Radius Recycling reported its fourth-quarter 2024 earnings, revealing a significant miss on EPS expectations, which led to a sharp decline in its stock price. The company's EPS came in at -1.33, far below the expected -0.435, while revenue slightly missed forecasts at $656.54 million compared to the anticipated $661.7 million. Following the announcement, Radius Recycling's stock fell by 25.93%, closing at $10.94, approaching its 52-week low.
Key Takeaways
- Radius Recycling's EPS miss was substantial, leading to a 25.93% drop in stock price.
- Revenue was slightly below expectations, contributing to negative investor sentiment.
- The company achieved significant cost savings and increased sales volumes across its product lines.
- High net debt and a negative effective tax rate remain concerns.
Company Performance
Radius Recycling demonstrated mixed performance in Q4 2024. The company achieved a consolidated adjusted EBITDA of $17 million, up from $9 million in the previous quarter, driven by increased sales volumes in non-ferrous, ferrous, and finished steel. However, the earnings miss overshadowed these gains, impacting investor confidence.
Financial Highlights
- Revenue: $656.54 million (slightly below forecast)
- Earnings per share: -1.33 (significantly below forecast)
- Net debt: $409 million
- Positive operating cash flow: $4 million
Earnings vs. Forecast
The actual EPS of -1.33 missed the forecast of -0.435 by 0.895, a significant deviation that is larger than usual for the company. Revenue was also below expectations, though the shortfall was less pronounced.
Market Reaction
Following the earnings release, Radius Recycling's stock price plummeted by 25.93%, reflecting strong negative sentiment among investors. The decline brought the stock close to its 52-week low, highlighting the impact of the earnings miss on market perception.
Outlook & Guidance
Radius Recycling remains optimistic about future prospects, anticipating benefits from U.S. interest rate reductions and improved manufacturing activity. The company projects FY2025 CapEx at approximately $80 million, with 20% allocated for growth projects.
Executive Commentary
CEO Tamara Lundgren emphasized strategic initiatives to capitalize on market conditions, stating, "We are well positioned to benefit from demand trends associated with decarbonization, infrastructure investment, and stronger global manufacturing activity."
Q&A
During the earnings call, analysts questioned the tight scrap supply flows and the impact of seasonality on volume improvements. The company detailed its strategies in the non-ferrous market and metal recovery.
Risks and Challenges
- High net debt levels could strain financial flexibility.
- Continued pressure on earnings due to market conditions.
- Potential volatility in metal prices affecting revenue.
- Macroeconomic factors, including interest rate changes, could impact operations.
- Execution risks related to strategic investments in metal recovery technologies.
Full transcript - Radius Recycling Inc (RDUS) Q4 2024:
Victor, Conference Operator: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michael Bennett, Investor Relations. Please go ahead.
Michael Bennett, Vice President of Investor Relations, Radius Recycling: Thank you, Victor, and good morning. I'm Michael Bennett, the company's Vice President of Investor Relations. I'm happy to welcome you to Radius Recycling's earnings presentation for the Q4 of fiscal 2024. In addition to today's audio comments, we have issued our press release and posted a set of slides, both of which you can access on our website at radiusrecycling.com. Before we start, let me call your attention to the detailed Safe Harbor statement on Slide 2, which is also included in our press release and in the company's Form 10 ks, which will be filed later today.
As we note on Slide 2, we may make forward looking statements on our call today, such as our statements about our targets, volume growth and margins. Our actual results may differ materially from those projected in our forward looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward looking statements is contained in Slide 2 as well as our press release of today and our Form 10 ks. Please note that we will be discussing some non GAAP measures during our presentation today. We've included a reconciliation of those metrics to GAAP in the appendix to our slide presentation.
Now let me turn the call over to Tamara Lundgren, our Chairman and Chief Executive Officer.
Tamara Lundgren, Chairman and Chief Executive Officer, Radius Recycling: Thank you, Michael. Good morning, everyone, and welcome to our Q4 earnings call. I am joined today by our Senior Vice President and Chief Financial Officer, Stefano Guggenie. I'll start this morning's discussion with an overview of our fiscal 2024 Q4, a review of market conditions and an update on the strategic actions we have underway to address current industry dynamics and create long term value through the cycle. Stefano will then cover the quarterly financial and operating results in more detail.
