Ferrous, Nonferrous and Finished Steel Sales Volumes Up Sequentially
Radius Board Declares Quarterly Dividend
The Company’s reported and adjusted results differed significantly this quarter. Due primarily to a non-cash goodwill impairment charge reflecting the challenging market conditions for recycled metals experienced during the last year, the Company reported a loss per share from continuing operations of
Adjusted EBITDA in the third quarter was
Nonferrous and ferrous market conditions reflected diverging trends in the third quarter. Global demand for nonferrous recycled metals strengthened throughout the quarter, leading to a 10% sequential increase in average net selling prices and 4% higher sales volumes. However, global demand for ferrous recycled metals was softer sequentially, due in part to continued elevated levels of Chinese steel exports, which led to a 9% decline in average net selling prices. Ferrous sales volumes increased 13% sequentially, benefiting from seasonally higher flows and the sales of cargoes delayed at the end of the prior quarter. Driven by seasonally stronger construction activity, finished steel sales volumes increased 11% sequentially, and rolling mill utilization was 88% compared to 81% in the prior quarter.
“In the current market environment, the constrained supply of unprocessed recycled metals is the main driver leading to compressed margins. We expect that as manufacturing activity improves and construction activity picks up, supply flows should expand. Independent of the timing of that recovery, we are continuing to see benefits from progress on our strategic initiatives which include investments in advanced nonferrous metal recovery technologies and expansion of our recycling services platform.”
Summary Results | |||||||||||||||||||||
($ in millions, except per share and per ferrous ton amounts) | |||||||||||||||||||||
Quarter | Nine Months Ended | ||||||||||||||||||||
3Q24 | 2Q24 | 3Q23 | 2024 | 2023 | |||||||||||||||||
Revenues | $ | 674 | $ | 621 | $ | 810 | $ | 1,968 | $ | 2,164 | |||||||||||
Gross margin | $ | 46 | $ | 40 | $ | 96 | $ | 125 | $ | 218 | |||||||||||
Selling, general and administrative expense | $ | 62 | $ | 62 | $ | 69 | $ | 187 | $ | 197 | |||||||||||
Net (loss) income | $ | (199 | ) | $ | (34 | ) | $ | 14 | $ | (250 | ) | $ | — | ||||||||
Net (loss) income per ferrous ton(5) | $ | (178 | ) | $ | (35 | ) | $ | 12 | $ | (77 | ) | $ | — | ||||||||
Diluted (loss) income per share from continuing operations attributable to Radius shareholders | |||||||||||||||||||||
Reported | $ | (6.97 | ) | $ | (1.19 | ) | $ | 0.48 | $ | (8.82 | ) | $ | — | ||||||||
Adjusted(1) | $ | (0.59 | ) | $ | (1.04 | ) | $ | 0.67 | $ | (2.28 | ) | $ | 0.38 | ||||||||
Adjusted EBITDA(1) | $ | 9 | $ | 3 | $ | 56 | $ | 12 | $ | 96 | |||||||||||
Adjusted EBITDA per ferrous ton(1) (5) | $ | 8 | $ | 3 | $ | 48 | $ | 4 | $ | 29 | |||||||||||
Cash flows from operating activities | $ | (1 | ) | $ | (55 | ) | $ | (21 | ) | $ | (57 | ) | $ | 5 | |||||||
Ferrous sales volumes (LT, in thousands)(2) | 1,112 | 980 | 1,157 | 3,244 | 3,270 | ||||||||||||||||
Avg. net ferrous sales prices ($/LT)(3) | $ | 350 | $ | 384 | $ | 413 | $ | 361 | $ | 376 | |||||||||||
Nonferrous sales volumes (pounds, in millions)(2) (4) | 183 | 176 | 208 | 541 | 535 | ||||||||||||||||
Avg. nonferrous sales prices ($/pound)(3) (4) | $ | 1.04 | $ | 0.94 | $ | 1.01 | $ | 0.97 | $ | 0.97 | |||||||||||
Finished steel average net sales price ($/ST)(3) | $ | 817 | $ | 832 | $ | 924 | $ | 827 | $ | 959 | |||||||||||
Finished steel sales volumes (ST, in thousands) | 126 | 114 | 142 | 369 | 369 | ||||||||||||||||
Rolling mill utilization (%) | 88 | % | 81 | % | 97 | % | 88 | % | 84 | % |
LT = Long Ton, which is equivalent to 2,240 pounds
ST =
(1) See Non-GAAP Financial Measures for reconciliation to
(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.
