Radius Recycling, Inc.

Radius Recycling did not provide revenue in the prepared remarks, but it reported an adjusted EPS loss of $1.33, with the year-over-year difference primarily due to an income tax detriment associated with deferred tax assets. Operating cash flow was near breakeven, adjusted SG&A was down 6% year over year, and reported SG&A was down 10% year over year aided by a $2 million insurance recovery gain. Finished steel volumes were 125,000 tons, down 11% sequentially; average rolling mill utilization was 81%, down from 97% sequentially and 95% a year ago. The company ended the quarter with net debt of $430 million, invested $12 million in CapEx, and now expects fiscal 2025 CapEx of around $60 million. Management also expects to close two property transactions in the second half of fiscal 2025 and raise net proceeds of approximately $35 million. Forward-looking, the company expects winter seasonality in Q2, a meaningful ramp in technology contributions over the next couple of quarters, continued benefits from cost reduction efforts, and lower interest costs as Fed cuts flow through.

Tamara Lundgren framed the quarter as resilient in a difficult market, emphasizing that operating results were stable year over year despite weaker ferrous and finished steel conditions. She highlighted strategic priorities around advanced metal recovery technology, 3PR services, and cost/productivity actions as aligned with long-term secular demand for recycled metals. Her tone was constructive and cyclical: she said manufacturing weakness is the biggest headwind now, but also argued that a recovery would ease scrap constraints and lift demand.

Stefano Gaggini said the business offset softer market conditions with stronger nonferrous demand and about $20 million of quarterly run-rate benefits from productivity and cost savings. He pointed to 10% year-over-year finished steel spread compression, 14% sequential declines in nonferrous volumes, and several million dollars of elevated legal costs that he expects to recede in the second half. On capital and liquidity, he noted $12 million of first-quarter CapEx, expected full-year CapEx of about $60 million, $35 million of expected asset-sale proceeds, net debt of $430 million, and an $800 million credit facility expiring in August 2027. He also said the company is not expected to be a cash taxpayer in fiscal 2025 and that the recent 100 basis points of Fed cuts should help interest expense, with the benefit more visible in Q2.

Analysts focused on weak export ferrous pricing, especially the effect of elevated Chinese steel exports, and management said it expects an eventual correction as other countries push back on cheap imports, though it would not give a timing. The other major question was rising interest expense after the credit facility amendment; Stefano explained that the amendment costs are now fully reflected, but are noncash and not material, and said lower short-term rates should benefit interest costs more fully in Q2. Management also stressed that debt is being managed alongside lower CapEx, expected asset monetization, and improving self-help initiatives.