I'll wrap up and then we'll take your questions. Before turning to the next slide, I'd like to take a moment to recognize our employees for delivering another year of improved safety performance. In fiscal 2024, we achieved a 16% year over year reduction in our total case incident rate and almost 90% of our facilities had no lost time incidents. Our year over year improvement reflects the commitment of all our employees to continuous improvement through actions like enhanced training and increased communications and reengineering practices and processes to reduce operating risk. While we still have work to do to achieve our goal of 0 injuries, these results reflect our team's unwavering commitment to safety and their dedication to creating a safe work environment and a sustainable safety culture.
So now let's turn to Slide 4 to review our 4th quarter highlights. While the long term trends for recycled metals are strong, market conditions remained challenging during the Q4 with tight scrap availability and softer global steel demand creating significant headwinds. Our Q4 results were significantly impacted by the ongoing stickiness in scrap purchase costs, leading to margin compression in our financial results. However, by focusing on actions within our control, lowering our costs, operating efficiently and executing on our strategic priorities, our team was able to mitigate some of these headwinds and deliver strong sequential quarterly improvements in both our operating and our financial results. We nearly doubled our adjusted EBITDA to $17,000,000 We successfully increased non ferrous sales volumes by 13%, ferrous sales volumes by 12% and finished steel sales volumes by 11%, due in part to contributions from our metal recovery technology investments, new commercial initiatives and growth in our recycling services platform.
We delivered substantially the full quarterly run rate benefits from our cost savings and productivity improvement program announced earlier this year. And we generated positive operating cash flow and returned capital to our shareholders through our 120 second consecutive quarterly dividend. Looking forward, we expect continued reductions in U. S. Interest rates to benefit consumer manufacturing and construction activity, which in turn should lead to improved scrap supply flows and increased demand for finished steel.
The long term demand for recycled metals is supported by structural deficits for nonferrous metals such as copper, the increased demand from manufacturers to maximize their use of recycled materials and the growth in electric arc furnace steelmaking capacity, which uses ferrous scrap as its primary raw material. Our strategic initiatives focused on metal recovery technologies, volume growth and expansion of our 3PR services are strongly aligned with these secular growth trends. Let's turn now to Slide 5 for a deeper dive into market conditions. During most of our fiscal year, both finished steel and recycled ferrous metal prices softened. The decline in domestic steel prices was underpinned by both the continuing contraction in U.
S. Manufacturing, which is reflected in manufacturing PMI remaining in contraction for 22 out of the last 23 months and imports. The ferrous price declines during the year were largely due to both the dampening effect of elevated levels of Chinese steel exports, which reached multi year highs and lower global manufacturing levels. Nonferrous prices reflected strong global demand, particularly for copper, with prices ending the year higher than where they started. Average prices for copper, aluminum and other non ferrous products were up approximately 10% year over year with copper reaching multi year highs for a brief period in late spring.
Prices of PGM metals were the exception, down year over year by almost 10% due primarily to subdued auto production. From a supply flow perspective, compared to pre pandemic levels, auto production remains low and financing costs for new and used cars are still comparatively high, both of which have contributed to the average age of vehicles reaching their highest level on record, resulting in lower scrappage rates of end of life vehicles. We expect that continued reductions in U. S. Interest rates along with the spending associated with the U.
S. Infrastructure bills will be major catalysts leading to higher manufacturing, construction and consumer activity and higher scrap flows. Let's turn now to Slide 6 for an update on our strategic priorities and the longer term outlook for recycled metals. Our strategic priorities are directly aligned with the long term trends we just reviewed and can be summarized as follows. First, our cost reduction and productivity program.
This quarter, we achieved substantially the full quarterly run rate of benefits associated with our $70,000,000 annual cost reduction and productivity improvement plan, which we announced earlier this fiscal year. As part of our continued focus on optimizing production efficiencies, we anticipate achieving new benefits in fiscal 2025 through the monetization of certain discrete real estate assets in locations where we can both substantially consolidate or reposition our business activity and unlock the associated real estate value. 2nd, our investments in Advanced Metal Recovery Technologies. This is
Victor, Conference Operator: a multi
Tamara Lundgren, Chairman and Chief Executive Officer, Radius Recycling: site, multi year investment program focused on increasing the recovery of non ferrous metals from our shredding process and creating product optionality by enabling us to create furnace ready products based on demand and price. In fiscal 2024, we achieved nearly a quarter of the anticipated annual benefits. The majority of the returns from these investments should come through our results in fiscal 2025. We estimate these investments should return over $40,000,000 in annual EBITDA after full deployment. 3rd, our trademark 3PR Service and Solutions business line.
