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 ~~November~~February 3028, ~~2024~~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 2728,~~955~~001,~~384~~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 ~~January~~April 61, 2025.

RADIUS RECYCLING, INC.

FORM 10-Q

TABLE OF CONTENTS

	PAGE
FORWARD-LOOKING STATEMENTS	3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	45
Unaudited Condensed Consolidated Balance Sheets as of November 30, 2024 and August 31, 2024	4
Unaudited Condensed Consolidated Balance Sheets as of February 28, 2025 and August 31, 2024	5
Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended November 30, 2024 and November 30, 2023	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 Months Ended November 30, 2024 and November 30, 2023	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 Months Ended November 30, 2024 and November 30, 2023	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 Three Months Ended November 30, 2024 and November 30, 2023	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	1012
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2427
Item 3. Quantitative and Qualitative Disclosures about Market Risk	3539
Item 4. Controls and Procedures	3640
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	3741
Item 1A. Risk Factors	3741
Item 5. Other Information	3743
Item 6. Exhibits	3844
SIGNATURES	3945

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 ~~sanctions and tariffs, quotas, and other trade actions and import restrictions; 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: ~~potential~~the ~~environmental~~completion ~~cleanup~~of ~~costs~~the ~~related~~Merger tois ~~the~~subject ~~Portland~~to ~~Harbor~~various ~~Superfund~~risks ~~site~~and oruncertainties ~~other~~related ~~locations;~~to, ~~the~~among ~~impact~~other ofthings, ~~equipment~~its ~~upgrades~~terms, ~~equipment~~timing, ~~failures~~structure, benefits, costs and ~~facility~~completion; ~~damage~~the onoccurrence ~~production;~~of ~~failure~~any toevent, ~~realize~~change or ~~delays~~other incircumstances ~~realizing~~that ~~expected~~could ~~benefits~~give ~~from~~rise ~~capital~~to ~~and~~the ~~other~~termination ~~projects,~~of ~~including~~the ~~investments~~Merger inAgreement ~~processing~~(as ~~and~~defined ~~manufacturing~~below); ~~technology~~the ~~improvements~~disruption ~~and~~of ~~information~~management’s ~~technology~~attention ~~systems;~~from the ~~cyclicality~~Company’s ~~and~~ongoing ~~impact~~business ofoperations ~~general~~due ~~economic~~to ~~conditions~~the Merger; the ~~impact~~effect of ~~inflation~~the ~~and~~announcement ~~interest~~of ~~rate~~the ~~and~~Merger ~~foreign~~on ~~currency~~the ~~fluctuations;~~Company’s ~~changing~~relationships ~~conditions~~with inits ~~global~~customers, ~~markets~~third-party ~~including~~suppliers, ~~the~~industrial ~~impact~~vendors ofand ~~sanctions~~other ~~and~~third ~~tariffs~~parties, ~~quotas,~~as ~~and~~well ~~other~~as ~~trade~~its ~~actions~~operating results and ~~import~~business ~~restrictions~~generally; ~~increases~~the potential difficulties in ~~the~~employee ~~relative~~retention ~~value~~as a result of the ~~U.S. dollar~~Merger; ~~economic~~the ~~and~~Merger ~~geopolitical~~Agreement ~~instability~~may ~~including~~be asterminated ain ~~result~~circumstances ofthat ~~military~~may ~~conflict;~~require ~~volatile~~the ~~supply~~Company ~~and~~to ~~demand~~pay ~~conditions~~TAI ~~affecting~~a ~~prices~~termination ~~and~~fee; ~~volumes in~~ the ~~markets~~fact ~~for~~that, ~~raw~~if ~~materials~~the ~~and~~Merger ~~other~~is ~~inputs~~completed, weshareholders ~~purchase;~~will ~~significant~~forgo ~~decreases~~the inopportunity ~~recycled~~to ~~metal~~realize ~~prices;~~the ~~imbalances~~potential inlong-term ~~supply~~value ~~and~~of ~~demand~~the ~~conditions~~successful inexecution of the ~~global~~Company’s ~~steel~~current ~~industry;~~strategy ~~difficulties~~as ~~associated~~an ~~with~~independent ~~acquisitions~~company; ~~and~~required ~~integration~~approvals ofto ~~acquired~~complete ~~businesses;~~the ~~supply~~Merger ~~chain~~by ~~disruptions;~~our ~~reliance~~shareholders onand ~~third-party~~the ~~shipping~~receipt ~~companies,~~of ~~including~~certain ~~with~~regulatory ~~respect~~approvals, to ~~freight~~the ~~rates~~extent required, and the ~~availability~~timing ofand ~~transportation~~conditions for such approvals; ~~restrictions~~the onstock ~~our~~price ~~business~~of ~~and~~the ~~financial~~Company ~~covenants~~may ~~under~~decline ~~the~~significantly ~~agreement~~if ~~governing~~the ~~our~~merger ~~bank~~is ~~credit~~not ~~facilities~~completed; ~~potential~~the ~~limitations~~possibility onthat ~~our~~TAI ~~ability~~could, toat ~~access~~a ~~capital~~later ~~resources~~date, ~~and~~engage ~~existing~~in ~~credit~~unspecified ~~facilities;~~transactions, including restructuring efforts, special dividends or the ~~impact~~sale of ~~impairment~~some or all of ~~goodwill~~the ~~and~~Company’s assets ~~other~~to ~~than~~one ~~goodwill;~~or ~~the~~more ~~impact~~purchasers, ofthat ~~pandemics,~~could ~~epidemics,~~conceivably orproduce ~~other~~a ~~public~~higher ~~health~~aggregate ~~emergencies~~value than that available to shareholders in the Merger; the inability to ~~achieve~~consummate orthe ~~sustain~~Merger within the ~~benefits~~anticipated ~~from~~time ~~productivity~~period, ~~cost~~or ~~savings~~at all, ~~and~~due ~~restructuring~~to ~~initiatives;~~any ~~inability~~reason, toincluding ~~renew~~the ~~facility~~failure ~~leases;~~to ~~customer~~satisfy ~~fulfillment~~the ofclosing ~~their~~conditions ~~contractual~~to ~~obligations~~the Merger; ~~the~~potential ~~impact~~environmental ofcleanup ~~consolidation~~costs inrelated to the ~~steel~~Portland ~~industry;~~Harbor ~~product~~Superfund ~~liability~~site ~~claims~~or other locations; the impact of ~~legal~~equipment ~~proceedings~~upgrades, equipment failures, and ~~legal~~facility ~~compliance~~damage on production; ~~the~~failure ~~impact~~to ofrealize ~~climate~~or ~~change;~~delays ~~the~~in ~~impact~~realizing ofexpected ~~not~~benefits ~~realizing~~from ~~deferred~~capital ~~tax~~and ~~assets;~~other ~~the~~projects, ~~impact~~including ofinvestments ~~tax~~in ~~increases~~processing and ~~changes~~manufacturing intechnology ~~tax~~improvements ~~rules~~and information technology systems; the cyclicality and impact of ~~one~~general oreconomic ~~more cybersecurity incidents~~conditions; the impact of ~~increasing~~inflation ~~attention~~and tointerest ~~environmental,~~rate ~~social,~~ and ~~governance~~foreign ~~matters~~currency fluctuations; ~~translation~~changing ~~risks~~conditions ~~associated with fluctuation~~ in ~~foreign~~global ~~exchange~~markets ~~rates;~~including the impact of ~~hedging~~sanctions ~~transactions;~~and ~~inability~~tariffs, toquotas, ~~obtain~~and orother ~~renew~~trade ~~business~~actions ~~licenses~~ and ~~permits~~import restrictions; ~~environmental~~increases ~~compliance~~in ~~costs~~the ~~and~~relative ~~potential~~value ~~environmental~~of ~~liabilities;~~the ~~increased~~U.S. ~~environmental~~dollar; ~~regulations~~economic and ~~enforcement;~~geopolitical ~~compliance~~instability ~~with~~including ~~climate~~as ~~change~~a ~~and~~result ~~greenhouse~~of ~~gas~~military ~~emission~~conflict; ~~laws~~volatile supply and ~~regulations;~~demand ~~the~~conditions ~~impact~~affecting ofprices ~~labor~~and ~~shortages~~volumes orin ~~increased~~the ~~labor~~markets ~~costs;~~for ~~reliance~~raw onmaterials ~~employees~~and ~~subject~~other toinputs ~~collective~~we ~~bargaining agreements~~purchase; ~~and~~significant ~~the~~decreases ~~impact~~in ofrecycled ~~the~~metal ~~underfunded~~prices; ~~status~~imbalances ofin ~~multiemployer~~supply ~~plans~~and demand conditions in ~~which~~the weglobal ~~participate.~~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)

	November 30, 2024			August 31, 2024
	February 28, 2025			August 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	155,~~223~~437		$	5,552
Accounts receivable, net of allowance for credit losses of $2,376 and $1,918		212,496			258,157
Accounts receivable, net of allowance for credit losses of $1,931 and $1,918		216,365			258,157
Inventories		~~306~~281,~~360~~757			293,932
Refundable income taxes		~~666~~514			923
Prepaid expenses and other current assets		5342,~~519~~088			50,563
Total current assets		~~588~~546,~~264~~161			609,127
Property, plant and equipment, net of accumulated depreciation of $990,432 and $970,237		658,487			672,192
Property, plant and equipment, net of accumulated depreciation of $997,357 and $970,237		654,523			672,192
Operating lease right-of-use assets		~~135~~130,~~939~~686			123,546
Investments in joint ventures		108,~~053~~282			9,841
Goodwill		13,105			13,105
Intangibles, net of accumulated amortization of $19,152 and $17,552		27,056			28,656
Intangibles, net of accumulated amortization of $20,752 and $17,552		25,456			28,656
Deferred income taxes		17,~~728~~007			18,577
Other assets		6062,~~162~~963			58,725
Total assets	$	1,~~510~~458,~~794~~183		$	1,533,769
Liabilities and Equity
Current liabilities:
Short-term borrowings	$	5,~~573~~480		$	5,688
Accounts payable		~~180~~193,~~812~~063			202,498
Accrued payroll and related liabilities		2019,~~807~~137			24,654
Environmental liabilities		1312,~~305~~706			13,232
Operating lease liabilities		2021,~~802~~159			19,262
Accrued income taxes		7871			3
Other accrued liabilities		50,~~277~~453			51,233
Total current liabilities		~~291~~302,~~654~~069			316,570
Deferred income taxes		73,~~768~~074			4,472
Long-term debt, net of current maturities		~~439~~424,~~872~~424			409,082
Environmental liabilities, net of current portion		52,~~314~~172			52,417
Operating lease liabilities, net of current maturities		~~115~~110,~~283~~799			104,246
Other long-term liabilities		20,~~996~~641			21,242
Total liabilities		~~927~~913,~~887~~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, 27,955 and 27,839 shares issued and outstanding		27,955			27,839
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		3032,~~209~~682			28,828
Retained earnings		~~563~~525,~~770~~365			606,417
Accumulated other comprehensive income (loss)		(4143,~~704~~531	)		(40,172	)
Total Radius shareholders’ equity		~~580~~542,~~430~~716			623,112
Noncontrolling interests		2,~~477~~288			2,628
Total equity		~~582~~545,~~907~~004			625,740
Total liabilities and equity	$	1,~~510~~458,~~794~~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 November 30,
	Three Months Ended						Six Months Ended
	2024			2023
	February 28,			February 29,			February 28,			February 29,
Revenues	$	656,537		$	672,897
	2025			2024			2025			2024
Operating expense:
Revenues	$	642,508		$	621,059		$	1,299,045		$	1,293,956
Cost of goods sold		623,132			633,420
Operating expense:
Selling, general and administrative		56,684			63,102
Cost of goods sold		615,011			580,996			1,238,143			1,214,416
(Income) from joint ventures		(448	)		(673	)
Selling, general and administrative		54,943			62,160			111,627			125,262
Asset impairment charges		184			—
(Income) from joint ventures		(188	)		(30	)		(636	)		(703	)
Restructuring charges and other exit-related activities		1,897			35
Asset impairment charges		—			1,476			184			1,476
Operating income (loss)		(24,912	)		(22,987	)
Restructuring charges and other exit-related activities		1,422			3,175			3,319			3,210
Interest expense		(8,862	)		(4,810	)
Operating income (loss)		(28,680	)		(26,718	)		(53,592	)		(49,705	)
Other income (expense), net		636			(170	)
Interest expense		(8,771	)		(5,803	)		(17,633	)		(10,613	)
Income (loss) from continuing operations before income taxes		(33,138	)		(27,967	)
Other income (expense), net		209			(263	)		845			(432	)
Income tax (expense) benefit		(3,791	)		10,170
Income (loss) from continuing operations before income taxes		(37,242	)		(32,784	)		(70,380	)		(60,750	)
Income (loss) from continuing operations		(36,929	)		(17,797	)
Income tax (expense) benefit		4,277			(1,195	)		486			8,975
Income (loss) from discontinued operations, net of tax		—			(2	)
Income (loss) from continuing operations		(32,965	)		(33,979	)		(69,894	)		(51,775	)
Net income (loss)		(36,929	)		(17,799	)
Income (loss) from discontinued operations, net of tax		—			(31	)		—			(33	)
Net (income) loss attributable to noncontrolling interests		(244	)		(165	)
Net income (loss)		(32,965	)		(34,010	)		(69,894	)		(51,808	)
Net income (loss) attributable to Radius shareholders	$	(37,173	)	$	(17,964	)
Net (income) loss attributable to noncontrolling interests		(12	)		31			(256	)		(135	)
Net income (loss) per share attributable to Radius shareholders:
Net income (loss) attributable to Radius shareholders	$	(32,977	)	$	(33,979	)	$	(70,150	)	$	(51,943	)
Basic:
Net income (loss) per share attributable to Radius shareholders:
Income (loss) per share from continuing operations	$	(1.30	)	$	(0.64	)
Basic:
Income (loss) loss per share	$	(1.30	)	$	(0.64	)
Income (loss) per share from continuing operations	$	(1.15	)	$	(1.19	)	$	(2.45	)	$	(1.83	)
Diluted:
Income (loss) loss per share	$	(1.15	)	$	(1.19	)	$	(2.45	)	$	(1.83	)
Income (loss) per share from continuing operations	$	(1.30	)	$	(0.64	)
Diluted:
Income (loss) per share	$	(1.30	)	$	(0.64	)
Income (loss) per share from continuing operations	$	(1.15	)	$	(1.19	)	$	(2.45	)	$	(1.83	)
Weighted average number of common shares:
Income (loss) per share	$	(1.15	)	$	(1.19	)	$	(2.45	)	$	(1.83	)
Basic		28,573			28,219
Weighted average number of common shares:
Diluted		28,573			28,219
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 November 30,
	Three Months Ended						Six Months Ended
	2024			2023
	February 28,			February 29,			February 28,			February 29,
Net income (loss)	$	(36,929	)	$	(17,799	)
	2025			2024			2025			2024
Other comprehensive income (loss), net of tax:
Net income (loss)	$	(32,965	)	$	(34,010	)	$	(69,894	)	$	(51,808	)
Foreign currency translation adjustments		(2,109	)		(499	)
Other comprehensive income (loss), net of tax:
Cash flow hedges, net		712			(107	)
Foreign currency translation adjustments		(1,846	)		(83	)		(3,955	)		(582	)
Pension obligations, net		(135	)		187
Cash flow hedges, net		(9	)		285			703			178
Total other comprehensive income (loss), net of tax		(1,532	)		(419	)
Pension obligations, net		28			216			(107	)		403
Comprehensive income (loss)		(38,461	)		(18,218	)
Total other comprehensive income (loss), net of tax		(1,827	)		418			(3,359	)		(1	)
Less comprehensive (income) loss attributable to noncontrolling interests		(244	)		(165	)
Comprehensive income (loss)		(34,792	)		(33,592	)		(73,253	)		(51,809	)
Comprehensive income (loss) attributable to Radius shareholders	$	(38,705	)	$	(18,383	)
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 November 30, 2023	Shares			Amount			Shares		Amount		Paid-in Capital			Retained Earnings			ComprehensiveIncome (Loss)			Shareholders’Equity			NoncontrollingInterests			Total Equity
Three Months ended February 29, 2024	Shares			Amount			Shares		Amount		Paid-in Capital			Retained Earnings			ComprehensiveIncome (Loss)			Shareholders’Equity			NoncontrollingInterests			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
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)		—			—			—		—		—			(1733,~~964~~979	)		—			(1733,~~964~~979	)		~~165~~(31	)		(1734,~~799~~010	)
Other comprehensive income (loss), net of tax		—			—			—		—		—			—			~~(419~~418	)		~~(419~~418	)		—			~~(419~~418	)
Distributions to noncontrolling interests		—			—			—		—		—			—			—			—			(~~362~~222	)		(~~362~~222	)
Issuance of restricted stock		~~562~~119			~~562~~119			—		—		(~~562~~119	)		—			—			—			—			—
Restricted stock withheld for taxes		~~(211~~—	)		~~(211~~—	)		—		—		(~~4,591~~1	)		—			—			(~~4,802~~1	)		—			(~~4,802~~1	)
Share-based compensation cost		—			—			—		—		12,~~376~~365			—			—			12,~~376~~365			—			12,~~376~~365
Dividends ($0.1875 per common share)		—			—			—		—		—			(5,~~377~~360	)		—			(5,~~377~~360	)		—			(5,~~377~~360	)
Balance as of November 30, 2023		27,663		$	27,663			200	$	200	$	22,258		$	870,975		$	(40,102	)	$	880,994		$	3,282		$	884,276
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 November 30, 2024	Shares			Amount			Shares		Amount		Paid-inCapital			RetainedEarnings			ComprehensiveIncome (Loss)			Shareholders’Equity			NoncontrollingInterests			TotalEquity
Three Months ended February 28, 2025	Shares			Amount			Shares		Amount		Paid-inCapital			RetainedEarnings			ComprehensiveIncome (Loss)			Shareholders’Equity			NoncontrollingInterests			TotalEquity
Balance as of September 1, 2024		27,839		$	27,839			200	$	200	$	28,828		$	606,417		$	(40,172	)	$	623,112		$	2,628		$	625,740
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)		—			—			—		—		—			(3732,~~173~~977	)		—			(3732,~~173~~977	)		~~244~~12			(3632,~~929~~965	)
Other comprehensive income (loss), net of tax		—			—			—		—		—			—			(1,~~532~~827	)		(1,~~532~~827	)		—			(1,~~532~~827	)
Distributions to noncontrolling interests		—			—			—		—		—			—			—			—			(~~395~~201	)		(~~395~~201	)
Issuance of restricted stock		~~174~~45			~~174~~45			—		—		(~~174~~45	)		—			—			—			—			—
Restricted stock withheld for taxes		~~(58~~—	)		~~(58~~—	)		—		—		~~(891~~—	)		—			—			~~(949~~—	)		—			~~(949~~—	)
Share-based compensation cost		—			—			—		—		2,~~446~~518			—			—			2,~~446~~518			—			2,~~446~~518
Dividends ($0.1875 per common share)		—			—			—		—		—			(5,~~474~~428	)		—			(5,~~474~~428	)		—			(5,~~474~~428	)
Balance as of November 30, 2024		27,955		$	27,955			200	$	200	$	30,209		$	563,770		$	(41,704	)	$	580,430		$	2,477		$	582,907
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)

