Document and Entity Information
Document and Entity Information Document - shares | 6 Months Ended | |
Feb. 29, 2024 | Apr. 02, 2024 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Feb. 29, 2024 | |
Entity Registrant Name | RADIUS RECYCLING, INC. | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Trading Symbol | RDUS | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000912603 | |
Current Fiscal Year End Date | --08-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity File Number | 000-22496 | |
Entity Tax Identification Number | 93-0341923 | |
Entity Address, Address Line One | 299 SW Clay Street | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Portland | |
Entity Address, State or Province | OR | |
Entity Address, Postal Zip Code | 97201 | |
City Area Code | 503 | |
Local Phone Number | 224-9900 | |
Entity Incorporation, State or Country Code | OR | |
Title of 12(b) Security | Class A Common Stock, $1.00 par value | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 27,782,161 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 200,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Feb. 29, 2024 | Aug. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 13,562 | $ 6,032 |
Accounts receivable, net of allowance for credit losses of $1,593 and $1,590 | 218,745 | 210,442 |
Inventories | 314,421 | 278,642 |
Refundable income taxes | 3,426 | 3,245 |
Prepaid expenses and other current assets | 44,438 | 51,979 |
Total current assets | 594,592 | 550,340 |
Property, plant and equipment, net of accumulated depreciation of $940,096 and $902,231 | 691,901 | 706,805 |
Operating lease right-of-use assets | 117,763 | 115,686 |
Investments in joint ventures | 10,491 | 10,750 |
Goodwill | 229,319 | 229,419 |
Intangibles, net of accumulated amortization of $15,451 and $12,442 | 31,279 | 32,540 |
Deferred income taxes | 19,457 | 22,713 |
Other assets | 50,727 | 47,696 |
Total assets | 1,745,529 | 1,715,949 |
Current liabilities: | ||
Short-term borrowings | 5,459 | 5,813 |
Accounts payable | 192,200 | 209,423 |
Accrued payroll and related liabilities | 26,141 | 35,144 |
Environmental liabilities | 13,656 | 13,743 |
Operating lease liabilities | 19,932 | 19,835 |
Accrued income taxes | 78 | 358 |
Other accrued liabilities | 46,510 | 39,614 |
Total current liabilities | 303,976 | 323,930 |
Deferred income taxes | 46,187 | 58,617 |
Long-term debt, net of current maturities | 368,119 | 243,579 |
Environmental liabilities, net of current portion | 52,034 | 53,034 |
Operating lease liabilities, net of current maturities | 97,959 | 96,086 |
Other long-term liabilities | 29,788 | 29,044 |
Total liabilities | 898,063 | 804,290 |
Commitments and contingencies (Note 5) | ||
Radius Recycling, Inc. ("Radius") shareholders' equity: | ||
Preferred stock – 20,000 shares $1.00 par value authorized, none issued | 0 | 0 |
Additional paid-in capital | 24,503 | 26,035 |
Retained earnings | 831,636 | 894,316 |
Accumulated other comprehensive loss | (39,684) | (39,683) |
Total Radius shareholders' equity | 844,437 | 908,180 |
Noncontrolling interests | 3,029 | 3,479 |
Total equity | 847,466 | 911,659 |
Total liabilities and equity | 1,745,529 | 1,715,949 |
Class A Common Stock | ||
Radius Recycling, Inc. ("Radius") shareholders' equity: | ||
Common stock, value | 27,782 | 27,312 |
Class B Common Stock | ||
Radius Recycling, Inc. ("Radius") shareholders' equity: | ||
Common stock, value | $ 200 | $ 200 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Feb. 29, 2024 | Aug. 31, 2023 |
Current assets: | ||
Accounts receivable, allowance for credit loss | $ 1,593 | $ 1,590 |
Property, plant and equipment, accumulated depreciation | 940,096 | 902,231 |
Intangibles, accumulated amortization | $ 15,451 | $ 12,442 |
Radius Recycling, Inc. ("Radius") shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Class A Common Stock | ||
Radius Recycling, Inc. ("Radius") shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 27,782,000 | 27,312,000 |
Common stock, shares outstanding | 27,782,000 | 27,312,000 |
Class B Common Stock | ||
Radius Recycling, Inc. ("Radius") shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 200,000 | 200,000 |
Common stock, shares outstanding | 200,000 | 200,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Income Statement [Abstract] | ||||
Revenues | $ 621,059 | $ 755,953 | $ 1,293,956 | $ 1,354,683 |
Operating expense: | ||||
Cost of goods sold | 580,996 | 682,937 | 1,214,416 | 1,232,948 |
Selling, general and administrative | 62,160 | 63,957 | 125,262 | 128,185 |
(Income) from joint ventures | (30) | (311) | (703) | (1,101) |
Asset impairment charges | 1,476 | 1,476 | ||
Restructuring charges and other exit-related activities | 3,175 | 828 | 3,210 | 2,420 |
Operating (loss) income | (26,718) | 8,542 | (49,705) | (7,769) |
Interest expense | (5,803) | (4,908) | (10,613) | (8,232) |
Other loss, net | (263) | (99) | (432) | (3,983) |
(Loss) income from continuing operations before income taxes | (32,784) | 3,535 | (60,750) | (19,984) |
Income tax (expense) benefit | (1,195) | 513 | 8,975 | 6,545 |
(Loss) income from continuing operations | (33,979) | 4,048 | (51,775) | (13,439) |
(Loss) income from discontinued operations, net of tax | (31) | 224 | (33) | 155 |
Net (loss) income | (34,010) | 4,272 | (51,808) | (13,284) |
Net loss (income) attributable to noncontrolling interests | 31 | 81 | (135) | (151) |
Net (loss) income attributable to Radius shareholders | $ (33,979) | $ 4,353 | $ (51,943) | $ (13,435) |
Net (loss) income per share attributable to Radius shareholders Basic: | ||||
(Loss) income per share from continuing operations | $ (1.19) | $ 0.15 | $ (1.83) | $ (0.49) |
Net (loss) income per share | (1.19) | 0.16 | (1.83) | (0.48) |
Net (loss) income per share attributable to Radius shareholders Diluted: | ||||
(Loss) income per share from continuing operations | (1.19) | 0.14 | (1.83) | (0.49) |
Net (loss) income per share | $ (1.19) | $ 0.15 | $ (1.83) | $ (0.48) |
Weighted average number of common shares: | ||||
Basic | 28,454 | 28,081 | 28,337 | 27,912 |
Diluted | 28,454 | 28,617 | 28,337 | 27,912 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (34,010) | $ 4,272 | $ (51,808) | $ (13,284) |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (83) | (1,361) | (582) | (3,607) |
Cash flow hedges, net | 285 | 178 | ||
Pension obligations, net | 216 | 58 | 403 | 91 |
Total other comprehensive income (loss), net of tax | 418 | (1,303) | (1) | (3,516) |
Comprehensive (loss) income | (33,592) | 2,969 | (51,809) | (16,800) |
Less comprehensive loss (income) attributable to noncontrolling interests | 31 | 81 | (135) | (151) |
Comprehensive (loss) income attributable to Radius shareholders | $ (33,561) | $ 3,050 | $ (51,944) | $ (16,951) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Class A Common Stock | Class B Common Stock | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Radius Shareholders' Equity | Noncontrolling Interests |
Beginning balance at Aug. 31, 2022 | $ 958,474 | $ 26,747 | $ 200 | $ 22,975 | $ 941,146 | $ (37,089) | $ 953,979 | $ 4,495 | ||
Beginning balance (in shares) at Aug. 31, 2022 | 26,747 | 200 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (13,284) | (13,435) | (13,435) | 151 | ||||||
Other comprehensive (loss), income net of tax | (3,516) | (3,516) | (3,516) | |||||||
Distributions to noncontrolling interests | (1,155) | (1,155) | ||||||||
Issuance of restricted stock | $ 762 | (762) | ||||||||
Issuance of restricted stock (in shares) | 762 | |||||||||
Restricted stock withheld for taxes | (6,809) | $ (254) | (6,555) | (6,809) | ||||||
Restricted stock withheld for taxes (in shares) | (254) | |||||||||
Share-based compensation cost | 5,173 | 5,173 | 5,173 | |||||||
Dividends | (10,445) | (10,445) | (10,445) | |||||||
Ending balance at Feb. 28, 2023 | 928,438 | $ 27,255 | $ 200 | 20,831 | 917,266 | (40,605) | 924,947 | 3,491 | ||
Ending balance (in shares) at Feb. 28, 2023 | 27,255 | 200 | ||||||||
Beginning balance at Nov. 30, 2022 | 928,504 | $ 27,165 | $ 200 | 18,582 | 918,094 | (39,302) | 924,739 | 3,765 | ||
Beginning balance (in shares) at Nov. 30, 2022 | 27,165 | 200 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 4,272 | 4,353 | 4,353 | (81) | ||||||
Other comprehensive (loss), income net of tax | (1,303) | (1,303) | (1,303) | |||||||
Distributions to noncontrolling interests | (193) | (193) | ||||||||
Issuance of restricted stock | $ 90 | (90) | ||||||||
Issuance of restricted stock (in shares) | 90 | |||||||||
Restricted stock withheld for taxes | (2) | (2) | (2) | |||||||
Share-based compensation cost | 2,341 | 2,341 | 2,341 | |||||||
Dividends | (5,181) | (5,181) | (5,181) | |||||||
Ending balance at Feb. 28, 2023 | 928,438 | $ 27,255 | $ 200 | 20,831 | 917,266 | (40,605) | 924,947 | 3,491 | ||
Ending balance (in shares) at Feb. 28, 2023 | 27,255 | 200 | ||||||||
Beginning balance at Aug. 31, 2023 | 911,659 | $ 27,312 | $ 200 | 26,035 | 894,316 | (39,683) | 908,180 | 3,479 | ||
Beginning balance (in shares) at Aug. 31, 2023 | 27,312 | 200 | 27,312 | 200 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (51,808) | (51,943) | (51,943) | (135) | ||||||
Other comprehensive (loss), income net of tax | (1) | (1) | (1) | |||||||
Distributions to noncontrolling interests | (585) | (585) | ||||||||
Issuance of restricted stock | $ 681 | (681) | ||||||||
Issuance of restricted stock (in shares) | 681 | |||||||||
Restricted stock withheld for taxes | (4,803) | $ (211) | (4,592) | (4,803) | ||||||
Restricted stock withheld for taxes (in shares) | (211) | |||||||||
Share-based compensation cost | 3,741 | 3,741 | 3,741 | |||||||
Dividends | (10,737) | (10,737) | (10,737) | |||||||
Ending balance at Feb. 29, 2024 | 847,466 | $ 27,782 | $ 200 | 24,503 | 831,636 | (39,684) | 844,437 | 3,029 | ||
Ending balance (in shares) at Feb. 29, 2024 | 27,782 | 200 | 27,782 | 200 | ||||||
Beginning balance at Nov. 30, 2023 | 884,276 | $ 27,663 | $ 200 | 22,258 | 870,975 | (40,102) | 880,994 | 3,282 | ||
Beginning balance (in shares) at Nov. 30, 2023 | 27,663 | 200 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (34,010) | (33,979) | (33,979) | (31) | ||||||
Other comprehensive (loss), income net of tax | 418 | 418 | 418 | |||||||
Distributions to noncontrolling interests | (222) | (222) | ||||||||
Issuance of restricted stock | $ 119 | (119) | ||||||||
Issuance of restricted stock (in shares) | 119 | |||||||||
Restricted stock withheld for taxes | (1) | (1) | (1) | |||||||
Share-based compensation cost | 2,365 | 2,365 | 2,365 | |||||||
Dividends | (5,360) | (5,360) | (5,360) | |||||||
Ending balance at Feb. 29, 2024 | $ 847,466 | $ 27,782 | $ 200 | $ 24,503 | $ 831,636 | $ (39,684) | $ 844,437 | $ 3,029 | ||
Ending balance (in shares) at Feb. 29, 2024 | 27,782 | 200 | 27,782 | 200 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends per common share | $ 0.1875 | $ 0.1875 | $ 0.375 | $ 0.375 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Feb. 29, 2024 | Feb. 28, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (51,808) | $ (13,284) |
Adjustments to reconcile net loss to cash (used in) provided by operating activities: | ||
Asset impairment charges | 1,967 | 4,000 |
Exit-related asset impairments | 143 | |
Depreciation and amortization | 47,782 | 43,850 |
Inventory write-downs | 575 | |
Deferred income taxes | (9,500) | (6,337) |
Undistributed equity in earnings of joint ventures | (703) | (1,101) |
Share-based compensation expense | 3,741 | 5,144 |
(Gain) loss on disposal of assets, net | (459) | 16 |
Unrealized foreign exchange loss, net | 273 | 85 |
Credit loss, net | 177 | 195 |
Changes in assets and liabilities, net of acquisitions: | ||
Accounts receivable | (14,504) | (13,914) |
Inventories | (30,423) | 33,834 |
Income taxes | 144 | (4,783) |
Prepaid expenses and other current assets | 12,519 | 9,758 |
Other long-term assets | (3,696) | (1,389) |
Operating lease assets and liabilities | (195) | 232 |
Accounts payable | (6,368) | 12,245 |
