SCHNITZER STEEL(SCHN) - 2025 Q2 - Quarterly Results

Financial Performance Q2 FY2025 Financial Highlights Radius Recycling reported a Q2 FY2025 net loss of $33 million, an improvement from prior year, with adjusted EBITDA near break-even Q2 FY2025 vs Q2 FY2024 Key Financials | Metric | Q2 FY2025 | Q2 FY2024 | | :--- | :--- | :--- | | Net Loss | $(33) million | $(34) million | | Loss per Share from Continuing Operations | $(1.15) | $(1.19) | | Adjusted Loss per Share from Continuing Operations | $(0.99) | $(1.04) | | Adjusted EBITDA | Approx. break-even | $3 million | Q2 FY2025 Cash Flow and Debt | Metric | Value | | :--- | :--- | | Operating Cash Flow | $20 million | | Free Cash Flow | $13 million | | Total Debt (end of quarter) | $430 million | | Debt, Net of Cash | $424 million | | Capital Expenditures | $11 million | Operational Performance Analysis Operating performance declined due to lower ferrous and finished steel prices, partially offset by higher volumes and reduced SG&A - Ferrous average net selling prices were 14% lower year-over-year, compressing metal spreads, however, ferrous sales volumes were 12% higher, benefiting from a reduction in inventories[5] - Stronger nonferrous demand led to 10% higher average net selling prices, while sales volumes were 1% lower due to the timing of shipments[5] - Finished steel contribution was lower due to a 9% decline in average net selling prices, partially offset by 15% higher sales volumes, with the mill utilization rate increasing to 88% from 81% in the prior year's quarter[5] - Productivity initiatives resulted in a 12% reduction in consolidated Selling, General, and Administrative (SG&A) costs compared to the prior year quarter[5] Corporate Developments Merger Update Radius entered a definitive merger agreement with Toyota Tsusho America, Inc. on March 13, 2025, expected to close in H2 2025 - The Company entered into an Agreement and Plan of Merger with Toyota Tsusho America, Inc. (TAI) on March 13, 2025[8] - Subject to closing conditions, the merger is anticipated to close in the second half of calendar 2025[8] - As a result of the pending merger, the company will not hold a second quarter earnings conference call[9] Declaration of Quarterly Dividend The Board declared a quarterly cash dividend of $0.1875 per common share, marking the company's 124th consecutive quarterly payment - The Board of Directors declared a cash dividend of $0.1875 per common share[7] - This represents the company's 124th consecutive quarterly dividend payment[6] Detailed Financial Statements Summary Results This section summarizes key financial and operational metrics, comparing Q2 FY25 with prior periods, including revenues, net income, and product data Q2 FY2025 Performance Summary | Metric | Q2 FY2025 | Q2 FY2024 | | :--- | :--- | :--- | | Revenues | $643M | $621M | | Net loss | $(33)M | $(34)M | | Diluted loss per share | $(1.15) | $(1.19) | | Ferrous sales volumes (LT, thousands) | 1,094 | 980 | | Avg. net ferrous sales prices ($/LT) | $330 | $384 | | Nonferrous sales volumes (lbs, millions) | 174 | 176 | | Avg. nonferrous sales prices ($/pound) | $1.03 | $0.94 | Condensed Consolidated Statements of Operations This statement details revenues, costs, and net income for Q2 FY25, showing revenues of $642.5 million and a net loss of $(33.0) million Statement of Operations (Three Months Ended) | ($ in thousands) | Feb 28, 2025 | Feb 29, 2024 | | :--- | :--- | :--- | | Revenues | $642,508 | $621,059 | | Cost of goods sold | $615,011 | $580,996 | | SG&A expense | $54,943 | $62,160 | | Operating loss | $(28,680) | $(26,718) | | Net loss | $(32,965) | $(34,010) | Selected Operating Statistics This section provides granular operating data for Q2 FY25, including ferrous volumes of 1.094 million long tons and 88% rolling mill utilization Q2 FY2025 Operating Statistics | Metric | Value | | :--- | :--- | | Total ferrous volumes (LT, thousands) | 1,094 | | Average ferrous selling price ($/LT) | $330 | | Total nonferrous volumes (pounds, thousands) | 174,323 | | Average nonferrous price ($/pound) | $1.03 | | Finished steel sales volume (ST, thousands) | 131 | | Rolling mill utilization | 88% | Condensed Consolidated Balance Sheets The balance sheet shows total assets decreased to $1.46 billion, total liabilities increased, and total equity was $545.0 million as of February 28, 2025 Balance Sheet Summary ($ in thousands) | Account | Feb 28, 2025 | Aug 31, 2024 | | :--- | :--- | :--- | | Total current assets | $546,161 | $609,127 | | Total assets | $1,458,183 | $1,533,769 | | Total current liabilities | $302,069 | $316,570 | | Total liabilities | $913,179 | $908,029 | | Total equity | $545,004 | $625,740 | Non-GAAP Financial Measures and Reconciliations Explanation of Non-GAAP Measures Management uses non-GAAP measures like adjusted EPS and EBITDA to provide a clearer view of operational performance by excluding non-recurring items - Management uses non-GAAP measures to present results from business operations excluding items not related to underlying performance, such as restructuring charges, legacy environmental matters, and asset impairment charges[27] - Free cash flow is defined as cash flow from operating activities, net of capital expenditures and proceeds from sales of property, plant, and equipment, and is considered a useful measure of liquidity[27] Reconciliations This section provides detailed reconciliations of GAAP to non-GAAP measures, showing Q2 FY25 adjusted loss per share of $(0.99) and adjusted EBITDA of approximately zero Q2 FY2025 Adjusted EPS Reconciliation | Description | Per Share Amount | | :--- | :--- | | As reported loss per share | $(1.15) | | Adjustments (Restructuring, etc.) | $0.16 | | Adjusted loss per share | $(0.99) | Q2 FY2025 Adjusted EBITDA Reconciliation ($ in millions) | Description | Amount | | :--- | :--- | | Net loss | $(33) | | Adjustments (Interest, Taxes, D&A, etc.) | $33 | | Adjusted EBITDA | $0 | Q2 FY2025 Free Cash Flow Reconciliation ($ in thousands) | Description | Amount | | :--- | :--- | | Cash flow from operating activities | $19,954 | | Capital expenditures | $(11,334) | | Proceeds from sales of PPE | $4,273 | | Free cash flow | $12,893 | Forward-Looking Statements This section contains forward-looking statements, cautioning that actual results may differ due to risks including the pending TAI merger, economic conditions, and environmental liabilities - Forward-looking statements include information regarding the proposed Merger with TAI, future outlook, pricing, volumes, profitability, and strategic goals[37] - The completion of the merger is subject to significant risks and uncertainties, including the potential for termination, disruption to business operations, and the need for shareholder and regulatory approvals[40] - Other major risks include potential environmental cleanup costs, economic cyclicality, inflation, supply chain disruptions, and geopolitical instability[40]