	Three Months Ended November 30,
	Six Months Ended
	2024			2023
	February 28,			February 29,
	2025			2024
Cash flows from operating activities:
Net income (loss)	$	(3669,~~929~~894	)	$	(1751,~~799~~808	)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Asset impairment charges		184			~~219~~1,967
Depreciation and amortization		2448,~~034~~066			2347,~~471~~782
Inventory write-downs		92			—
Deferred income taxes		3(1,~~305~~239	)		(109,~~834~~500	)
Undistributed equity in earnings of joint ventures		(~~448~~636	)		(~~673~~703	)
Share-based compensation expense		24,~~446~~964			13,~~376~~741
(Gain) loss on disposal of assets, net		~~289~~(3,089	)		(~~418~~459	)
Other (gain) loss, net		2844			~~356~~450
Changes in assets and liabilities, net of acquisitions:
Accounts receivable		4033,~~987~~389			15(14,~~847~~504	)
Inventories		(819,~~880~~059	)		~~293~~(30,423	)
Income taxes		~~550~~859			~~405~~144
Prepaid expenses and other current assets		~~(3,918~~103	)		(212,~~771~~519	)
Other long-term assets		(23,~~063~~765	)		(13,~~184~~696	)
Operating lease assets and liabilities		~~245~~445			(65195	)
Accounts payable		(186,~~121~~480	)		~~353~~(6,368	)
Accrued payroll and related liabilities		(35,~~813~~455	)		(8,~~163~~996	)
Other accrued liabilities		(~~615~~1,764	)		~~(683~~2,686	)
Environmental liabilities		76(575	)		(21,~~523~~072	)
Other long-term liabilities		~~672~~941			~~494~~1,042
Distributed equity in earnings of joint ventures		—2,000			1,000
Net cash provided by (used in) operating activities		(118,~~905~~049	)		(156,~~299~~393	)
Cash flows from investing activities:
Capital expenditures		(1223,~~058~~392	)		(2439,~~808~~791	)
Proceeds from insurance and sale of assets		~~279~~4,484			~~609~~2,133
Net cash used in investing activities		(11,779	)		(24,199	)
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		~~197~~388,~~557~~747			~~135~~389,~~099~~692
Repayment of long-term debt		(~~166~~373,~~707~~432	)		(~~100~~265,~~568~~910	)
Payment of debt issuance costs		(~~564~~2,132	)		—
Taxes paid related to net share settlement of share-based payment awards		(949	)		(4,~~802~~803	)
Distributions to noncontrolling interests		(~~395~~596	)		(~~362~~585	)
Dividends paid		(510,~~588~~876	)		(510,~~551~~798	)
Net cash provided by (used in) financing activities		~~23,354~~762			23107,~~816~~596
Effect of exchange rate changes on cash		1(18	)		58(15	)
Net change in cash and cash equivalents		~~9,671~~(115	)		(17,~~624~~530	)
Cash and cash equivalents as of beginning of period		5,552			6,032
Cash and cash equivalents as of end of period	$	155,~~223~~437		$	413,~~408~~562

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

810

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RADIUS RECYCLING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Three Months Ended November 30,
	Six Months Ended
	2024			2023
	February 28,			February 29,
	2025			2024
SUPPLEMENTAL DISCLOSURES:
Cash paid (received) during the period for:
Interest	$	716,~~143~~663		$	49,~~428~~792
Income taxes, net	$	(4690	)	$	~~235~~368
Schedule of noncash investing and financing transactions:
Purchases of property, plant and equipment included in liabilities	$	5,~~192~~841		$	75,~~120~~470

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

911

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RADIUS RECYCLING, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	PAGE
Note 1 - Summary of Significant Accounting Policies	1113
Note 2 - Inventories	1315
Note 3 - Goodwill	1315
Note 4 - Commitments and Contingencies	1315
Note 5 - Accumulated Other Comprehensive Income (Loss)	1820
Note 6 - Revenue	1921
Note 7 - Share-Based Compensation	1922
Note 8 - Derivative Financial Instruments	2023
Note 9 - Income Taxes	2123
Note 10 - Net Income (Loss) Per Share	2224
Note 11 - Related Party Transactions	2224
Note 12 - Debt	2224
Note 13 - Subsequent Events	25

1012

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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 ~~November~~February 3028, ~~2024~~2025 and ~~November~~February 3029, ~~2023~~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 $4952 million and $59 million as of ~~November~~February 3028, ~~2024~~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.

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.13

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 $4 million and $3 million for the three months ended November 30, 2024 and November 30, 2023, respectively.

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RADIUS RECYCLING, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 $2414 million and $22 million as of ~~November~~February 3028, ~~2024~~2025 and August 31, 2024, respectively, and consisted primarily of deposits on capital projects and prepaid services, ~~insurance~~property taxes, and ~~property taxes~~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 ~~November~~both ~~30,~~February ~~2024~~28, ~~receivables~~2025 ~~from~~and ~~insurers totaled $16 million, including $14 million relating to environmental claims. As of~~ August 31, 2024, receivables from insurers totaled $15 million, including $13 million relating to environmental claims. See “Accounting for Impacts of Involuntary Events” below in this Note for further discussion of receivables and advance payments from insurers relating to property damage and business interruption claims.

Other assets as of ~~November~~February 3028, ~~2024~~2025 and August 31, 2024 included $2022 million and $18 million, respectively, representing advances to a supplier of metals recycling equipment.

Other assets as of ~~November~~February 3028, ~~2024~~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 ~~November~~February 3028, ~~2024~~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 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 quarter of fiscal 2024, the Company recognized a $4 million insurance receivable and related insurance recovery gain, reported within cost of goods sold on the Unaudited Condensed Consolidated Statements of Operations. 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.

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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 ~~November~~February 3028, ~~2024~~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):

	November 30, 2024		August 31, 2024
	February 28, 2025		August 31, 2024
Processed and unprocessed scrap metal	$	~~153~~131,~~843~~376	$	137,013
Semi-finished goods		16,~~070~~085		14,846
Finished goods		6562,~~539~~015		72,225
Supplies		7072,~~908~~281		69,848
Inventories	$	~~306~~281,~~360~~757	$	293,932

Note 3 - Goodwill

As of ~~each~~both ofFebruary ~~November 30~~28, ~~2024~~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 ~~three~~half ~~months~~ 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.

~~Changes in the Company’s environmental liabilities for the three months ended November 30, 2024 were as follows (in thousands):~~15

Balance as ofSeptember 1, 2024				LiabilitiesEstablished(Released), Net				Payments andOther				Balance as ofNovember 30, 2024				Short-Term				Long-Term
$	65,649			$	569			$	(599	)		$	65,619			$	13,305			$	52,314

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RADIUS RECYCLING, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AsChanges ofin ~~each of November 30, 2024 and August 31, 2024,~~ the Company’s ~~had~~ environmental liabilities ~~of $66 million~~ for the ~~potential~~six ~~remediation~~months ofended ~~locations~~February 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 damages28, ~~governmental~~2025 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~~as ~~individually~~follows ~~material~~(in ~~at any site.~~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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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 ~~November~~February 3028, ~~2024~~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 ~~November~~February 3028, ~~2024~~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 ~~November~~February 3028, ~~2024~~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 ~~the second quarter of~~ 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 ~~November~~February 3028, ~~2024~~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 ~~November~~February 3028, ~~2024~~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 ~~November~~February 3028, ~~2024~~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 ~~November~~February 3028, ~~2024~~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 ~~November~~February 3028, ~~2024~~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 ~~November~~February 3028, ~~2024~~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.

~~Contingencies – Other~~19

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~and~~Contingencies ~~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.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 November 30, 2024												Three Months Ended November 30, 2023
	Three Months ended February 28, 2025												Three Months ended February 29, 2024
	Foreign CurrencyTranslationAdjustments			Cash Flow Hedges, Net			Pension Obligations,Net			Total			Foreign CurrencyTranslationAdjustments			Cash Flow Hedges, Net			Pension Obligations,Net			Total
Balances - September 1 (Beginning of period)	$	(37,678	)	$	(1,428	)	$	(1,066	)	$	(40,172	)	$	(37,340	)	$	(304	)	$	(2,039	)	$	(39,683	)
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		(21,~~109~~846	)		~~1,099~~(9	)		~~(210~~—	)		(1,~~220~~855	)		(~~499~~83	)		~~197~~711			~~178~~—			~~(124~~628	)
Income tax benefit (expense)		—			~~(248~~2	)		47—			~~(201~~2	)		—			(44160	)		~~(40~~—	)		(84160	)
Other comprehensive income (loss) before reclassifications, net of tax		(21,~~109~~846	)		~~851~~(7	)		~~(163~~—	)		(1,~~421~~853	)		(~~499~~83	)		~~153~~551			~~138~~—			~~(208~~468	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			(~~180~~3	)		36			~~(144~~33	)		—			(~~336~~343	)		63279			(~~273~~64	)
Income tax (benefit) expense		—			411			(8	)		33(7	)		—			7677			(1463	)		6214
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		—			(~~139~~2	)		28			~~(111~~26	)		—			(~~260~~266	)		49216			(~~211~~50	)
Net periodic other comprehensive income (loss)		(21,~~109~~846	)		~~712~~(9	)		~~(135~~28	)		(1,~~532~~827	)		(~~499~~83	)		~~(107~~285	)		~~187~~216			~~(419~~418	)
Balances - November 30, respectively (End of period)	$	(39,787	)	$	(716	)	$	(1,201	)	$	(41,704	)	$	(37,839	)	$	(411	)	$	(1,852	)	$	(40,102	)
Balances - February 28 and 29, respectively (End of period)	$	(41,633	)	$	(725	)	$	(1,173	)	$	(43,531	)	$	(37,922	)	$	(126	)	$	(1,636	)	$	(39,684	)

Reclassifications from accumulated other comprehensive loss to earnings, both individually and in the aggregate, were not material to the impacted captions in the Unaudited Condensed Consolidated Statements of Operations in all periods presented.20

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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	)	$	(1,428	)	$	(1,066	)	$	(40,172	)	$	(37,340	)	$	(304	)	$	(2,039	)	$	(39,683	)
Other comprehensive income (loss) before reclassifications		(3,955	)		1,090			(210	)		(3,075	)		(582	)		908			178			504
Income tax (expense) benefit		—			(246	)		47			(199	)		—			(204	)		(40	)		(244	)
Other comprehensive income (loss) before reclassifications, net of tax		(3,955	)		844			(163	)		(3,274	)		(582	)		704			138			260
Amounts reclassified from accumulated other comprehensive income (loss)		—			(183	)		72			(111	)		—			(679	)		342			(337	)
Income tax expense (benefit)		—			42			(16	)		26			—			153			(77	)		76
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		—			(141	)		56			(85	)		—			(526	)		265			(261	)
Net periodic other comprehensive income (loss)		(3,955	)		703			(107	)		(3,359	)		(582	)		178			403			(1	)
Balances - February 28 and 29, respectively (End of period)	$	(41,633	)	$	(725	)	$	(1,173	)	$	(43,531	)	$	(37,922	)	$	(126	)	$	(1,636	)	$	(39,684	)

Note 6 - Revenue

Disaggregation of Revenues

The table below illustrates the Company’s revenues disaggregated by major product and sales destination (in thousands):

	Three Months Ended November 30,
	Three Months Ended				Six Months Ended
	2024		2023
	February 28,		February 29,		February 28,		February 29,
Major product information:
	2025		2024		2025		2024
Ferrous revenues	$	327,104	$	348,897
Major product information:
Nonferrous revenues		182,049		169,294
Ferrous revenues	$	318,955	$	316,097	$	646,059	$	664,994
Steel revenues(1)		101,851		113,531
Nonferrous revenues		179,012		164,481		361,061		333,775
Retail and other revenues		45,533		41,175
Steel revenues(1)		104,114		100,721		205,965		214,252
Total revenues	$	656,537	$	672,897
Retail and other revenues		40,427		39,760		85,960		80,935
Revenues based on sales destination:
Total revenues	$	642,508	$	621,059	$	1,299,045	$	1,293,956
Foreign	$	354,850	$	358,021
Revenues based on sales destination:
Domestic		301,687		314,876
Foreign	$	336,707	$	328,259	$	691,557	$	686,280
Total revenues	$	656,537	$	672,897
Domestic		305,801		292,800		607,488		607,676
Total revenues	$	642,508	$	621,059	$	1,299,045	$	1,293,956

(1)

Steel revenues include predominantly sales of finished steel products, in addition to sales of semi-finished goods (billets) and steel manufacturing scrap.