Our 3PR service offering enables our customers to increase their recycling rates, reduce material going to landfills, lower their carbon footprint and provide enhanced sustainability reporting. This is an asset light business, typically with multiyear contracts that can provide a counterbalance to our more cyclical core recycling operations and is highly aligned with secular growth trends. Reflecting steady growth, our 3PR business line is now contributing over 10% to our recycled metals volumes. And 4th, increasing our volumes. Despite the tight supply environment, we increased our sales of recycled metals in fiscal 2024 compared to fiscal 2023.
Our focus on commercial initiatives to increase our organic ferrous and non ferrous volumes gives us the opportunity to create operating leverage using the 1,000,000 tons of capacity that we currently have available. We are also investing in digital tools at our pick and pull franchise to capture previously untapped sources of car flows and related revenue streams, which are especially important as new auto production remains below pre pandemic levels and demand for salvage auto parts remains solid. While benefits from these initiatives are already contributing to our financial performance, their full positive effect on our operating margins is currently being masked by the impact of the headwinds we've been experiencing. As these abate, we expect the benefits of our actions to become much more visible in our margins and EBITDA and to provide a substantial boost to future financial results. So now let me turn the presentation over to Stefano.
Stefano Guggenie, Senior Vice President and Chief Financial Officer, Radius Recycling: Thank you, Tamara, and good morning. Consolidated adjusted EBITDA in the 4th quarter was $17,000,000 compared to $9,000,000 in the prior quarter, which had included $7,000,000 in insurance recoveries. The biggest drivers of the improved results were higher sales volumes for all of our products, stronger non ferrous demand and prices, an expansion in recycled mail spreads and the ramp up in benefits associated with our cost reduction and productivity program. Cost savings and productivity measures are critical levers within our control to mitigate operating margin pressure from the current market conditions and inflationary headwinds. Our program reflects a number of structural initiatives that generate sustained benefits independent of changes in market conditions or volumes.
Our fiscal 2024 program has benefits that aggregate to $70,000,000 on an annualized basis, of which approximately onethree are savings resulting from a targeted 10% reduction of SG and A expense. These initiatives are primarily comprised of production cost reductions, yield increases, optimization of transportation and logistics, decreases in non trade procurement spend, adjustments in headcount and other employee related expenses and a reduction in discretionary activities such as travel and use of professional and other outside services. Looking more specifically at SG and A expense. In the 4th quarter, adjusted SG and A costs were down 7% compared to the prior year, reflecting the benefits from the measures we implemented during the year. However, those benefits were partially offset by elevated costs for certain ongoing legal matters in the Q4, which we expect to be temporary and received later in fiscal 2025.
As part of our continuous improvement, we routinely review our operating platform and the locations in which we do business. As Tamara mentioned, this process includes identifying opportunities to monetize certain discrete real estate assets, while substantially repositioning the existing material flows to a nearby facility. These monetization opportunities do not involve meaningfully modifying our operating footprint. To date, we have executed 2 contracts to sell own real estate properties and expect to generate net cash proceeds in excess of $35,000,000 from these sales. We target closing of these transactions during the second half of fiscal twenty twenty five subject to customary terms.
Let's move to Slide 8 to discuss Ferrous sales and the market dynamics. Ferrous sales volumes were up 12% sequentially, reflecting in equal parts seasonality on flows of material and the focus on commercial initiatives as well as benefits from timing of shipments. The share of domestic ferrous shipments was 40%. Our top sales destinations for ferrous exports were Bangladesh, Turkey and India. Benefiting from the seasonally higher flows and the above parity export prices, we were able to expand ferrous metal spreads sequentially, which together with operating leverage created by the increased process volumes resulted in higher contribution to performance in the quarter.
The impact of average inventory accounting was a small detriment of $1 per ferrous ton in the 4th quarter compared to a detriment of $3 per ferrous ton in the prior quarter. Ferrous average net selling prices were substantially flat sequentially. As Tamara mentioned, we continue to see pressure on the global scrap market from elevated levels of Chinese steel exports. As the graph on the bottom right shows, in the 1st 9 months of calendar year 2024, China's finished steel exports increased nearly 20% year over year and reached an 8 year high impacting steel production and ferrous scrap demand, particularly in the Asian markets. Now let's move to Slide 9 to discuss non ferrous sales and provide an update on our non ferrous investments.
