Radius Recycling Reports Fourth Quarter and Fiscal 2024 Financial Results
Significant Sequential Improvement in Operating and Financial Performance in Q4
Ferrous, Nonferrous and Finished Steel Sales Volumes Up Sequentially
Radius Board Declares Quarterly Dividend
PORTLAND, Ore., Oct. 24, 2024 (GLOBE NEWSWIRE) -- Radius Recycling, Inc. (NASDAQ:RDUS) today reported results for the fourth quarter and fiscal year ended August 31, 2024.
The Company reported a net loss of $(16) million, or $(13) per ferrous ton, and a loss per share from continuing operations in the fourth quarter of fiscal 2024 of $(0.56), a significant improvement compared to the third quarter which included a material goodwill impairment charge.
Adjusted EBITDA in the fourth quarter was $17 million, or $13 per ferrous ton, nearly double as compared to the third quarter which included $7 million of insurance recoveries. Adjusted loss per share from continuing operations was $(0.41) in the fourth quarter.
The biggest drivers of the sequential performance improvement were significantly higher sales volumes for ferrous, nonferrous, and finished steel products, stronger nonferrous market conditions and prices, an expansion in recycled metal spreads, and the ramp-up to the full quarterly run rate of benefits associated with the Company's $70 million annual cost reduction and productivity improvement program.
Nonferrous demand was strong in the fourth quarter, driving average net selling prices up 4% and sales volumes up 13%, sequentially. Ferrous sales volumes increased 12% sequentially including from seasonally higher supply flows and benefits from timing of shipments, while average net selling prices were flat in the fourth quarter as they continued to reflect the dampening effect of continued elevated levels of Chinese steel exports and subdued manufacturing activity in the U.S.
Finished steel sales volumes increased 11% sequentially, driven primarily by seasonally stronger construction activity. Rolling mill utilization was 97% in the fourth quarter compared to 88% in the prior quarter.
Tamara Lundgren, Chairman and Chief Executive Officer, said, "Our results this quarter benefited from our significant cost savings and productivity improvement program and our success in increasing ferrous, nonferrous, and finished steel sales volumes. We expect the execution of our strategic initiatives, including investments in advanced metal recovery technologies, expansion of our recycling services platform, and productivity and cost controls to continue to positively contribute to our performance."
Ms. Lundgren continued, "Tight scrap availability has been our biggest headwind, and declines in U.S. interest rates should benefit consumer, manufacturing, and construction activity which, in turn, should lead to improved scrap supply flows. The structural demand for recycled metals remains strong, underpinned by the global transition to low carbon technologies and demand from the anticipated increase in infrastructure investment."
Summary Results
($ in millions, except per share and per ferrous ton amounts)
Quarter
Year
4Q24
3Q24
4Q23
2024
2023
Revenues
$
771
$
674
$
718
$
2,739
$
2,882
Gross margin (total revenues less cost of goods sold)
$
52
$
46
$
90
$
177
$
308
Selling, general and administrative expense
$
61
$
62
$
69
$
248
$
266
Net loss
$
(16
)
$
(199
)
$
(26
)
$
(266
)
$
(25
)
Net loss per ferrous ton
$
(13
)
$
(178
)
$
(23
)
$
(59
)
$
(6
)
Diluted (loss) earnings per share from continuing operations attributable to Radius shareholders
Reported
$
(0.56
)
$
(6.97
)
$
(0.92
)
$
(9.37
)
$
(0.92
)
Adjusted(1)
$
(0.41
)
$
(0.59
)
$
0.47
$
(2.68
)
$
0.85
Adjusted EBITDA(1)
$
17
$
9
$
49
$
29
$
144
Adjusted EBITDA per ferrous ton(1) (5)
$
13
$
8
$
44
$
7
$
33
Cash flows from (used in) operating activities
$
4
$
(1
)
$
135
$
(53
)
$
139
Ferrous sales volumes (LT, in thousands)(2)
1,249
1,112
1,105
4,493
4,376
Avg. net ferrous sales prices ($/LT)(3)
$
348
$
350
$
357
$
358
$
371
Nonferrous sales volumes (pounds, in millions)(2) (4)
207
183
204
748
739
Avg. nonferrous sales prices ($/pound)(3) (4)
$
1.08
$
1.04
$
0.94
$
1.00
$
0.96
Finished steel average net sales price ($/ST)(3)
$
795
$
817
$
861
$
818
$
930
Finished steel sales volumes (ST, in thousands)
140
126
152
509
521
Rolling mill utilization (%)
97
%
88
%
102
%
90
%
89
%
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.