Receivables from Contracts with Customers

The revenue accounting standard defines a receivable as an entity’s right to consideration that is unconditional, meaning that only the passage of time is required before payment is due. As of ~~November~~February 3028, ~~2024~~2025 and August 31, 2024, receivables from contracts with customers, net of an allowance for credit losses, represented substantially all of total accounts receivable reported in the Unaudited Condensed Consolidated Balance Sheets as of each reporting date.

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RADIUS RECYCLING, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contract Liabilities

Contract consideration received from a customer prior to revenue recognition is recorded as a contract liability and is recognized as revenue when the Company satisfies the related performance obligation under the terms of the contract. The Company’s contract liabilities, which consist almost entirely of customer deposits for recycled metal and finished steel sales contracts, are reported within accounts payable in the Unaudited Condensed Consolidated Balance Sheets and totaled $813 million and $10 million as of ~~November~~February 3028, ~~2024~~2025 and August 31, 2024, respectively. Unsatisfied performance obligations reflected in these contract liabilities relate to contracts with original expected durations of one year or less and, therefore, are not disclosed. The substantial majority of outstanding contract liabilities are reclassified to revenues within three months of the reporting date as a result of satisfying performance obligations.

Note 7 - Share-Based Compensation

In the first quarter of fiscal 2025, the Compensation Committee of the Company’s Board of Directors granted 446,993 restricted stock units (“RSUs”) and 340,454 performance share awards (“PSUs”) to the Company’s key employees and officers under the Company’s 2024 Omnibus Incentive Plan (the “2024 Plan”).

Of the RSUs granted in the first quarter of fiscal 2025, 334,042 RSUs have a five-year term and vest one-fifth per year commencing November 30, 2025 and each October 31 thereafter. The remaining 112,951 RSUs have a three-year term and vest one-third per year commencing November 30, 2025 and each October 31 thereafter. The aggregate fair value of all the RSUs granted was based on the market closing price of the underlying Class A common stock on the grant date and totaled $9 million. The compensation expense associated with the RSUs is recognized over the requisite service period of the awards, net of forfeitures, which for participants who were retirement eligible as of the grant date or who will become retirement eligible during the term of the awards is the longer of two years or the period ending on the date retirement eligibility is achieved.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The PSUs granted in the first quarter of fiscal 2025 comprise two separate and distinct awards with different vesting conditions. Awards vest if the threshold level under the specified metric is met at the end of the approximately three-year performance period. The performance metrics are (1) the Company’s total shareholder return (“TSR”) based on the Company’s average TSR percentile rank relative to a designated peer group and (2) the Company’s volume growth. Award share payouts depend on the extent to which the performance goals have been achieved. The number of shares that a participant receives is equal to the number of performance shares granted multiplied by a payout factor, which ranges from a threshold of 50% to a maximum of 200%. The TSR award stipulates certain limitations to the payout in the event the payout reaches a defined ceiling level or the Company’s TSR is negative.

Approximately half of the PSUs granted during the first quarter of fiscal 2025 vest based on the Company’s relative TSR metric over an approximately three-year performance period ending August 31, 2027. The Company estimated the fair value of TSR awards granted in the first quarter of fiscal 2025 using a Monte-Carlo simulation model utilizing several key assumptions, including the following:


		Percentage
Expected share price volatility (Radius)		50.2 %
Expected share price volatility (Peer group)		47.0 %
Expected correlation to peer group companies		42.4 %
Risk-free rate of return		4.2 %

The estimated aggregate fair value of the TSR-based PSUs at the date of grant was $3 million. The compensation expense for these awards based on the grant-date fair value, net of estimated forfeitures, is recognized over the requisite service period (or to the date a qualifying employment termination event entitles the recipient to a prorated award, if before the end of the service period), regardless of whether the market condition has been or will be satisfied.

Approximately half of the PSUs granted during the first quarter of fiscal 2025 vest based on the Company’s volume growth for the three-year performance period consisting of the Company’s 2025, 2026 and 2027 fiscal years. The fair value of the awards granted was based on the market closing price of the underlying Class A common stock on the grant date and totaled $3 million.

The Company accrues compensation cost for the PSUs related to volume growth based on the probable outcome of achieving specified performance conditions, net of estimated forfeitures, over the requisite service period (or to the date a qualifying employment termination event entitles the recipient to a prorated award, if before the end of the service period). The Company reassesses whether achievement of the performance conditions is probable at each reporting date. If it is probable that the actual performance results will exceed the stated target performance conditions, the Company accrues additional compensation cost for the additional performance shares to be awarded. If, upon reassessment, it is no longer probable that the actual performance results will exceed the stated target performance conditions, or it is no longer probable that the target performance conditions will be achieved, the Company reverses any recognized compensation cost for shares no longer probable of being issued. If the performance conditions are not achieved at the end of the performance period, all related compensation cost previously recognized is reversed.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

conditions, or it is no longer probable that the target performance conditions will be achieved, the Company reverses any recognized compensation cost for shares no longer probable of being issued. If the performance conditions are not achieved at the end of the performance period, all related compensation cost previously recognized is reversed.

PSUs will be paid in Class A common stock as soon as practicable after the end of the requisite service period and vesting date of October 31, 2027.

In the second quarter of fiscal 2025, the Company granted deferred stock units (“DSUs”) to each of its non-employee directors under the Company’s 2024 Plan. Each DSU gives the director the right to receive one share of Class A common stock at a future date. The grant included an aggregate of 57,642 shares that will vest in full on the day before the Company’s 2025 annual meeting of shareholders, subject to continued Board service. The total fair value of these awards at the grant date was $1 million.

Note 8 - Derivative Financial Instruments

Interest Rate Swaps

The Company is exposed to interest rate risk on its debt and may enter interest rate swap contracts to effectively manage the impact of interest rate changes on its outstanding debt, which has predominantly floating interest rates. The Company does not enter interest rate swap transactions for trading or speculative purposes.

In ~~the fourth quarter of~~ fiscal 2023, the Company entered three pay-fixed interest rate swap transactions, each with a different major financial institution counterparty and designated as a cash flow hedge, to hedge the variability in interest cash flows associated with the Company’s variable-rate loans under its bank revolving credit facilities. The interest rate swaps involve the receipt of variable-rate amounts from the counterparty in exchange for the Company making fixed-rate payments over the life of the agreement without exchange of the underlying notional amount. These contracts mature in August 2026. As of both ~~November~~February 3028, ~~2024~~2025 and August 31, 2024, the total notional amount of these interest rate swaps was $150 million. The fair values of the interest rate swaps are based upon inputs corroborated by observable market data which is considered Level 2 of the fair value hierarchy.

20The fair value of derivative instruments in the Unaudited Condensed Consolidated Balance Sheet as of February 28, 2025 and August 31, 2024 is as follows (in thousands):


	Balance Sheet Location	February 28, 2025		August 31, 2024
Interest rate swap contracts	Other accrued liabilities	$	506	$	174
Interest rate swap contracts	Other long-term liabilities	$	428	$	1,667

See Note 5 - Accumulated Other Comprehensive Income (Loss) for tabular presentation of the effects of interest rate swap derivative cash flow hedges on other comprehensive income. All related cash flow hedge amounts reclassified from accumulated other comprehensive income (“AOCI”) were recorded in interest expense on the Unaudited Condensed Consolidated Statement of Operations for the three and six months ended February 28, 2025, which reclassified amounts totaled less than $1 million for each period. For the three and six months ended February 29, 2024, such reclassified amounts totaled less than $1 million and $1 million, respectively. Total interest expense was $9 million and $18 million, respectively, for the second quarter and first six months of fiscal 2025, compared to $6 million and $11 million, respectively, for the same periods in the prior year. There was no hedge ineffectiveness with respect to the Company’s interest rate swap cash flow hedges for the three and six months ended February 28, 2025 and February 29, 2024.

Note 9 - Income Taxes

Effective Tax Rate

The Company’s effective tax rate from continuing operations for the second quarter and the first six months of fiscal 2025 was a benefit on pre-tax loss of 11.5% and 0.7%, respectively, compared to an expense on pre-tax loss of 3.6% and a benefit on pre-tax loss of 14.8%, respectively, for the comparable prior year periods. The Company’s effective tax rate from continuing operations for the second quarter of fiscal 2025 was lower than the U.S. federal statutory rate of 21% primarily due to the aggregate effect of the Company’s financial performance including an increase in the Company’s valuation allowance against deferred tax assets in the U.S. tax jurisdiction and the impact of intra-period allocation of the estimated annual tax provision. For the second quarter of fiscal 2024, the Company’s effective tax rate from continuing operations was significantly different than the U.S. federal statutory rate of 21% primarily due to the aggregate effect of the Company’s financial performance, permanent differences from non-deductible expenses, and unrecognized tax benefits on

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RADIUS RECYCLING, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~The~~intra-period ~~fair~~allocation ~~value~~ of ~~derivative~~the ~~instruments~~estimated inannual ~~the~~tax ~~Unaudited~~provision, ~~Condensed~~as ~~Consolidated~~well ~~Balance~~as ~~Sheet~~the asrecognition of ~~November~~a ~~30,~~valuation ~~2024~~allowance ~~and~~against ~~August~~deferred ~~31,~~tax ~~2024~~assets isin asthe ~~follows~~Company’s ~~(in~~Puerto ~~thousands):~~Rico tax jurisdiction.

	Derivatives
	Balance Sheet Location	November 30, 2024		August 31, 2024
Interest rate swap contracts	Other accrued liabilities	$	263	$	174
Interest rate swap contracts	Other long-term liabilities	$	660	$	1,667

See Note 5 - Accumulated Other Comprehensive Income (Loss) for tabular presentation of the effects of interest rate swap derivative cash flow hedges on other comprehensive income. All related cash flow hedge amounts reclassified from accumulated other comprehensive income (“AOCI”) were recorded in interest expense on the Unaudited Condensed Consolidated Statement of Operations for the three months ended November 30, 2024 and 2023, which reclassified amounts totaled less than $1 million for each period. Total interest expense was $9 million and $5 million, respectively, for the three months ended November 30, 2024 and 2023. There was no hedge ineffectiveness with respect to the Company’s interest rate swap cash flow hedges for the three months ended November 30, 2024 and 2023.

Note 9 - Income Taxes

Effective Tax Rate

The Company’s effective tax rate from continuing operations for the first quarter of fiscal 2025 was an expense on pre-tax loss of 11.4% compared to a benefit on pre-tax loss of 36.4% for the comparable prior year period. The Company’s effective tax rate from continuing operations for the first quarter of fiscal 2025 was lower than the U.S. federal statutory rate of 21% primarily due to permanent differences from non-deductible expenses, an increase in the Company’s valuation allowance against deferred tax assets and the movement of unrecognized tax benefits on intra-period allocation of the estimated annual tax provision. For the first quarter of fiscal 2024, the Company’s effective tax rate from continuing operations was higher than the U.S. federal statutory rate of 21% primarily due to the aggregate effect of the Company’s financial performance, permanent differences from non-deductible expenses, and unrecognized tax benefits on intra-period allocation of the estimated annual tax provision.

Valuation Allowances

The Company assesses the realizability of its deferred tax assets on a quarterly basis through an analysis of potential sources of future taxable income, including prior year taxable income available to absorb a carryback of tax losses, reversals of existing taxable temporary differences, tax planning strategies, and forecasts of taxable income. The Company considers and weighs all positive and negative evidence to determine if valuation allowances against deferred tax assets are required. The Company continues to maintain a valuation allowance against its deferred tax assets in the Company’s U.S. federal, state and foreign tax jurisdictions.