Accrued payroll and related liabilities | (8,996) | (33,421) |
Other accrued liabilities | 2,686 | (7,177) |
Environmental liabilities | (1,072) | (4,914) |
Other long-term liabilities | 1,042 | 1,935 |
Distributed equity in earnings of joint ventures | 1,000 | |
Net cash (used in) provided by operating activities | (56,393) | 25,692 |
Cash flows from investing activities: | ||
Capital expenditures | (39,791) | (74,511) |
Acquisitions, net of acquired cash | (26,902) | |
Proceeds from insurance and sale of assets | 2,133 | 3,026 |
Purchase of investments | (6,000) | |
Net cash used in investing activities | (43,658) | (98,387) |
Cash flows from financing activities: | ||
Borrowings from long-term debt | 389,692 | 333,242 |
Repayment of long-term debt | (265,910) | (274,036) |
Payment of debt issuance costs | (156) | |
Taxes paid related to net share settlement of share-based payment awards | (4,803) | (6,809) |
Distributions to noncontrolling interests | (585) | (1,155) |
Dividends paid | (10,798) | (10,671) |
Net cash provided by financing activities | 107,596 | 40,415 |
Effect of exchange rate changes on cash | (15) | (64) |
Net increase (decrease) in cash and cash equivalents | 7,530 | (32,344) |
Cash and cash equivalents as of beginning of period | 6,032 | 43,803 |
Cash and cash equivalents as of end of period | 13,562 | 11,459 |
Cash paid during the period for: | ||
Interest | 9,792 | 7,339 |
Income taxes, net | 368 | 4,332 |
Schedule of noncash investing and financing transactions: | ||
Purchases of property, plant and equipment included in liabilities | $ 5,470 | $ 13,815 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (33,979) | $ 4,353 | $ (51,943) | $ (13,435) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Feb. 29, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule 10b51 Arr Modified Flag | false |
Non Rule 10b51 Arr Modified Flag | false |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Feb. 29, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 - Summary of Significant Accounting Policies Basis of Presentation The accompanying Unaudited Condensed Consolidated Financial Statements of Radius Recycling, Inc. (formerly Schnitzer Steel Industries, 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 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. 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, 2023. The results for the three and six months ended February 29, 2024 and February 28, 2023 are not necessarily indicative of the results of operations for the entire fiscal year. Liquidity The Company currently faces challenging market conditions resulting in compressed operating margins. As of February 29, 2024, the Company was in compliance with all of the financial covenants under its credit facilities, the aggregate principal amount outstanding under which was $ 355 million, with $ 438 million remaining available for borrowing (see Note 13 – Debt). The Company has taken steps to reduce its operating costs and improve margins. If market conditions do not improve, the Company is unable to realize the expected value of its cost savings initiatives, or other negative factors occur, the Company anticipates it would be unable to remain in compliance with the current financial covenants under its credit agreement. If the Company were unable to meet its financial covenants and then were unable to renegotiate the terms of its financial covenants, all debt outstanding under the credit facilities could become immediately due and payable. If such actions became necessary, the Company expects that it would be successful in renegotiating an amendment or obtaining a waiver on terms acceptable to the Company, however there can be no assurance that it would be able to do so. Company Name On July 26, 2023, the Company announced its new brand and assumed name, Radius Recycling. The Company’s shareholders approved an amendment to the Company’s Articles of Incorporation to change the corporate name of the Company from Schnitzer Steel Industries, Inc. to Radius Recycling, Inc. at the Annual Meeting of Shareholders held on January 30, 2024 (the “Name Change”). That same day, the Company effectuated the Name Change by filing articles of amendment of the Articles of Incorporation with the Oregon Secretary of State and amended and restated its Bylaws to reflect the Name Change. 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. 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 $ 49 million and $ 62 million as of February 29, 2024 and August 31, 2023 , 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. 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 $ 6 million for each of the six months ended February 29, 2024 and February 28, 2023 . Prepaid Expenses The Company’s prepaid expenses, reported within prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets, totaled $ 13 million and $ 27 million as of February 29, 2024 and August 31, 2023, respectively, and consisted primarily of deposits on capital projects and prepaid services, property taxes, and insurance. Other Assets The Company’s other assets, exclusive of prepaid expenses and assets relating to certain employee benefit plans, consisted primarily of receivables from insurers, advances to a supplier of metals recycling equipment, cash held in a client trust account relating to a legal settlement, short-term certificates of deposit, two equity investments, capitalized implementation costs for cloud computing arrangements, major spare parts and equipment, 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, property loss and damage and other claims in connection with the December 2021 fire at the Company’s shredder facility in Everett, Massachusetts, workers’ compensation claims, and third-party claims. As of February 29, 2024 , receivables from insurers totaled $ 19 million, including $ 12 million relating to environmental claims. As of August 31, 2023 , receivables from insurers totaled $ 14 million, including $ 10 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 February 29, 2024 and August 31, 2023 also included $ 13 million and $ 11 million, respectively, representing advances to a supplier of metals recycling equipment. Other assets as of August 31, 2023 also included approximately $ 7 million in connection with cash deposited into a client trust account in fiscal 2021 to fund the remediation of a site, a portion of which was previously leased to and operated by an indirect, wholly-owned subsidiary. The cash was deposited into the client trust account by other potentially liable parties pursuant to a settlement agreement resolving a lawsuit relating to allocation of the remediation costs, including agreement by the Company’s subsidiary to perform certain remedial actions. In the second quarter of fiscal 2024, the approximately $ 7 million was distributed to the Company from the client trust account for purposes of holding the funds and maximizing returns, each consistent with the terms of the settlement agreement, of which $ 6 million was held in short-term certificates of deposit and is reported within prepaid expenses and other current assets as of February 29, 2024. See “Other Legacy Environmental Loss Contingencies” within “Contingencies – Environmental” in Note 5 - Commitments and Contingencies for further discussion of this matter. The Company invested $ 6 million in the equity of a privately-held U.S. waste and recycling entity in fiscal 2017. The investment is accounted for under the guidance for investments in equity securities. During the first half of fiscal 2023, the equity investment was determined to not have a readily determinable fair value and, therefore, was carried at cost and adjusted for impairments and observable price changes. In the first quarter of fiscal 2023, the Company identified an impairment indicator for its investment and, based on its fair value measurement incorporating observable trading prices of the publicly-traded entity and unobservable inputs, recognized a $ 4 million impairment in other loss, net on the Unaudited Condensed Consolidated Statement of Operations. During the third quarter of fiscal 2023, the publicly-traded entity allowed for an exchange event, and the Company exchanged its full investment in the subsidiary's equity units for shares of the publicly-traded entity, which have a readily determinable fair value, and which the Company still held as of February 29, 2024. As of February 29, 2024 and August 31, 2023 , the fair value of the investment was less than $ 1 million and $ 1 million, respectively. The investment is reported within prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets. Other assets as of February 29, 2024 and August 31, 2023 included approximately $ 7 million and $ 5 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 May 22, 2021, the Company experienced a fire at its steel mill in McMinnville, Oregon. Direct physical loss or damage to property from the incident was limited to the mill’s melt shop, with no bodily injuries and no physical loss or damage to other buildings or equipment. The Company experienced loss of business income during the shutdown of the steel mill and the subsequent ramp-up phase which was substantially completed in fiscal 2022. The Company filed insurance claims for the physical loss and damage experienced at the mill’s melt shop and business income losses resulting from the matter. In the fourth quarter of fiscal 2023, the Company reached a full and final settlement with its insurers for its claims. All insurance proceeds and recovery gains in connection with the Company’s claims had been received and recognized, respectively, as of August 31, 2023. 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. As a result of the fire, shredding operations ceased, while all non-shredding operations at the facility continued, including torching, shearing, separating, and sorting purchased non-shreddable recycled ferrous metals. On January 28, 2022, shredding operations at the facility began ramping up following the replacement and repairs to shredder equipment that had been damaged. In addition, shredding operations temporarily ceased at the facility on June 18, 2022 and, following discussions with the Massachusetts Department of Environmental Protection and the Massachusetts Attorney General’s office, the Company installed a temporary emission capture system and controls that allowed for the resumption of shredding operations on November 11, 2022 and for continued operation during the repair and replacement of the shredder enclosure building. Non-shredding operations at the facility continued during this period. 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 anticipated business income losses resulting from the matter. As of August 31, 2023, the Company had recognized, in aggregate, $ 34 million in insurance recovery gains and had received, in aggregate, advance payments from insurers totaling approximately $ 33 million towards its claims. During the first half of fiscal 2024, the Company recognized an additional $ 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. As of February 29, 2024, the Company had recognized, in aggregate, $ 40 million in insurance recovery gains and had received, in aggregate, advance payments from insurers totaling approximately $ 37 million towards its claims, and not reflecting any final or full settlement of claims with the insurers. As of February 29, 2024 and August 31, 2023 , the Company had receivables from its insurers of $ 3 million and $ 1 million, respectively, reported within prepaid expenses and other current assets on the Unaudited Condensed Consolidated Balance Sheets. Business Acquisitions The Company recognizes the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. Contingent purchase consideration is recorded at fair value at the date of acquisition. Any excess purchase price over the fair value of the net assets acquired is recorded as goodwill. Within one year from the date of acquisition, the Company may update the value allocated to the assets acquired and liabilities assumed and the resulting goodwill balance as a result of information received regarding the valuation of such assets and liabilities that was not available at the time of purchase. Measuring assets and liabilities at fair value requires the Company to determine the price that would be paid by a third-party market participant based on the highest and best use of the assets or interests acquired. Acquisition costs are expensed as incurred. See Note 3 - Business Acquisitions for further detail. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, and derivative financial instruments. The majority of cash and cash equivalents is maintained with major financial institutions. Balances with these and certain other institutions exceeded the Federal Deposit Insurance Corporation insured amount of $ 250 thousand as of February 29, 2024 . 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 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-07 (“ASU 2023-07”), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, amending reportable segment disclosure requirements to include disclosure of incremental segment information on an annual and interim basis. Among the disclosure enhancements are new disclosures regarding significant segment expenses that are regularly provided to the chief operating decision-maker and included within each reported measure of segment profit or loss, as well as other segment items bridging segment revenue to each reported measure of segment profit or loss. The amendments in ASU 2023-07 are effective for the Company’s fiscal 2025, and interim periods within the Company’s fiscal 2026, and are applied retrospectively. Early adoption is permitted. As the amendments apply to reportable segment disclosures only, the Company does not expect adoption to have a material impact on its consolidated financial statements. In December 2023, the FASB issued Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective beginning in the Company’s fiscal 2026 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. As the amendments apply to income tax disclosures only, the Company does not expect adoption to have a material impact on its consolidated financial statements. |
Inventories
Inventories | 6 Months Ended |
Feb. 29, 2024 | |
Inventory, Net [Abstract] | |
Inventories | Note 2 - Inventories Inventories consisted of the following (in thousands): February 29, 2024 August 31, 2023 Processed and unprocessed scrap metal $ 156,300 $ 143,986 Semi-finished goods 18,146 9,959 Finished goods 73,441 60,348 Supplies 66,534 64,349 Inventories $ 314,421 $ 278,642 |
Business Acquisitions
Business Acquisitions | 6 Months Ended |
Feb. 29, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisitions | Note 3 - Business Acquisitions Fiscal 2023 Business Acquisition On November 18, 2022 , the Company used cash on hand and borrowings under its existing credit facilities to acquire the operating assets of ScrapSource, a recycling services company that provides solutions for industrial companies that generate scrap metal from their manufacturing process. The acquired business expands the Company’s national recycling services operations, giving rise to expected benefits supporting the amount of acquired goodwill. The total purchase consideration of approximately $ 25 million was allocated to the assets acquired and liabilities assumed based on their respective estimated fair values on the date of the acquisition. The $ 13 million excess of the total purchase consideration over the fair value of the identifiable net assets acquired was recorded as goodwill. The results of operations for the acquired ScrapSource business beginning as of the November 18, 2022 acquisition date are included in the accompanying financial statements. For the three and six months ended February 28, 2023, the revenues and net income contributed by the acquired ScrapSource business and reported in the Unaudited Condensed Consolidated Statements of Operations were not material to the financial statements taken as a whole. For the six months ended February 28, 2023, the unaudited pro forma amounts of revenues and net income of the acquired ScrapSource business were not material to the financial statements taken as a whole; therefore, unaudited pro forma amounts for the Company are not provided. |
Goodwill
Goodwill | 6 Months Ended |
Feb. 29, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 4 - Goodwill The Company evaluates goodwill for impairment annually on July 1 and upon the occurrence of certain triggering events or substantive changes in circumstances that indicate that the fair value of goodwill may be impaired. There were no triggering events identified during the first half of fiscal 2024 requiring an interim goodwill impairment test, and the Company did not record a goodwill impairment charge in any of the periods presented. Impairment of goodwill is tested at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment (referred to as a “component”). A component of an operating segment is required to be identified as a reporting unit if the component is a business for which discrete financial information is available and segment management regularly reviews its operating results. The Company most recently performed the quantitative impairment test for goodwill carried by three of its reporting units, consisting of two regional metals recycling operations and its network of auto parts stores, as of July 1, 2023. For one of the metals recycling reporting units and the autos reporting unit subject to the quantitative impairment test, the estimated fair value of the reporting unit exceeded its carrying amount by approximately 24 % and 33 %, respectively, as of July 1, 2023. For the other metals recycling reporting unit, the estimated fair value of the reporting unit was less than its carrying amount, resulting in a partial impairment of goodwill of $ 39 million. The determination of fair value of the reporting units used to perform the impairment test requires judgment and involves significant estimates and assumptions about the expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact management's assumptions used to estimate the reporting units’ fair value. Although the Company believes the assumptions used in the July 1, 2023 test of its reporting units’ goodwill for impairment are reasonable, a lack of recovery or further deterioration in market conditions for recycled metals from current levels, a sustained trend of weaker than anticipated financial performance for the reporting units with allocated goodwill, including the pace and extent of operating margin and volume recovery, a lack of recovery or further decline in the Company's share price from current levels for a sustained period, or an increase in the market-based weighted average cost of capital, among other factors, could significantly impact the Company's impairment analysis and may result in future goodwill impairment charges that, if incurred, could have a material adverse effect on its financial condition and results of operations. The gross change in the carrying amount of goodwi ll for the six months ended February 29, 2024 was as follows (in thousands): Goodwill August 31, 2023 $ 229,419 Foreign currency translation adjustment ( 100 ) February 29, 2024 $ 229,319 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Feb. 29, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 5 - 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 six months ended February 29, 2024 were as follows (in thousands): Balance as of Liabilities Payments and Balance as of Short-Term Long-Term $ 66,777 $ 2,227 $ ( 3,314 ) $ 65,690 $ 13,656 $ 52,034 As of February 29, 2024 and August 31, 2023, the Company had environmental liabilities of $ 66 million and $ 67 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 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. 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. As of February 29, 2024 and August 31, 2023 , the Company had $ 2 million and $ 1 million in environmental reserves related to this matter, respectively. The Company has insurance policies and Qualified Settlement Funds (“QSFs”) pursuant to which the Company is being reimbursed for the costs it has incurred for remedial design. See further discussion of the QSFs below in this Note. As of both February 29, 2024 and August 31, 2023, 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 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 $ 2.3 million for this alleged natural resource damages liability as it continues to work with the Trustee Council to finalize an early settlement. As of each of February 29, 2024 and August 31, 2023, 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. 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. The Company’s environmental liabilities as of February 29, 2024 and August 31, 2023 included $ 6 million and $ 5 million, respectively, relating to the Portland Harbor matters described above. 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 the settlement 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 February 29, 2024 and August 31, 2023, the Company had an insurance receivable in the same amount as the environmental reserve for such source control work. Other Legacy Environmental Loss Contingencies The Company’s environmental loss contingencies as of February 29, 2024 and August 31, 2023, 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. 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 each of February 29, 2024 and August 31, 2023 , the Company had $ 4 million accrued for this matter. It is reasonably possible that the Company may recognize additional liabilities in connection with this matter at the time such losses are probable and can be reasonably estimated. The Company previously estimated a range of reasonably possible losses related to this matter in excess of current accruals at between zero and $ 28 million based on a range of remedial alternatives and subject to development and approval by regulators of specific remedy implementation plans. However, subsequent to the development of those remedial alternatives, the Company performed additional investigative activities under new state requirements that are likely to impact the required remedial actions and associated cost estimates, but the scope of such impacts and the amount or the range of the additional associated costs are not reasonably estimable at this time and are subject to further investigation, analysis, and discussion by the Company and regulators. The Company is investigating whether a portion or all of the current and future losses related to this matter, if incurred, are covered by existing insurance coverage or may be offset by contributions from other responsible parties. In addition, the Company’s loss contingencies as of February 29, 2024 and August 31, 2023 included $ 3 million and $ 5 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. In the first quarter of fisc al 2023, the Co mpany accrued an incremental $ 1 million for certain soil remediation activities based on additional information related to estimated costs to complete. Investigation and remediation activities have been conducted under the oversight of the applicable state regulatory agency and are on-going, and the Company’s subsidiary has also been working with state and local officials with respect to the protection of public and private water supplies. As part of its activities relating to the protection of public water supplies, the Company’s subsidiary agreed to reimburse the municipality for certain studies and plans and to provide funding for the construction and operation by the municipality of wellhead treatment facilities. It is reasonably possible that the Company may recognize additional liabilities in connection with this matter at the time such additional losses are probable and can be reasonably estimated. However, the Company cannot reasonably estimate at this time the possible additional loss or range of possible additional losses associated with this matter pending the on-going implementation of the approved remediation plans for soil and groundwater conditions and completion and operation of the wellhead treatment facilities. In addition, the Company’s loss contingencies as of each of February 29, 2024 and August 31, 2023 included $ 10 million for the estimated costs related to remediation of a site a portion of which was previously leased to and operated by an indirect, wholly-owned subsidiary. In connection with settlement of a lawsuit relating to allocation of the remediation costs, the Company’s subsidiary agreed to perform the remedial action related to metals contamination on the site initially estimated to cost approximately $ 7.9 million, and another potentially liable party agreed to perform the remedial action related to creosote contamination at the site. As part of the settlement, other potentially liable parties agreed to make payments totaling approximately $ 7.6 million to fund the remediation of the metals contamination at the site in exchange for a release and indemnity. This amount was fully funded in fiscal 2021. In the fourth quarter of fiscal 2023, the Company increased its estimate of the cost to perform the remedial action by approximately $ 3 million. It is reasonably possible that the Company may recognize additional liabilities in connection with this matter at the time such additional losses are probable and can be reasonably estimated. The Company estimates the reasonably possible additional losses associated with this matter to range from zero to $ 10 million as of February 29, 2024, pending completion, approval, and implementation of the remediation action plan. 