Non ferrous sales volumes were up 13% sequentially, reflecting the benefits of seasonality on flows, higher production associated with our nonferrous recovery investments and timing of shipments. We sold our nonferrous products to 13 countries with the major export destinations being Malaysia, India and China. Average net selling prices for our recycled nonferrous products were up 4% sequentially on strong demand. We continue to progress our investment in primary nonferrous recovery systems, which drive the incremental metal recovery and the majority of the expected contribution from these technologies. We further advanced our ramp up activities on several of these primary systems during the quarter.
We project completion of construction and start of ramp up of the last of the currently permitted primary systems by the end of calendar year 2024. We have 2 primary systems left to start construction on the West Coast, which remain subject to permitting approval. Overall, the contribution to performance from these systems was positive in the Q4. We expect to see a trend of increasing returns from these investments in the remainder of calendar 2024 and target full ramp up of the permitted systems by early calendar 2025. Once fully operational, we continue to expect substantial returns from our investments of approximately $10 EBITDA per ferrous ton.
Now let's move to Slide 10 to discuss our steel mill performance. Finished steel sales volumes of 140,000 tons in the 4th quarter were up 11% sequentially as we benefited from a solid pickup in seasonal construction activity. Average rolling mill utilization was 97%, up from 88% in the prior quarter and also well above the U. S. Average of 78% for the period.
Average net selling prices for finished steel were down 3% compared to the prior quarter. We believe our mills tend to benefit from the anticipated demand associated with the U. S. Infrastructure build. Now let's move to Slide 11.
Operating cash flow for the 4th quarter was positive at $4,000,000 reflecting the higher EBITDA results sequentially. The impact on working capital of the higher volumes for all of our products created a detriment to net working capital in the quarter. The benefit to ferrous sales volumes from timing of shipments we saw in the quarter was offset by the timing of collection on bulk cargoes. Capital expenditures in the 4th quarter were $20,000,000 For the full fiscal 2024, CapEx was $76,000,000 This was a reduction of more than onethree compared to fiscal 2023 as we aligned the level of our CapEx investments to current performance trends. Looking ahead, we currently project our fiscal 2025 CapEx investments to remain at similar levels and be approximately $80,000,000 Around 20% of this will be for growth projects, including investments to support the continued expansion of recycling services and completion of our non ferrous technology initiatives, with the remaining spend for maintaining the business and environmental related capital projects.
Net debt was $409,000,000 at the end of the 4th quarter. Our credit facility has a capacity of $800,000,000 and a maturity date of August 2027. Under our credit agreement, interest costs are linked to short term market rates. As a result, we benefit from short term interest rate cuts by the U. S.
Federal Reserve, such as the 50 basis points reduction that occurred in September. The effective tax rate for the Q4 was a benefit of 10% on reported pretax results, which reflected a true up charge of $5,000,000 to the valuation allowance on deferred tax assets driven by the goodwill impairment charge taken in the prior quarter. The tax rate on our non GAAP results, which exclude the impairment charge and its related tax impact, was a benefit of 33% in the 4th quarter. Looking ahead, because of the significant estimates involved in the computation of the deferred tax valuation allowance position, we expect our tax rate to potentially be subject to quarter to quarter volatility in fiscal 2025. We do not expect to be a cash taxpayer in fiscal 2025 given the availability of net operating loss carryforwards.
We pursue a balanced capital allocation focused on reinvesting in the business, supporting our strategic initiatives, returning capital to shareholders through our quarterly dividend and maintaining a flexible balance sheet. Looking ahead, we expect to experience typical Q1 seasonality in our recycling and finished steel sales volumes. At this time in the quarter, uncertainties remain with respect to various market factors that can impact prices and flows, it is too early to provide a Q1 quantitative outlook. And with that, I'll turn the call back over to Tamara.
Tamara Lundgren, Chairman and Chief Executive Officer, Radius Recycling: Thank you, Stefano. I want to commend our team for not just waiting for the markets to improve, but for successfully focusing on the things that we can control. Our results this quarter benefited from our significant cost savings and productivity improvement programs and our success in increasing ferrous, non ferrous and finished steel sales volumes. Today's market conditions won't last forever. And as we've discussed earlier, we are well positioned to benefit from demand trends associated with decarbonization, infrastructure investment and stronger global manufacturing activity.
While we don't control the pace of improvement in market conditions, we've seen in the past how quickly the cycle can turn. We expect the decline in U. S. Interest rates to help improve manufacturing and construction activity and benefit scrub supply flows. Improved scrap supply flows should provide us with significant operating leverage benefits as volumes recover.