The Company files federal and state income tax returns in the U.S. and foreign tax returns in Puerto Rico and Canada. For U.S. federal income tax returns, fiscal years 2021 to 2024 remain subject to examination under the statute of limitations.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 10 - Net Income (Loss) Per Share

The following table sets forth the information used to compute basic and diluted net income (loss) per share attributable to Radius shareholders (in thousands):

	Three Months Ended November 30,
	Three Months Ended						Six Months Ended
	2024			2023
	February 28,			February 29,			February 28,			February 29,
Income (loss) from continuing operations	$	(36,929	)	$	(17,797	)
	2025			2024			2025			2024
Net (income) loss attributable to noncontrolling interests		(244	)		(165	)
Income (loss) from continuing operations	$	(32,965	)	$	(33,979	)	$	(69,894	)	$	(51,775	)
Income (loss) from continuing operations attributable to Radius shareholders	$	(37,173	)	$	(17,962	)
Net (income) loss attributable to noncontrolling interests		(12	)		31			(256	)		(135	)
Income (loss) from discontinued operations, net of tax		—			(2	)
Income (loss) from continuing operations attributable to Radius shareholders	$	(32,977	)	$	(33,948	)	$	(70,150	)	$	(51,910	)
Net income (loss) attributable to Radius shareholders	$	(37,173	)	$	(17,964	)
Income (loss) from discontinued operations, net of tax		—			(31	)		—			(33	)
Computation of shares:
Net income (loss) attributable to Radius shareholders	$	(32,977	)	$	(33,979	)	$	(70,150	)	$	(51,943	)
Weighted average common shares outstanding, basic		28,573			28,219
Computation of shares:
Incremental common shares attributable to dilutive performance share awards, RSUs and DSUs		—			—
Weighted average common shares outstanding, basic		28,684			28,454			28,628			28,337
Weighted average common shares outstanding, diluted		28,573			28,219
Incremental common shares attributable to dilutive performance share awards, RSUs and DSUs		—			—			—			—
Weighted average common shares outstanding, diluted		28,684			28,454			28,628			28,337

Common stock equivalent shares of ~~489~~990,~~587~~999 and 719,952 were considered antidilutive and were excluded from the calculation of diluted net income (loss) per share for the three and six months ended ~~November~~February 3028, ~~2024~~2025, respectively, compared to ~~525~~340,~~287~~415 and 407,103 for the three and six months ended ~~November~~February 3029, ~~2023~~2024, respectively.

Note 11 - Related Party Transactions

The Company purchases recycled metal from one of its joint venture operations at prices that approximate fair market value. These purchases totaled $4 million ~~for~~and ~~both~~$5 million for the three months ended ~~November~~February 3028, 2025 and February 29, 2024, respectively, and ~~November~~$8 30million and $9 million for the six months ended February 28, ~~2023~~2025 and February 29, 2024, respectively.

Note 12 - Debt

Debt consisted of the following as of ~~November~~February 3028, ~~2024~~2025 and August 31, 2024 (in thousands):

	November 30, 2024			August 31, 2024
	February 28, 2025			August 31, 2024
Bank revolving credit facilities, interest primarily at SOFR or LIBOR plus a spread	$	~~425~~410,000		$	393,612
Finance lease liabilities		87,~~344~~815			9,042
Other debt obligations		12,~~101~~089			12,116
Total debt		~~445~~429,~~445~~904			414,770
Less current maturities		(5,~~573~~480	)		(5,688	)
Debt, net of current maturities	$	~~439~~424,~~872~~424		$	409,082

The Company’s senior secured revolving credit facilities provide for $800 million and C$15 million in revolving loans maturing in August 2027. The $800 million credit facility includes a $50 million sublimit for letters of credit, a $25 million sublimit for swing line loans, and a $50 million sublimit for multicurrency borrowings. On January 3, 2025, the Company and certain of its subsidiaries entered into the Fifth Amendment (the “Fifth Amendment”) to its Third Amended and Restated Credit Agreement, dated as of April 6, 2016, by and among the Company, as the U.S. Borrower, Schnitzer Steel Canada, Ltd., as the Canadian Borrower, the subsidiaries of the Company party thereto (the “Guarantors”), Bank of America N.A., as administrative agent and the other lenders party thereto (as amended prior to the Fifth Amendment, the “Existing Credit Agreement”, the Existing Credit Agreement, as amended pursuant to the Fifth Amendment, the “Amended Credit Agreement”). The Fifth Amendment makes certain modifications to the Existing Credit Agreement, including amendments that, among other things, extend for two additional fiscal quarters the replacement of the maintenance covenant previously requiring compliance with a minimum permitted fixed charge coverage ratio, as described below.24

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The applicable interest rates under the facility are based, at the Company’s option, on either the Secured Overnight Financing Rate (“SOFR”) (or the Term Canadian Overnight Repo Rate Average “CORRA” for C$ loans), plus a spread of between 1.50% and 2.50%, with the amount of the spread based on a pricing grid tied to the Company’s ratio of consolidated net funded debt to EBITDA (as defined by the credit agreement), or the greater of (a) the prime rate, (b) the federal funds rate plus 0.50% or (c) the daily rate equal to Term SOFR plus 1.00%, in each case, plus a spread of between 0.50% and 1.50% based on a pricing grid tied to the Company’s consolidated net funded debt to EBITDA ratio. In addition, commitment fees are payable on the unused portion of the credit facilities at rates between 0.175% and 0.350% based on a pricing grid tied to the Company’s ratio of consolidated net funded debt to EBITDA.

As of ~~November~~February 3028, ~~2024~~2025 and August 31, 2024, borrowings outstanding under the credit facilities were $~~425~~410 million and $394 million, respectively. The weighted average interest rate on amounts outstanding under the credit facilities was 76.29% and 8.0% as of ~~November~~February 3028, ~~2024~~2025 and August 31, 2024, respectively.

The credit agreement contains various representations and warranties, events of default, and financial and other customary covenants which limit (subject to certain exceptions) the Company’s ability to, among other things, incur or suffer to exist certain liens, make investments, incur or guaranty additional indebtedness, enter into consolidations, mergers, acquisitions, and sales of assets, make distributions and other restricted payments, change the nature of the business, engage in transactions with affiliates, and enter into restrictive agreements, including agreements that restrict the ability of the subsidiaries to make distributions. The financial covenants under the Amended Credit Agreement include (a) a consolidated fixed charge coverage ratio of no less than 1.50 to 1.00, defined as the four-quarter rolling sum of consolidated EBITDA less defined maintenance capital expenditures and certain environmental expenditures divided by consolidated fixed charges which, for the fiscal quarters ending May 31, 2024 through August 31, 2025, has been temporarily replaced with (i) a minimum consolidated interest coverage ratio of 2.00 to 1.00 for the fiscal quarter ending May 31, 2024, and 1.25 to 1.00 for each of the fiscal quarters ending February 28, 2025 through August 31, 2025, and (ii) a minimum consolidated asset coverage ratio of no less than 1.00 to 1.00 for each of the fiscal quarters ending May 31, 2024 through August 31, 2025, and (b) a consolidated leverage ratio of no more than 0.55 to 1.00, defined as consolidated funded indebtedness divided by the sum of consolidated net worth and consolidated funded indebtedness. The Company’s obligations under the credit agreement are guaranteed by substantially all of its subsidiaries. The credit facilities and the related guarantees are secured by senior first priority liens on certain of the Company’s and its subsidiaries’ assets, including equipment, inventory, accounts receivable and most other personal property and equity interests held by the Company and the Guarantors in their respective subsidiaries.

As of ~~November~~February 3028, ~~2024~~2025, the Company was in compliance with the applicable financial covenants under the Amended Credit Agreement. While the Company expects to remain in compliance with the financial covenants under the credit agreement, the Company may not be able to do so in the event market conditions do not improve, or other factors have a significant adverse impact on its results of operations and financial position. If the Company does not maintain compliance with its financial covenants and is unable to obtain an amendment or waiver from its lenders, a breach of a financial covenant would constitute an event of default and allow the lenders to exercise remedies under the agreements, the most severe of which is the termination of the credit facility under the Amended Credit Agreement and acceleration of the amounts owed under the agreement.

23Note 13 - Subsequent Events

On March 13, 2025, the Company, TAI and Merger Sub, entered into 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, 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.

On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), and as a result of the Merger, each share of common stock of the Company (“Radius Common Stock”) that is issued and outstanding

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

immediately prior to the Effective Time (other than any shares of Class B common stock of the Company for which dissenters’ rights have been properly exercised and perfected and not withdrawn) will be converted into the right to receive $30.00 in cash (the “Merger Consideration”), without interest, and less any applicable withholding taxes.

In addition, pursuant to the Merger Agreement, as of the Effective Time, (i) each Company RSU Award (as defined in the Merger Agreement) (or a portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right to receive an amount in cash equal to the sum of (x) the product of (A) Merger Consideration and (B) the total number of shares of Radius Common Stock subject to such Company RSU Award (or portion thereof) immediately prior to the Effective Time, and (y) any accrued and unpaid dividends or dividend equivalent rights corresponding to such Company RSU Award, (ii) each Company PSU Award (as defined in the Merger Agreement) (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled and converted into the right to receive an amount in cash equal to the product of (x) the Merger Consideration and (y) the total number of shares of Radius Common Stock subject to such Company PSU Award (or portion thereof) immediately prior to the Effective Time, calculated based on the greater of (A) actual performance, calculated with the applicable performance period running through the last day of the Company’s most recently completed quarter prior to the Effective Time and (B) deemed target level performance, and (iii) each Company DSU Award (as defined in the Merger Agreement) (or portion thereof) that is outstanding immediately prior to the Effective Time will, to the extent not vested, automatically become fully vested and be cancelled, and converted into the right to receive an amount in cash equal to the sum of (x) the product of (A) the Merger Consideration and (B) the total number of shares of Radius Common Stock subject to such Company DSU Award (or portion thereof), and (y) any accrued and unpaid dividends or dividend equivalent rights corresponding to such Company DSU Award.

The Company, TAI and Merger Sub have made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants that (i) the Company will conduct its and its subsidiaries’ business in the ordinary course of business consistent with past practice in all material respects during the interim period between the execution of the Merger Agreement and the Effective Time, (ii) the Company will not engage in certain types of transactions or take certain actions outside the ordinary course during such period without the prior consent of TAI, (iii) the Company will cause a meeting of the holders of Radius Common Stock to be held to consider approval of the Merger, and (iv) subject to certain customary exceptions, the Board of Directors of the Company will recommend that holders of Radius Common Stock vote in favor of the Merger. The Company has also made certain additional customary covenants, including, among others, covenants not to: (A) solicit or knowingly encourage any inquiries with respect to certain alternative business combination transactions or (B) subject to certain exceptions designed to allow the Board of Directors of the Company to fulfill its fiduciary duties to the Company’s shareholders, engage in any discussions concerning, or provide confidential information to, any person relating to certain alternative business combination transactions.

Subject to the satisfaction of such closing conditions, the Company anticipates the Merger and the other transactions contemplated by the Merger Agreement to close in the second half of calendar year 2025. Following completion of the Merger, the Company's common stock will no longer be publicly listed.

The Merger Agreement contains certain customary termination rights for the Company and TAI, including the Company’s right to terminate the Merger Agreement to accept a “Superior Proposal” (as defined in the Merger Agreement) subject to compliance with certain procedures specified in the Merger Agreement. Upon termination of the Merger Agreement under certain specified circumstances, the Company will be required to pay TAI a termination fee of $27.2 million.

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RADIUS RECYCLING, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section includes a discussion of our operations for the three and six months ended ~~November~~February 3028, ~~2024~~2025 and ~~November~~February 3029, ~~2023~~2024. The following discussion and analysis provide information which management believes is relevant to an assessment and understanding of our financial condition and results of operations. The discussion should be read in conjunction with our Annual Report on Form 10-K for the year ended August 31, 2024, and the Unaudited Condensed Consolidated Financial Statements and the related Notes thereto included in Part I, Item 1 of this report.

General

Founded in 1906, Radius Recycling, Inc. is one of North America’s largest recyclers of ferrous and nonferrous metal, including end-of-life vehicles, and a manufacturer of finished steel products. As a vertically integrated organization, we offer a range of products and services to meet global demand through our network that includes 50 retail self-service auto parts stores, 53 metals recycling facilities, and an electric arc furnace (“EAF”) steel mill. Our internal organizational and reporting structure includes a single operating and reportable segment.

We sell recycled ferrous and nonferrous metal in both foreign and domestic markets. We also sell a range of finished steel long products produced at our steel mill. We acquire, process, and recycle end-of-life (salvaged) vehicles, rail cars, home appliances, industrial machinery, manufacturing scrap, and construction and demolition scrap through our facilities. Our retail self-service auto parts stores located across the United States (“U.S.”) and Western Canada, which operate under the commercial brand-name Pick-n-Pull, procure the significant majority of our salvaged vehicles and sell serviceable used auto parts from these vehicles. Upon acquiring a salvaged vehicle, we remove catalytic converters, aluminum wheels, and batteries for separate processing and sale prior to placing the vehicle in our retail lot. After retail customers have removed desired parts from a vehicle, we may remove remaining major component parts containing ferrous and nonferrous metals, which are primarily sold to wholesalers. The remaining auto bodies are crushed and shipped to our metals recycling facilities to be shredded or sold to third parties when geographically more economical. At our metals recycling facilities, we process mixed and large pieces of scrap metal into smaller pieces by crushing, torching, shearing, shredding, separating, and sorting, resulting in recycled ferrous, nonferrous, and mixed metal pieces of a size, density, and metal content required by customers to meet their production needs. Each of our shredding, nonferrous processing, and separation systems is designed to optimize the recovery of valuable recycled metal. We also purchase nonferrous metal directly from industrial vendors and other suppliers and aggregate and prepare this metal for shipment to customers by ship, rail, or truck. In addition to the sale of recycled metal processed at our facilities, we also provide a variety of recycling and related services including brokering the sale of ferrous and nonferrous scrap metal generated by industrial entities and demolition projects to customers in the domestic market, among other services. Our steel mill produces semi-finished goods (billets) and finished goods, consisting of rebar, coiled rebar, wire rod, merchant bar, and other specialty products, using recycled ferrous metal sourced internally from our recycling and joint venture operations and other raw materials.

We operate seven deepwater port locations, six of which are equipped with large-scale shredders. Our deepwater port facilities on both the East and West Coasts of the U.S. (in Everett, Massachusetts; Providence, Rhode Island; Oakland, California; Tacoma, Washington; and Portland, Oregon) and access to public deepwater port facilities (in Kapolei, Hawaii and Salinas, Puerto Rico) allow us to ship bulk cargoes of processed recycled ferrous metal to steel manufacturers located in Europe, Africa, the Middle East, Asia, North America, Central America, and South America. Our exports of nonferrous recycled metal are shipped in containers through various public docks to specialty steelmakers, foundries, aluminum sheet and ingot manufacturers, copper refineries and smelters, brass and bronze ingot manufacturers, wire and cable producers, wholesalers, and other recycled metal processors globally. We also transport both ferrous and nonferrous metals by truck, rail, and barge in order to transfer scrap metal between our facilities for further processing, to load shipments at our export facilities, and to meet regional domestic demand.

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Our results of operations depend in large part on the demand and prices for recycled metal in foreign and domestic markets and on the supply of raw materials, including end-of-life vehicles, available to be processed at our facilities. Our results of operations also depend substantially on our operating leverage from processing and selling higher volumes of recycled metal as well as our ability to efficiently extract ferrous and nonferrous metals from the shredding process. We respond to changes in selling prices for processed metal by seeking to adjust purchase prices for unprocessed scrap metal in order to manage the impact on our operating results. The spread between selling prices for processed metal and the cost of purchased scrap metal (metal spread) is subject to a number of factors, including differences in the market conditions between the domestic regions where scrap metal is acquired and the areas in the world to which the processed metals are sold, market volatility from the time the selling price is agreed upon with the customer until the time the scrap metal is purchased, changes in the availability of scrap metal including the volume generated by source and grade, and changes in transportation costs. We believe we generally benefit from sustained periods of stable or rising recycled metal selling prices, which allow us to better maintain or increase both operating results and unprocessed scrap metal flow into our facilities. When recycled metal selling prices decline, either sharply or for a sustained period, our operating margins typically compress. With respect to finished steel products produced at our steel mill, our results of operations are impacted by demand and prices for these products, which are sold to customers located primarily in the Western U.S. and Western Canada.