Fourth Quarter Fiscal 2024 Financial Review and Analysis
Results for the fourth quarter included a detriment from average inventory accounting of approximately $1 per ferrous ton, compared to a detriment of $3 per ferrous ton in the third quarter.
Results for the fourth quarter did not reflect benefits from insurance recoveries, compared to $7 million in benefits recognized in the third quarter of fiscal 2024 upon final settlement of certain property damage and business interruption matters that occurred in prior periods.
Operating cash flow in the fourth quarter was positive at $4 million. Total debt was $415 million and debt, net of cash was $409 million at the end of the quarter. Capital expenditures were $20 million in the fourth quarter, and $76 million for fiscal 2024. The effective tax rate for the fourth quarter was a benefit of 10% on GAAP results and a benefit of 33% on adjusted non-GAAP results.
During the fourth quarter, the Company returned capital to shareholders through its 122nd consecutive quarterly dividend.
Declaration of Quarterly Dividend
The Board of Directors declared a cash dividend of $0.1875 per common share, payable November 26, 2024 to shareholders of record on November 12, 2024. The Company has paid a dividend every quarter since going public in November 1993.
Analysts' Conference Call: Fourth Quarter and Fiscal 2024 Results
A conference call and slide presentation to discuss results will be held today, October 24, 2024, at 11:30 a.m. Eastern and will be hosted by Tamara Lundgren, Chairman and Chief Executive Officer, and Stefano Gaggini, Senior Vice President and Chief Financial Officer. The call and accompanying slide presentation will be webcast and accessible under the Events Calendar on the Company's website at: www.radiusrecycling.com/company/investors. Summary financial data is provided in the following pages. The slide presentation and related materials will be available prior to the call on the Company's website.
About Radius Recycling, Inc.
Radius Recycling, Inc. (formerly Schnitzer Steel Industries, Inc.) is one of the largest manufacturers and exporters of recycled metal products in North America with operating facilities located in 25 states, Puerto Rico, and Western Canada. Radius has seven deep water export facilities located on both the East and West Coasts and in Hawaii and Puerto Rico. The Company's integrated operating platform also includes 50 stores which sell serviceable used auto parts from salvaged vehicles and receive over 4 million annual retail visits. The Company's steel manufacturing operations produce finished steel products, including rebar, wire rod, and other specialty products. The Company began operations in 1906 in Portland, Oregon.
RADIUS RECYCLING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share amounts)
(Unaudited)
Quarter
Year
4Q24
3Q24
4Q23
2024
2023
Revenues
$
770,816
$
673,920
$
717,931
$
2,738,692
$
2,882,224
Cost of goods sold
718,785
628,390
627,880
2,561,591
2,574,513
Selling, general and administrative expense
60,974
62,100
69,217
248,336
265,929
Income from joint ventures
(397
)
(300
)
(704
)
(1,400
)
(2,090
)
Goodwill impairment charges
—
215,941
39,270
215,941
39,270
Other asset impairment charges
—
—
5,797
1,476
5,797
Restructuring charges and other exit-related activities
244
3,275
141
6,729
2,730
Operating loss
(8,790
)
(235,486
)
(23,670
)
(293,981
)
(3,925
)
Interest expense
(8,917
)
(7,368
)
(5,211
)
(26,898
)
(18,589
)
Other income (expense), net
66
(187
)
(273
)
(554
)
(5,562
)
Loss from continuing operations before income taxes
(17,641
)
(243,041
)
(29,154
)
(321,433
)
(28,076
)
Income tax benefit
1,759
44,551
3,423
55,285
2,747
Loss from continuing operations
(15,882
)
(198,490
)
(25,731
)
(266,148
)
(25,329
)
Loss from discontinued operations, net of tax
(22
)
(21
)
(31
)
(76
)
(109
)
Net loss
(15,904
)
(198,511
)
(25,762
)
(266,224
)
(25,438
)
Net (income) loss attributable to noncontrolling interests
(174
)
121
(54
)
(187
)
(353
)
Net loss attributable to Radius shareholders
$
(16,078
)
$
(198,390
)
$
(25,816
)
$
(266,411
)
$
(25,791
)
Net income (loss) per share attributable to Radius shareholders:
