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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

    ☒   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

   

For the Quarterly Period Ended February 28, 2025

    ☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

   

For the Transition Period from __________ to __________

Commission File Number 000-22496

RADIUS RECYCLING, INC.

(Exact name of registrant as specified in its charter)



Oregon		93-0341923
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

222 SW Columbia Street, Suite 1150, Portland, Oregon		97201
(Address of principal executive offices)		(Zip Code)

(503) 224-9900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $1.00 par value	RDUS	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒	Non-accelerated filer	☐


Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The registrant had 28,001,982 shares of Class A common stock, par value of $1.00 per share, and 200,000 shares of Class B common stock, par value of $1.00 per share, outstanding as of April 1, 2025.

RADIUS RECYCLING, INC.

FORM 10-Q

TABLE OF CONTENTS


	PAGE
FORWARD-LOOKING STATEMENTS	3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)	5

Unaudited Condensed Consolidated Balance Sheets as of February 28, 2025 and August 31, 2024	5

Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months ended February 28, 2025 and February 29, 2024	6

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months ended February 28, 2025 and February 29, 2024	7

Unaudited Condensed Consolidated Statements of Equity for the Three and Six Months ended February 28, 2025 and February 29, 2024	8

Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months ended February 28, 2025 and February 29, 2024	10

Notes to the Unaudited Condensed Consolidated Financial Statements	12

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3. Quantitative and Qualitative Disclosures about Market Risk	39

Item 4. Controls and Procedures	40

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	41

Item 1A. Risk Factors	41

Item 5. Other Information	43

Item 6. Exhibits	44

SIGNATURES	45

Table of Contents

FORWARD-LOOKING STATEMENTS

Statements and information included in this Quarterly Report on Form 10-Q by Radius Recycling, Inc. that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Except as noted herein or as the context may otherwise require, all references to “we,” “our,” “us,” “the Company,” “Radius Recycling,” and “Radius” refer to Radius Recycling, Inc. and its consolidated subsidiaries.

Forward-looking statements in this Quarterly Report on Form 10-Q include statements regarding future events or our expectations, intentions, beliefs, and strategies regarding the future, which may include statements regarding our proposed Merger (as defined below) with Toyota Tsusho America, Inc. (“TAI”), a U.S. subsidiary of Toyota Tsusho Corporation (“TTC”); the impact of equipment upgrades, equipment failures, and facility damage on production, including timing of repairs and resumption of operations; the realization of insurance recoveries; the Company’s outlook, growth initiatives, or expected results or objectives, including pricing, margins, volumes, and profitability; completion of acquisitions and integration of acquired businesses; the progression and impact of investments in processing and manufacturing technology improvements and information technology systems; the impact of sanctions and tariffs, quotas, and other trade actions and import restrictions; the impacts of supply chain disruptions, inflation, and rising interest rates; liquidity positions; our ability to generate cash from continuing operations; trends, cyclicality, and changes in the markets we sell into; strategic direction or goals; targets; changes to manufacturing and production processes; the realization of deferred tax assets; planned capital expenditures; the cost of and the status of any agreements or actions related to our compliance with environmental and other laws; expected tax rates, deductions, and credits; the impact of pandemics, epidemics, or other public health emergencies; the impact of labor shortages or increased labor costs; obligations under our retirement plans; benefits, savings, or additional costs from business realignment, cost containment, and productivity improvement programs; the potential impact of adopting new accounting pronouncements; and the adequacy of accruals.

Forward-looking statements by their nature address matters that are, to different degrees, uncertain, and often contain words such as “outlook,” “target,” “aim,” “believes,” “expects,” “anticipates,” “intends,” “assumes,” “estimates,” “evaluates,” “may,” “will,” “should,” “could,” “opinions,” “forecasts,” “projects,” “plans,” “future,” “forward,” “potential,” “probable,” and similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking.

We may make other forward-looking statements from time to time, including in reports filed with the Securities and Exchange Commission, press releases, presentations, and on public conference calls. All forward-looking statements we make are based on information available to us at the time the statements are made, and we assume no obligation to update any forward-looking statements, except as may be required by law. Our business is subject to the effects of changes in domestic and global economic conditions and a number of other risks and uncertainties that could cause actual results to differ materially from those included in, or implied by, such forward-looking statements. Some of these risks and uncertainties are discussed in “Item 1A. Risk Factors” of Part I of our most recent Annual Report on Form 10-K and Part II of this Quarterly Report on Form 10-Q. Examples of these risks include: the completion of the Merger is subject to various risks and uncertainties related to, among other things, its terms, timing, structure, benefits, costs and completion; the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement (as defined below); the disruption of management’s attention from the Company’s ongoing business operations due to the Merger; the effect of the announcement of the Merger on the Company’s relationships with its customers, third-party suppliers, industrial vendors and other third parties, as well as its operating results and business generally; the potential difficulties in employee retention as a result of the Merger; the Merger Agreement may be terminated in circumstances that may require the Company to pay TAI a termination fee; the fact that, if the Merger is completed, shareholders will forgo the opportunity to realize the potential long-term value of the successful execution of the Company’s current strategy as an independent company; required approvals to complete the Merger by our shareholders and the receipt of certain regulatory approvals, to the extent required, and the timing and conditions for such approvals; the stock price of the Company may decline significantly if the merger is not completed; the possibility that TAI could, at a later date, engage in unspecified transactions, including restructuring efforts, special dividends or the sale of some or all of the Company’s assets to one or more purchasers, that could conceivably produce a higher aggregate value than that available to shareholders in the Merger; the inability to consummate the Merger within the anticipated time period, or at all, due to any reason, including the failure to satisfy the closing conditions to the Merger; potential environmental cleanup costs related to the Portland Harbor Superfund site or other locations; the impact of equipment upgrades, equipment failures, and facility damage on production; failure to realize or delays in realizing expected benefits from capital and other projects, including investments in processing and manufacturing technology improvements and information technology systems; the cyclicality and impact of general economic conditions; the impact of inflation and interest rate and foreign currency fluctuations; changing conditions in global markets including the impact of sanctions and tariffs, quotas, and other trade actions and import restrictions; increases in the relative value of the U.S. dollar; economic and geopolitical instability including as a result of military conflict; volatile supply and demand conditions affecting prices and volumes in the markets for raw materials and other inputs we purchase; significant decreases in recycled metal prices; imbalances in supply and demand conditions in the global steel industry; difficulties