Independent (LON:IOG) of the timing of that recovery, our strategic initiatives including investments in metal recovery technologies, expansion of our recycling services platform and continued focus on productivity and cost control will position our company to benefit from both an improvement in market conditions and the structural tailwinds for recycled metals. Before we open the call for questions, I'd like to thank our team for their dedication and our customers, suppliers and the communities in which we operate for their partnership and support. In fiscal 2024, we were certified for the 4th consecutive year as a Great Place to Work. This certification is a testament to the positive experiences of our employees and the strong workplace culture we have built together. And working together, we continue to demonstrate the critical and essential role of our business in our local economies and across the globe.
And now, Victor, let's take some questions.
Victor, Conference Operator: Thank you. Our first question will come from the line of Martin Englert from Seaport Research Partners. Your line is open.
Martin Englert, Analyst, Seaport Research Partners: Good morning. Good morning, everyone.
Stefano Guggenie, Senior Vice President and Chief Financial Officer, Radius Recycling: Good morning. Good morning.
Martin Englert, Analyst, Seaport Research Partners: Question on unit profitability improvement quarter on quarter. Is there any way that you can help parse out the sequential change in EBITDA, the volume contribution, price, cost on a unit basis and anything else? I know there was a component of reduced inventory holding losses, but the other components would be helpful to the extent that you can speak to it.
Stefano Guggenie, Senior Vice President and Chief Financial Officer, Radius Recycling: Hi, Martin. This is Stefano. So when we think about the drivers of the $15,000,000 sequential improvement in underlying EBITDA performance. So this is regarding for a moment the insurance reimbursements we recognized in the prior quarter. In terms of sizing those drivers, I would say, the individually largest component making up slightly less than half of that sequential result improvement is from the increase in volumes for all of our products, including the creation of operating leverage from those higher volumes.
The second component, I would say, is the ramp up in cost savings and productivity benefits to the full quarterly run rate of our $70,000,000 program. And that I would say makes up around a third of the overall sequential improvement. And then the rest is from a combination of higher non ferrous prices due to the strong demand and the expansion of the recycled metal spreads, including what you mentioned, the lesser detriment from average inventory accounting compared to Q3.
Martin Englert, Analyst, Seaport Research Partners: Okay. Appreciate that. Did you see any measurable change in the tightness on scrap flows during the quarter or since exiting? Or is it still kind of the same fundamental backdrop when it comes to flows?
Tamara Lundgren, Chairman and Chief Executive Officer, Radius Recycling: We haven't seen any loosening. And yes, there's supply flows are obviously impacted by seasonality. So right now, the changes in supply flows, any changes we see are really a function of seasonality than they are any benefits yet from interest rate reduction or interest rate reductions or any change in manufacturing or durable goods inventory levels or the like.
Martin Englert, Analyst, Seaport Research Partners: Okay. Appreciate that. Can you provide a brief update what you're seeing as far as ferrous export activity in demand here in October and I guess more recent history?
Tamara Lundgren, Chairman and Chief Executive Officer, Radius Recycling: Sure. Well, as you can follow in the domestic market, domestic prices increased by about $20 in October, which led to bringing domestic and export into parity. And that increase that occurred in the domestic October trade was the first time that we've seen an increase in calendar year 2024. If we look at the East Coast export activity, deep sea ferrous scrap demand from Turkey has remained generally stable since the end of our Q4 amid tight availability in both the U. S.
And Europe. And sentiment on the West Coast or off the West Coast, export demand off the West Coast, the sentiment in the Asian steel and scrap vertical remains mixed, as overall weak steel fundamentals and the high volumes of Chinese semi and finished steel exports continue to pressure that region. And I think that they are cautiously awaiting details of the impact of the Chinese stimulus on both Chinese steel production, Chinese export levels to see whether either production decreases or exports decrease because of higher absorption within the Chinese domestic market.
Martin Englert, Analyst, Seaport Research Partners: Okay. Appreciate it and nice job on the volumes for the quarter.
Tamara Lundgren, Chairman and Chief Executive Officer, Radius Recycling: Thank you.
Stefano Guggenie, Senior Vice President and Chief Financial Officer, Radius Recycling: Thank you.
Victor, Conference Operator: One moment for our next question. Our next question comes from the line of Samuel McKinley from KeyBanc Capital Markets. Your line is open.
Samuel McKinley, Analyst, KeyBanc Capital Markets: Hi, good morning, Tim and Stefano.
Stefano Guggenie, Senior Vice President and Chief Financial Officer, Radius Recycling: Good morning.