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 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. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Feb. 29, 2024 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Note 6 - Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss, net of tax, comprise the following (in thousands): Three Months Ended February 29, 2024 Three Months Ended February 28, 2023 Foreign Currency Cash Flow Hedges, Net Pension Obligations, Total Foreign Currency Pension Obligations, Total Balances - December 1 (Beginning of period) $ ( 37,839 ) $ ( 411 ) $ ( 1,852 ) $ ( 40,102 ) $ ( 36,925 ) $ ( 2,377 ) $ ( 39,302 ) Other comprehensive (loss) income before reclassifications ( 83 ) 711 — 628 ( 1,361 ) — ( 1,361 ) Income tax expense — ( 160 ) — ( 160 ) — — — Other comprehensive (loss) income before reclassifications, net of tax ( 83 ) 551 — 468 ( 1,361 ) — ( 1,361 ) Amounts reclassified from accumulated other comprehensive loss — ( 343 ) 279 ( 64 ) — 75 75 Income tax expense (benefit) — 77 ( 63 ) 14 — ( 17 ) ( 17 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — ( 266 ) 216 ( 50 ) — 58 58 Net periodic other comprehensive (loss) income ( 83 ) 285 216 418 ( 1,361 ) 58 ( 1,303 ) Balances - February 29 and 28, respectively (End of period) $ ( 37,922 ) $ ( 126 ) $ ( 1,636 ) $ ( 39,684 ) $ ( 38,286 ) $ ( 2,319 ) $ ( 40,605 ) Six Months Ended February 29, 2024 Six Months Ended February 28, 2023 Foreign Currency Cash Flow Hedges, Net Pension Obligations, Total Foreign Currency Pension Obligations, Total Balances - September 1 (Beginning of period) $ ( 37,340 ) $ ( 304 ) $ ( 2,039 ) $ ( 39,683 ) $ ( 34,679 ) $ ( 2,410 ) $ ( 37,089 ) Other comprehensive (loss) income before reclassifications ( 582 ) 908 178 504 ( 3,607 ) ( 34 ) ( 3,641 ) Income tax (expense) benefit — ( 204 ) ( 40 ) ( 244 ) — 8 8 Other comprehensive (loss) income before reclassifications, net of tax ( 582 ) 704 138 260 ( 3,607 ) ( 26 ) ( 3,633 ) Amounts reclassified from accumulated other comprehensive loss — ( 679 ) 342 ( 337 ) — 151 151 Income tax expense (benefit) — 153 ( 77 ) 76 — ( 34 ) ( 34 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — ( 526 ) 265 ( 261 ) — 117 117 Net periodic other comprehensive (loss) income ( 582 ) 178 403 ( 1 ) ( 3,607 ) 91 ( 3,516 ) Balances - February 29 and 28, respectively (End of period) $ ( 37,922 ) $ ( 126 ) $ ( 1,636 ) $ ( 39,684 ) $ ( 38,286 ) $ ( 2,319 ) $ ( 40,605 ) 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. |
Revenue
Revenue | 6 Months Ended |
Feb. 29, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 7 - Revenue Disaggregation of Revenues The table below illustrates the Company’s revenues disaggregated by major product and sales destination (in thousands): Three Months Ended Six Months Ended February 29, February 28, February 29, February 28, 2024 2023 2024 2023 Major product information: Ferrous revenues $ 316,097 $ 434,122 $ 664,994 $ 695,851 Nonferrous revenues 164,481 179,655 333,775 357,330 Steel revenues (1) 100,721 107,825 214,252 232,340 Retail and other revenues 39,760 34,351 80,935 69,162 Total revenues $ 621,059 $ 755,953 $ 1,293,956 $ 1,354,683 Revenues based on sales destination: Foreign $ 328,259 $ 436,219 $ 686,280 $ 708,903 Domestic 292,800 319,734 607,676 645,780 Total revenues $ 621,059 $ 755,953 $ 1,293,956 $ 1,354,683 (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 February 29, 2024 and August 31, 2023 , receivables from contracts with customers, net of an allowance for credit losses, totaled $ 217 million and $ 208 million, respectively, representing 99 % of total accounts receivable reported in the Unaudited Condensed Consolidated Balance Sheets at each reporting date. 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 $ 9 million and $ 7 million as of February 29, 2024 and August 31, 2023 , 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. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Feb. 29, 2024 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Share-based Compensation | Note 8 - Share-Based Compensation In the first quarter of fiscal 2024, as part of the annual awards under the Company’s Long-Term Incentive Plan, the Compensation Committee of the Company’s Board of Directors granted 290,461 restricted stock units (“RSUs”) and 293,239 performance share awards to the Company’s key employees and officers under the Company’s 1993 Amended and Restated Stock Incentive Plan (the “1993 Plan”). The RSUs have a five-year term and vest 20 % per year commencing October 31, 2024. 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 $ 7 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 five-year term of the awards is the longer of two years or the period ending on the date retirement eligibility is achieved. The performance share awards granted in the first quarter of 2024 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 recycled metal 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. During the first quarter of fiscal 2024, the Company granted 148,032 performance share awards based on its relative TSR metric over an approximately three-year performance period ending August 31, 2026. The Company estimated the fair value of TSR awards granted in the first quarter of fiscal 2024 using a Monte-Carlo simulation model utilizing several key assumptions, including the following: Percentage Expected share price volatility (Radius) 47.9 % Expected share price volatility (Peer group) 46.6 % Expected correlation to peer group companies 46.6 % Risk-free rate of return 4.82 % The estimated aggregate fair value of the TSR-based performance share awards 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. During the first quarter of fiscal 2024, the Company granted 145,207 performance share awards based on its recycled metal volume growth for the three-year performance period consisting of the Company’s 2024, 2025 and 2026 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 performance share awards related to recycled metal 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. Performance share awards 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, 2026. On January 30, 2024, the Company’s shareholders approved the Radius Recycling, Inc. 2024 Omnibus Incentive Plan (the “2024 Omnibus Incentive Plan”). The 2024 Omnibus Incentive Plan authorizes the Compensation Committee of the Board of Directors of the Company to grant to directors, officers, employees, consultants, and advisors of the Company incentive compensation, including share-based compensation. The 2024 Omnibus Incentive Plan provides for 3.0 million shares of the Company’s common stock to be available for issuance and replaces and supersedes the remaining shares available for grant under the 1993 Plan. In the second quarter of fiscal 2024, the Company granted deferred stock units (“DSUs”) to each of its non-employee directors under the Company’s 2024 Omnibus Incentive 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 26,400 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. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Feb. 29, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 9 - 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 February 29, 2024 and August 31, 2023 , 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. The fair value of derivative instruments in the Unaudited Condensed Consolidated Balance Sheet as of February 29, 2024 and August 31, 2023 is as follows (in thousands): Asset (Liability) Derivatives Balance Sheet Location February 29, 2024 August 31, 2023 Interest rate swap contracts Prepaid expenses and other current assets $ 853 $ 1,163 Interest rate swap contracts Other long-term liabilities ( 1,015 ) ( 1,555 ) See Note 6 - Accumulated Other Comprehensive 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 29, 2024 , which reclassified amounts totaled less than $ 1 million and $ 1 million, respectively. Total interest expense w as $ 6 million and $ 11 million , respectively, for the three and six months ended February 29, 2024. 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 29, 2024 . |
Income Taxes
Income Taxes | 6 Months Ended |
Feb. 29, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10 - Income Taxes Effective Tax Rate The Company’s effective tax rate from continuing operations for the second quarter and first six months of fiscal 2024 was an expense on pre-tax loss of 3.6 % and a benefit on pre-tax loss of 14.8 % , respectively, compared to a benefit on pre-tax income of 14.5 % and a benefit on pre-tax loss of 32.8 % , respectively, for the comparable prior year periods. The Company’s effective tax rate from continuing operations for the second quarter of fiscal 2024 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 intra-period allocation of the estimated annual tax provision, as well as the recognition of a valuation allowance against deferred tax assets in the Company’s Puerto Rico tax jurisdiction. The Company recognized this valuation allowance as a result of negative evidence, including recent losses in the tax jurisdiction, outweighing the more subjective positive evidence, indicating that it is more likely than not that the associated tax benefits will not be realized. For the second quarter of fiscal 2023 , 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 Company’s financial performance and the effect of discrete items. 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 all negative and positive evidence, including the weight of the evidence, to determine if valuation allowances against deferred tax assets are required. The Company continues to maintain valuation allowances against certain state and Canadian deferred tax assets, and it recognized a $ 2 million valuation allowance against its deferred tax assets in Puerto Rico in the second quarter of fiscal 2024. Canadian deferred tax assets against which the Company continues to maintain a valuation allowance relate to goodwill treated as indefinite-lived for Canadian tax purposes. 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 2014 to 2023 remain subject to examination under the statute of limitations. |
Net (Loss) Income Per Share
Net (Loss) Income Per Share | 6 Months Ended |
Feb. 29, 2024 | |