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associated with acquisitions and integration of acquired businesses; supply chain disruptions; reliance on third-party shipping companies, including with respect to freight rates and the availability of transportation; restrictions on our business and financial covenants under the agreement governing our bank credit facilities; potential limitations on our ability to access capital resources and existing credit facilities; the impact of impairment of goodwill and assets other than goodwill; the impact of pandemics, epidemics, or other public health emergencies; inability to achieve or sustain the benefits from productivity, cost savings, and restructuring initiatives; inability to renew facility leases; customer fulfillment of their contractual obligations; the impact of consolidation in the steel industry; product liability claims; the impact of legal proceedings and legal compliance; the impact of climate change; the impact of not realizing deferred tax assets; the impact of tax increases and changes in tax rules; the impact of one or more cybersecurity incidents; the impact of increasing attention to environmental, social, and governance matters; translation risks associated with fluctuation in foreign exchange rates; the impact of hedging transactions; inability to obtain or renew business licenses and permits; environmental compliance costs and potential environmental liabilities; increased environmental regulations and enforcement; compliance with climate change and greenhouse gas emission laws and regulations; the impact of labor shortages or increased labor costs; reliance on employees subject to collective bargaining agreements; and the impact of the underfunded status of multiemployer plans in which we participate.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

RADIUS RECYCLING, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except per share amounts)


	February 28, 2025			August 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	5,437		$	5,552
Accounts receivable, net of allowance for credit losses of $1,931 and $1,918		216,365			258,157
Inventories		281,757			293,932
Refundable income taxes		514			923
Prepaid expenses and other current assets		42,088			50,563
Total current assets		546,161			609,127
Property, plant and equipment, net of accumulated depreciation of $997,357 and $970,237		654,523			672,192
Operating lease right-of-use assets		130,686			123,546
Investments in joint ventures		8,282			9,841
Goodwill		13,105			13,105
Intangibles, net of accumulated amortization of $20,752 and $17,552		25,456			28,656
Deferred income taxes		17,007			18,577
Other assets		62,963			58,725
Total assets	$	1,458,183		$	1,533,769
Liabilities and Equity
Current liabilities:
Short-term borrowings	$	5,480		$	5,688
Accounts payable		193,063			202,498
Accrued payroll and related liabilities		19,137			24,654
Environmental liabilities		12,706			13,232
Operating lease liabilities		21,159			19,262
Accrued income taxes		71			3
Other accrued liabilities		50,453			51,233
Total current liabilities		302,069			316,570
Deferred income taxes		3,074			4,472
Long-term debt, net of current maturities		424,424			409,082
Environmental liabilities, net of current portion		52,172			52,417
Operating lease liabilities, net of current maturities		110,799			104,246
Other long-term liabilities		20,641			21,242
Total liabilities		913,179			908,029
Commitments and contingencies (Note 4)
Radius Recycling, Inc. (“Radius”) shareholders’ equity:
Preferred stock – 20,000 shares $1.00 par value authorized, none issued		—			—
Class A common stock – 75,000 shares $1.00 par value authorized, 28,000 and 27,839 shares issued and outstanding		28,000			27,839
Class B common stock – 25,000 shares $1.00 par value authorized, 200 and 200 shares issued and outstanding		200			200
Additional paid-in capital		32,682			28,828
Retained earnings		525,365			606,417
Accumulated other comprehensive income (loss)		(43,531	)		(40,172	)
Total Radius shareholders’ equity		542,716			623,112
Noncontrolling interests		2,288			2,628
Total equity		545,004			625,740
Total liabilities and equity	$	1,458,183		$	1,533,769

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

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RADIUS RECYCLING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share amounts)


	Three Months Ended						Six Months Ended
	February 28,			February 29,			February 28,			February 29,
	2025			2024			2025			2024
Revenues	$	642,508		$	621,059		$	1,299,045		$	1,293,956
Operating expense:
Cost of goods sold		615,011			580,996			1,238,143			1,214,416
Selling, general and administrative		54,943			62,160			111,627			125,262
(Income) from joint ventures		(188	)		(30	)		(636	)		(703	)
Asset impairment charges		—			1,476			184			1,476
Restructuring charges and other exit-related activities		1,422			3,175			3,319			3,210
Operating income (loss)		(28,680	)		(26,718	)		(53,592	)		(49,705	)
Interest expense		(8,771	)		(5,803	)		(17,633	)		(10,613	)
Other income (expense), net		209			(263	)		845			(432	)
Income (loss) from continuing operations before income taxes		(37,242	)		(32,784	)		(70,380	)		(60,750	)
Income tax (expense) benefit		4,277			(1,195	)		486			8,975
Income (loss) from continuing operations		(32,965	)		(33,979	)		(69,894	)		(51,775	)
Income (loss) from discontinued operations, net of tax		—			(31	)		—			(33	)
Net income (loss)		(32,965	)		(34,010	)		(69,894	)		(51,808	)
Net (income) loss attributable to noncontrolling interests		(12	)		31			(256	)		(135	)
Net income (loss) attributable to Radius shareholders	$	(32,977	)	$	(33,979	)	$	(70,150	)	$	(51,943	)

Net income (loss) per share attributable to Radius shareholders:
Basic:
Income (loss) per share from continuing operations	$	(1.15	)	$	(1.19	)	$	(2.45	)	$	(1.83	)
Income (loss) loss per share	$	(1.15	)	$	(1.19	)	$	(2.45	)	$	(1.83	)
Diluted:
Income (loss) per share from continuing operations	$	(1.15	)	$	(1.19	)	$	(2.45	)	$	(1.83	)
Income (loss) per share	$	(1.15	)	$	(1.19	)	$	(2.45	)	$	(1.83	)
Weighted average number of common shares:
Basic		28,684			28,454			28,628			28,337
Diluted		28,684			28,454			28,628			28,337

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

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RADIUS RECYCLING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands)


	Three Months Ended						Six Months Ended
	February 28,			February 29,			February 28,			February 29,
	2025			2024			2025			2024
Net income (loss)	$	(32,965	)	$	(34,010	)	$	(69,894	)	$	(51,808	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(1,846	)		(83	)		(3,955	)		(582	)
Cash flow hedges, net		(9	)		285			703			178
Pension obligations, net		28			216			(107	)		403
Total other comprehensive income (loss), net of tax		(1,827	)		418			(3,359	)		(1	)
Comprehensive income (loss)		(34,792	)		(33,592	)		(73,253	)		(51,809	)
Less comprehensive (income) loss attributable to noncontrolling interests		(12	)		31			(256	)		(135	)
Comprehensive income (loss) attributable to Radius shareholders	$	(34,804	)	$	(33,561	)	$	(73,509	)	$	(51,944	)

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

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RADIUS RECYCLING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited, in thousands, except per share amounts)