Third Quarter Fiscal 2024 Financial Review and Analysis
Due to the decline in ferrous prices during the quarter, metal spreads compressed and contributed to an average inventory accounting detriment of approximately
During the third quarter, the Company achieved approximately three-quarters of the quarterly run rate of benefits associated with its previously announced
Operating cash outflow in the third quarter was
During the third quarter, the Company returned capital to shareholders through its 121st consecutive quarterly dividend.
Subsequent Event
As previously reported, on
Declaration of Quarterly Dividend
The Board of Directors declared a cash dividend of
Analysts’ Conference Call: Third Quarter Fiscal 2024 Results
A conference call and slide presentation to discuss results will be held today,
About
RADIUS RECYCLING, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ($ in thousands, except per share amounts) (Unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
2024 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
Revenues | $ | 673,920 | $ | 621,059 | $ | 809,610 | $ | 1,967,876 | $ | 2,164,293 | ||||||||||
Cost of goods sold | 628,390 | 580,996 | 713,685 | 1,842,806 | 1,946,633 | |||||||||||||||
Selling, general and administrative expense | 62,100 | 62,160 | 68,527 | 187,362 | 196,712 | |||||||||||||||
Income from joint ventures | (300 | ) | (30 | ) | (285 | ) | (1,003 | ) | (1,386 | ) | ||||||||||
215,941 | — | — | 215,941 | — | ||||||||||||||||
Other asset impairment charges | — | 1,476 | — | 1,476 | — | |||||||||||||||
Restructuring charges and other exit-related activities | 3,275 | 3,175 | 169 | 6,485 | 2,589 | |||||||||||||||
Operating (loss) income | (235,486 | ) | (26,718 | ) | 27,514 | (285,191 | ) | 19,745 | ||||||||||||
Interest expense | (7,368 | ) | (5,803 | ) | (5,146 | ) | (17,981 | ) | (13,378 | ) | ||||||||||
Other loss, net | (187 | ) | (263 | ) | (1,306 | ) | (620 | ) | (5,289 | ) | ||||||||||
(Loss) income from continuing operations before income taxes | (243,041 | ) | (32,784 | ) | 21,062 | (303,792 | ) | 1,078 | ||||||||||||
Income tax benefit (expense) | 44,551 | (1,195 | ) | (7,221 | ) | 53,526 | (676 | ) | ||||||||||||
(Loss) income from continuing operations | (198,490 | ) | (33,979 | ) | 13,841 | (250,266 | ) | 402 | ||||||||||||
Loss from discontinued operations, net of tax | (21 | ) | (31 | ) | (233 | ) | (54 | ) | (78 | ) | ||||||||||
Net (loss) income | (198,511 | ) | (34,010 | ) | 13,608 | (250,320 | ) | 324 | ||||||||||||
Net loss (income) attributable to noncontrolling interests | 121 | 31 | (148 | ) | (13 | ) | (299 | ) | ||||||||||||
Net (loss) income attributable to Radius shareholders | $ | (198,390 | ) | $ | (33,979 | ) | $ | 13,460 | $ | (250,333 | ) | $ | 25 | |||||||
Net (loss) income per share attributable to Radius shareholders: | ||||||||||||||||||||
Basic: | ||||||||||||||||||||
(Loss) income per share from continuing operations | $ | (6.97 | ) | $ | (1.19 | ) | $ | 0.49 | $ | (8.82 | ) | $ | — | |||||||
Net (loss) income per share | $ | (6.97 | ) | $ | (1.19 | ) | $ | 0.48 | $ | (8.82 | ) | $ | — | |||||||
Diluted: | ||||||||||||||||||||
(Loss) income per share from continuing operations | $ | (6.97 | ) | $ | (1.19 | ) | $ | 0.48 | $ | (8.82 | ) | $ | — | |||||||
Net (loss) income per share | $ | (6.97 | ) | $ | (1.19 | ) | $ | 0.47 | $ | (8.82 | ) | $ | — | |||||||
Weighted average number of common shares: | ||||||||||||||||||||