Earnings Per Share [Abstract] | |
Net (Loss) Income Per Share | Note 11 - Net (Loss) Income Per Share The following table sets forth the information used to compute basic and diluted net (loss) income per share attributable to Radius shareholders (in thousands): Three Months Ended Six Months Ended February 29, February 28, February 29, February 28, 2024 2023 2024 2023 (Loss) income from continuing operations $ ( 33,979 ) $ 4,048 $ ( 51,775 ) $ ( 13,439 ) Net loss (income) attributable to noncontrolling interests 31 81 ( 135 ) ( 151 ) (Loss) income from continuing operations attributable to Radius shareholders $ ( 33,948 ) $ 4,129 $ ( 51,910 ) $ ( 13,590 ) (Loss) income from discontinued operations, net of tax ( 31 ) 224 ( 33 ) 155 Net (loss) income attributable to Radius shareholders $ ( 33,979 ) $ 4,353 $ ( 51,943 ) $ ( 13,435 ) Computation of shares: Weighted average common shares outstanding, basic 28,454 28,081 28,337 27,912 Incremental common shares attributable to dilutive performance share awards, restricted stock units and deferred stock units — 536 — — Weighted average common shares outstanding, diluted 28,454 28,617 28,337 27,912 Common stock equivalent shares of 340,415 and 407,103 were considered antidilutive and were excluded from the calculation of diluted net (loss) income per share for the three and six months ended February 29, 2024 , respectively, compared to 56,520 and 796,877 for the three and six months ended February 28, 2023 , respectively. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Feb. 29, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12 - 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 $ 5 million and $ 4 million for the three months ended February 29, 2024 and February 28, 2023 , respectively, and $ 9 million and $ 8 million for the six months ended February 29, 2024 and February 28, 2023 , respectively. |
Debt
Debt | 6 Months Ended |
Feb. 29, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Note 13 - Debt Debt consisted of the following as of February 29, 2024 and August 31, 2023 (in thousands): February 29, 2024 August 31, 2023 Bank revolving credit facilities, interest primarily at SOFR or LIBOR plus a spread $ 355,000 $ 230,000 Finance lease liabilities 6,400 7,200 Other debt obligations 12,178 12,192 Total debt 373,578 249,392 Less current maturities ( 5,459 ) ( 5,813 ) Debt, net of current maturities $ 368,119 $ 243,579 On August 22, 2022, the Company and certain of its subsidiaries entered into the Third Amendment to the Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”), by and among Schnitzer Steel Industries, Inc., as the U.S. borrower, Schnitzer Steel Canada Ltd., as the Canadian borrower, Bank of America, N.A., as administrative agent, and other lenders party thereto, which amended and restated our previously existing credit agreement. The Amended Credit Agreement provides for $ 800 million and C$ 15 million in senior secured revolving credit facilities 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. The Company incurred $ 2 million in debt issuance costs in connection with the Amended Credit Agreement, which are amortized to interest expense over the five-year term of the arrangement. Interest rates on outstanding indebtedness under the Amended Credit Agreement are based, at our option, on either the Secured Overnight Financing Rate (“SOFR”) (or the Canadian Dollar Offered Rate, “CDOR” for C$ loans), plus a spread of between 1.25 % and 2.00 %, 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 Amended 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 0.25 % and 1.00 % 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 0.30 % based on a pricing grid tied to our ratio of consolidated net funded debt to EBITDA. As of February 29, 2024 and August 31, 2023, borrowings outstanding under the credit facilities were $ 355 million and $ 230 million, respectively. The weighted average interest rate on amounts outstanding under the credit facilities was 6.92 % and 7.17 % as of February 29, 2024 and August 31, 2023. 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. As of February 29, 2024, the financial covenants under the credit agreement included (a) a consolidated fixed charge coverage ratio, defined as the four-quarter rolling sum of consolidated EBITDA less defined maintenance capital expenditures and certain environmental expenditures divided by consolidated fixed charges and (b) a consolidated leverage ratio, 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, and accounts receivable. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Feb. 29, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Unaudited Condensed Consolidated Financial Statements of Radius Recycling, Inc. (formerly Schnitzer Steel Industries, 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 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. 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, 2023. The results for the three and six months ended February 29, 2024 and February 28, 2023 are not necessarily indicative of the results of operations for the entire fiscal year. |
Liquidity | Liquidity The Company currently faces challenging market conditions resulting in compressed operating margins. As of February 29, 2024, the Company was in compliance with all of the financial covenants under its credit facilities, the aggregate principal amount outstanding under which was $ 355 million, with $ 438 million remaining available for borrowing (see Note 13 – Debt). The Company has taken steps to reduce its operating costs and improve margins. If market conditions do not improve, the Company is unable to realize the expected value of its cost savings initiatives, or other negative factors occur, the Company anticipates it would be unable to remain in compliance with the current financial covenants under its credit agreement. If the Company were unable to meet its financial covenants and then were unable to renegotiate the terms of its financial covenants, all debt outstanding under the credit facilities could become immediately due and payable. If such actions became necessary, the Company expects that it would be successful in renegotiating an amendment or obtaining a waiver on terms acceptable to the Company, however there can be no assurance that it would be able to do so. |
Company Name | Company Name On July 26, 2023, the Company announced its new brand and assumed name, Radius Recycling. The Company’s shareholders approved an amendment to the Company’s Articles of Incorporation to change the corporate name of the Company from Schnitzer Steel Industries, Inc. to Radius Recycling, Inc. at the Annual Meeting of Shareholders held on January 30, 2024 (the “Name Change”). That same day, the Company effectuated the Name Change by filing articles of amendment of the Articles of Incorporation with the Oregon Secretary of State and amended and restated its Bylaws to reflect the Name Change. |
Segment Reporting | 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. |
Cash and Cash Equivalents | 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 $ 49 million and $ 62 million as of February 29, 2024 and August 31, 2023 , respectively. |
Accounts Receivable, net | 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. 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 $ 6 million for each of the six months ended February 29, 2024 and February 28, 2023 . |
Other Assets | Prepaid Expenses The Company’s prepaid expenses, reported within prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets, totaled $ 13 million and $ 27 million as of February 29, 2024 and August 31, 2023, respectively, and consisted primarily of deposits on capital projects and prepaid services, property taxes, and insurance. Other Assets The Company’s other assets, exclusive of prepaid expenses and assets relating to certain employee benefit plans, consisted primarily of receivables from insurers, advances to a supplier of metals recycling equipment, cash held in a client trust account relating to a legal settlement, short-term certificates of deposit, two equity investments, capitalized implementation costs for cloud computing arrangements, major spare parts and equipment, 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, property loss and damage and other claims in connection with the December 2021 fire at the Company’s shredder facility in Everett, Massachusetts, workers’ compensation claims, and third-party claims. As of February 29, 2024 , receivables from insurers totaled $ 19 million, including $ 12 million relating to environmental claims. As of August 31, 2023 , receivables from insurers totaled $ 14 million, including $ 10 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 February 29, 2024 and August 31, 2023 also included $ 13 million and $ 11 million, respectively, representing advances to a supplier of metals recycling equipment. Other assets as of August 31, 2023 also included approximately $ 7 million in connection with cash deposited into a client trust account in fiscal 2021 to fund the remediation of a site, a portion of which was previously leased to and operated by an indirect, wholly-owned subsidiary. The cash was deposited into the client trust account by other potentially liable parties pursuant to a settlement agreement resolving a lawsuit relating to allocation of the remediation costs, including agreement by the Company’s subsidiary to perform certain remedial actions. In the second quarter of fiscal 2024, the approximately $ 7 million was distributed to the Company from the client trust account for purposes of holding the funds and maximizing returns, each consistent with the terms of the settlement agreement, of which $ 6 million was held in short-term certificates of deposit and is reported within prepaid expenses and other current assets as of February 29, 2024. See “Other Legacy Environmental Loss Contingencies” within “Contingencies – Environmental” in Note 5 - Commitments and Contingencies for further discussion of this matter. The Company invested $ 6 million in the equity of a privately-held U.S. waste and recycling entity in fiscal 2017. The investment is accounted for under the guidance for investments in equity securities. During the first half of fiscal 2023, the equity investment was determined to not have a readily determinable fair value and, therefore, was carried at cost and adjusted for impairments and observable price changes. In the first quarter of fiscal 2023, the Company identified an impairment indicator for its investment and, based on its fair value measurement incorporating observable trading prices of the publicly-traded entity and unobservable inputs, recognized a $ 4 million impairment in other loss, net on the Unaudited Condensed Consolidated Statement of Operations. During the third quarter of fiscal 2023, the publicly-traded entity allowed for an exchange event, and the Company exchanged its full investment in the subsidiary's equity units for shares of the publicly-traded entity, which have a readily determinable fair value, and which the Company still held as of February 29, 2024. As of February 29, 2024 and August 31, 2023 , the fair value of the investment was less than $ 1 million and $ 1 million, respectively. The investment is reported within prepaid expenses and other current assets in the Unaudited Condensed Consolidated Balance Sheets. Other assets as of February 29, 2024 and August 31, 2023 included approximately $ 7 million and $ 5 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 | 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 May 22, 2021, the Company experienced a fire at its steel mill in McMinnville, Oregon. Direct physical loss or damage to property from the incident was limited to the mill’s melt shop, with no bodily injuries and no physical loss or damage to other buildings or equipment. The Company experienced loss of business income during the shutdown of the steel mill and the subsequent ramp-up phase which was substantially completed in fiscal 2022. The Company filed insurance claims for the physical loss and damage experienced at the mill’s melt shop and business income losses resulting from the matter. In the fourth quarter of fiscal 2023, the Company reached a full and final settlement with its insurers for its claims. All insurance proceeds and recovery gains in connection with the Company’s claims had been received and recognized, respectively, as of August 31, 2023. 