Our quarterly operating results fluctuate based on a variety of factors including, but not limited to, changes in market conditions for recycled ferrous and nonferrous metal and finished steel products, the supply of scrap metal in our domestic markets, varying demand for used auto parts from our self-service retail stores, the efficiency of our supply chain, and variations in production and other operating costs. Certain of these factors are influenced, to a degree, by the impact of seasonal changes including severe weather conditions, which can impact the timing of shipments and inhibit construction activity utilizing our products, scrap metal collection and production levels at our facilities, and retail admissions and parts sales at our auto parts stores. Further, ~~sanctions,~~ trade actions, including tariffs, sanctions, and any retaliation by affected countries, as well as licensing, product quality, and inspection requirements, can impact the level of profitability on sales of our products and, in certain cases, impede or restrict our ability to sell to certain export markets or require us to direct our sales to alternative market destinations, which can cause our quarterly operating results to fluctuate. For further information regarding the potential impact of uncertainty in global markets including the impact of tariffs and other trade actions on our business and results of operations, see Part II, Item 1A. Risk Factors of this report.

Merger with TAI

On March 13, 2025, we entered into a Merger Agreement with Toyota Tsusho America, Inc. (“TAI”), a U.S. subsidiary of Toyota Tsusho Corporation (“TTC”) and TAI Merger Corporation, a wholly owned subsidiary of TAI (“Merger Sub”), 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, with the Company continuing as the surviving corporation in the Merger as a wholly owned subsidiary of TAI. Upon the Effective Time, and as a result of the Merger, each share of Radius Common Stock that is issued and outstanding immediately prior to the Effective Time (other than any shares of Class B common stock of the Company for which dissenters’ rights have been properly exercised and perfected and not withdrawn) will be converted into the right to receive $30.00 in cash without interest, and less any applicable withholding taxes. The transaction has been unanimously approved by the Company’s Board of Directors and is expected to close in the second half of calendar year 2025, with the closing and timing thereof subject to certain customary closing conditions. See Note 13 - Subsequent Events in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report for more information.

Everett Facility Shredder Fire

On December 8, 2021, we experienced a fire at our 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 experienced physical loss or damage, primarily buildings and improvements, was substantially completed by the end of fiscal 2023. We have insurance that was fully applicable to the losses, including but not limited to the costs of installing the temporary capture and controls system and any associated loss of business income, and filed insurance claims, which were subject to deductibles and various conditions, exclusions, and limits, for the property damage or loss and business income losses resulting from the matter. During the first ~~quarter~~half of fiscal 2024, we recognized an additional $46 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. All insurance proceeds and recovery gains in connection with our claims had been received and recognized, respectively, as of August 31, 2024.

Use of Non-GAAP Financial Measures

In this management’s discussion and analysis, we use supplemental measures of our performance, liquidity, and capital structure which are derived from our consolidated financial information, but which are not presented in our consolidated financial statements prepared in accordance with GAAP. We believe that providing these non-GAAP financial measures adds a meaningful presentation of our operating and financial performance, liquidity, and capital structure. For example, we use adjusted EBITDA as one of the measures to compare and evaluate financial performance. Adjusted EBITDA is the sum of our net income before results from discontinued operations, interest expense, income taxes, depreciation and amortization, restructuring charges and other exit-related activities, charges for legacy environmental matters (net of recoveries), amortization of capitalized cloud computing implementation costs, asset impairment charges, business development costs not related to ongoing operations including pre-acquisition expenses, and other items which are not related to underlying business operational performance. See the reconciliations of supplemental financial measures, including adjusted EBITDA, in Non-GAAP Financial Measures at the end of this Item 2.

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in accordance with GAAP. We believe that providing these non-GAAP financial measures adds a meaningful presentation of our operating and financial performance, liquidity, and capital structure. For example, we use adjusted EBITDA as one of the measures to compare and evaluate financial performance. Adjusted EBITDA is the sum of our net income before results from discontinued operations, interest expense, income taxes, depreciation and amortization, restructuring charges and other exit-related activities, charges for legacy environmental matters (net of recoveries), amortization of capitalized cloud computing implementation costs, asset impairment charges, business development costs not related to ongoing operations including pre-acquisition and merger expenses, and other items which are not related to underlying business operational performance. See the reconciliations of supplemental financial measures, including adjusted EBITDA, in Non-GAAP Financial Measures at the end of this Item 2.

Our non-GAAP financial measures should be considered in addition to, but not as a substitute for, the most directly comparable GAAP measures. Although we find these non-GAAP financial measures useful in evaluating the performance of our business, our reliance on these measures is limited because they often materially differ from our consolidated financial statements presented in accordance with GAAP. Therefore, we typically use these adjusted amounts in conjunction with our GAAP results to address these limitations. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

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Financial Highlights of Results of Operations for the ~~First~~Second Quarter of Fiscal 2025

•

Diluted loss per share from continuing operations attributable to Radius shareholders in the ~~first~~second quarter of fiscal 2025 was $(1.3015), compared to $(01.6419) in the prior year quarter.

•

Adjusted diluted loss per share from continuing operations attributable to Radius shareholders in the ~~first~~second quarter of fiscal 2025 was ($10.3399), ~~which~~compared ~~excludes both the benefit of a legacy environmental recovery gain and restructuring charges in the current period. Adjusted diluted loss per share from continuing operations attributable~~ to ~~Radius shareholders was~~ $(01.6404) in the prior year quarter.

•

Net loss in the ~~first~~second quarter of fiscal 2025 was $3733 million, compared to net loss of $1834 million in the prior year quarter.

•

Adjusted EBITDA in the ~~first~~second quarter of fiscal 2025 was break-even, compared to $13 million in the prior year quarter.

Compared to the prior year quarter, financial performance in the ~~first~~second quarter of fiscal 2025 was impacted by softer market conditions for recycled ferrous metal and finished steel, ~~with~~leading to lower average net selling prices ~~down~~and 7%compression ~~which~~of ~~contributed to lower~~ metal spreads ~~for our finished steel products~~. Average net selling prices for our ferrous products ~~for~~were ~~the~~14% ~~first~~lower ~~quarter~~compared ofto ~~fiscal~~the ~~2025~~prior ~~decreased~~year 5%quarter, due in part to elevated levels of Chinese steel exports. ~~Ferrous~~During ~~volumes~~the ~~were~~second 4%quarter ~~lower~~of ~~year-over-year~~fiscal 2025, domestic and export market conditions diverged, with domestic ferrous scrap prices rebounding significantly as a result of domestic mill restocking, further supported by the impact of particularly adverse winter weather conditions on already tight supply flows. ~~Strength~~The increase in ~~demand~~domestic ~~for~~scrap ~~nonferrous~~prices ~~metals~~led ~~improved~~to ina temporary compression of spreads on export shipments contracted before the ~~first~~price surge occurred. For the second quarter of fiscal 2025, ~~leading~~average net selling prices for our finished steel products were 9% lower than the prior year quarter, which contributed to lower metal spreads. Stronger nonferrous global demand led to higher average net selling prices for our nonferrous products in the second quarter of fiscal 2025 compared to the prior year quarter. Contributions from productivity and cost reduction initiatives implemented throughout fiscal 2024 helped to ~~substantially~~ offset the impact of the softer market conditions and were the primary drivers of the 1012% reduction in selling, general and administrative (“SG&A”) expense in the ~~first~~second quarter of fiscal 2025 compared to the prior year quarter.

The following items further highlight selected liquidity and capital structure metrics:

•

For the first ~~three~~six months of fiscal 2025, net cash ~~used~~provided inby operating activities was $218 million, compared to net cash used in operating activities of $156 million in the prior year ~~quarter~~period.

•

Debt was $~~445~~430 million as of ~~November~~February 3028, ~~2024~~2025, compared to $415 million as of August 31, 2024, as a result of increased borrowings from our credit facilities primarily to fund working capital needs and capital expenditures.

•

Debt, net of cash, was $~~430~~424 million as of ~~November~~February 3028, ~~2024~~2025, compared to $409 million as of August 31, 2024.

See the reconciliations of adjusted diluted earnings per share from continuing operations attributable to Radius shareholders, adjusted EBITDA, and debt, net of cash in Non-GAAP Financial Measures at the end of this Item 2.

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Results of Operations

Selected Financial Measures and Operating Statistics

	Three Months Ended November 30,
	Three Months Ended									Six Months Ended
($ in thousands, except for prices and per share amounts)	~~2024~~February 28, 2025			~~2023~~February 29, 2024			%			February 28, 2025			February 29, 2024			%
Ferrous revenues	$	~~327~~318,~~104~~955		$	~~348~~316,~~897~~097			(61	)%	$	646,059		$	664,994			(3	)%
Nonferrous revenues		~~182~~179,~~049~~012			~~169~~164,~~294~~481			89	%		361,061			333,775			8	%
Steel revenues(1)		~~101~~104,~~851~~114			~~113~~100,~~531~~721			~~(10~~3	)%		205,965			214,252			(4	)%
Retail and other revenues		4540,~~533~~427			4139,~~175~~760			112	%		85,960			80,935			6	%
Total revenues		~~656~~642,~~537~~508			~~672~~621,~~897~~059			(23	)%		1,299,045			1,293,956			(—	)%
Cost of goods sold		~~623~~615,~~132~~011			~~633~~580,~~420~~996			(26	)%		1,238,143			1,214,416			2	%
Gross margin (total revenues less cost of goods sold)	$	3327,~~405~~497		$	3940,~~477~~063			(1531	)%	$	60,902		$	79,540			(23	)%
Gross margin (%)		54.13	%		56.95	%		(1434	)%		4.7	%		6.1	%		(23	)%
Selling, general and administrative expense	$	5654,~~684~~943		$	6362,~~102~~160			(1012	)%	$	111,627		$	125,262			(11	)%
Diluted income (loss) per share from continuing operations attributable to Radius shareholders:
Reported	$	(1.3015	)	$	(01.6419	)		~~103~~(3	)%	$	(2.45	)	$	(1.83	)		34	%
Adjusted(2)	$	(10.3399	)	$	(01.6404	)		~~107~~(5	)%	$	(2.32	)	$	(1.68	)		38	%
Net income (loss)	$	(3632,~~929~~965	)	$	(1734,~~799~~010	)		~~107~~(3	)%	$	(69,894	)	$	(51,808	)		35	%
Adjusted EBITDA(2)	$	28(480	)	$	12,~~061~~796		(NM)	~~(97~~	)%	$	(452	)	$	3,858		(NM)
Average ferrous recycled metal sales prices ($/LT)(3):
Domestic	$	~~331~~353		$	~~342~~391			(410	)%	$	343		$	366			(6	)%
Foreign	$	~~340~~321		$	~~359~~381			(516	)%	$	330		$	369			(11	)%
Average	$	~~338~~330		$	~~354~~384			(514	)%	$	334		$	368			(9	)%
Ferrous volumes (LT, in thousands):
Domestic(4)		~~477~~468			~~535~~483			(113	)%		945			1,018			(7	)%
Foreign		~~629~~626			~~617~~497			226	%		1,255			1,114			13	%
Total ferrous volumes (LT, in thousands)(4)(8)		1,~~106~~094			~~1,152~~980			(412	)%		2,200			2,132			3	%
Average nonferrous sales price ($/pound)(3)(5)	$	1.0203		$	0.9194			1210	%	$	1.02		$	0.93			10	%
Nonferrous volumes (pounds, in thousands)(4)(5)		~~177~~174,~~255~~323			~~181~~176,~~728~~477			(21	)%		351,578			358,205			(2	)%
Finished steel average sales price ($/ST)(3)	$	~~775~~756		$	~~831~~832			(79	)%	$	765		$	832			(8	)%
Finished steel sales volumes (ST, in thousands)		~~125~~131			~~129~~114			(315	)%		256			243			5	%
Cars purchased (in thousands)(6)		5660			6467			(1310	)%		116			131			(11	)%
Number of auto parts stores at period end		50			50			(—	)%		50			50			(—	)%
Rolling mill utilization(7)		8188	%		9581	%		~~(15~~9	)%		84	%		88	%		(5	)%

NM = Not Meaningful

LT = Long Ton, which is equivalent to 2,240 pounds. ST = Short Ton, which is equivalent to 2,000 pounds.

(1)

Steel revenues include predominantly sales of finished steel products, in addition to sales of semi-finished goods (billets) and steel manufacturing scrap.

(2)

See the reconciliations of Non-GAAP Financial Measures at the end of this Item 2.

(3)

Price information is shown after netting the cost of freight incurred to deliver the product to the customer.

(4)

Ferrous and nonferrous volumes sold externally and delivered to our steel mill for finished steel production.

(5)

Average sales price and volume information excludes PGMs in catalytic converters.

(6)

Cars purchased by auto parts stores only.

(7)

Rolling mill utilization is based on effective annual production capacity under current conditions of 580 thousand tons of finished steel products.

(8)

May not foot due to rounding.

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Revenues

Revenues in the ~~first~~second quarter of fiscal 2025 ~~decreased~~increased 23% compared to the prior year ~~period. In the first~~ quarter ofand ~~fiscal~~remained ~~2025,~~flat in the ~~average~~first ~~net~~six ~~selling~~months ~~prices for our ferrous products decreased 5%~~ compared to the prior year period. ~~including~~In asthe asecond ~~result~~quarter ofand ~~continued~~first ~~elevated~~six ~~levels~~months of ~~Chinese~~fiscal ~~steel~~2025, ~~exports.~~global ~~Global~~ nonferrous demand was stronger ~~in the first quarter of fiscal 2025~~, leading to a 1210% increase in average net selling prices for our nonferrous products compared to the prior year ~~period~~periods. ~~Our~~In ~~ferrous~~the second quarter and ~~nonferrous~~first ~~sales~~six ~~volumes~~months inof fiscal 2025, the ~~first~~average ~~quarter~~net ofselling ~~fiscal~~prices ~~2025~~for our ferrous products decreased 414% and 29%, respectively, compared to the prior year ~~quarter~~periods, ~~reflecting~~including ~~the~~as ~~impact~~a result of ~~persistently~~continued elevated levels of Chinese steel exports. Amid continuing tight supply conditions for scrap metal due to low levels of U.S. manufacturing activity and lower end-of-life vehicle turnover, our ferrous sales volumes in the second quarter and first six months of fiscal 2025 were 12% and 3% higher, respectively, compared to the prior year periods, primarily due to timing of shipments. Finished steel average selling prices in the ~~first~~second quarter and first six months of fiscal 2025 were 79% and 8% lower, ~~and~~respectively, ~~finished~~compared to the prior year periods. Finished steel sales volumes ~~decreased~~increased 315% and 5%, respectively, compared to the prior year ~~period~~periods when demand for wire rod products was softer.