Basic | 28,479 | 28,454 | 28,114 | 28,385 | 27,980 | |||||||||||||||
Diluted | 28,479 | 28,454 | 28,659 | 28,385 | 28,646 | |||||||||||||||
Dividends declared per common share | $ | 0.1875 | $ | 0.1875 | $ | 0.1875 | $ | 0.5625 | $ | 0.5625 |
RADIUS RECYCLING, INC. SELECTED OPERATING STATISTICS (Unaudited) | |||||||||||||||
YTD | |||||||||||||||
1Q24 | 2Q24 | 3Q24 | 2024 | ||||||||||||
Total ferrous volumes (LT, in thousands)(1) | 1,152 | 980 | 1,112 | 3,244 | |||||||||||
Total nonferrous volumes (pounds, in thousands)(1)(2) | 181,728 | 176,477 | 183,230 | 541,435 | |||||||||||
Ferrous selling prices ($/LT)(3) | |||||||||||||||
Domestic | $ | 342 | $ | 391 | $ | 341 | $ | 357 | |||||||
Foreign | $ | 359 | $ | 381 | $ | 354 | $ | 364 | |||||||
Average | $ | 354 | $ | 384 | $ | 350 | $ | 361 | |||||||
Ferrous sales volume (LT, in thousands) | |||||||||||||||
Domestic | 535 | 483 | 528 | 1,546 | |||||||||||
Foreign | 617 | 497 | 584 | 1,698 | |||||||||||
Total | 1,152 | 980 | 1,112 | 3,244 | |||||||||||
Nonferrous average price ($/pound)(2)(3) | $ | 0.91 | $ | 0.94 | $ | 1.04 | $ | 0.97 | |||||||
Cars purchased (in thousands)(4) | 64 | 67 | 64 | 195 | |||||||||||
Auto stores at period end | 50 | 50 | 50 | 50 | |||||||||||
Finished steel average sales price ($/ST)(3) | $ | 831 | $ | 832 | $ | 817 | $ | 827 | |||||||
Sales volume (ST, in thousands) | |||||||||||||||
Rebar | 94 | 83 | 83 | 260 | |||||||||||
Coiled products | 34 | 30 | 42 | 106 | |||||||||||
Merchant bar and other | 1 | 1 | 1 | 3 | |||||||||||
Finished steel products sold | 129 | 114 | 126 | 369 | |||||||||||
Rolling mill utilization(5) | 95 | % | 81 | % | 88 | % | 88 | % |
(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 | ||||||||||||||||||||
1Q23 | 2Q23 | 3Q23 | 4Q23 | 2023 | ||||||||||||||||
Total ferrous volumes (LT, in thousands)(1) | 851 | 1,263 | 1,157 | 1,105 | 4,376 | |||||||||||||||
Total nonferrous volumes (pounds, in thousands)(1)(2) | 162,720 | 164,796 | 207,714 | 203,707 | 738,937 | |||||||||||||||
Ferrous selling prices ($/LT)(3) | ||||||||||||||||||||
Domestic | $ | 313 | $ | 359 | $ | 414 | $ | 346 | $ | 360 | ||||||||||
Foreign | $ | 356 | $ | 368 | $ | 414 | $ | 363 | $ | 376 | ||||||||||
Average | $ | 340 | $ | 367 | $ | 413 | $ | 357 | $ | 371 | ||||||||||
Ferrous sales volume (LT, in thousands) | ||||||||||||||||||||
Domestic | 432 | 444 | 548 | 528 | 1,952 | |||||||||||||||
Foreign | 418 | 819 | 609 | 577 | 2,424 | |||||||||||||||
Total(6) | 851 | 1,263 | 1,157 | 1,105 | 4,376 | |||||||||||||||
Nonferrous average price ($/pound)(2)(3) | $ | 0.90 | $ | 0.99 | $ | 1.01 | $ | 0.94 | $ | 0.96 | ||||||||||
Cars purchased (in thousands)(4) | 69 | 72 | 78 | 67 | 286 | |||||||||||||||
Auto stores at period end | 51 | 50 | 50 | 50 | 50 | |||||||||||||||
Finished steel average sales price ($/ST)(3) | $ | 1,015 | $ | 943 | $ | 924 | $ | 861 | $ | 930 | ||||||||||
Sales volume (ST, in thousands) | ||||||||||||||||||||
Rebar | 101 | 84 | 97 | 108 | 390 | |||||||||||||||
Coiled products | 16 | 24 | 43 | 43 | 126 | |||||||||||||||
Merchant bar and other | 1 | 1 | 2 | 1 | 5 | |||||||||||||||
Finished steel products sold | 118 | 109 | 142 | 152 | 521 | |||||||||||||||
Rolling mill utilization(5) | 81 | % | 75 | % | 97 | % | 102 | % | 89 | % |
LT = Long Ton, which is equivalent to 2,240 pounds
ST =
(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.
(6) May not foot due to rounding.