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. As a result of the fire, shredding operations ceased, while all non-shredding operations at the facility continued, including torching, shearing, separating, and sorting purchased non-shreddable recycled ferrous metals. On January 28, 2022, shredding operations at the facility began ramping up following the replacement and repairs to shredder equipment that had been damaged. In addition, shredding operations temporarily ceased at the facility on June 18, 2022 and, following discussions with the Massachusetts Department of Environmental Protection and the Massachusetts Attorney General’s office, the Company installed a temporary emission capture system and controls that allowed for the resumption of shredding operations on November 11, 2022 and for continued operation during the repair and replacement of the shredder enclosure building. Non-shredding operations at the facility continued during this period. 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 anticipated business income losses resulting from the matter. As of August 31, 2023, the Company had recognized, in aggregate, $ 34 million in insurance recovery gains and had received, in aggregate, advance payments from insurers totaling approximately $ 33 million towards its claims. During the first half of fiscal 2024, the Company recognized an additional $ 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. As of February 29, 2024, the Company had recognized, in aggregate, $ 40 million in insurance recovery gains and had received, in aggregate, advance payments from insurers totaling approximately $ 37 million towards its claims, and not reflecting any final or full settlement of claims with the insurers. As of February 29, 2024 and August 31, 2023 , the Company had receivables from its insurers of $ 3 million and $ 1 million, respectively, reported within prepaid expenses and other current assets on the Unaudited Condensed Consolidated Balance Sheets. |
Business Acquisitions | Business Acquisitions The Company recognizes the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. Contingent purchase consideration is recorded at fair value at the date of acquisition. Any excess purchase price over the fair value of the net assets acquired is recorded as goodwill. Within one year from the date of acquisition, the Company may update the value allocated to the assets acquired and liabilities assumed and the resulting goodwill balance as a result of information received regarding the valuation of such assets and liabilities that was not available at the time of purchase. Measuring assets and liabilities at fair value requires the Company to determine the price that would be paid by a third-party market participant based on the highest and best use of the assets or interests acquired. Acquisition costs are expensed as incurred. See Note 3 - Business Acquisitions for further detail. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, and derivative financial instruments. The majority of cash and cash equivalents is maintained with major financial institutions. Balances with these and certain other institutions exceeded the Federal Deposit Insurance Corporation insured amount of $ 250 thousand as of February 29, 2024 . 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 | Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-07 (“ASU 2023-07”), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, amending reportable segment disclosure requirements to include disclosure of incremental segment information on an annual and interim basis. Among the disclosure enhancements are new disclosures regarding significant segment expenses that are regularly provided to the chief operating decision-maker and included within each reported measure of segment profit or loss, as well as other segment items bridging segment revenue to each reported measure of segment profit or loss. The amendments in ASU 2023-07 are effective for the Company’s fiscal 2025, and interim periods within the Company’s fiscal 2026, and are applied retrospectively. Early adoption is permitted. As the amendments apply to reportable segment disclosures only, the Company does not expect adoption to have a material impact on its consolidated financial statements. In December 2023, the FASB issued Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective beginning in the Company’s fiscal 2026 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. As the amendments apply to income tax disclosures only, the Company does not expect adoption to have a material impact on its consolidated financial statements. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Feb. 29, 2024 | |
Inventory, Net [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): February 29, 2024 August 31, 2023 Processed and unprocessed scrap metal $ 156,300 $ 143,986 Semi-finished goods 18,146 9,959 Finished goods 73,441 60,348 Supplies 66,534 64,349 Inventories $ 314,421 $ 278,642 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Feb. 29, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Gross Change in Carrying Amount of Goodwill | The gross change in the carrying amount of goodwi ll for the six months ended February 29, 2024 was as follows (in thousands): Goodwill August 31, 2023 $ 229,419 Foreign currency translation adjustment ( 100 ) February 29, 2024 $ 229,319 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Feb. 29, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Environmental Liabilities | Changes in the Company’s environmental liabilities for the six months ended February 29, 2024 were as follows (in thousands): Balance as of Liabilities Payments and Balance as of Short-Term Long-Term $ 66,777 $ 2,227 $ ( 3,314 ) $ 65,690 $ 13,656 $ 52,034 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Feb. 29, 2024 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss, net of tax, comprise the following (in thousands): Three Months Ended February 29, 2024 Three Months Ended February 28, 2023 Foreign Currency Cash Flow Hedges, Net Pension Obligations, Total Foreign Currency Pension Obligations, Total Balances - December 1 (Beginning of period) $ ( 37,839 ) $ ( 411 ) $ ( 1,852 ) $ ( 40,102 ) $ ( 36,925 ) $ ( 2,377 ) $ ( 39,302 ) Other comprehensive (loss) income before reclassifications ( 83 ) 711 — 628 ( 1,361 ) — ( 1,361 ) Income tax expense — ( 160 ) — ( 160 ) — — — Other comprehensive (loss) income before reclassifications, net of tax ( 83 ) 551 — 468 ( 1,361 ) — ( 1,361 ) Amounts reclassified from accumulated other comprehensive loss — ( 343 ) 279 ( 64 ) — 75 75 Income tax expense (benefit) — 77 ( 63 ) 14 — ( 17 ) ( 17 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — ( 266 ) 216 ( 50 ) — 58 58 Net periodic other comprehensive (loss) income ( 83 ) 285 216 418 ( 1,361 ) 58 ( 1,303 ) Balances - February 29 and 28, respectively (End of period) $ ( 37,922 ) $ ( 126 ) $ ( 1,636 ) $ ( 39,684 ) $ ( 38,286 ) $ ( 2,319 ) $ ( 40,605 ) Six Months Ended February 29, 2024 Six Months Ended February 28, 2023 Foreign Currency Cash Flow Hedges, Net Pension Obligations, Total Foreign Currency Pension Obligations, Total Balances - September 1 (Beginning of period) $ ( 37,340 ) $ ( 304 ) $ ( 2,039 ) $ ( 39,683 ) $ ( 34,679 ) $ ( 2,410 ) $ ( 37,089 ) Other comprehensive (loss) income before reclassifications ( 582 ) 908 178 504 ( 3,607 ) ( 34 ) ( 3,641 ) Income tax (expense) benefit — ( 204 ) ( 40 ) ( 244 ) — 8 8 Other comprehensive (loss) income before reclassifications, net of tax ( 582 ) 704 138 260 ( 3,607 ) ( 26 ) ( 3,633 ) Amounts reclassified from accumulated other comprehensive loss — ( 679 ) 342 ( 337 ) — 151 151 Income tax expense (benefit) — 153 ( 77 ) 76 — ( 34 ) ( 34 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — ( 526 ) 265 ( 261 ) — 117 117 Net periodic other comprehensive (loss) income ( 582 ) 178 403 ( 1 ) ( 3,607 ) 91 ( 3,516 ) Balances - February 29 and 28, respectively (End of period) $ ( 37,922 ) $ ( 126 ) $ ( 1,636 ) $ ( 39,684 ) $ ( 38,286 ) $ ( 2,319 ) $ ( 40,605 ) |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Feb. 29, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenues Disaggregated by Major Product and Sales Destination | The table below illustrates the Company’s revenues disaggregated by major product and sales destination (in thousands): Three Months Ended Six Months Ended February 29, February 28, February 29, February 28, 2024 2023 2024 2023 Major product information: Ferrous revenues $ 316,097 $ 434,122 $ 664,994 $ 695,851 Nonferrous revenues 164,481 179,655 333,775 357,330 Steel revenues (1) 100,721 107,825 214,252 232,340 Retail and other revenues 39,760 34,351 80,935 69,162 Total revenues $ 621,059 $ 755,953 $ 1,293,956 $ 1,354,683 Revenues based on sales destination: Foreign $ 328,259 $ 436,219 $ 686,280 $ 708,903 Domestic 292,800 319,734 607,676 645,780 Total revenues $ 621,059 $ 755,953 $ 1,293,956 $ 1,354,683 (1) Steel revenues include predominantly sales of finished steel products, in addition to sales of semi-finished goods (billets) and steel manufacturing scrap. |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Feb. 29, 2024 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Key Assumptions for a Monte-Carlo Simulation Model Utilized to Estimate the Fair Value of Performance Share awards | The Company estimated the fair value of TSR awards granted in the first quarter of fiscal 2024 using a Monte-Carlo simulation model utilizing several key assumptions, including the following: Percentage Expected share price volatility (Radius) 47.9 % Expected share price volatility (Peer group) 46.6 % Expected correlation to peer group companies 46.6 % Risk-free rate of return 4.82 % |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Feb. 29, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Fair Value of Derivative Instruments in Unaudited Condensed Consolidated Balance Sheet | The fair value of derivative instruments in the Unaudited Condensed Consolidated Balance Sheet as of February 29, 2024 and August 31, 2023 is as follows (in thousands): Asset (Liability) Derivatives Balance Sheet Location February 29, 2024 August 31, 2023 Interest rate swap contracts Prepaid expenses and other current assets $ 853 $ 1,163 Interest rate swap contracts Other long-term liabilities ( 1,015 ) ( 1,555 ) |
Net (Loss) Income Per Share (Ta
Net (Loss) Income Per Share (Tables) | 6 Months Ended |
Feb. 29, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net (Loss) Income Per Share | The following table sets forth the information used to compute basic and diluted net (loss) income per share attributable to Radius shareholders (in thousands): Three Months Ended Six Months Ended February 29, February 28, February 29, February 28, 2024 2023 2024 2023 (Loss) income from continuing operations $ ( 33,979 ) $ 4,048 $ ( 51,775 ) $ ( 13,439 ) Net loss (income) attributable to noncontrolling interests 31 81 ( 135 ) ( 151 ) (Loss) income from continuing operations attributable to Radius shareholders $ ( 33,948 ) $ 4,129 $ ( 51,910 ) $ ( 13,590 ) (Loss) income from discontinued operations, net of tax ( 31 ) 224 ( 33 ) 155 Net (loss) income attributable to Radius shareholders $ ( 33,979 ) $ 4,353 $ ( 51,943 ) $ ( 13,435 ) Computation of shares: Weighted average common shares outstanding, basic 28,454 28,081 28,337 27,912 Incremental common shares attributable to dilutive performance share awards, restricted stock units and deferred stock units — 536 — — Weighted average common shares outstanding, diluted 28,454 28,617 28,337 27,912 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Feb. 29, 2024 | |