	Common Stock														Accumulated
	Class A				Class B				Additional						Other			Total Radius
Three Months ended February 29, 2024	Shares		Amount		Shares		Amount		Paid-in Capital			Retained Earnings			Comprehensive Income (Loss)			Shareholders’ Equity			Noncontrolling Interests			Total Equity
Balance as of December 1, 2023		27,663	$	27,663		200	$	200	$	22,258		$	870,975		$	(40,102	)	$	880,994		$	3,282		$	884,276
Net income (loss)		—		—		—		—		—			(33,979	)		—			(33,979	)		(31	)		(34,010	)
Other comprehensive income (loss), net of tax		—		—		—		—		—			—			418			418			—			418
Distributions to noncontrolling interests		—		—		—		—		—			—			—			—			(222	)		(222	)
Issuance of restricted stock		119		119		—		—		(119	)		—			—			—			—			—
Restricted stock withheld for taxes		—		—		—		—		(1	)		—			—			(1	)		—			(1	)
Share-based compensation cost		—		—		—		—		2,365			—			—			2,365			—			2,365
Dividends ($0.1875 per common share)		—		—		—		—		—			(5,360	)		—			(5,360	)		—			(5,360	)
Balance as of February 29, 2024		27,782	$	27,782		200	$	200	$	24,503		$	831,636		$	(39,684	)	$	844,437		$	3,029		$	847,466


	Common Stock														Accumulated
	Class A				Class B				Additional						Other			Total Radius
Three Months ended February 28, 2025	Shares		Amount		Shares		Amount		Paid-in Capital			Retained Earnings			Comprehensive Income (Loss)			Shareholders’ Equity			Noncontrolling Interests			Total Equity
Balance as of December 1, 2024		27,955	$	27,955		200	$	200	$	30,209		$	563,770		$	(41,704	)	$	580,430		$	2,477		$	582,907
Net income (loss)		—		—		—		—		—			(32,977	)		—			(32,977	)		12			(32,965	)
Other comprehensive income (loss), net of tax		—		—		—		—		—			—			(1,827	)		(1,827	)		—			(1,827	)
Distributions to noncontrolling interests		—		—		—		—		—			—			—			—			(201	)		(201	)
Issuance of restricted stock		45		45		—		—		(45	)		—			—			—			—			—
Restricted stock withheld for taxes		—		—		—		—		—			—			—			—			—			—
Share-based compensation cost		—		—		—		—		2,518			—			—			2,518			—			2,518
Dividends ($0.1875 per common share)		—		—		—		—		—			(5,428	)		—			(5,428	)		—			(5,428	)
Balance as of February 28, 2025		28,000	$	28,000		200	$	200	$	32,682		$	525,365		$	(43,531	)	$	542,716		$	2,288		$	545,004

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

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RADIUS RECYCLING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited, in thousands, except per share amounts)


	Common Stock																Accumulated
	Class A						Class B				Additional						Other			Total Radius
Six Months Ended February 29, 2024	Shares			Amount			Shares		Amount		Paid-in Capital			Retained Earnings			Comprehensive Income (Loss)			Shareholders’ Equity			Noncontrolling Interests			Total Equity
Balance as of September 1, 2023		27,312		$	27,312			200	$	200	$	26,035		$	894,316		$	(39,683	)	$	908,180		$	3,479		$	911,659
Net income (loss)		—			—			—		—		—			(51,943	)		—			(51,943	)		135			(51,808	)
Other comprehensive income (loss), net of tax		—			—			—		—		—			—			(1	)		(1	)		—			(1	)
Distributions to noncontrolling interests		—			—			—		—		—			—			—			—			(585	)		(585	)
Issuance of restricted stock		681			681			—		—		(681	)		—			—			—			—			—
Restricted stock withheld for taxes		(211	)		(211	)		—		—		(4,592	)		—			—			(4,803	)		—			(4,803	)
Share-based compensation cost		—			—			—		—		3,741			—			—			3,741			—			3,741
Dividends ($0.375 per common share)		—			—			—		—		—			(10,737	)		—			(10,737	)		—			(10,737	)
Balance as of February 29, 2024		27,782		$	27,782			200	$	200	$	24,503		$	831,636		$	(39,684	)	$	844,437		$	3,029		$	847,466


	Common Stock																Accumulated
	Class A						Class B				Additional						Other			Total Radius
Six Months ended February 28, 2025	Shares			Amount			Shares		Amount		Paid-in Capital			Retained Earnings			Comprehensive Income (Loss)			Shareholders’ Equity			Noncontrolling Interests			Total Equity
Balance as of September 1, 2024		27,839		$	27,839			200	$	200	$	28,828		$	606,417		$	(40,172	)	$	623,112		$	2,628		$	625,740
Net income (loss)		—			—			—		—		—			(70,150	)		—			(70,150	)		256			(69,894	)
Other comprehensive income (loss), net of tax		—			—			—		—		—			—			(3,359	)		(3,359	)		—			(3,359	)
Distributions to noncontrolling interests		—			—			—		—		—			—			—			—			(596	)		(596	)
Issuance of restricted stock		219			219			—		—		(219	)		—			—			—			—			—
Restricted stock withheld for taxes		(58	)		(58	)		—		—		(891	)		—			—			(949	)		—			(949	)
Share-based compensation cost		—			—			—		—		4,964			—			—			4,964			—			4,964
Dividends ($0.375 per common share)		—			—			—		—		—			(10,902	)		—			(10,902	)		—			(10,902	)
Balance as of February 28, 2025		28,000		$	28,000			200	$	200	$	32,682		$	525,365		$	(43,531	)	$	542,716		$	2,288		$	545,004

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

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RADIUS RECYCLING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


	Six Months Ended
	February 28,			February 29,
	2025			2024
Cash flows from operating activities:
Net income (loss)	$	(69,894	)	$	(51,808	)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Asset impairment charges		184			1,967
Depreciation and amortization		48,066			47,782
Inventory write-downs		92			—
Deferred income taxes		(1,239	)		(9,500	)
Undistributed equity in earnings of joint ventures		(636	)		(703	)
Share-based compensation expense		4,964			3,741
(Gain) loss on disposal of assets, net		(3,089	)		(459	)
Other (gain) loss, net		844			450
Changes in assets and liabilities, net of acquisitions:
Accounts receivable		33,389			(14,504	)
Inventories		19,059			(30,423	)
Income taxes		859			144
Prepaid expenses and other current assets		103			12,519
Other long-term assets		(3,765	)		(3,696	)
Operating lease assets and liabilities		445			(195	)
Accounts payable		(6,480	)		(6,368	)
Accrued payroll and related liabilities		(5,455	)		(8,996	)
Other accrued liabilities		(1,764	)		2,686
Environmental liabilities		(575	)		(1,072	)
Other long-term liabilities		941			1,042
Distributed equity in earnings of joint ventures		2,000			1,000
Net cash provided by (used in) operating activities		18,049			(56,393	)
Cash flows from investing activities:
Capital expenditures		(23,392	)		(39,791	)
Proceeds from insurance and sale of assets		4,484			2,133
Purchase of investments		—			(6,000	)
Net cash used in investing activities		(18,908	)		(43,658	)
Cash flows from financing activities:
Borrowings from long-term debt		388,747			389,692
Repayment of long-term debt		(373,432	)		(265,910	)
Payment of debt issuance costs		(2,132	)		—
Taxes paid related to net share settlement of share-based payment awards		(949	)		(4,803	)
Distributions to noncontrolling interests		(596	)		(585	)
Dividends paid		(10,876	)		(10,798	)
Net cash provided by (used in) financing activities		762			107,596
Effect of exchange rate changes on cash		(18	)		(15	)
Net change in cash and cash equivalents		(115	)		7,530
Cash and cash equivalents as of beginning of period		5,552			6,032
Cash and cash equivalents as of end of period	$	5,437		$	13,562