Samuel McKinley, Analyst, KeyBanc Capital Markets: Sticking in the ferrous volumes and they were really a surprise to the upside in the Q4 buoyed by those export numbers. But I understand supply was seasonally better during the summer months, but can you dig into the dynamics around the benefits from timing of shipments that you noted in the release?
Stefano Guggenie, Senior Vice President and Chief Financial Officer, Radius Recycling: Yes. I'll take that, Sam. So we said during the prepared remarks that the increase in ferrous was due more or less in equal parts to that seasonality factor in the summer and the other half approximately was from the timing of shipments on the ferrous on bulk cargo. So those will be the 2 components that drove that increase of 12% sequentially.
Samuel McKinley, Analyst, KeyBanc Capital Markets: I guess what I'm asking is when you say benefits from timing of shipments, I mean in the past I know delayed cargoes have caused volumes to maybe seep into later quarters, but what were the benefits from the timing of shipments?
Stefano Guggenie, Senior Vice President and Chief Financial Officer, Radius Recycling: What I mean, Sami, there was a reduction in inventory sequentially, and that's the benefit from the timing of shipments. As you know, timing of shipments given the size of the cargoes can make a difference in our federal sales volumes in this current quarter. There was a reduction in inventory sequentially.
Samuel McKinley, Analyst, KeyBanc Capital Markets: Okay, understood. Thank you. And then in non ferrous, I mean, you've cited the tight premium of Twitch over Zorba has made conversion sometimes less attractive. With Zorba prices still sitting around $90 a pound, can you talk to us about how that premium has evolved in recent months and how you're viewing that market into the fiscal year 2025?
Tamara Lundgren, Chairman and Chief Executive Officer, Radius Recycling: Sure. Let me start, Stefano, and then why don't you add. I think that auto production, a rebound recovery in auto production, which is still below pre pandemic levels, is really weighing on Twitch levels. And that compresses the spread between Twitch and Zorba. One of the strategic reasons why we have made the metal recovery investments that we've had is to provide the product optionality that lets us access markets at different points in the, let's say, refinement of the metal process, so that we can capture the highest profits.
So that spread, we anticipate widening as auto production recovers as the main driver. Stefano, you might want to dig in deeper to the specifics.
Stefano Guggenie, Senior Vice President and Chief Financial Officer, Radius Recycling: I agree, Tamara. And Sam, right, that product optionality allows us to basically process the material into higher value depending on the prices that we get on the sale. So if there is enough of a premium between those grades of material, we will process them or else we don't have to where we can sell, for example, our Zorba product straight to export. So that product functionality is important and currently we are not utilizing it because of the compressed spreads.
Samuel McKinley, Analyst, KeyBanc Capital Markets: I appreciate the detail on that answer. That was very helpful. Thank you. And then lastly for me, 4th quarter rebar and coil volumes improved solidly again off the Q3 that benefited from the solid seasonal pickup in West Coast non res demand. I think you had some rain issues in the Q2.
But can you provide some more detail on the specific construction drivers that led to the Q4 volume uptick? Was it more of that West Coast non res
Tamara Lundgren, Chairman and Chief Executive Officer, Radius Recycling: demand? Very much so.
Victor, Conference Operator: Okay.
Tamara Lundgren, Chairman and Chief Executive Officer, Radius Recycling: Yes, very much so. We still anticipate that the West Coast market has will benefit and has yet to experience any real benefits from the infrastructure funds that are expected to flow probably mid 2025. We continue to see bidding activity. You can look at the Dodge Momentum Index and year over year it's significantly higher. I think it's decreased a bit from August to September.
But from a long term perspective, we anticipate continued strong demand in the West Coast. And you can see our utilization rate at 97% is continues to be strong.
Michael Bennett, Vice President of Investor Relations, Radius Recycling: All right. Thank you both.
Tamara Lundgren, Chairman and Chief Executive Officer, Radius Recycling: Thank you.
Stefano Guggenie, Senior Vice President and Chief Financial Officer, Radius Recycling: Thank you, Sam.
Victor, Conference Operator: Thank you. I'm not showing any further questions at this time. I would now like to turn it back over to Tamara Lundrich from for closing remarks.
Tamara Lundgren, Chairman and Chief Executive Officer, Radius Recycling: Thank you, Victor. Thank you, everyone, for your time today. We look forward to speaking with you again when we report our Q1 results in January. In the interim, stay safe and stay well.
Victor, Conference Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.
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