Operating Performance

Net loss in the ~~first~~second quarter and first six months of fiscal 2025 was $33 million and ~~2024~~$70 ~~was~~million, respectively, compared to $3734 million and $1852 million, respectively, in the comparable prior year periods. Adjusted EBITDA in both the ~~first~~second quarter and the first six months of fiscal 2025 was break-even, compared to $13 million and $4 million, respectively in the corresponding prior year ~~quarter~~periods. ~~The~~Ferrous ~~combination~~metal ofspreads ~~lower~~decreased ~~finished~~compared ~~steel~~to ~~sales~~the ~~prices~~prior ~~and~~year ~~volumes~~periods, ~~and~~driven ~~higher~~primarily ~~conversion~~by ~~costs~~the ~~due~~decrease toin ~~lower~~average ~~mill~~net ~~utilization,~~selling ~~including~~prices ~~from~~for ~~planned~~our ~~maintenance~~ferrous ~~during~~products. ~~the~~The ~~first~~combination ~~quarter~~ of ~~fiscal~~lower ~~2025,~~finished steel sales prices and higher conversion costs resulted in lower contribution from finished steel compared to the prior year ~~quarter~~periods. ~~The impact of higher average net selling prices on our nonferrous products contributed to an increase in our nonferrous margins.~~ Our results in the ~~first~~second quarter and first six months of fiscal 2025 also reflected ~~increased~~a ~~contributions~~$3 ~~from~~million ~~progress~~gain on ~~our~~the ~~strategic~~sale ~~initiatives~~of incertain ~~advanced~~real ~~metal~~property ~~recovery~~assets. ~~technologies~~The ~~compared to the~~ prior year quarter. ~~The~~and ~~prior~~first ~~year~~six ~~quarter~~months included nonrecurring insurance recovery gains of $42 million and $6 million, respectively, related to the Everett Facility shredder fire, which was fully resolved in fiscal 2024.

In the ~~first~~second quarter and first six months of fiscal 2025, we benefited from the full quarterly run rate of the savings associated with our productivity and cost reduction measures implemented ~~during~~since the beginning of fiscal 2024. SG&A expense in the ~~first~~second quarter and first six months of fiscal 2025 decreased 1012% and 11%, respectively, compared to the prior year ~~quarter~~periods reflecting benefits from the cost reduction measures which more than offset the impact of inflation. In addition, SG&A in the first ~~quarter~~six months of fiscal 2025 included a $2 million insurance recovery gain related to a legacy environmental matter.

See the reconciliation of adjusted EBITDA in Non-GAAP Financial Measures at the end of this Item 2.

Interest Expense

Interest expense was $9 million and $18 million, respectively, for the ~~first~~second quarter and first six months of fiscal 2025, compared to $56 million and $11 million, respectively, for the same ~~period~~periods in the prior year. The increase in interest expense was primarily due to increased average borrowings, as well as higher interest rates on amounts outstanding under our bank credit facilities, compared to the prior year ~~period~~periods.

Income Tax

The effective tax rate from continuing operations for the ~~first~~second quarter and first six months of fiscal 2025 was ana ~~expense~~benefit on pre-tax loss of 11.45% and 0.7%, respectively, compared to a expense on pre-tax loss of 3.6% and a benefit on pre-tax loss of 3614.48%, respectively, for the comparable prior year ~~quarter~~periods. Our effective tax rate from continuing operations for the ~~first~~second quarter of fiscal 2025 was lower than the U.S. federal statutory rate of 21% primarily due to ~~permanent~~the ~~differences~~aggregate ~~from~~effect ~~non-deductible~~of ~~expenses,~~the Company’s financial performance including an increase in our valuation allowance against deferred tax assets ~~and~~in the ~~movement~~U.S. oftax ~~unrecognized~~jurisdiction ~~tax~~and ~~benefits~~the onimpact of intra-period allocation of the estimated annual tax provision. For the ~~first~~second quarter of fiscal 2024, our effective tax rate from continuing operations was ~~higher~~significantly different than the U.S. federal statutory rate of 21% primarily due to the aggregate effect of ~~our~~the Company’s financial performance, permanent differences from non-deductible expenses, and unrecognized tax benefits on intra-period allocation of the estimated annual tax provision, as well as the recognition of a valuation allowance against deferred tax assets in our Puerto Rico tax jurisdiction.

Liquidity and Capital Resources

We rely on cash provided by operating activities as a primary source of liquidity, supplemented by current cash on hand and borrowings under our existing credit facilities.

~~Sources and Uses of Cash~~32

We had cash balances of $15 million and $6 million as of November 30, 2024 and August 31, 2024, respectively. Cash balances are intended to be used primarily for working capital, capital expenditures, dividends, share repurchases, investments, and acquisitions. We use excess cash on hand to reduce amounts outstanding under our credit facilities. As of November 30, 2024, debt was $445 million compared to $415 million as of August 31, 2024, and debt, net of cash, was $430 million as of November 30, 2024, compared to $409 million as of August 31, 2024. The increase in debt was primarily due to increased borrowings from our credit facilities mainly to fund

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~~working~~Sources ~~capital needs~~ and ~~capital~~Uses ~~expenditures. See the reconciliation~~ of ~~debt, net of cash, in Non-GAAP Financial Measures at the end of this Item 2.~~Cash

We had cash balances of $5 million and $6 million as of February 28, 2025 and August 31, 2024, respectively. Cash balances are intended to be used primarily for working capital, capital expenditures, dividends, share repurchases, investments, and acquisitions. We use excess cash on hand to reduce amounts outstanding under our credit facilities. As of February 28, 2025, debt was $430 million compared to $415 million as of August 31, 2024, and debt, net of cash, was $424 million as of February 28, 2025, compared to $409 million as of August 31, 2024. The increase in debt was primarily due to increased borrowings from our credit facilities mainly to fund working capital needs and capital expenditures. See the reconciliation of debt, net of cash, in Non-GAAP Financial Measures at the end of this Item 2.

Operating Activities

Net cash ~~used~~provided inby operating activities in the first ~~three~~six months of fiscal 2025 was $218 million, compared to net cash used in operating activities of $156 million in the first ~~three~~six months of fiscal 2024.

Sources of cash in the first ~~three~~six months of fiscal 2025 included a $4133 million decrease in accounts receivable primarily reflecting the impact of changes in product selling prices and the timing of sales and collections and a $19 million decrease in inventories primarily due to timing of purchases and sales. Uses of cash in the first ~~three~~six months of fiscal 2025 included ana $186 million decrease in accounts payable primarily due to the timing of purchases and payments~~, and a $9 million increase in inventories primarily due to timing of purchases and sales~~.

Sources of cash in the first ~~three~~six months of fiscal 2024 included a $1613 million decrease in ~~accounts~~prepaid ~~receivable~~expenses ~~primarily~~and ~~reflecting~~other ~~the~~current ~~impact~~assets ofprimarily ~~changes~~due into ~~product~~a ~~selling~~decrease ~~prices~~in ~~and~~prepaid ~~the~~insurance ~~timing of sales and collections~~premiums. Uses of cash in the first ~~three~~six months of fiscal 2024 included ana $830 million ~~decrease~~increase in ~~accrued~~inventories ~~payroll and related liabilities~~ primarily due to ~~the~~delay ~~payment~~ of ~~incentive~~certain ~~compensation~~bulk ~~previously~~shipments ~~accrued~~at ~~under our fiscal 2023 plans~~period-end, a $315 million increase in ~~prepaid~~accounts ~~expenses~~receivable ~~and other current assets~~ primarily ~~relating~~due to the ~~recognition~~timing of ~~insurance~~sales ~~receivables~~and collections, and a $39 million decrease in ~~environmental~~accrued payroll and related liabilities primarily due to ~~payments~~the payment of incentive compensation in ~~connection~~the ~~with~~first ~~legacy~~quarter ~~environmental~~of ~~matters~~fiscal 2024 previously accrued under our fiscal 2023 plans.

Investing Activities

Net cash used in investing activities was $1219 million in the first ~~three~~six months of fiscal 2025, compared to $2444 million in the first ~~three~~six months of fiscal 2024.

Cash used in investing activities in the first ~~three~~six months of fiscal 2025 included capital expenditures of $1223 million to upgrade our equipment and infrastructure and for investments in advanced metals recovery technology, information technology systems, and environmental and safety-related assets, compared to $2540 million in the prior year period.

Financing Activities

Net cash provided by financing activities in the first ~~three~~six months of fiscal 2025 was $231 million, compared to $24108 million in the first ~~three~~six months of fiscal 2024.

Cash flows from financing activities in the first ~~three~~six months of fiscal 2025 included $3115 million in net borrowings of debt, compared to $35124 million in the prior year period (refer to Non-GAAP Financial Measures at the end of this Item 2). Uses of cash in the first ~~three~~six months of fiscal 2025 and 2024 included $611 million in each period for the payment of dividends.

Debt

Our senior secured revolving credit facilities provide for revolving loans of $800 million and C$15 million, which mature in August 2027. On January 3, 2025, we and certain of our subsidiaries entered into the Fifth Amendment (the “Fifth Amendment”) to our Third Amended and Restated Credit Agreement, dated as of April 6, 2016, by and among the Company, as the U.S. Borrower, Schnitzer Steel Canada, Ltd., as the Canadian Borrower, the subsidiaries of the Company party thereto (the “Guarantors”), Bank of America N.A., as administrative agent and the other lenders party thereto (as amended prior to the Fifth Amendment, the “Existing Credit Agreement”, the Existing Credit Agreement, as amended pursuant to the Fifth Amendment, the “Amended Credit Agreement”). The principal change to the Existing Credit Agreement effected by the Fifth Amendment is to extend for two additional fiscal quarters the replacement of the maintenance covenant previously requiring compliance with a minimum permitted fixed charge coverage ratio, as described below. Such replacement had previously been scheduled to extend through February 28, 2025 and will now extend through the fiscal quarter ending August 31, 2025.

The applicable interest rates under the facility are based, at our option, on either the Secured Overnight Financing Rate (“SOFR”) (or the Term Canadian Overnight Repo Rate Average “CORRA” for C$ loans), plus a spread of between 1.50% and 2.50%, with the amount of the spread based on a pricing grid tied to our ratio of consolidated net funded debt to EBITDA (as defined by the credit agreement), or the greater of (a) the prime rate, (b) the federal funds rate plus 0.50% or (c) the daily rate equal to Term SOFR plus 1.00%, in each case, plus a spread of between 0.50% and 1.50% based on a pricing grid tied to our consolidated net funded debt to EBITDA ratio. In addition, commitment fees are payable on the unused portion of the credit facilities at rates between 0.175% and 0.350% based on a pricing grid tied to our ratio of consolidated net funded debt to EBITDA.33

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Our obligations under our credit agreement are guaranteed by substantially all of our subsidiaries. The credit facilities and the related guarantees are secured by senior first priority liens on certain of our and our subsidiaries’ assets, including equipment, inventory, accounts receivable, and most other personal property and equity interests held by the Company and the Guarantors in their respective subsidiaries.

We had borrowings outstanding under our credit facilities of $~~425~~410 million as of ~~November~~February 3028, ~~2024~~2025 and $394 million as of August 31, 2024. The weighted average interest rate on amounts outstanding under our credit facilities was 76.29% and 8.0% as of ~~November~~February 3028, ~~2024~~2025 and August 31, 2024, respectively.

We use the credit facilities to fund working capital, capital expenditures, dividends, share repurchases, investments, and acquisitions. Our credit agreement contains various representations and warranties, events of default, and financial and other customary covenants which limit (subject to certain exceptions) our ability to, among other things, incur or suffer to exist certain liens, make investments, incur or guaranty additional indebtedness, enter into consolidations, mergers, acquisitions, and sales of assets, make distributions and other restricted payments, change the nature of our business, engage in transactions with affiliates, and enter into restrictive agreements, including agreements that restrict the ability of our subsidiaries to make distributions. The financial covenants under the Amended Credit Agreement include (a) a consolidated fixed charge coverage ratio of no less than 1.50 to 1.00, defined as the four-quarter rolling sum of consolidated EBITDA less defined maintenance capital expenditures and certain environmental expenditures divided by consolidated fixed charges which, for the fiscal quarters ending May 31, 2024 through August 31, 2025, has been temporarily replaced with (i) a minimum consolidated interest coverage ratio of 2.00 to 1.00 for the fiscal quarter ending May 31, 2024, and 1.25 to 1.00 for each of the fiscal quarters ending February 28, 2025 through August 31, 2025, and (ii) a minimum consolidated asset coverage ratio of no less than 1.00 to 1.00 for each of the fiscal quarters ending May 31, 2024 through August 31, 2025, and (b) a consolidated leverage ratio of no more than 0.55 to 1.00, defined as consolidated funded indebtedness divided by the sum of consolidated net worth and consolidated funded indebtedness.

As of ~~November~~February 3028, ~~2024~~2025, we were in compliance with the applicable financial covenants under our Amended Credit Agreement. The consolidated interest coverage ratio was required to be no less than 1.25 to 1.00 and was 1.56 to 1.00 as of February 28, 2025. The consolidated asset coverage ratio was required to be no less than 1.00 to 1.00 and was 1.1517 to 1.00 as of ~~November~~February 3028, ~~2024~~2025. The consolidated leverage ratio was required to be no more than 0.55 to 1.00 and was 0.4344 to 1.00 as of ~~November~~February 3028, ~~2024~~2025.

While we expect to remain in compliance with the financial covenants under the credit agreement, we may not be able to do so in the event market conditions or other factors have a significant adverse impact on our results of operations and financial position. If we do not maintain compliance with our financial covenants and are unable to obtain an amendment or waiver from our lenders, a breach of a financial covenant would constitute an event of default and allow the lenders to exercise remedies under the agreements, the most severe of which is the termination of the credit facility under our committed bank credit agreement and acceleration of the amounts owed under the agreement. In such case, we would be required to evaluate available alternatives and take appropriate steps to obtain alternative funds. We cannot assure that any such alternative funds, if sought, could be obtained or, if obtained, would be adequate or on acceptable terms.

Other debt obligations, which totaled $12 million as of each of ~~November~~February 3028, ~~2024~~2025 and August 31, 2024, respectively, primarily relate to equipment purchases, the contract consideration for which includes an obligation to make future monthly payments to the vendor in the form of licensing fees. For accounting purposes, such obligations are treated as a partial financing of the purchase price by the equipment vendor. Monthly payments commence when the equipment is placed in service and achieves specified minimum operating metrics, with payments continuing for a period of four years thereafter.