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

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RADIUS RECYCLING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


	Six Months Ended
	February 28,			February 29,
	2025			2024
SUPPLEMENTAL DISCLOSURES:
Cash paid (received) during the period for:
Interest	$	16,663		$	9,792
Income taxes, net	$	(90	)	$	368
Schedule of noncash investing and financing transactions:
Purchases of property, plant and equipment included in liabilities	$	5,841		$	5,470

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

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RADIUS RECYCLING, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


	PAGE
Note 1 - Summary of Significant Accounting Policies	13

Note 2 - Inventories	15

Note 3 - Goodwill	15

Note 4 - Commitments and Contingencies	15

Note 5 - Accumulated Other Comprehensive Income (Loss)	20

Note 6 - Revenue	21

Note 7 - Share-Based Compensation	22

Note 8 - Derivative Financial Instruments	23

Note 9 - Income Taxes	23

Note 10 - Net Income (Loss) Per Share	24

Note 11 - Related Party Transactions	24

Note 12 - Debt	24

Note 13 - Subsequent Events	25

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RADIUS RECYCLING, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying Unaudited Condensed Consolidated Financial Statements of Radius Recycling, Inc. and its majority-owned and wholly-owned subsidiaries (the “Company”) have been prepared pursuant to generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for Form 10-Q, including Article 10 of Regulation S-X. The accompanying Unaudited Condensed Consolidated Financial Statements are presented in U.S. Dollars. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. Certain information and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. Certain prior year amounts have been reclassified to conform with current year presentation. In the opinion of management, all normal, recurring adjustments considered necessary for a fair statement have been included. Management suggests that these Unaudited Condensed Consolidated Financial Statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2024. The results for the three and six months ended February 28, 2025 and February 29, 2024 are not necessarily indicative of the results of operations for the entire fiscal year.

Segment Reporting

The Company acquires and recycles ferrous and nonferrous scrap metal for sale to foreign and domestic metal producers, processors, and brokers, and it procures salvaged vehicles and sells serviceable used auto parts from these vehicles through a network of self-service auto parts stores. Most of these auto parts stores supply the Company’s shredding facilities with auto bodies that are processed into saleable recycled metal products. In addition to the sale of recycled metal products processed at its facilities, the Company provides a variety of recycling and related services. The Company also produces a range of finished steel long products at its electric arc furnace (“EAF”) steel mill using recycled ferrous metal sourced internally from its recycling and joint venture operations and other raw materials.

The accounting standards for reporting information about operating segments define an operating segment as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses for which discrete financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company’s internal organizational and reporting structure reflects a functionally based, integrated model and includes a single operating and reportable segment.

Merger with Toyota Tsusho America, Inc.

On March 13, 2025, the Company, Toyota Tsusho America, Inc., a New York corporation (“TAI”), and TAI Merger Corporation, a Delaware corporation and a wholly owned subsidiary of TAI (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving corporation in the Merger as a wholly owned subsidiary of TAI. The Board of Directors of the Company has approved the Merger Agreement and the transactions contemplated thereby, including the Merger. Refer to Note 13 - Subsequent Events, for more detailed information regarding the Merger.

Cash and Cash Equivalents

Cash and cash equivalents include short-term securities that are not restricted by third parties and have an original maturity date of 90 days or less. Included in accounts payable are book overdrafts representing outstanding payments in excess of funds on deposit of $52 million and $59 million as of February 28, 2025 and August 31, 2024, respectively.

Accounts Receivable, net

Accounts receivable represent amounts primarily due from customers on product and other sales. These accounts receivable, which are reduced by an allowance for credit losses, are recorded at the invoiced amount and do not bear interest. The Company extends credit to customers under contracts containing customary and explicit payment terms, and payment is generally required within 30 to 60 days of shipment. Nonferrous export sales typically require a deposit prior to shipment. Historically, almost all of the Company’s ferrous export sales have been made with letters of credit. Ferrous and nonferrous metal sales to domestic customers and finished steel sales are generally made on open account, and a portion of these sales are covered by credit insurance.

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RADIUS RECYCLING, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company evaluates the collectibility of its accounts receivable based on a combination of factors, including whether sales were made pursuant to letters of credit or required deposits prior to shipment, the aging of customer receivable balances, the financial condition of the Company’s customers, historical collection rates, and economic trends. Management uses this evaluation to estimate the amount of customer receivables that may not be collected in the future and records a provision for expected credit losses. Accounts are written off when all efforts to collect have been exhausted.

Also included in accounts receivable are short-term advances to scrap metal suppliers used as a mechanism to acquire unprocessed scrap metal. The advances are generally repaid with scrap metal, as opposed to cash. Repayments of advances with scrap metal are treated as noncash operating activities in the Unaudited Condensed Consolidated Statements of Cash Flows and totaled $8 million and $6 million for the six months ended February 28, 2025 and February 29, 2024, respectively.

Prepaid Expenses

The Company’s prepaid expenses, reported within prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets, totaled $14 million and $22 million as of February 28, 2025 and August 31, 2024, respectively, and consisted primarily of deposits on capital projects and prepaid services, property taxes, and insurance.

Other Assets

The Company’s other assets, exclusive of prepaid expenses and assets relating to certain employee benefit plans, consisted primarily of receivables from insurers, advances to a supplier of metals recycling equipment, short-term certificates of deposit, capitalized implementation costs for cloud computing arrangements, major spare parts and equipment, assets held for sale, equity investments, debt issuance costs, and notes and other contractual receivables. Other assets are reported within either prepaid expenses and other current assets or other assets in the Unaudited Condensed Consolidated Balance Sheets based on their expected use either during or beyond the current operating cycle of one year from the reporting date.