RADIUS RECYCLING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS ($ in thousands) (Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 25,189 | $ | 6,032 | ||||
Accounts receivable, net | 205,267 | 210,442 | ||||||
Inventories | 334,284 | 278,642 | ||||||
Other current assets | 51,903 | 55,224 | ||||||
Total current assets | 616,643 | 550,340 | ||||||
Property, plant and equipment, net | 684,627 | 706,805 | ||||||
Operating lease right-of-use assets | 122,964 | 115,686 | ||||||
13,105 | 229,419 | |||||||
Other assets | 115,565 | 113,699 | ||||||
Total assets | $ | 1,552,904 | $ | 1,715,949 | ||||
Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | $ | 5,734 | $ | 5,813 | ||||
Accounts payable | 207,989 | 209,423 | ||||||
Environmental liabilities | 12,547 | 13,743 | ||||||
Operating lease liabilities | 19,444 | 19,835 | ||||||
Other current liabilities | 65,704 | 75,116 | ||||||
Total current liabilities | 311,418 | 323,930 | ||||||
Long-term debt, net of current maturities | 405,514 | 243,579 | ||||||
Environmental liabilities, net of current portion | 52,024 | 53,034 | ||||||
Operating lease liabilities, net of current maturities | 103,464 | 96,086 | ||||||
Other long-term liabilities | 34,459 | 87,661 | ||||||
Total liabilities | 906,879 | 804,290 | ||||||
643,271 | 908,180 | |||||||
Noncontrolling interests | 2,754 | 3,479 | ||||||
Total equity | 646,025 | 911,659 | ||||||
Total liabilities and equity | $ | 1,552,904 | $ | 1,715,949 |
Non-GAAP Financial Measures
This press release contains performance based on adjusted diluted earnings per share from continuing operations attributable to Radius shareholders, adjusted EBITDA, adjusted EBITDA per ferrous ton, and adjusted selling, general, and administrative expense which are non-GAAP financial measures as defined under
Reconciliation of adjusted diluted (loss) earnings per share from continuing operations attributable to Radius shareholders | ||||||||||||||||||||
($ per share) | Three Months Ended | Nine Months Ended | ||||||||||||||||||
3Q24 | 2Q24 | 3Q23 | 2024 | 2023 | ||||||||||||||||
As reported | $ | (6.97 | ) | $ | (1.19 | ) | $ | 0.48 | $ | (8.82 | ) | $ | — | |||||||
7.58 | — | — | 7.61 | — | ||||||||||||||||
Restructuring charges and other exit-related activities, per share | 0.11 | 0.11 | 0.01 | 0.23 | 0.09 | |||||||||||||||
Charges for legacy environmental matters, net, per share(1) | 0.01 | 0.01 | 0.18 | 0.03 | 0.23 | |||||||||||||||
Other asset impairment charges, per share(3) | — | 0.06 | 0.05 | 0.07 | 0.19 | |||||||||||||||
Business development costs, per share | — | — | — | 0.01 | 0.01 | |||||||||||||||
Income tax benefit allocated to adjustments, per share(4) | (1.34 | ) | (0.03 | ) | (0.05 | ) | (1.40 | ) | (0.15 | ) | ||||||||||
Adjusted(5) | $ | (0.59 | ) | $ | (1.04 | ) | $ | 0.67 | $ | (2.28 | ) | $ | 0.38 |
Reconciliation of adjusted EBITDA and adjusted EBITDA per ferrous ton | ||||||||||||||||||||
($ in millions) | Three Months Ended | Nine Months Ended | ||||||||||||||||||
3Q24 | 2Q24 | 3Q23 | 2024 | 2023 | ||||||||||||||||
Net (loss) income | $ | (199 | ) | $ | (34 | ) | $ | 14 | $ | (250 | ) | $ | — | |||||||
Plus loss from discontinued operations, net of tax | — | — | — | — | — | |||||||||||||||
Plus interest expense | 7 | 6 | 5 | 18 | 13 | |||||||||||||||
Plus income tax (benefit) expense | (45 | ) | 1 | 7 | (54 | ) | 1 | |||||||||||||
Plus depreciation and amortization | 24 | 24 | 23 | 72 | 66 | |||||||||||||||
Plus goodwill impairment charges | 216 | — | — | 216 | — | |||||||||||||||
Plus restructuring charges and other exit-related activities | 3 | 3 | — | 6 | 3 | |||||||||||||||
Plus charges for legacy environmental matters, net(1) | — | — | 5 | 1 | 7 | |||||||||||||||
Plus amortization of cloud computing software costs(2) | — | — | — | 1 | — | |||||||||||||||
Plus other asset impairment charges(3) | — | 1 | 1 | 2 | 5 | |||||||||||||||
Plus business development costs | — | — | — | — | — | |||||||||||||||
Adjusted EBITDA(5) | $ | 9 | $ | 3 | $ | 56 | $ | 12 | $ | 96 | ||||||||||
Ferrous sales volume (LT, in thousands) | 1,112 | 980 | 1,157 | 3,244 | 3,270 | |||||||||||||||
Adjusted EBITDA per ferrous ton sold ($/LT) | $ | 8 | $ | 3 | $ | 48 | $ | 4 | $ | 29 |
Reconciliation of Adjusted selling, general and administrative expense: | ||||||||||||||||||||
($ in millions) | Three Months Ended | Nine Months Ended | ||||||||||||||||||