~~Capital Expenditures~~34

Capital expenditures totaled $12 million for the first three months of fiscal 2025, compared to $25 million for the prior year period. We currently plan to invest approximately $60 million in capital expenditures in fiscal 2025. These capital expenditures include investments in growth, including new nonferrous processing technologies, and to support volume initiatives as well as post-acquisition and other growth projects, and investments to upgrade our equipment, infrastructure, and information technology systems, and for environmental and safety-related assets, using cash generated from operations and available credit facilities. Supply chain disruptions have contributed to some delays in construction activities and equipment deliveries related to our capital projects, and to the time required to obtain permits from government agencies, resulting in the deferral of certain capital expenditures. Given the continually evolving nature of such disruptions and other factors impacting the timing of project completion, the extent to which forecasted capital expenditures could be deferred is uncertain.

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Capital Expenditures

Capital expenditures totaled $23 million for the first six months of fiscal 2025, compared to $40 million for the prior year period. We currently plan to invest approximately $60 million in capital expenditures in fiscal 2025. These capital expenditures include investments in growth, including new nonferrous processing technologies, and to support volume initiatives as well as post-acquisition and other growth projects, and investments to upgrade our equipment, infrastructure, and information technology systems, and for environmental and safety-related assets, using cash generated from operations and available credit facilities. Supply chain disruptions have contributed to some delays in construction activities and equipment deliveries related to our capital projects, and to the time required to obtain permits from government agencies, resulting in the deferral of certain capital expenditures. Given the continually evolving nature of such disruptions and other factors impacting the timing of project completion, the extent to which forecasted capital expenditures could be deferred is uncertain.

Environmental Compliance

Building on our commitment to recycling and operating our business in an environmentally responsible manner, we continue to invest in facilities that improve our environmental presence in the communities in which we operate. As part of our capital expenditures discussed in the prior paragraph, we invested approximately $56 million in capital expenditures for environmental projects in the first ~~three~~six months of fiscal 2025, and we currently plan to invest approximately $20 million for such projects in fiscal 2025. These projects include investments in equipment to ensure ongoing compliance with air quality and other environmental regulations and storm water systems.

We have been identified by the United States Environmental Protection Agency as one of the potentially responsible parties that own or operate or formerly owned or operated sites which are part of or adjacent to the Portland Harbor Superfund site (“Portland Harbor”). See Note 4 - Commitments and Contingencies in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report for a discussion of this matter, as well as other legacy environmental loss contingencies. We believe it is not possible to reasonably estimate the amount or range of costs which we are likely to or which it is reasonably possible that we will incur in connection with Portland Harbor, although such costs could be material to our financial position, results of operations, cash flows, and liquidity. We have insurance policies and Qualified Settlement Funds (“QSFs”) that we believe will provide reimbursement for costs we incur for defense, remediation, and mitigation for natural resource damages claims in connection with Portland Harbor, although there are no assurances that those policies and the QSFs will cover all of the costs which we may incur. Significant cash outflows in the future related to Portland Harbor, as well as related to other legacy environmental loss contingencies, could reduce the amounts available for borrowing that could otherwise be used for working capital, capital expenditures, dividends, share repurchases, investments, and acquisitions and could result in our failure to maintain compliance with certain covenants in our debt agreements, and could adversely impact our liquidity.

Dividends

On ~~October~~January 247, ~~2024~~2025, our Board of Directors declared a dividend for the ~~first~~second quarter of fiscal 2025 of $0.1875 per common share, which equates to an annual cash dividend of $0.75 per common share. The dividend was paid on ~~November~~February 2618, ~~2024~~2025.

Share Repurchase Program

As of ~~November~~February 3028, ~~2024~~2025, pursuant to our board-authorized share repurchase programs, we had remaining authorization to repurchase up to 2.8 million shares of our Class A common stock when we deem such repurchases to be appropriate. We may repurchase our common stock for a variety of reasons, such as to optimize our capital structure and to offset dilution related to share-based compensation arrangements. We consider several factors in determining whether to make share repurchases including, among other things, our cash needs, the availability of funding, our future business plans, and the market price of our stock. We did not repurchase any of our common stock during the ~~first~~second quarter of fiscal 2025. The repurchase of shares of our Class A common stock is restricted under the terms of the Merger Agreement. As a result, we do not anticipate repurchases of shares of our Class A common stock during the pendency of the Merger.

Assessment of Liquidity and Capital Resources

Historically, our available cash resources, internally generated funds, credit facilities, and equity offerings have financed our acquisitions, capital expenditures, working capital, and other financing needs.

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We generally believe our current cash resources, internally generated funds, existing credit facilities, and access to the capital markets will provide adequate short-term and long-term liquidity needs for working capital, capital expenditures, dividends, investments and acquisitions, joint ventures, debt service requirements, environmental obligations, share repurchases, and other contingencies. However, in the event market conditions fail to improve, we are unable to realize the benefits of our operational and cost savings initiatives, or other negative factors occur, we may need additional liquidity which would require us to evaluate available alternatives and take appropriate steps to obtain sufficient additional funds. There can be no assurances that any such supplemental funding, if sought, could be obtained or, if obtained, would be adequate or on acceptable terms.

Contractual Obligations

There were no material changes related to contractual obligations and commitments from the information provided in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024.

We maintain stand-by letters of credit to provide support for certain obligations, including workers’ compensation and performance bonds. As of ~~November~~February 3028, ~~2024~~2025, we had $7 million outstanding under these arrangements.

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Critical Accounting Estimates

There were no material changes to our critical accounting estimates as described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended August 31, 2024.

Recently Issued Accounting Standards

For a description of recent accounting pronouncements that may have an impact on our financial condition, results of operations, or cash flows, see “Recent Accounting Pronouncements” in Note 1 - Summary of Significant Accounting Policies in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report.

Non-GAAP Financial Measures

Debt, net of cash

Debt, net of cash is the difference between (i) the sum of long-term debt and short-term borrowings (i.e., total debt) and (ii) cash and cash equivalents. We believe that presenting debt, net of cash is useful to investors as a measure of our leverage, as cash and cash equivalents can be used, among other things, to repay indebtedness.

The following is a reconciliation of debt, net of cash (in thousands):

	November 30, 2024		August 31, 2024
	February 28, 2025		August 31, 2024
Short-term borrowings	$	5,~~573~~480	$	5,688
Long-term debt, net of current maturities		~~439~~424,~~872~~424		409,082
Total debt		~~445~~429,~~445~~904		414,770
Less cash and cash equivalents		155,~~223~~437		5,552
Total debt, net of cash	$	~~430~~424,~~222~~467	$	409,218

Net borrowings (repayments) of debt

Net borrowings (repayments) of debt is the sum of borrowings from long-term debt and repayments of long-term debt. We present this amount as the net change in our borrowings (repayments) for the period because we believe it is useful for investors as a meaningful presentation of the change in debt.

The following is a reconciliation of net borrowings (repayments) of debt (in thousands):

	Three Months Ended November 30,
	Six Months Ended
	2024			2023
	February 28,			February 29,
Borrowings from long-term debt	$	197,557		$	135,099
	2025			2024
Repayments of long-term debt		(166,707	)		(100,568	)
Borrowings from long-term debt	$	388,747		$	389,692
Net borrowings (repayments) of debt	$	30,850		$	34,531
Repayments of long-term debt		(373,432	)		(265,910	)
Net borrowings (repayments) of debt	$	15,315		$	123,782

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Adjusted EBITDA, adjusted selling, general, and administrative expense, adjusted loss from continuing operations attributable to Radius shareholders, and adjusted diluted (loss) earnings per share from continuing operations attributable to Radius shareholders

Management believes that providing these non-GAAP financial measures adds a meaningful presentation of our results from business operations excluding adjustments for restructuring charges and other exit-related activities, asset impairment charges, amortization of capitalized cloud computing implementation costs, charges for legacy environmental matters (net of recoveries), business development costs not related to ongoing operations including pre-acquisition and merger expenses, and the income tax benefit allocated to these adjustments, items which are not related to underlying business operational performance, and improves the period-to-period comparability of our results from business operations.

Following are reconciliations of net loss to adjusted EBITDA and adjusted selling, general, and administrative expense (in thousands):

	Three Months Ended November 30,
	Three Months Ended						Six Months Ended
	2024			2023
	February 28,			February 29,			February 28,			February 29,
Reconciliation of adjusted EBITDA:
	2025			2024			2025			2024
Net income (loss)	$	(36,929	)	$	(17,799	)
Reconciliation of adjusted EBITDA:
Loss from discontinued operations, net of tax		—			2
Net income (loss)	$	(32,965	)	$	(34,010	)	$	(69,894	)	$	(51,808	)
Interest expense		8,862			4,810
Loss from discontinued operations, net of tax		—			31			—			33
Income tax expense (benefit)		3,791			(10,170	)
Interest expense		8,771			5,803			17,633			10,613
Depreciation and amortization		24,034			23,471
Income tax expense (benefit)		(4,277	)		1,195			(486	)		(8,975	)
Restructuring charges and other exit-related activities		1,897			35
Depreciation and amortization		24,032			24,311			48,066			47,782
Charges (recoveries) for legacy environmental matters, net(1)		(2,084	)		323
Business development costs		2,541			140			2,551			230
Amortization of cloud computing software costs(2)		263			80
Restructuring charges and other exit-related activities		1,422			3,175			3,319			3,210
Asset impairment charges		184			219
Charges (recoveries) for legacy environmental matters, net(1)		(244	)		156			(2,328	)		479
Business development costs		10			90
Amortization of cloud computing software costs(2)		240			247			503			327
Adjusted EBITDA	$	28		$	1,061
Asset impairment charges		—			1,748			184			1,967
Selling, general and administrative expense:
Adjusted EBITDA	$	(480	)	$	2,796		$	(452	)	$	3,858
As reported	$	56,684		$	63,102
Selling, general and administrative expense:
(Charges) recoveries for legacy environmental matters, net(1)		2,084			(323	)
As reported	$	54,943		$	62,160		$	111,627		$	125,262
Business development costs		(10	)		(90	)
(Charges) recoveries for legacy environmental matters, net(1)		244			(156	)		2,328			(479	)
Adjusted	$	58,758		$	62,689
Business development costs		(2,541	)		(140	)		(2,551	)		(230	)
Adjusted	$	52,646		$	61,864		$	111,404		$	124,553

(1)

Legal and environmental charges, net of recoveries, for legacy environmental matters including those related to the Portland Harbor Superfund site and to other legacy environmental loss contingencies. See Note 4 - Commitments and Contingencies, “Portland Harbor” and “Other Legacy Environmental Loss Contingencies” in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this report.

(2)

Amortization of cloud computing software costs consists of expense recognized in cost of goods sold and selling, general, and administrative expense resulting from amortization of capitalized implementation costs for cloud computing IT systems. This expense is not included in depreciation and amortization.

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Following are reconciliations of adjusted net loss from continuing operations attributable to Radius shareholders and adjusted diluted loss per share from continuing operations attributable to Radius shareholders (in thousands, except per share data):

	Three Months Ended November 30,
	Three Months Ended						Six Months Ended
	2024			2023
	February 28,			February 29,			February 28,			February 29,
Income (loss) from continuing operations attributable to Radius shareholders:
	2025			2024			2025			2024
As reported	$	(37,173	)	$	(17,962	)
Income (loss) from continuing operations attributable to Radius shareholders:
Restructuring charges and other exit-related activities		1,897			35
As reported	$	(32,977	)	$	(33,948	)	$	(70,150	)	$	(51,910	)
Charges (recoveries) for legacy environmental matters, net(1)		(2,084	)		323
Business development costs		2,541			140			2,551			230
Asset impairment charges		184			219
Restructuring charges and other exit-related activities		1,422			3,175			3,319			3,210
Business development costs		10			90
Charges (recoveries) for legacy environmental matters, net(1)		(244	)		156			(2,328	)		479
Income tax benefit allocated to adjustments(2)		(935	)		(737	)
Asset impairment charges		—			1,748			184			1,967
Adjusted	$	(38,101	)	$	(18,032	)
Income tax expense (benefit) allocated to adjustments(2)		832			(938	)		(103	)		(1,675	)
Diluted income (loss) per share from continuing operations attributable to Radius shareholders:
Adjusted	$	(28,426	)	$	(29,667	)	$	(66,527	)	$	(47,699	)
As reported	$	(1.30	)	$	(0.64	)
Diluted income (loss) per share from continuing operations attributable to Radius shareholders:
Restructuring charges and other exit-related activities, per share		0.07			—
As reported	$	(1.15	)	$	(1.19	)	$	(2.45	)	$	(1.83	)
Charges (recoveries) for legacy environmental matters, net, per share(1)		(0.07	)		0.01
Business development costs, per share		0.09			—			0.09			0.01
Asset impairment charges, per share		—			0.01
Restructuring charges and other exit-related activities, per share		0.05			0.11			0.12			0.11
Business development costs, per share		—			—
Charges (recoveries) for legacy environmental matters, net, per share(1)		(0.01	)		0.01			(0.08	)		0.02
Income tax benefit allocated to adjustments, per share(2)		(0.03	)		(0.03	)
Asset impairment charges, per share		—			0.06			—			0.07
Adjusted(3)	$	(1.33	)	$	(0.64	)
Income tax expense (benefit) allocated to adjustments, per share(2)		0.03			(0.03	)		—			(0.06	)
Adjusted(3)	$	(0.99	)	$	(1.04	)	$	(2.32	)	$	(1.68	)

(1)

(2)

Income tax allocated to the aggregate adjustments reconciling reported and adjusted income (loss) from continuing operations attributable to Radius shareholders and diluted income (loss) per share from continuing operations attributable to Radius shareholders is determined based on a tax provision calculated with and without the adjustments.

(3)

May not foot due to rounding.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Price Risk

We are exposed to commodity price risk, mainly associated with variations in the market price for ferrous and nonferrous metals, including scrap metal, finished steel products, auto bodies and other commodities. The timing and magnitude of industry cycles are difficult to predict and are impacted by general economic conditions as well as other factors including political and military events. We respond to increases and decreases in forward selling prices by adjusting purchase prices. We actively manage our exposure to commodity price risk and monitor the actual and expected spread between forward selling prices and purchase costs and processing and shipping expense. Sales contracts are based on prices negotiated with our customers, and generally orders are placed 30 to 60 days ahead of the shipment date. However, financial results may be negatively impacted when forward selling prices fall more quickly than we can adjust purchase prices or when customers fail to meet their contractual obligations. We assess the net realizable value of inventory (“NRV”) each quarter based upon contracted sales orders and estimated future selling prices. Based on contracted sales and estimates of future selling prices, a 10% decrease in the estimated selling price of inventory would not have had a material NRV impact as of ~~November~~February 3028, ~~2024~~2025.

Interest Rate Risk

There have been no material changes to our disclosure regarding interest rate risk set forth in Item 7A. Quantitative and Qualitative Disclosures About Market Risk included in our Annual Report on Form 10-K for the year ended August 31, 2024.