Receivables from insurers represent the portion of insured losses expected to be recovered from the Company’s insurers under various insurance policies, or from a Qualified Settlement Fund holding settlement amounts deposited by certain insurers of claims against the Company related to the Portland Harbor Superfund site. The receivables are recorded at an amount not to exceed the recorded loss and only if the terms of legally enforceable insurance contracts support that the insurance recovery will not be disputed and is deemed collectible, or if recovery of the loss by the Company from a Qualified Settlement Fund is probable. Receivables from insurers as of each reporting date relate to environmental claims, workers’ compensation claims, and third-party claims. As of both February 28, 2025 and August 31, 2024, receivables from insurers totaled $15 million, including $13 million relating to environmental claims.

Other assets as of February 28, 2025 and August 31, 2024 included $22 million and $18 million, respectively, representing advances to a supplier of metals recycling equipment.

Other assets as of February 28, 2025 and August 31, 2024 included $6 million related to funding for remediation costs of a legacy environmental matter held in short-term certificates of deposit and is reported within prepaid expenses and other current assets.

Other assets as of February 28, 2025 and August 31, 2024 also included $6 million and $7 million, respectively, of capitalized cloud computing arrangement implementation costs. Amortization of capitalized implementation costs is recorded on a straight-line basis over the term of the cloud computing arrangement, which is the non-cancellable period of the agreement, together with periods covered by renewal options which the Company is reasonably certain to exercise. This amortization expense is reported within operating expense, separately from depreciation and amortization expense for property, plant, and equipment and intangible assets as reported on the Unaudited Condensed Consolidated Statements of Cash Flows.

Accounting for Impacts of Involuntary Events

Assets destroyed or damaged as a result of involuntary events are written off or reduced in carrying value to their salvage value. When recovery of all or a portion of the amount of property damage loss or other covered expenses through insurance proceeds is demonstrated to be probable, a receivable is recorded and offsets the loss or expense up to the amount of the total loss or expense. No gain is recorded until all contingencies related to the insurance claim have been resolved.

On December 8, 2021, the Company experienced a fire at its metals recycling facility in Everett, Massachusetts. Direct physical loss or damage to property from the incident was limited to the facility’s shredder building and equipment, with no bodily injuries and no physical loss or damage to property reported at other buildings or equipment. The repair and replacement of most property that

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RADIUS RECYCLING, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

experienced physical loss or damage, primarily buildings and improvements, was substantially completed by the end of fiscal 2023. The Company filed insurance claims for the property that experienced physical loss or damage and business income losses resulting from the matter. During the first half of fiscal 2024, the Company recognized a $6 million insurance receivable and related insurance recovery gain, reported within cost of goods sold on the Unaudited Condensed Consolidated Statements of Operations, $2 million of which was recognized in the second quarter of fiscal 2024. In fiscal 2024, the Company reached a full and final settlement with its insurers for its claims, and all insurance proceeds and recovery gains in connection with the Company’s claims had been received and recognized, respectively, as of August 31, 2024.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, and derivative financial instruments. The majority of cash and cash equivalents is maintained with major financial institutions. Balances with these and certain other institutions exceeded the Federal Deposit Insurance Corporation insured amount of $250 thousand as of February 28, 2025. Concentration of credit risk with respect to accounts receivable is limited because a large number of geographically diverse customers make up the Company’s customer base. The Company controls credit risk through credit approvals, credit limits, credit insurance, letters of credit or other collateral, cash deposits, and monitoring procedures. The Company is exposed to a residual credit risk with respect to open letters of credit by virtue of the possibility of the failure of a bank providing a letter of credit. The counterparties to the Company’s derivative financial instruments are major financial institutions.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses, requiring additional disclosure of the nature of expenses included in the income statement. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The provisions in ASU 2024-03 are effective for the Company’s fiscal 2028, and interim periods within the Company’s fiscal 2029 and are applied prospectively. Early adoption and retrospective application of the new standard are permitted. As the provisions only apply to disclosures, the Company does not expect adoption to have a material impact on its consolidated financial statements.

Note 2 - Inventories

Inventories consisted of the following (in thousands):


	February 28, 2025		August 31, 2024
Processed and unprocessed scrap metal	$	131,376	$	137,013
Semi-finished goods		16,085		14,846
Finished goods		62,015		72,225
Supplies		72,281		69,848
Inventories	$	281,757	$	293,932

Note 3 - Goodwill

As of both February 28, 2025 and August 31, 2024, the balance of the Company’s goodwill was $13 million, all of which was allocated to one reporting unit, a recycling services operation. The Company evaluates goodwill for impairment annually on July 1 and upon the occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of goodwill may be impaired. There were no triggering events identified during the first half of fiscal 2025 requiring an interim goodwill impairment test, and the Company did not record a goodwill impairment charge in any of the periods presented.

Note 4 - Commitments and Contingencies

Contingencies - Environmental

The Company evaluates the adequacy of its environmental liabilities on a quarterly basis. Adjustments to the liabilities are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues or expenditures are made for which liabilities were established.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Changes in the Company’s environmental liabilities for the six months ended February 28, 2025 were as follows (in thousands):


Balance as of September 1, 2024		Liabilities Established (Released), Net		Payments and Other			Balance as of February 28, 2025		Short-Term		Long-Term
$	65,649	$	309	$	(1,080	)	$	64,878	$	12,706	$	52,172

As of February 28, 2025 and August 31, 2024, the Company had environmental liabilities of $65 million and $66 million, respectively, for the potential remediation of locations where it has conducted business or has environmental liabilities from historical or recent activities. These liabilities relate to the investigation and potential remediation of waterways and soil and groundwater contamination and may also involve natural resource damages, governmental fines and penalties, and claims by third parties for personal injury and property damage. Except for Portland Harbor and certain liabilities discussed under “Other Legacy Environmental Loss Contingencies” below, such liabilities were not individually material at any site.

Portland Harbor

In December 2000, the Company was notified by the United States Environmental Protection Agency (“EPA”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) that it is one of the potentially responsible parties (“PRPs”) that own or operate or formerly owned or operated sites which are part of or adjacent to the Portland Harbor Superfund site (“Portland Harbor”).

The precise nature and extent of cleanup of any specific areas within Portland Harbor, the parties to be involved, the timing of any specific remedial action and the allocation of the costs for any cleanup among responsible parties have not yet been determined. The process of site investigation, remedy selection, identification of additional PRPs, and allocation of costs has been underway for a number of years, but significant uncertainties remain. It is unclear to what extent the Company will be liable for environmental costs or third-party contribution or damage claims with respect to Portland Harbor.