Schedule of Debt | Debt consisted of the following as of February 29, 2024 and August 31, 2023 (in thousands): February 29, 2024 August 31, 2023 Bank revolving credit facilities, interest primarily at SOFR or LIBOR plus a spread $ 355,000 $ 230,000 Finance lease liabilities 6,400 7,200 Other debt obligations 12,178 12,192 Total debt 373,578 249,392 Less current maturities ( 5,459 ) ( 5,813 ) Debt, net of current maturities $ 368,119 $ 243,579 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 21 Months Ended | 27 Months Ended | |||
Feb. 29, 2024 USD ($) | Feb. 28, 2023 USD ($) | Nov. 30, 2022 USD ($) | Feb. 29, 2024 USD ($) Segment | Feb. 28, 2023 USD ($) | Aug. 31, 2023 USD ($) | Feb. 29, 2024 USD ($) | |
Significant Accounting Policies [Line Items] | |||||||
Aggregate principal amount | $ 355,000 | $ 355,000 | $ 355,000 | ||||
Available for borrowing | 438,000 | $ 438,000 | 438,000 | ||||
Number of operating segments | Segment | 1 | ||||||
Number of reportable segments | Segment | 1 | ||||||
Bank Overdrafts | 49,000 | $ 49,000 | $ 62,000 | 49,000 | |||
Repayment of Advances with Scrap Metal | 6,000 | $ 6,000 | |||||
Advances to supplier | 13,000 | 13,000 | 11,000 | 13,000 | |||
Cash deposited into client trust account | 7,000 | ||||||
Cash reserve deposit distributed | 7,000 | ||||||
Impairment in other loss, net | $ (4,000) | ||||||
Fair value of investment | 1,000 | ||||||
Capitalized cloud computing arrangement implementation costs | 7,000 | 7,000 | 5,000 | 7,000 | |||
Gain on insurance receivable recognized | 2,000 | 6,000 | |||||
Gain (loss) from equity method investments | 30 | $ 311 | 703 | $ 1,101 | |||
Cash, FDIC Insured Amount | 250 | 250 | 250 | ||||
Maximum | |||||||
Significant Accounting Policies [Line Items] | |||||||
Fair value of investment | 1,000 | 1,000 | 1,000 | ||||
Damage From Fire at Metals Recycling Facility in Everett, Massachusetts | |||||||
Significant Accounting Policies [Line Items] | |||||||
Insurance receivable | 3,000 | 3,000 | 1,000 | 3,000 | |||
Insurance recovery gain | 34,000 | 40,000 | |||||
Received payment related to claims from various insurers | 33,000 | 37,000 | |||||
US Recycling | |||||||
Significant Accounting Policies [Line Items] | |||||||
Investment, Original Cost | 6,000 | 6,000 | 6,000 | ||||
Prepaid Expenses and Other Current Assets | |||||||
Significant Accounting Policies [Line Items] | |||||||
Prepaid expense | 13,000 | 13,000 | 27,000 | 13,000 | |||
Prepaid Expenses and Other Current Assets | Certificates of Deposit | |||||||
Significant Accounting Policies [Line Items] | |||||||
Short-term investment | 6,000 | 6,000 | 6,000 | ||||
Other Current Assets | |||||||
Significant Accounting Policies [Line Items] | |||||||
Insurance receivable | 19,000 | 19,000 | 14,000 | 19,000 | |||
Environmental claims insurance receivable | $ 12,000 | $ 12,000 | $ 10,000 | $ 12,000 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Feb. 29, 2024 | Aug. 31, 2023 |
Inventory, Net [Abstract] | ||
Processed and unprocessed scrap metal | $ 156,300 | $ 143,986 |
Semi-finished goods | 18,146 | 9,959 |
Finished goods | 73,441 | 60,348 |
Supplies | 66,534 | 64,349 |
Inventories | $ 314,421 | $ 278,642 |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | Nov. 18, 2022 | Feb. 29, 2024 | Aug. 31, 2023 |
Business Acquisition [Line Items] | |||
Goodwill | $ 229,319 | $ 229,419 | |
ScrapSource | |||
Business Acquisition [Line Items] | |||
Business acquisition, effective date of acquisition | Nov. 18, 2022 | ||
Business acquisition, total purchase consideration | $ 25,000 | ||
Goodwill | $ 13,000 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) $ in Millions | 6 Months Ended | |
Feb. 29, 2024 USD ($) Reporting_unit | Aug. 31, 2023 | |
Goodwill [Line Items] | ||
Number of reporting units | Reporting_unit | 3 | |
Goodwill impairment charges | $ | $ 39 | |
Metals Recycling | ||
Goodwill [Line Items] | ||
Estimated fair value of reporting unit exceeded carrying amount | 24% | |
Autos Reporting Units | ||
Goodwill [Line Items] | ||
Estimated fair value of reporting unit exceeded carrying amount | 33% |
Goodwill - Schedule of Gross Ch
Goodwill - Schedule of Gross Change in Carrying Amount of Goodwill (Details) $ in Thousands | 6 Months Ended |
Feb. 29, 2024 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | $ 229,419 |
Foreign currency translation adjustment | (100) |
Goodwill, end of period | $ 229,319 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Environmental Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Feb. 29, 2024 | Aug. 31, 2023 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | ||
Beginning Balance | $ 66,777 | |
Environmental Loss Contingency, Statement of Financial Position [Extensible Enumeration] | Short-Term, Long-Term | |
Liabilities Established (Released), Net | $ 2,227 | |
Payments and Other | (3,314) | |
Ending Balance | 65,690 | |
Short-Term | 13,656 | $ 13,743 |
Long-Term | $ 52,034 | $ 53,034 |
Commitments and Contingencies_2
Commitments and Contingencies - Recycling Operations - Recycling Operations (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | 216 Months Ended | |||||
Dec. 01, 2017 | Feb. 28, 2021 | Apr. 30, 2020 USD ($) | Jan. 31, 2017 USD ($) Potentially_responsible_party | Feb. 29, 2024 USD ($) | Dec. 31, 2017 USD ($) Potentially_responsible_party | Aug. 31, 2023 USD ($) | Jan. 30, 2017 Party | |
Loss Contingencies [Line Items] | ||||||||
Accrual for Environmental Loss Contingencies | $ 65,690 | $ 66,777 | ||||||
Liabilities Established | 2,227 | |||||||
Portland Harbor Superfund Site | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accrual for Environmental Loss Contingencies | 6,000 | 5,000 | ||||||
Number Of Other Potentially Responsible Parties Signing Settlement Agreement and Order on Consent | Potentially_responsible_party | 3 | |||||||
Number of Years for Pre-Remedial Design | 2 years | |||||||
Number Of Potentially Responsible Parties Joining Allocation Process | Potentially_responsible_party | 100 | |||||||
Portland Harbor Superfund Site | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Percentage of area require active clean up in remedial design phase | 100% | |||||||
Portland Harbor Superfund Site - River Mile 3.5 | ||||||||
Loss Contingencies [Line Items] | ||||||||
Site contingency expected completion term for remedial design | 4 years | |||||||
Site contingency EPA estimated completion cost for remedial design | $ 4,000 | |||||||
Insurance receivable | 2,000 | $ 1,000 | ||||||
Portland Harbor Superfund Site - NRD | ||||||||
Loss Contingencies [Line Items] | ||||||||
Parties named in Litigation | Party | 30 | |||||||
Portland Harbor Superfund Site - NRD | Other Noncurrent Assets | ||||||||
Loss Contingencies [Line Items] | ||||||||
Insurance receivable | 2,300 | |||||||
Insurance liability | $ 2,300 | |||||||
Lower Willamette Group | Portland Harbor Superfund Site | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Remedial Investigation and Feasibility Study Costs | $ 155,000 | |||||||
Potential Responsible Parties | Portland Harbor Superfund Site | ||||||||
Loss Contingencies [Line Items] | ||||||||
Estimated Cost of Selected Remedy Undiscounted | $ 1,700,000 | |||||||
Estimated Cost of Selected Remedy Discounted | $ 1,050,000 | |||||||
Estimated Cost of Selected Remedy, Discount Rate | 7% | |||||||
Site Contingency, Estimated Construction Time Frame | 13 years | |||||||
Potential Responsible Parties | Portland Harbor Superfund Site | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Estimated Cost of Selected Remedy, Range | 50% | |||||||
Potential Responsible Parties | Portland Harbor Superfund Site | Maximum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Estimated Cost of Selected Remedy, Range | (30.00%) |
Commitments and Contingencies_3
Commitments and Contingencies - Recycling Operations - Other Legacy (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Aug. 31, 2023 | Nov. 30, 2022 | Aug. 31, 2018 | Feb. 29, 2024 | |
Loss Contingencies [Line Items] | |||||
Accrual for Environmental Loss Contingencies | $ 66,777 | $ 65,690 | |||
Legacy Environmental Site 1 - Remediation of Shredder Residue | |||||
Loss Contingencies [Line Items] | |||||
Environmental remediation expense accrued in the period | $ 4,000 | ||||
Accrual for Environmental Loss Contingencies | 4,000 | 4,000 | |||
Legacy Environmental Site 1 - Remediation of Shredder Residue | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, range of possible loss | 0 | ||||
Legacy Environmental Site 1 - Remediation of Shredder Residue | Maximum | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, range of possible loss | 28,000 | ||||
Legacy Environmental Site 2 - Remediation of Soil and Groundwater Conditions | |||||
Loss Contingencies [Line Items] | |||||
Accrual for Environmental Loss Contingencies | 5,000 | 3,000 | |||
Legacy Environmental Site 2 - Soil Remediation Activities | |||||
Loss Contingencies [Line Items] | |||||
Accrued for certain soil remediation activities | $ 1,000 | ||||
Legacy Environmental Site 3 - Metals Contamination | |||||
Loss Contingencies [Line Items] | |||||
Environmental remediation expense accrued in the period | 3,000 | ||||
Accrual for Environmental Loss Contingencies | $ 10,000 | 10,000 | |||
Litigation settlement, cost of remedial action | $ 7,900 | ||||
Litigation settlement, amount payment other party | $ 7,600 | ||||
Legacy Environmental Site 3 - Metals Contamination | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, range of possible loss | 0 | ||||
Legacy Environmental Site 3 - Metals Contamination | Maximum | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, range of possible loss | $ 10,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | $ 884,276 | $ 928,504 | $ 911,659 | $ 958,474 |
Total other comprehensive income (loss), net of tax | 418 | (1,303) | (1) | (3,516) |
Ending balance | 847,466 | 928,438 | 847,466 | 928,438 |
Foreign Currency Translation Adjustments | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | (37,839) | (36,925) | (37,340) | (34,679) |
Other comprehensive (loss) income before reclassifications | (83) | (1,361) | (582) | (3,607) |
Income tax (expense) benefit | 0 | 0 | 0 | 0 |
Other comprehensive (loss) income before reclassifications, net of tax | (83) | (1,361) | (582) | (3,607) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Income tax expense (benefit) | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss), net of tax | (83) | (1,361) | (582) | (3,607) |
Ending balance | (37,922) | (38,286) | (37,922) | (38,286) |
Cash Flow Hedges, Net | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | (411) | (304) | ||
Other comprehensive (loss) income before reclassifications | 711 | 908 | ||
Income tax (expense) benefit | (160) | (204) | ||
Other comprehensive (loss) income before reclassifications, net of tax | 551 | 704 | ||
Amounts reclassified from accumulated other comprehensive loss | (343) | (679) | ||
Income tax expense (benefit) | 77 | 153 | ||
Amounts reclassified from accumulated other comprehensive loss, net of tax | (266) | (526) | ||
Total other comprehensive income (loss), net of tax | 285 | 178 | ||
Ending balance | (126) | (126) | ||
Pension Obligations, Net | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | (1,852) | (2,377) | (2,039) | (2,410) |
Other comprehensive (loss) income before reclassifications | 0 | 0 | 178 | (34) |
Income tax (expense) benefit | 0 | 0 | (40) | 8 |
Other comprehensive (loss) income before reclassifications, net of tax | 0 | 0 | 138 | (26) |
Amounts reclassified from accumulated other comprehensive loss | 279 | 75 | 342 | 151 |
Income tax expense (benefit) | (63) | (17) | (77) | (34) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 216 | 58 | 265 | 117 |
Total other comprehensive income (loss), net of tax | 216 | 58 | 403 | 91 |
Ending balance | (1,636) | (2,319) | (1,636) | (2,319) |
Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) In Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | (40,102) | (39,302) | (39,683) | (37,089) |
Other comprehensive (loss) income before reclassifications | 628 | (1,361) | 504 | (3,641) |
Income tax (expense) benefit | (160) | 0 | (244) | 8 |
Other comprehensive (loss) income before reclassifications, net of tax | 468 | (1,361) | 260 | (3,633) |
Amounts reclassified from accumulated other comprehensive loss | (64) | 75 | (337) | 151 |
Income tax expense (benefit) | 14 | (17) | 76 | (34) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | (50) | 58 | (261) | 117 |
Total other comprehensive income (loss), net of tax | 418 | (1,303) | (1) | (3,516) |
Ending balance | $ (39,684) | $ (40,605) | $ (39,684) | $ (40,605) |
Revenue - Summary of Revenues D
Revenue - Summary of Revenues Disaggregated by Major Product and Sales Destination (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 621,059 | $ 755,953 | $ 1,293,956 | $ 1,354,683 |
Ferrous Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 316,097 | 434,122 | 664,994 | 695,851 |
Nonferrous Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 164,481 | 179,655 | 333,775 | 357,330 |
Steel Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 100,721 | 107,825 | 214,252 | 232,340 |
Retail and Other Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 39,760 | 34,351 | 80,935 | 69,162 |
Foreign | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 328,259 | 436,219 | 686,280 | 708,903 |
Domestic | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 292,800 | $ 319,734 | $ 607,676 | $ 645,780 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | Feb. 29, 2024 | Aug. 31, 2023 |
Disaggregation of Revenue [Line Items] | ||
Receivables from contracts with customers, net of allowance for credit losses | $ 217 | $ 208 |
Percentage of receivables from contracts with customers of accounts receivable | 99% | |
Contract liabilities | $ 9 | $ 7 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Feb. 29, 2024 | Nov. 30, 2023 | Jan. 30, 2024 | |
Restricted Stock Units (“RSUs”) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 290,461 | ||
Vesting term | 5 years | ||
Vesting percentage per year | 20% | ||
Shares granted, fair value | $ 7 | ||
Restricted Stock Units (“RSUs”) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for retirement eligibility for expense to be recognized | 5 years | ||
Restricted Stock Units (“RSUs”) | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period for retirement eligibility for expense to be recognized | 2 years | ||
Performance Shares (PSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 293,239 | ||
Share-based compensation arrangement by share-based payment award, award requisite performance period | 3 years | ||
Performance Shares (PSUs) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance based awards award payouts threshold | 200% | ||
Performance Shares (PSUs) | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance based awards award payouts threshold | 50% | ||
Total Shareholder Return (TSR) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 148,032 | ||
Share-based compensation arrangement by share-based payment award, award requisite performance period | 3 years | ||
Shares granted, fair value | $ 3 | ||
Recycled Metal Volume Growth | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 145,207 | ||
Share-based compensation arrangement by share-based payment award, award requisite performance period | 3 years | ||
Shares granted, fair value | $ 3 | ||
Omnibus Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for grant | 3,000,000 | ||
Deferred stock units ("DSUs") | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted, fair value | $ 1 | ||
Deferred stock units ("DSUs") | Non-employee Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 26,400 | ||
Deferred stock units ("DSUs") | Non-employee Directors | Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares per stock unit | 1 |
Share-based Compensation - Summ
Share-based Compensation - Summary of Fair Value using Monte-Carlo Simulation Model Utilizing Several Key Assumptions (Details) - Total Shareholder Return (TSR) | 3 Months Ended |
Nov. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected share price volatility | 47.90% |
Risk-free rate of return | 4.82% |
Peer Group | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected share price volatility | 46.60% |
Expected correlation | 46.60% |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | Aug. 31, 2023 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Other comprehensive income loss reclassification adjustment recorded in interest expense | $ 1,000,000 | ||||
Interest expense | $ (5,803,000) | $ (4,908,000) | (10,613,000) | $ (8,232,000) | |
Maximum | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Other comprehensive income loss reclassification adjustment recorded in interest expense | 1,000,000 | ||||
Interest Rate Swaps | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Notional amount of interest rate swaps | $ 150,000,000 | $ 150,000,000 | $ 150,000,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Summary of Fair Value of Derivative Instruments in Unaudited Condensed Consolidated Balance Sheet (Details) - Interest Rate Swap Contracts - USD ($) $ in Thousands | Feb. 29, 2024 | Aug. 31, 2023 |
Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate swap contracts, Asset fair value | $ 853 | $ 1,163 |
Other Long-term Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate swap contracts, Liability fair value | $ (1,015) | $ (1,555) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 3.60% | 14.50% | 14.80% | 32.80% |
Federal statutory rate | 21% | 21% | ||
Valuation allowance against deferred tax assets | $ 2 | $ 2 |
Net (Loss) Income Per Share - S
Net (Loss) Income Per Share - Schedule of Basic and Diluted Net (Loss) Income Per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Earnings Per Share [Abstract] | ||||
(Loss) income from continuing operations | $ (33,979) | $ 4,048 | $ (51,775) | $ (13,439) |
Net loss (income) attributable to noncontrolling interests | 31 | 81 | (135) | (151) |
(Loss) income from continuing operations attributable to Radius shareholders | (33,948) | 4,129 | (51,910) | (13,590) |
(Loss) income from discontinued operations, net of tax | (31) | 224 | (33) | 155 |
Net (loss) income attributable to Radius shareholders | $ (33,979) | $ 4,353 | $ (51,943) | $ (13,435) |
Computation of shares: | ||||
Weighted average common shares outstanding, basic | 28,454 | 28,081 | 28,337 | 27,912 |
Incremental common shares attributable to dilutive performance share awards, restricted stock units and deferred stock units | 536 | |||
Weighted average common shares outstanding, diluted | 28,454 | 28,617 | 28,337 | 27,912 |
Net (Loss) Income Per Share - A
Net (Loss) Income Per Share - Additional Information (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from calculation of diluted net income loss per share, amount (in shares) | 340,415 | 56,520 | 407,103 | 796,877 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Corporate Joint Venture | ||||
Related Party Transaction [Line Items] | ||||
Purchases from joint ventures | $ 5 | $ 4 | $ 9 | $ 8 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) | Feb. 29, 2024 | Aug. 31, 2023 |
Debt Instrument [Line Items] | ||
Bank revolving credit facilities, interest primarily at SOFR or LIBOR plus a spread | $ 355,000,000 | |
Finance lease liabilities | 6,400,000 | $ 7,200,000 |
Other debt obligations | 12,178,000 | 12,192,000 |
Total debt | 373,578,000 | 249,392,000 |
Less current maturities | (5,459,000) | (5,813,000) |
Debt, net of current maturities | 368,119,000 | 243,579,000 |
Secured Revolving Credit Facility | Bank of America NA And Other Lenders | ||
Debt Instrument [Line Items] | ||
Bank revolving credit facilities, interest primarily at SOFR or LIBOR plus a spread | 355,000,000 | 230,000,000 |
Line of Credit | Secured Revolving Credit Facility | Bank of America NA And Other Lenders | ||
Debt Instrument [Line Items] | ||
Bank revolving credit facilities, interest primarily at SOFR or LIBOR plus a spread | $ 355,000,000 | $ 230,000,000 |
Debt - Additional Information (
Debt - Additional Information (Details) | Aug. 22, 2022 USD ($) | Feb. 29, 2024 USD ($) | Aug. 31, 2023 USD ($) | Aug. 22, 2022 CAD ($) |
Debt Instrument [Line Items] | ||||
Borrowings outstanding | $ 355,000,000 | |||
Senior Secured Revolving Credit Facility | Bank of America NA And Other Lenders | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 800,000,000 | |||
Secured Revolving Credit Facility | Bank of America NA And Other Lenders | ||||
Debt Instrument [Line Items] | ||||
Borrowings outstanding | $ 355,000,000 | $ 230,000,000 | ||
Weighted average interest rate | 6.92% | 7.17% | ||
Secured Revolving Credit Facility | Bank of America NA And Other Lenders | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Borrowings outstanding | $ 355,000,000 | $ 230,000,000 | ||
Senior Secured Credit Facilities, Amended Credit Agreement | Bank of America NA And Other Lenders | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 800,000,000 | $ 15,000,000 | ||
Debt instrument, Maturity date | Aug. 31, 2027 | |||
Debt issuance costs | $ 2,000,000 | |||
Debt issuance costs amortized to interest expense term | 5 years | |||
Senior Secured Credit Facilities, Amended Credit Agreement | Bank of America NA And Other Lenders | Line of Credit | Minimum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee percentage | 0.175% | |||
Senior Secured Credit Facilities, Amended Credit Agreement | Bank of America NA And Other Lenders | Line of Credit | Maximum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee percentage | 0.30% | |||
Senior Secured Credit Facilities, Amended Credit Agreement | Bank of America NA And Other Lenders | Line of Credit | Amended Credit Agreement, Interest Rate Option 1 | Secured Overnight Financing Rate (SOFR) | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, Variable rate | 1.25% | |||
Senior Secured Credit Facilities, Amended Credit Agreement | Bank of America NA And Other Lenders | Line of Credit | Amended Credit Agreement, Interest Rate Option 1 | Secured Overnight Financing Rate (SOFR) | Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, Variable rate | 2% | |||
Senior Secured Credit Facilities, Amended Credit Agreement | Bank of America NA And Other Lenders | Line of Credit | Amended Credit Agreement, Interest Rate Option 2 | Federal Funds Effective Swap Rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, Variable rate | 0.50% | |||
Senior Secured Credit Facilities, Amended Credit Agreement | Bank of America NA And Other Lenders | Line of Credit | Amended Credit Agreement, Interest Rate Option 2 | Secured Overnight Financing Rate (SOFR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, Variable rate | 1% | |||
Senior Secured Credit Facilities, Amended Credit Agreement | Bank of America NA And Other Lenders | Line of Credit | Amended Credit Agreement, Interest Rate Option 2 | Secured Overnight Financing Rate (SOFR) | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, Variable rate | 0.25% | |||
Senior Secured Credit Facilities, Amended Credit Agreement | Bank of America NA And Other Lenders | Line of Credit | Amended Credit Agreement, Interest Rate Option 2 | Secured Overnight Financing Rate (SOFR) | Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, Variable rate | 1% | |||
Senior Secured Credit Facilities, Amended Credit Agreement | Bank of America NA And Other Lenders | Letters of Credit | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000,000 | |||
Senior Secured Credit Facilities, Amended Credit Agreement | Bank of America NA And Other Lenders | Swingline Loans | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 25,000,000 | |||
Senior Secured Credit Facilities, Amended Credit Agreement | Bank of America NA And Other Lenders | Multicurrency Borrowings | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000,000 |