Significant Improvements Sequentially and Year-Over-Year
Higher Ferrous, Nonferrous and Finished Steel Sales Volumes
Radius Board Declares Quarterly Dividend
Radius Recycling, Inc. (NASDAQ: RDUS) (“Radius” or the “Company”) today reported results for the third quarter of fiscal 2025 ended May 31, 2025.
The Company reported a loss per share from continuing operations of $(0.59) and a net loss of $(16) million in the third quarter of fiscal 2025, a significant improvement compared to ($1.15) and ($33) million, respectively, in the second quarter of fiscal 2025.
Adjusted EBITDA was $22 million in the third quarter, a significant improvement from approximately break-even in the prior quarter. Adjusted loss per share from continuing operations was $(0.39) in the third quarter, compared to ($0.99) in the second quarter.
The biggest drivers of the sequential performance improvement were significantly higher sales volumes for all the Company’s products, stronger nonferrous and finished steel market conditions and prices, and higher auto parts retail sales.
Nonferrous demand was strong in the third quarter, especially in the domestic market, driving average net selling prices up 7% sequentially. Nonferrous sales volumes increased 23%, supported by seasonally higher supply flows and higher yields from the Company’s metal recovery technology investments.
Ferrous sales volumes were 4% higher sequentially, primarily driven by seasonality on supply flows. In a particularly volatile market environment, ferrous average net selling prices were 3% higher sequentially. Domestically, ferrous demand and prices rose in March on mill restocking activity, before decreasing significantly in the remainder of the quarter on macroeconomic uncertainty. Export ferrous market conditions were weaker, as demand was impacted by increased levels of Chinese semi-finished and finished steel exports, compounded by the uncertain macroeconomic environment. The impact of average inventory accounting was approximately neutral in the third quarter of fiscal 2025, similar to the previous quarter.
Finished steel sales volumes increased 15% sequentially, driven primarily by seasonally stronger construction activity amid continued healthy demand in the Company’s Western markets. Rolling mill utilization reached 107%, significantly higher than 88% in the prior quarter, which contributed to improved operating leverage and a sequential expansion in margins. Finished steel average net selling prices increased 4% sequentially.
In the third quarter of fiscal 2025, the Company generated positive operating cash flow of $3 million. Total debt was $454 million at the end of the quarter, and debt, net of cash, was $438 million. Capital expenditures were $10 million in the quarter.
The effective tax rate for the third quarter of fiscal 2025 was a benefit of 2% on a pre-tax loss, primarily a reflection of the Company’s valuation allowance position.
During the third quarter of fiscal 2025, the Company returned capital to shareholders through its 125th consecutive quarterly dividend.
Declaration of Quarterly Dividend
The Board of Directors declared a cash dividend of $0.1875 per common share, payable August 4, 2025 to shareholders of record on July 21, 2025. The Company has paid a dividend every quarter since going public in November 1993.
Pending Merger
As previously announced, on March 13, 2025, the Company, Toyota Tsusho America, Inc. (“TAI”), and TAI Merger Corporation, a wholly-owned subsidiary of TAI (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving corporation in the Merger as a wholly-owned subsidiary of TAI.
As previously announced, on June 5, 2025, the Company held a special meeting of shareholders, at which the Company’s shareholders approved the proposal to approve the Merger Agreement. The closing of the Merger remains subject to the satisfaction or waiver of customary closing conditions set forth in the Merger Agreement, including the receipt of certain regulatory approvals. Assuming timely satisfaction of necessary closing conditions, the parties to the Merger Agreement expect the Merger to close during the second half of calendar year 2025.
Subsequent Event
As previously reported, on June 20, 2025, the Company and its lenders executed an amendment to the Company’s existing credit agreement, which among other things, reduces the aggregate amount of revolving commitments available from $800 million to $625 million, and provides for certain other modifications.
Earnings Conference Call
As a result of the pending Merger with TAI, the Company will not be holding a third quarter earnings conference call or webcast.
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