Credit Risk

Credit risk relates to the risk of loss that might occur as a result of non-performance by counterparties of their contractual obligations to take delivery of scrap metal and finished steel products and to make financial settlements of these obligations, or to provide sufficient quantities of scrap metal or payment to settle advances, loans and other contractual receivables in connection with demolition and scrap extraction projects. We manage our exposure to credit risk through a variety of methods, including shipping ferrous scrap metal exports under letters of credit, collection of deposits prior to shipment for certain nonferrous export customers, establishment of credit limits for certain sales on open terms, credit insurance and designation of collateral and financial guarantees securing advances, loans, and other contractual receivables. We have experienced reductions in the availability of credit insurance that we have historically used to cover a portion of our recycled metal and finished steel sales to domestic customers, which reduced availability may increase our exposure to customer credit risk. In addition, in higher or rising commodity price environments, we have experienced proportionately lower credit insurance coverage of applicable customer credit limits, which may increase our exposure to customer credit risk.

Historically, we have shipped almost all of our large shipments of ferrous scrap metal to foreign customers under contracts supported by letters of credit issued or confirmed by banks deemed creditworthy. The letters of credit ensure payment by the customer. As we generally sell export recycled ferrous metal under contracts or orders that generally provide for shipment within 30 to 60 days after the price is agreed, our customers typically do not have difficulty obtaining letters of credit from their banks in periods of rising ferrous prices, as the value of the letters of credit are collateralized by the value of the inventory on the ship. However, in periods of significantly declining prices, our customers may not be able to obtain letters of credit for the full sales value of the inventory to be shipped.

As of ~~November~~February 3028, ~~2024~~2025 and August 31, 2024, 2217% and 28%, respectively, of our accounts receivable balance was covered by letters of credit, and the amount of past due receivables was not material.

Foreign Currency Exchange Rate Risk

We are exposed to foreign currency exchange rate risk, mainly associated with sales transactions and related accounts receivable denominated in the U.S. Dollar by our Canadian subsidiary with a functional currency of the Canadian Dollar.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives. Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has completed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~November~~February 3028, ~~2024~~2025, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended ~~November~~February 3028, ~~2024~~2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information regarding reportable legal proceedings is contained in Part I, “Item 3. Legal Proceedings” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024 and Note 4 - Commitments and Contingencies in the Notes to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, incorporated by reference herein.

ITEM 1A. RISK FACTORS

There have been no material changes to our risk factors reported or new risk factors identified since the filing of our Annual Report on Form 10-K for the year ended August 31, 2024., except for the following:

Changing conditions in global markets including the impact of sanctions and tariffs, quotas, and other trade actions and import restrictions may adversely affect our operating results, financial condition, and cash flows

We generate a substantial portion of our revenues from sales to customers located outside the U.S., including countries in Asia, the Mediterranean region, and North, Central, and South America. In each of the last three fiscal years, exports comprised approximately 54% to 61% of our ferrous sales volumes and 56% to 57% of our nonferrous sales volumes. Our ability to sell our products profitably, or at all, into international markets is subject to a number of risks including adverse impacts of political, economic, military, terrorist, or major pandemic events; labor and social issues; legal and regulatory requirements or limitations imposed by foreign governments including quotas, tariffs, or other trade barriers, sanctions, adverse tax law changes, nationalization, currency restrictions, or import restrictions for certain types of products we export; and disruptions or delays in shipments caused by customs compliance or other actions of government agencies. Economic and geopolitical instability, including as a result of military conflict, could give rise to turmoil in markets that could have an impact on our business. The occurrence of such events and conditions may adversely affect our operating results, financial condition, and cash flows. For example, tariffs and import license requirements and quotas have been in place for several years in multiple jurisdictions, including China. Our ability to navigate these tariffs and restrictions is critical to our business and any changes or expansion in these tariffs and restrictions could adversely impact our business or results of operations. In addition, changing conditions in global markets may contribute to concentration in one or more of our country destinations. For example, in fiscal 2024, Bangladesh, Turkey and India comprised 85% of our ferrous export sales. We also import various materials from countries subject to tariffs, including recycled metals from our Canadian operations, recycled metals from unrelated suppliers, and certain non-trade goods, as well as purchase foreign-sourced goods from domestic distributors.

In March 2018, the U.S. imposed a 25% tariff on certain imported steel products and a 10% tariff on certain imported aluminum products under Section 232 of the Trade Expansion Act of 1962, as well as duties in various ranges on imports from China under Section 301 of the Trade Act of 1974. Those duties remain in effect. Since January 2025, there have been a number of tariffs, both threatened and imposed, including an additional 20% tariff on Chinese-origin goods, and another 34% tariff to become effective, making the total tariff 54% on China. Various other tariffs on imports from all countries ranging from 10% to 49% have been announced, with a temporary exclusion for goods that enter the United States as qualifying goods under the U.S. Mexico Canada Free Trade Agreement, which includes our recycled metal imports from Canada. Additionally, there has been an expansion of the Section 232 steel and aluminum tariffs to countries and products that had previously been excluded, a broad scope of derivative products, and the increase of the aluminum tariff to 25%. These tariffs have the potential of increasing our costs for foreign-origin trade and non-trade material.

Additionally, these tariffs, along with other U.S. trade actions, have triggered retaliatory actions by certain affected countries, and other foreign governments may impose trade measures, including reciprocal tariffs, on other U.S. goods in the future. These tariffs and other trade actions could result in a decrease in international steel demand and negatively impact demand for our exported products, which would adversely impact our business.

Given the uncertainty regarding the scope and duration of these trade actions by the U.S. and other countries, the impact of the trade actions on our operations or results remains uncertain, but this impact could be material.

Risk Factors Relating to the Merger

We may not complete the pending transaction with TAI within the time frame we anticipate or at all, which could have an adverse effect on our business, financial results, operations and/or the market price of our common stock.

On March 13, 2025, we entered into the Merger Agreement, with TAI and Merger Sub 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, with the Company continuing as the surviving corporation in the Merger as a wholly owned subsidiary of TAI.

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RADIUS RECYCLING, INC.

Consummation of the Merger is subject to certain customary conditions, including (i) the adoption of the Merger by the holders of a majority of the outstanding shares of Radius Common Stock, (ii) the absence of any law prohibiting or order preventing the consummation of the Merger, (iii) the receipt of certain regulatory approvals, to the extent required, (iv) the receipt of CFIUS approval without the imposition of certain conditions set forth in the Merger Agreement and (v) compliance in all material respects on the part of each of the Company, TAI and Merger Sub with such party’s covenants under the Merger Agreement. The obligation of each party to consummate the Merger is also conditioned upon the other party’s representations and warranties being true and correct (subject to certain materiality exceptions), and upon no “Company Material Adverse Effect” (as defined in the Merger Agreement) having occurred with respect to the Company since the signing of the Merger Agreement. In addition, we and TAI have certain customary termination rights pursuant to the Merger Agreement, including our right to terminate the Merger Agreement to accept a “Superior Proposal” (as defined in the Merger Agreement) subject to compliance with certain procedures specified in the Merger Agreement. As a result, we cannot assure you that all of the various closing conditions will be satisfied and that the Merger with TAI will be completed, or that, if completed, it will be exactly on the terms set forth in the Merger Agreement or within the expected time frame.

If the Merger is not completed within the expected time frame or at all, we may be subject to a number of material risks. The price of our common stock may decline to the extent that current market prices of our common stock reflect a market assumption that the Merger will be completed. We could also be required to pay TAI a termination fee of $27.2 million if the Merger Agreement is terminated under specific circumstances set forth in the Merger Agreement. The failure to complete the Merger also may result in negative publicity, a decline in investor confidence, stockholder litigation being brought against us, adverse impacts to our relationships with our existing and prospective employees, customers, regulators, third-party suppliers, industrial vendors and other business partners, us being unable to recruit prospective employees or to retain and motivate existing employees, and adverse financial impacts due to costs incurred in connection with the Merger. We may also be required to devote significant time and resources to litigation related to any failure to complete the Merger or related to any enforcement proceeding commenced against us to perform our obligations under the Merger Agreement.

The pendency of the Merger with TAI could adversely affect our business, financial results, operations and/or the market price of our common stock.

Our efforts to complete the Merger could cause substantial disruptions in, and create uncertainty surrounding, our business, which may materially adversely affect our results of operation and our business. Uncertainty as to whether the Merger will be completed may affect our ability to recruit prospective employees or to retain and motivate existing employees. Employee retention may be particularly challenging while the Merger is pending because employees may experience uncertainty about their roles following consummation of the Merger. Our management’s and certain of our employees’ attention is being directed toward the completion of the Merger and thus is being diverted to some extent from our day-to-day operations.

Uncertainty as to our future could adversely affect our business and our relationship with customers, regulators, third-party suppliers, industrial vendors and other business partners. For example, customers, third-party suppliers, industrial vendors and other counterparties may defer decisions concerning working with us or seek to change existing business relationships with us. Changes to or termination of existing business relationships could adversely affect our results of operations and financial condition, as well as the market price of our common stock. The adverse effects of the pendency of the Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement.

While the Merger Agreement is in effect, we are subject to restrictions on our business activities.

While the Merger Agreement is in effect, we are subject to restrictions on our business activities, generally requiring us to conduct our business in the ordinary course of business consistent with past practice in all material respects, and subjecting us to a variety of specified restrictions absent TAI’s prior consent. Subject to certain exceptions, these limitations include, among other things, restrictions on our ability to acquire other businesses and assets, dispose of our assets, make investments, enter into certain contracts, repurchase or issue securities, pay dividends that are inconsistent with our past practice, make capital expenditures, take certain actions relating to intellectual property, amend our organizational documents, and incur indebtedness. Furthermore, we are limited in our ability to solicit other acquisition proposals during the pendency of the Merger. These restrictions could prevent us from pursuing strategic business opportunities, taking actions with respect to our business that we may consider advantageous and responding effectively and/or timely to competitive pressures and industry developments, and may, as a result, materially and adversely affect our business, results of operations and financial condition, which in turn could materially and adversely affect the price of our common stock.

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RADIUS RECYCLING, INC.

In certain instances, the Merger Agreement requires us to pay a termination fee to TAI, which could require us to use available cash that would have otherwise been available for general corporate purposes.

Under the terms of the Merger Agreement, we may be required to pay TAI a termination fee of $27.2 million if the Merger Agreement is terminated under specific circumstances described in the Merger Agreement, including, but not limited to, a termination of the Merger Agreement by TAI in response to a “Change of Recommendation” (as defined in the Merger Agreement) of our Board of Directors or a termination of the Merger Agreement by us to accept a “Superior Proposal” (as defined in the Merger Agreement). If the Merger Agreement is terminated under such circumstances, the termination fee we may be required to pay under the Merger Agreement may require us to use available cash that would have otherwise been available for general corporate purposes and other uses. For these and other reasons, termination of the Merger Agreement could materially and adversely affect our business operations and financial condition, which in turn could materially and adversely affect the price of our common stock.

We have incurred, and will continue to incur, direct and indirect costs as a result of the pending transaction with TAI.

We have incurred, and will continue to incur, significant costs and expenses, including fees for professional services and other transaction costs, in connection with the pending Merger. We must pay substantially all of these costs and expenses whether or not the Merger is completed. We also could be subject to litigation related to the proposed Merger, which could prevent or delay the consummation of the Merger and result in significant costs and expenses.

There are a number of factors beyond our control that could affect the total amount or the timing of these costs and expenses.

If the Merger is completed, our business and shareholders would be exposed to additional risks.

The amount of cash per share to be paid under the Merger Agreement is fixed and will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or operating results or in the event of any change in the market price of, analyst estimates of, or projections relating to, our common stock.

The exchange of our common stock for the all-cash per share merger consideration under the Merger Agreement generally will be a taxable transaction to any stockholder that is treated as a U.S. taxpayer.

If the Merger is completed, our shareholders will forego the opportunity to realize the potential long-term value of the successful execution of our current strategy as an independent company. It is also possible that TAI could, at a later date, engage in unspecified transactions, including restructuring efforts, special dividends or the sale of some or all of our assets to one or more purchasers, that could conceivably produce a higher aggregate value than that available to shareholders in the Merger.

ITEM 5. OTHER INFORMATION

During the three months ended ~~November~~February 3028, ~~2024~~2025, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended), adopted, terminated, or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended).

~~On January 3, 2025, we and certain of our subsidiaries entered into the fifth amendment (the “Fifth Amendment”) to the Existing Credit Agreement.~~ 43

The Fifth Amendment makes certain modifications to the Existing Credit Agreement, including amendments that, among other things, (i) extend through August 31, 2025 the replacement of the maintenance covenant previously requiring compliance with a minimum permitted fixed charge coverage ratio (as defined under the Existing Credit Agreement) with maintenance covenants that instead require compliance with a minimum permitted interest coverage ratio and a minimum permitted asset coverage ratio (such replacement had previously been scheduled to extend through February 28, 2025) and (ii) make certain adjustments to the calculation of EBITDA (as defined under the Existing Credit Agreement) to now exclude certain gains or losses from non-ordinary course asset sales (up to $75 million of any such gains can be included in EBITDA over the remaining term of the Credit Agreement).

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ITEM 6. EXHIBITS

Exhibit Number		Exhibit Description
10.1*		Form of Long-Term Incentive Award Agreement under the 2024 Omnibus Incentive Plan used for awards granted in fiscal 2025.
2.1		Agreement and Plan of Merger, dated as of March 13, 2025, by and among Radius Recycling, Inc., Toyota Tsusho America, Inc. and TAI Merger Corporation. Filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on March 14, 2025, and incorporated herein by reference.
10.2*		Form of Restricted Stock Unit Award Agreement under the 2024 Omnibus Incentive Plan used for awards granted in fiscal 2025.
10.1*		Summary Sheet for 2025 Non-Employee Director Compensation
10.3*		Fiscal 2025 Annual Performance Bonus Program of the Chief Executive Officer.
10.2*		Form of Deferred Stock Unit Award Agreement under the 2024 Omnibus Incentive Plan used for non-employee directors for awards granted in 2025
10.3		Fifth Amendment, dated as of January 3, 2025, to Third Amended and Restated Credit Agreement dated as of April 6, 2016 by and among Radius Recycling, Inc. as the US Borrower, Schnitzer Steel Canada Ltd., as the Canadian Borrower, Bank of America, N.A., as Administrative Agent, and the other Lenders party thereto.
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		RADIUS RECYCLING, INC.
		(Registrant)
Date:	~~January~~April 84, 2025	By:	/s/ Tamara L. Lundgren
			Tamara L. Lundgren
			Chairman, President and Chief Executive Officer
Date:	~~January~~April 84, 2025	By:	/s/ Stefano R. Gaggini
			Stefano R. Gaggini
			Senior Vice President and Chief Financial Officer

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