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RDUS Nasdaq· Radius Recycling Inc
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RDUS Nasdaq· Radius Recycling Inc
Earnings report Q4 2023

Radius Recycling Reports 12% Increase in Total Revenues in Q1 2024

Segments of revenue

In the first quarter of fiscal 2024, Radius Recycling reported total revenues of $673 million, representing a 12% increase compared to the prior year quarter. This growth was primarily driven by higher sales volumes in both ferrous and nonferrous segments. Ferrous sales volumes increased by 35% year-over-year, while nonferrous sales volumes increased by 12%. The acquisition of the ScrapSource business also contributed to the increase in sales volumes.

Strengths

Radius Recycling's strong performance in the first quarter of fiscal 2024 can be attributed to higher sales volumes in the ferrous and nonferrous segments. The resolution of disruptions related to an extended shredder outage and a regulatory issue in the prior year quarter also contributed to the increase in sales volumes. Additionally, the company's management highlighted the impact of higher ferrous average net selling prices on the revenue growth.

Challenges

Despite the increase in total revenues, Radius Recycling faced challenges in maintaining its gross margin. The persistently tight supply conditions for scrap metal, including end-of-life vehicles, in the domestic markets during the first quarter of fiscal 2024 led to higher purchase prices for unprocessed scrap metal. This, combined with lower metal spreads for recycled metal and finished steel products, resulted in a decrease in gross margin.

Noteworthy

It is noteworthy that Radius Recycling reported a diluted loss per share from continuing operations of ($0.64) in the first quarter of fiscal 2024, which remained unchanged compared to the prior year quarter. However, the adjusted diluted loss per share increased from ($0.44) in the prior year quarter to ($0.64) in the current quarter. Adjusted EBITDA also declined significantly from $8 million in the prior year quarter to $1 million in the first quarter of fiscal 2024.

Summary

Radius Recycling demonstrated a strong performance in the first quarter of fiscal 2024, with a 12% increase in total revenues. The growth was primarily driven by higher sales volumes in the ferrous and nonferrous segments, including the contribution from the acquisition of the ScrapSource business. However, the company faced challenges in maintaining its gross margin due to tight supply conditions for scrap metal and lower metal spreads. The diluted loss per share remained unchanged, but the adjusted diluted loss per share increased, and adjusted EBITDA declined significantly compared to the prior year quarter. Overall, Radius Recycling's revenue growth reflects its ability to capitalize on higher sales volumes, but the challenges in maintaining profitability require attention.

Source documents

Form 10-Q  filed on Jan 04, 2024
137 pages scanned

Reference data

Company financials Q4 revenue 0
Analyst estimates Q4 EPS missed by 0.00%
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