Radius Recycling (RDUS) Q2 2025 earnings summary

Executive summary

• Entered into a definitive merger agreement with Toyota Tsusho America, Inc. (TAI); shareholders to receive $30.00 per share in cash; closing expected in the second half of 2025, subject to customary conditions.

• Net loss for Q2 FY2025 was $33 million, a slight improvement from the prior year; adjusted EBITDA was break-even versus $3 million prior year.

• Positive operating cash flow of $20 million and free cash flow of $13 million generated in Q2 FY2025.

• Board declared a quarterly dividend of $0.1875 per share, marking the 124th consecutive quarterly dividend.

• Productivity and cost reduction initiatives led to a 12% decrease in SG&A expenses year-over-year.

Financial highlights

• Q2 FY2025 revenues were $643 million, up from $621 million in Q2 FY2024.

• Gross margin for Q2 FY2025 was $27 million or 4.3%, down from $40 million or 6.5% prior year, reflecting lower metal spreads.

• Debt increased to $430 million as of February 28, 2025; debt net of cash was $424 million.

• Net cash provided by operating activities for the first six months was $18 million, compared to net cash used of $56 million prior year.

• Capital expenditures totaled $11 million in Q2 FY2025.

Outlook and guidance

• Merger with TAI expected to close in the second half of 2025; company will become a wholly owned subsidiary and shares will be delisted.

• Capital expenditures for FY2025 planned at $60 million, including $20 million for environmental projects.

• Management expects to remain in compliance with credit facility covenants but notes risk if market conditions deteriorate.

• No earnings conference call due to pending merger.