Company began operations in 1906 in Portland, Oregon.
| RADIUS RECYCLING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS($ in thousands, except per share amounts) (Unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| November 30, 2024 | August 31, 2024 | November 30, 2023 | |||||||||
| Revenues | $ | 656,537 | $ | 770,816 | $ | 672,897 | |||||
| Cost of goods sold | 623,132 | 718,785 | 633,420 | ||||||||
| Selling, general and administrative expense | 56,684 | 60,974 | 63,102 | ||||||||
| (Income) from joint ventures | (448 | ) | (397 | ) | (673 | ) | |||||
| Asset impairment charges | 184 | - | - | ||||||||
| Restructuring charges and other exit-related activities | 1,897 | 244 | 35 | ||||||||
| Operating income (loss) | (24,912 | ) | (8,790 | ) | (22,987 | ) | |||||
| Interest expense | (8,862 | ) | (8,917 | ) | (4,810 | ) | |||||
| Other income (expense), net | 636 | 66 | (170 | ) | |||||||
| Income (loss) from continuing operations before income taxes | (33,138 | ) | (17,641 | ) | (27,967 | ) | |||||
| Income tax (expense) benefit | (3,791 | ) | 1,759 | 10,170 | |||||||
| Income (loss) from continuing operations | (36,929 | ) | (15,882 | ) | (17,797 | ) | |||||
| Income (loss) from discontinued operations, net of tax | - | (22 | ) | (2 | ) | ||||||
| Net income (loss) | (36,929 | ) | (15,904 | ) | (17,799 | ) | |||||
| Net (income) loss attributable to noncontrolling interests | (244 | ) | (174 | ) | (165 | ) | |||||
| Net income (loss) attributable to Radius shareholders | $ | (37,173 | ) | $ | (16,078 | ) | $ | (17,964 | ) | ||
| Net income (loss) per share attributable to Radius shareholders: | |||||||||||
| Basic: | |||||||||||
| Income (loss) per share from continuing operations | $ | (1.30 | ) | $ | (0.56 | ) | $ | (0.64 | ) | ||
| Net income (loss) per share | $ | (1.30 | ) | $ | (0.56 | ) | $ | (0.64 | ) | ||
| Diluted: | |||||||||||
| Income (loss) per share from continuing operations | $ | (1.30 | ) | $ | (0.56 | ) | $ | (0.64 | ) | ||
| Net income (loss) per share | $ | (1.30 | ) | $ | (0.56 | ) | $ | (0.64 | ) | ||
| Weighted average number of common shares: | |||||||||||
| Basic | 28,573 | 28,511 | 28,219 | ||||||||
| Diluted | 28,573 | 28,511 | 28,219 | ||||||||
| Dividends declared per common share | $ | 0.1875 | $ | 0.1875 | $ | 0.1875 | |||||
| RADIUS RECYCLING, INC.SELECTED OPERATING STATISTICS(Unaudited) | |||
| 1Q25 | |||
| Total ferrous volumes (LT, in thousands)(1) | 1,106 | ||
| Total nonferrous volumes (pounds, in thousands)(1)(2) | 177,255 | ||
| Ferrous selling prices ($/LT)(3) | |||
| Domestic | $ | 331 | |
| Foreign | $ | 340 | |
| Average | $ | 338 | |
| Ferrous sales volume (LT, in thousands) | |||
| Domestic | 477 | ||
| Foreign | 629 | ||
| Total | 1,106 | ||
| Nonferrous average price ($/pound)(2)(3) | $ | 1.02 | |
| Cars purchased (in thousands)(4) | 56 | ||
| Auto stores at period end | 50 | ||
| Finished steel average sales price ($/ST)(3) | $ | 775 | |
| Sales volume (ST, in thousands) | |||
| Rebar | 85 | ||
| Coiled products | 39 | ||
| Merchant bar and other | 1 | ||
| Finished steel products sold | 125 | ||
| Rolling mill utilization(5) | 81 | % | |
ST = Short Ton, which is equivalent to 2,000 pounds
(1) Ferrous and nonferrous volumes sold externally and delivered to our steel mill for finished steel production.
(2) Excludes PGMs in catalytic converters.
(3) Price information is shown after netting the cost of freight incurred to deliver the product to the customer.
(4) Cars purchased by auto parts stores only.
(5) Rolling mill utilization is based on effective annual production capacity under current conditions of 580 thousand tons of finished steel products.
| RADIUS RECYCLING, INC.SELECTED OPERATING STATISTICS(Unaudited) | |||||||||||||||||||
| YTD | |||||||||||||||||||
| 1Q24 | 2Q24 | 3Q24 | 4Q24 | 2024(6) | |||||||||||||||
| Total ferrous volumes (LT, in thousands)(1) | 1,152 | 980 | 1,112 | ()[\]\\.,;:\s@\"]+)*)|(\".+\"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;return b.test(a)}$(document).ready(function(){if(performance.navigation.type==2){location.reload(true)}$("iframe[data-lazy-src]").each(function(b){$(this).attr("src",$(this).attr("data-lazy-src"))});if($(".owl-article-body-images").length){$(".owl-article-body-images").owlCarousel({items:1,loop:true,center:false,dots:false,autoPlay:true,mouseDrag:false,touchDrag:false,pullDrag:false,nav:true})}var a=$("#display_full_text").val();if(a==0){$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:$("#cms_article_id").val()},dataType:"json",success:function(b){},error:function(b,d,c){}})}$(".read-full-article").on("click",function(d){d.preventDefault();var b=$(this).attr("data-cmsArticleId");var c=$(this).attr("data-productId");var f=$(this).attr("data-href");dataLayer.push({event:"paywall_click",paywall_name:"the_manila_times_premium",paywall_id:"paywall_article_"+b});$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:b,productId:c},dataType:"json",success:function(e){window.location.href=$("#BASE_URL").val()+f},error:function(e,h,g){}})});$(".article-embedded-newsletter-form .close-btn").on("click",function(){$(".article-embedded-newsletter-form").fadeOut(1000)})});$(document).on("click",".article-embedded-newsletter-form .newsletter-button",function(){var b=$(".article-embedded-newsletter-form .newsletter_email").val();var d=$("#ga_user_id").val();var c=$("#ga_user_yob").val();var a=$("#ga_user_gender").val();var e=$("#ga_user_country").val();if(validateEmail(b)){$.ajax({url:"/ajax/sendynewsletter",type:"POST",data:{email:b},success:function(f){$(".article-embedded-newsletter-form .nf-message").html(f);$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000);dataLayer.push({event:"newsletter_sub",user_id:d,product_name:"newsletter",gender:a,yob:c,country:e})},error:function(f,h,g){}})}else{$(".article-embedded-newsletter-form .nf-message").html("Please enter a valid email address.");$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000)}});$(document).on("click",".article-embedded-newsletter-form .nf-message",function(){$(this).removeClass("show");$(this).html("")});
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