3Q24 | 2Q24 | 3Q23 | 2024 | 2023 | ||||||||||||||||
As reported | $ | 62 | $ | 62 | $ | 69 | $ | 187 | $ | 197 | ||||||||||
Charges for legacy environmental matters, net(1) | — | — | (5 | ) | (1 | ) | (7 | ) | ||||||||||||
Business development costs | — | — | — | — | — | |||||||||||||||
Adjusted(5) | $ | 62 | $ | 62 | $ | 63 | $ | 186 | $ | 190 |
Reconciliation of debt, net of cash | ||||||||||||
($ in thousands) | ||||||||||||
2024 | 2024 | 2023 | ||||||||||
Short-term borrowings | $ | 5,734 | $ | 5,459 | $ | 5,813 | ||||||
Long-term debt, net of current maturities | 405,514 | 368,119 | 243,579 | |||||||||
Total debt | 411,248 | 373,578 | 249,392 | |||||||||
Less: cash and cash equivalents | 25,189 | 13,562 | 6,032 | |||||||||
Total debt, net of cash | $ | 386,059 | $ | 360,016 | $ | 243,360 |
LT = Long Ton, which is equivalent to 2,240 pounds
(1) Legal and environmental charges, net of recoveries, for legacy environmental matters including those related to the Portland Harbor Superfund site and to other legacy environmental loss contingencies.
(2) Amortization of cloud computing software costs consists of expense recognized in cost of goods sold and selling, general, and administrative expense resulting from amortization of capitalized implementation costs for cloud computing IT systems. This expense is not included in depreciation and amortization. No amortization of cloud computing software costs was incurred prior to the first quarter of fiscal 2024; therefore, prior period Adjusted EBITDA amounts are not impacted.
(3) For the three months ended
(4) Income tax allocated to the aggregate adjustments reconciling reported and adjusted diluted (loss) earnings per share from continuing operations attributable to Radius shareholders is determined based on a tax provision calculated with and without the adjustments.
(5) May not foot due to rounding.
Forward-Looking Statements
Statements and information included in this press release by
Forward-looking statements in this press release include statements regarding future events or our expectations, intentions, beliefs, and strategies regarding the future, which may include statements regarding the impact of equipment upgrades, equipment failures, and facility damage on production, including timing of repairs and resumption of operations; the realization of insurance recoveries; the Company’s outlook, growth initiatives, or expected results or objectives, including pricing, margins, volumes, and profitability; completion of acquisitions and integration of acquired businesses; the progression and impact of investments in processing and manufacturing technology improvements and information technology systems; the impacts of supply chain disruptions, inflation, and rising interest rates; liquidity positions; our ability to generate cash from continuing operations; trends, cyclicality, and changes in the markets we sell into; strategic direction or goals; targets; changes to manufacturing and production processes; the realization of deferred tax assets; planned capital expenditures; the cost of and the status of any agreements or actions related to our compliance with environmental and other laws; expected tax rates, deductions, and credits; the impact of sanctions and tariffs, quotas, and other trade actions and import restrictions; the impact of pandemics, epidemics, or other public health emergencies, such as the coronavirus disease 2019 (“COVID-19”) pandemic; the impact of labor shortages or increased labor costs; obligations under our retirement plans; benefits, savings, or additional costs from business realignment, cost containment, and productivity improvement programs; the potential impact of adopting new accounting pronouncements; and the adequacy of accruals. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, and often contain words such as “outlook,” “target,” “aim,” “believes,” “expects,” “anticipates,” “intends,” “assumes,” “estimates,” “evaluates,” “may,” “will,” “should,” “could,” “opinions,” “forecasts,” “projects,” “plans,” “future,” “forward,” “potential,” “probable,” and similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. We may make other forward-looking statements from time to time, including in reports filed with the
Company Contact:
Investor Relations: |
(503) 323-2811 |
mcbennett@rdus.com |
Company Info: |
www.radiusrecycling.com |
ir@rdus.com |
Source:
2024 GlobeNewswire, Inc., source