From 2000 to 2017, the EPA oversaw a remedial investigation/feasibility study (“RI/FS”) at Portland Harbor. The Company was not among the parties that performed the RI/FS, but it contributed to the costs through an interim settlement with the performing parties. The performing parties have indicated that they incurred more than $155 million in that effort.

In January 2017, the EPA issued a Record of Decision (“ROD”) that identified the selected remedy for Portland Harbor. The EPA has estimated the total cost of the selected remedy at $1.7 billion with a then net present value cost of $1.05 billion (at a 7% discount rate) and an estimated construction period of 13 years following completion of the remedial designs. In the ROD, the EPA stated that the cost estimate is an order-of-magnitude engineering estimate that is expected to be within +50% to -30% of the actual project cost and that changes in the cost elements are likely to occur as a result of new information and data collected during the engineering design. Accordingly, the final cost may differ materially from that set forth in the ROD. The Company has identified a number of concerns regarding the remedy described in the ROD, which is based on data that is more than 15 years old, and the EPA’s estimates for the costs and time required to implement the selected remedy. Moreover, the ROD provided only Portland Harbor site-wide cost estimates and did not provide sufficient detail to estimate costs for specific sediment management areas within Portland Harbor. In addition, the ROD did not determine or allocate the responsibility for remediation costs among the PRPs.

In the ROD, the EPA acknowledged that much of the data was more than a decade old at that time and would need to be updated with a new round of “baseline” sampling to be conducted prior to the remedial design phase. The remedial design phase is an engineering phase during which additional technical information and data are collected, identified, and incorporated into technical drawings and specifications developed for the subsequent remedial action. Following issuance of the ROD, the EPA proposed that the PRPs, or a subgroup of PRPs, perform the additional investigative work in advance of remedial design.

In December 2017, the Company and three other PRPs entered into an Administrative Settlement Agreement and Order on Consent with the EPA to perform such pre-remedial design investigation and baseline sampling over a two-year period. The report analyzing the results concluded that Portland Harbor conditions have improved substantially since the data forming the basis of the ROD was collected. The EPA found with a few limited corrections that the new baseline data is of suitable quality and stated that such data will be used, in addition to existing and forthcoming design-level data, to inform implementation of the ROD. However, the EPA did not agree that the data or the analysis warranted a change to the remedy at this time and reaffirmed its commitment to proceed with remedial design. The Company and other PRPs disagree with the EPA’s position on use of the more recent data and will continue to pursue limited, but critical, changes to the selected remedy for Portland Harbor during the remedial design phase.

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The EPA encouraged PRPs to step forward (individually or in groups) to enter into consent agreements to perform remedial design in various project areas covering Portland Harbor. While certain PRPs executed consent agreements for remedial design work, because of the EPA’s refusal to date to modify the remedy to reflect the most current data on Portland Harbor conditions and because of concerns with the terms of the consent agreement, the Company elected not to enter into a consent agreement. In April 2020, the EPA issued a unilateral administrative order (“UAO”) to the Company and MMGL, LLC (“MMGL”), an unaffiliated company, for the remedial design work in a portion of Portland Harbor designated as the River Mile 3.5 East Project Area. As required by the UAO, the Company notified the EPA of its intent to comply while reserving all of its sufficient cause defenses. Failure to comply with a UAO, without sufficient cause, could subject the Company to significant penalties or treble damages. Pursuant to the optimized remedial design timeline set forth in the UAO, the EPA’s expected schedule for completion of the remedial design work was four years. At the time it issued the UAO in April 2020, the EPA estimated the cost of the work at approximately $4 million. The Company has agreed with the other respondent to the UAO, MMGL, that the Company will lead the performance and be responsible for a portion of the costs of the work for remedial design under the UAO and also entered into an agreement with another PRP pursuant to which such other PRP has agreed to fund a portion of the costs of such work. These agreements are not an allocation of liability or claims associated with Portland Harbor as between the respondents or with respect to any third party. The Company has insurance policies and Qualified Settlement Funds (“QSFs”) pursuant to which the Company is being reimbursed for the costs it has incurred for remedial design. See further discussion of the QSFs below in this Note. As of both February 28, 2025 and August 31, 2024, the Company had insurance and other receivables in the same amount as the environmental reserves for such remedial design work under the UAO. See “Other Assets” in Note 1 - Summary of Significant Accounting Policies for further discussion of insurance and other related receivables. The Company also expects to pursue in the future allocation or contribution from other PRPs for a portion of such remedial design costs. In February 2021, the EPA announced that 100 percent of Portland Harbor’s areas requiring active cleanup are in the remedial design phase of the process.

Except for certain early action projects in which the Company is not involved, remediation activities at Portland Harbor are not expected to commence for a number of years. Moreover, those activities are expected to be sequenced, and the order and timing of such sequencing has not been determined. In addition, as noted above, the ROD does not determine the allocation of costs among PRPs.

The Company has joined with approximately 100 other PRPs, including the RI/FS performing parties, in a voluntary process to establish an allocation of costs at Portland Harbor, including the costs incurred in the RI/FS, ongoing remedial design costs, and future remedial action costs. The Company expects the next major stage of the allocation process to proceed in parallel with the remedial design process.

In November 2024, the EPA issued a Special Notice Letter under Section 122(e) of CERCLA to the Company and certain other parties requesting a proposal to undertake remedial action at Portland Harbor. Negotiations with the EPA are expected to continue as remedial design work progresses.

The Company’s environmental liabilities as of each of February 28, 2025 and August 31, 2024 included $5 million relating to the Portland Harbor matters described above.

In addition to the remedial action process overseen by the EPA, the Portland Harbor Natural Resource Trustee Council (“Trustee Council”) is assessing natural resource damages at Portland Harbor. In 2008, the Trustee Council invited the Company and other PRPs to participate in funding and implementing the Natural Resource Injury Assessment for Portland Harbor. The Company and other participating PRPs ultimately agreed to fund the first two phases of the three-phase assessment, which included the development of the Natural Resource Damage Assessment Plan (“AP”) and implementation of the AP to develop information sufficient to facilitate early settlements between the Trustee Council and Phase 2 participants and the identification of restoration projects to be funded by the settlements. In late May 2018, the Trustee Council published notice of its intent to proceed with Phase 3, which will involve the full implementation of the AP and the final injury and damage determination. The Company is proceeding with the process established by the Trustee Council regarding early settlements under Phase 2. The Company has established an environmental reserve of approximately $2 million for this alleged natural resource damages liability as it continues to work with the Trustee Council to finalize an early settlement. As of each of February 28, 2025 and August 31, 2024, the Company had a receivable in the same amount as the environmental reserve. See “Other Assets” in Note 1 - Summary of Significant Accounting Policies for further discussion of insurance and other related receivables.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On January 30, 2017, one of the Trustees, the Confederated Tribes and Bands of the Yakama Nation, which withdrew from the council in 2009, filed a suit against approximately 30 parties, including the Company, seeking reimbursement of certain past and future response costs in connection with remedial action at Portland Harbor and recovery of assessment costs related to natural resources damages from releases at and from Portland Harbor to the Multnomah Channel and the Lower Columbia River. The parties filed various motions to dismiss or stay this suit, and in August 2019, the court issued an order denying the motions to dismiss and staying the action. The Company intends to defend against the claims in this suit and does not have sufficient information to determine the likelihood of a loss in this matter or to estimate the amount of damages being sought or the amount of such damages that could be allocated to the Company.

