SCHNITZER STEEL(SCHN) - 2024 Q4 - Annual Results

Financial and Operational Highlights Q4 & Fiscal 2024 Performance Summary Radius Recycling reported a net loss of $16 million for Q4 fiscal 2024, a sequential improvement, with full fiscal year 2024 net loss at $266 million Q4 & Fiscal 2024 Performance Summary | Metric | Q4 2024 | Q3 2024 | Q4 2023 | Fiscal Year 2024 | Fiscal Year 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $771 Million | $674 Million | $718 Million | $2,739 Million | $2,882 Million | | Net Loss | $(16) Million | $(199) Million | $(26) Million | $(266) Million | $(25) Million | | Diluted Loss Per Share | $(0.56) | $(6.97) | $(0.92) | $(9.37) | $(0.92) | | Adjusted Loss Per Share | $(0.41) | $(0.59) | $0.47 | $(2.68) | $0.85 | | Adjusted EBITDA | $17 Million | $9 Million | $49 Million | $29 Million | $144 Million | Key Performance Drivers Improved sequential performance in Q4 was driven by higher sales volumes, stronger nonferrous markets, expanded metal spreads, and cost reduction benefits - Key drivers for sequential improvement included higher sales volumes, stronger nonferrous prices, expanded metal spreads, and benefits from a $70 million annual cost reduction program[4] Sequential Volume and Price Changes (Q4 vs Q3) | Product Category | Sequential Volume Change (Q4 vs Q3) | Sequential Price Change (Q4 vs Q3) | | :--- | :--- | :--- | | Ferrous | +12% | Flat | | Nonferrous | +13% | +4% | | Finished Steel | +11% | N/A | - Rolling mill utilization increased to 97% in Q4, up from 88% in Q3, driven by seasonally stronger construction activity[6] Management Commentary and Outlook Management attributes Q4 results to cost savings and increased volumes, anticipating future benefits from strategic initiatives and potential interest rate declines - Management credits the cost savings program and increased sales volumes for the Q4 performance improvement[7] - Strategic initiatives, including investments in technology and expansion of the recycling services platform, are expected to continue contributing positively to results[7] - The company believes that declines in U.S. interest rates should improve scrap supply flows by boosting consumer, manufacturing, and construction activity[7] Detailed Financial Results Consolidated Statements of Operations Q4 2024 revenues were $770.8 million, resulting in an operating loss of $8.8 million and a net loss of $16.1 million, while fiscal year 2024 saw $2.74 billion in revenues and a $266.4 million net loss due to a goodwill impairment Condensed Consolidated Statements of Operations | ($ in thousands) | Q4 2024 | Fiscal Year 2024 | | :--- | :--- | :--- | | Revenues | $770,816 | $2,738,692 | | Operating Loss | $(8,790) | $(293,981) | | Goodwill Impairment Charges | $0 | $215,941 | | Net Loss Attributable to Radius Shareholders | $(16,078) | $(266,411) | | Diluted Loss Per Share | $(0.56) | $(9.37) | Selected Operating Statistics For fiscal year 2024, ferrous volumes reached 4.5 million long tons, nonferrous volumes 748 million pounds, and finished steel sales 509 thousand short tons, with rolling mill utilization at 90% Operating Metrics (Fiscal Year 2024) | Operating Metric (Fiscal Year 2024) | Volume | Average Price | | :--- | :--- | :--- | | Total Ferrous | 4,493 thousand Long Tons | $358 / Long Ton | | Total Nonferrous | 748,178 thousand Pounds | $1.00 / Pound | | Finished Steel | 509 thousand Short Tons | $818 / Short Ton | - Rolling mill utilization was 97% in Q4 2024, a significant increase from 88% in Q3 2024, and averaged 90% for the full fiscal year[21] Consolidated Balance Sheets As of August 31, 2024, total assets decreased to $1.53 billion, total liabilities increased to $908.0 million due to higher long-term debt, and shareholders' equity declined to $623.1 million Condensed Consolidated Balance Sheets | ($ in thousands) | August 31, 2024 | August 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $609,127 | $550,340 | | Total Assets | $1,533,769 | $1,715,949 | | Total Current Liabilities | $316,570 | $323,930 | | Long-term Debt | $409,082 | $243,579 | | Total Liabilities | $908,029 | $804,290 | | Total Radius Shareholders' Equity | $623,112 | $908,180 | Non-GAAP Financial Measures Reconciliation of Adjusted EPS The company reconciled its GAAP diluted loss per share of $(0.56) for Q4 2024 to an adjusted loss per share of $(0.41), and for the full fiscal year, adjusted the GAAP loss of $(9.37) to $(2.68) Reconciliation of Adjusted Diluted Earnings (Loss) Per Share | ($ per share) | Q4 2024 | Fiscal Year 2024 | | :--- | :--- | :--- | | As Reported (GAAP) | $(0.56) | $(9.37) | | Goodwill impairment charges | — | $7.60 | | Restructuring charges | — | $0.24 | | Other adjustments | $0.14 | $(1.15) | | Adjusted (Non-GAAP) | $(0.41) | $(2.68) | Reconciliation of Adjusted EBITDA Adjusted EBITDA for Q4 2024 was $17 million, reconciled from a net loss of $16 million, while for fiscal year 2024, it was $29 million from a net loss of $266 million Reconciliation of Adjusted EBITDA | ($ in millions) | Q4 2024 | Fiscal Year 2024 | | :--- | :--- | :--- | | Net Loss | $(16) | $(266) | | Plus: Interest, Taxes, D&A | $32 | $69 | | Plus: Goodwill Impairment | $0 | $216 | | Plus: Other Adjustments | $0 | $10 | | Adjusted EBITDA | $17 | $29 | Other Reconciliations Adjusted SG&A for fiscal 2024 was $247 million, and total debt, net of cash, significantly increased to $409.2 million as of August 31, 2024 - Adjusted selling, general and administrative expense for fiscal year 2024 was $247 million, compared to $255 million in fiscal 2023[31] Total Debt, Net of Cash | ($ in thousands) | Aug 31, 2024 | Aug 31, 2023 | | :--- | :--- | :--- | | Total Debt | $414,770 | $249,392 | | Less: Cash | $5,552 | $6,032 | | Total Debt, Net of Cash | $409,218 | $243,360 | Other Information Dividend Declaration The Board of Directors declared a quarterly cash dividend of $0.1875 per common share, marking the company's 122nd consecutive payment - The Board of Directors declared a cash dividend of $0.1875 per common share[14] - This is the company's 122nd consecutive quarterly dividend, having paid one every quarter since November 1993[13][14] About Radius Recycling, Inc. Radius Recycling is a leading North American recycled metal manufacturer and exporter, operating facilities across 25 states, Puerto Rico, and Western Canada, including used auto parts stores and steel manufacturing - Radius Recycling is one of the largest manufacturers and exporters of recycled metal products in North America[16] - The company's operations include 50 used auto parts stores and steel manufacturing facilities in addition to its recycling operations[16][17] Forward-Looking Statements This section contains a standard "safe harbor" statement, indicating that the report includes forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements regarding future events, objectives, and expectations, which are not purely historical[33][34] - These statements are subject to significant risks and uncertainties, including but not limited to economic conditions, market price volatility, supply chain disruptions, and environmental costs[36][37]