Because the final remedial actions have not yet been designed and there has not been a determination of the allocation among the PRPs of costs of the investigations or remedial action costs, the Company believes it is not possible to reasonably estimate the amount or range of costs which it is likely to or which it is reasonably possible that it will incur in connection with Portland Harbor, although such costs could be material to the Company’s financial position, results of operations, cash flows, and liquidity. Among the facts being evaluated are detailed information on the history of ownership of and the nature of the uses of and activities and operations performed on each property within Portland Harbor, which are factors that will play a substantial role in determining the allocation of investigation and remedy costs among the PRPs.

The Company has insurance policies that it believes will provide reimbursement for costs it incurs for defense, remediation, and mitigation for or settlement of natural resource damages claims in connection with Portland Harbor although there are no assurances that those policies will cover all the costs which the Company may incur. Most of these policies jointly insure the Company and MMGL, as the successor to a former subsidiary of the Company. The Company and MMGL have negotiated settlements with certain insurers of claims against them related to Portland Harbor, continue to seek settlements with other insurers, and formed two QSFs which became operative in fiscal 2020 and fiscal 2023, respectively, to hold such settlement amounts until funds are needed to pay or reimburse costs incurred by the Company and MMGL in connection with Portland Harbor. These insurance policies and the funds in the QSFs may not cover all of the costs which the Company may incur. Each QSF is an unconsolidated variable interest entity (“VIE”) with no primary beneficiary. Two managers unrelated to each other, one appointed by the Company and one appointed by MMGL, share equally the power to direct the activities of each VIE that most significantly impact its economic performance. The Company’s appointee to co-manage each VIE is an executive officer of the Company. Neither MMGL nor its appointee to co-manage each VIE is a related party of the Company for the purpose of the primary beneficiary assessment or otherwise.

The Oregon Department of Environmental Quality is separately providing oversight of investigations and source control activities by the Company at various sites adjacent to Portland Harbor that are focused on controlling any current “uplands” releases of contaminants into the Willamette River. The Company has accrued liabilities for source control and related work at two sites, reflecting estimated costs of primarily investigation and design, which costs have not been material in the aggregate to date. No liabilities have been established in connection with investigations for any other sites because the extent of contamination, required source control work, and the Company’s responsibility for the contamination and source control work, in each case if any, have not yet been determined. The Company believes that, pursuant to its insurance policies and agreements with other third parties, it will be reimbursed for the costs it incurs for required source control evaluation and remediation work; however, the Company’s insurance policies and agreements with other third parties may not cover all the costs which the Company incurs. As of both February 28, 2025 and August 31, 2024, the Company had an insurance receivable in the same amount as the environmental reserve for such source control work.

Other Legacy Environmental Loss Contingencies

The Company’s environmental loss contingencies as of February 28, 2025 and August 31, 2024, other than Portland Harbor, include actual or possible investigation and remediation costs from historical contamination at sites currently or formerly owned or formerly operated by the Company or at other sites where the Company may have responsibility for such costs due to past disposal or other activities (“legacy environmental loss contingencies”). These legacy environmental loss contingencies relate to the potential remediation of waterways and soil and groundwater contamination and may also involve natural resource damages, governmental fines and penalties, and claims by third parties for personal injury and property damage. The Company has been notified that it is or may be a potentially responsible party at certain of these sites, and investigation and remediation activities are ongoing or may be required in the future. The Company recognizes a liability for such matters when the loss is probable and can be reasonably estimated. When investigation, allocation, and remediation activities are ongoing or where the Company has not yet been identified as having responsibility or the contamination has not yet been identified, it is reasonably possible that the Company may need to recognize additional liabilities in connection with such sites but the Company cannot currently reasonably estimate the possible loss or range of loss absent additional information or developments. Such additional liabilities, individually or in the aggregate, may have a material adverse effect on the Company’s results of operations, financial condition, or cash flows.

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RADIUS RECYCLING, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In fiscal 2018, the Company accrued $4 million for the estimated costs related to remediation of shredder residue disposed of in or around the 1970s at third-party sites located near each other. Investigation activities have been conducted under oversight of the applicable state regulatory agency. As of both February 28, 2025 and August 31, 2024, the Company had $5 million accrued for this matter. It is reasonably possible that the Company may recognize additional liabilities in connection with this matter at the time such losses are probable and can be reasonably estimated. The Company previously estimated a range of reasonably possible losses related to this matter in excess of current accruals at between zero and $28 million based on a range of remedial alternatives and subject to development and approval by regulators of specific remedy implementation plans. However, subsequent to the development of those remedial alternatives, the Company performed additional investigative activities under new state requirements that are likely to impact the required remedial actions and associated cost estimates, but the scope of such impacts and the amount or the range of the additional associated costs are not reasonably estimable at this time and are subject to further investigation, analysis, and discussion by the Company and regulators. The Company is investigating whether a portion or all of the current and future losses related to this matter, if incurred, are covered by existing insurance coverage or may be offset by contributions from other responsible parties.

In addition, the Company’s loss contingencies as of February 28, 2025 and August 31, 2024 included $1 million and $2 million, respectively, for the estimated costs related to environmental matters in connection with a closed facility owned and previously operated by an indirect, wholly-owned subsidiary, including monitoring and remediation of soil and groundwater conditions and funding for wellhead treatment facilities. Investigation and remediation activities have been conducted under the oversight of the applicable state regulatory agency and are on-going, and the Company’s subsidiary has also been working with state and local officials with respect to the protection of public and private water supplies. As part of its activities relating to the protection of public water supplies, the Company’s subsidiary agreed to reimburse the municipality for certain studies and plans and to provide funding for the construction and operation by the municipality of wellhead treatment facilities. It is reasonably possible that the Company may recognize additional liabilities in connection with this matter at the time such additional losses are probable and can be reasonably estimated. However, the Company cannot reasonably estimate at this time the possible additional loss or range of possible additional losses associated with this matter pending the on-going implementation of the approved remediation plans for soil and groundwater conditions and completion and operation of the wellhead treatment facilities.

In addition, the Company’s loss contingencies as of each of February 28, 2025 and August 31, 2024 included $10 million for the estimated costs related to remediation of a site, a portion of which was previously leased to and operated by an indirect, wholly-owned subsidiary. In connection with settlement of a lawsuit relating to allocation of the remediation costs, the Company’s subsidiary agreed to perform the remedial action related to metals contamination on the site initially estimated to cost approximately $7.9 million, and another potentially liable party agreed to perform the remedial action related to creosote contamination at the site. As part of the settlement, other potentially liable parties agreed to make payments totaling approximately $7.6 million to fund the remediation of the metals contamination at the site in exchange for a release and indemnity. This amount was fully funded in fiscal 2021. In the fourth quarter of fiscal 2023, the Company increased its estimate of the cost to perform the remedial action by approximately $3 million. It is reasonably possible that the Company may recognize additional liabilities in connection with this matter at the time such additional losses are probable and can be reasonably estimated. The Company estimates the reasonably possible additional losses associated with this matter to range from zero to $10 million as of February 28, 2025, pending completion, approval, and implementation of the remediation action plan.

In addition, the Company is a PRP related to environmental matters in connection with a facility previously used for disposal of automobile shredder residue by a wholly-owned subsidiary. Investigation and remediation activities have been conducted under the oversight of the applicable state regulatory agency and are on-going. On December 4, 2020, the Company and two other PRPs entered into a final Administrative Order with the state agency, and another PRP was served with a unilateral order. Remediation discussions among the state agency, the Company and other PRPs pursuant to such order are ongoing as of February 2025. It is reasonably possible that the Company may recognize a liability in connection with this matter at the time such losses are probable and can be reasonably estimated. However, the Company cannot reasonably estimate at this time the possible additional loss or range of possible additional losses associated with this matter pending the on-going implementation of remediation plans for soil, groundwater and vapor conditions.

Summary - Environmental Contingencies

With respect to environmental contingencies other than the Portland Harbor Superfund site and the Other Legacy Environmental Loss Contingencies, which are discussed separately above, management currently believes that adequate provision has been made for the potential impact of its environmental contingencies. Historically, the amounts the Company has ultimately paid for such remediation activities have not been material in any given period, but there can be no assurance that such amounts paid will not be material in the future.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contingencies – Other

On May 6, 2022, The Athletics Investment Group LLC (“A’s”) filed an action in the Superior Court of the State of California, County of Alameda against the Bay Area Air Quality Management District (“BAAQMD”) as Respondent and the Company as Real Party in Interest (the “BAAQMD Case”) alleging that the BAAQMD has failed to properly regulate the Company’s Oakland shredder facility under the federal and California Clean Air Acts and seeking an order requiring the BAAQMD to revoke the Company’s Permit to Operate for the Oakland facility. On June 3, 2022, the BAAQMD removed this action to the United States District Court, Northern District of California where the A’s had previously filed an action against the Company on July 7, 2021 raising substantially similar issues under the federal Clean Air Act’s citizen suit provision alleging violations by the Oakland facility of the federal Clean Air Act and permit conditions and seeking declaratory and injunctive relief (the “CAA Case”). The A’s recently disclosed that they were also seeking up to approximately $183 million in fines in the CAA Case, which claims the Company denies. The Company has vigorously defended and will continue to defend against the claims asserted in the CAA Case, which went to trial on November 12, 2024, with post-trial briefing due in February 2025. The BAAQMD Case was remanded back to Alameda Superior Court on October 7, 2022, and discovery is proceeding.

On June 28, 2024, the Alameda County Criminal Grand Jury returned an indictment against the Company and two operations employees alleging felony and misdemeanor environmental regulatory violations for mishandling hazardous waste, including destruction of evidence, arising from the August 2023 scrap metal fire at the Company’s Oakland, CA facility and the Company’s subsequent shredding of the burned material. The Company disputes the allegations and intends to vigorously defend itself in connection with these allegations. On December 5, 2024, the Company and the individual defendants filed their joint demurrer to the indictment. The Company does not anticipate that the ultimate outcome of this matter will have a material adverse effect on its results of operations, financial condition, or cash flows.

In addition to legal proceedings relating to the contingencies described above, the Company is a party to various legal proceedings arising in the normal course of business. The Company recognizes a liability for such matters when the loss is probable and can be reasonably estimated. The Company does not anticipate that the liabilities arising from such legal proceedings in the normal course of business, after taking into consideration expected insurance recoveries, will have a material adverse effect on its results of operations, financial condition, or cash flows.

Note 5 - Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss), net of tax, comprise the following (in thousands):


	Three Months ended February 28, 2025												Three Months ended February 29, 2024
	Foreign Currency Translation Adjustments			Cash Flow Hedges, Net			Pension Obligations, Net			Total			Foreign Currency Translation Adjustments			Cash Flow Hedges, Net			Pension Obligations, Net			Total
Balances - December 1 (Beginning of period)	$	(39,787	)	$	(716	)	$	(1,201	)	$	(41,704	)	$	(37,839	)	$	(411	)	$	(1,852	)	$	(40,102	)
Other comprehensive income (loss) before reclassifications		(1,846	)		(9	)		—			(1,855	)		(83	)		711			—			628
Income tax benefit (expense)		—			2			—			2			—			(160	)		—			(160	)
Other comprehensive income (loss) before reclassifications, net of tax		(1,846	)		(7	)		—			(1,853	)		(83	)		551			—			468
Amounts reclassified from accumulated other comprehensive income (loss)		—			(3	)		36			33			—			(343	)		279			(64	)
Income tax (benefit) expense		—			1			(8	)		(7	)		—			77			(63	)		14
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		—			(2	)		28			26			—			(266	)		216			(50	)
Net periodic other comprehensive income (loss)		(1,846	)		(9	)		28			(1,827	)		(83	)		285			216			418
Balances - February 28 and 29, respectively (End of period)	$	(41,633	)	$	(725	)	$	(1,173	)	$	(43,531	)	$	(37,922	)	$	(126	)	$	(1,636	)	$	(39,684	)

Table of Contents

RADIUS RECYCLING, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

         
        Six Months ended February 28, 2025

        Six Months Ended February 29, 2024

         
        Foreign Currency
Translation
Adjustments

        Cash Flow Hedges, Net

        Pension Obligations,
Net

        Total

        Foreign Currency
Translation
Adjustments

        Cash Flow Hedges, Net

        Pension Obligations,
Net

        Total

Balances - September 1 (Beginning of period)

(37,678

)

RADIUS RECYCLING, INC. 10-Q