Worthington Steel posts $7M Q1 continuing-operations loss
The Kloeckner agreement requires shareholder approval and commercial-register registration and cannot take effect before January 1, 2027.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Worthington Steel, Inc. reported first-quarter fiscal 2027 net sales of $2,726.6 million, up 212% from $872.9 million, including $1,772.7 million contributed by Kloeckner & Co. Operating income was $56.0 million versus $48.3 million; net loss from continuing operations attributable to controlling interest was $7.0 million, compared with $36.8 million of earnings. Adjusted EBITDA, a non-GAAP measure, was $111.0 million versus $78.8 million, while adjusted diluted EPS from continuing operations was $0.57 versus $0.77.
The company held approximately 62.11% of Kloeckner after settling its delisting tender offer. Its September 8, 2026 Domination and Profit and Loss Transfer Agreement remains subject to Kloeckner shareholder approval and registration with the competent commercial register and cannot become effective before January 1, 2027. First-quarter free cash flow was negative $69.0 million; total debt was $2,196.4 million and cash was $248.2 million as of August 31, 2026. The board declared a $0.16-per-share dividend payable December 28, 2026, to shareholders of record December 14, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNet sales rose 212% to $2,726.6 million, including Kloeckner.
Negative
- Moderate pointContinuing-operations controlling-interest result: $7.0 million loss, versus $36.8 million earnings.
Insights
Analyzing...
8-K Event Classification
Key Figures
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Adjusted EBITDA financial
free cash flow financial
noncontrolling interests financial
Domination and Profit and Loss Transfer Agreement regulatory
Earnings Snapshot
FAQ
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What were WS's first-quarter fiscal 2027 net sales?
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AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
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Registrant’s Telephone Number, Including Area Code: |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On October 6, 2026, Worthington Steel, Inc. (“we,” “us,” “our,” the “Company,” and “registrant”) issued a news release (the “Financial Release”) reporting results for the three months ended August 31, 2026 (the first quarter of fiscal 2027). A copy of the Financial Release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
We will host a conference call at 8:30 a.m. ET on October 7, 2026, to discuss our unaudited financial results for the first quarter of fiscal 2027 and address our outlook for the second quarter of fiscal 2027. The conference call is accessible through Events & Presentations in the Investors section of our website at www.WorthingtonSteel.com, or by registering online at https://events.q4inc.com/attendee/682402066 for the live conference. Prior to the conference call, we made available an investor presentation on our website. The investor presentation is furnished herewith as Exhibit 99.2 and is incorporated herein by reference.
Financial measures prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and non-GAAP financial measures are included in the Financial Release and the investor presentation, and will be discussed during the conference call, to provide investors with additional information that we believe allows for increased comparability of the performance of our ongoing operations from period to period. Please see the Financial Release and the investor presentation for further explanations of why we use the non-GAAP financial measures and the reconciliations to the most directly comparable GAAP financial measures.
The information contained in this Item 2.02, including Exhibit 99.1 and Exhibit 99.2, is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, unless we specifically state that the information is to be considered “filed” under the Exchange Act or incorporate the information by reference into a filing under the Exchange Act or the Securities Act of 1933, as amended. Information on our website is not incorporated herein.
Item 8.01 Other Events.
On October 6, 2026, we issued a news release (the “Dividend Release”) reporting that our board of directors declared a quarterly cash dividend of $0.16 per common share. The dividend was declared on October 6, 2026, and is payable on December 28, 2026, to our shareholders of record at the close of business on December 14, 2026. A copy of the Dividend Release is filed herewith as Exhibit 99.3.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit No.
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Description |
99.1
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News Release of Worthington Steel, Inc. issued on October 6, 2026 (Financial Release) |
99.2 |
Investor Presentation of Worthington Steel, Inc., dated October 6, 2026
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99.3 |
News Release of Worthington Steel, Inc. issued on October 6, 2026 (Dividend Release)
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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WORTHINGTON STEEL, INC. |
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Date: |
October 7, 2026 |
By: |
/s/ Joseph Y. Heuer |
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Joseph Y. Heuer |
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EXHIBIT 99.1 |
Worthington Steel Reports First Quarter Fiscal 2027 Results
Includes financial results from Kloeckner & Co following majority acquisition
COLUMBUS, Ohio, October 6, 2026 – Worthington Steel, Inc. (NYSE: WS), a market-leading, value-added metals processing company, today reported financial results for the fiscal 2027 first quarter ended August 31, 2026. Except as otherwise noted, reported results reflect the impact of the Company’s acquisition of a majority interest in Klöckner & Co SE (“Kloeckner”).
First Quarter Highlights (all comparisons to the first quarter of fiscal 2026 on a continuing operations basis unless otherwise indicated):
“This quarter marks an important milestone for Worthington Steel as we report our first results including Kloeckner,” said Geoff Gilmore, president and CEO. “The addition of Kloeckner significantly expands our capabilities and positions us as a more diversified metals processing and manufacturing company. At the same time, our core Worthington Steel business delivered solid operating performance, driven by higher direct volumes and improved pricing. As we move forward, our priorities remain clear: serving our customers, improving our operations and creating long-term value for our shareholders.”
Financial highlights for the fiscal 2027 and comparative periods are as follows:
(In millions, except volume)
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1Q 2027 |
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1Q 2026 |
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Volume (tons) |
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1,943,340 |
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928,866 |
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Net sales |
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$ |
2,726.6 |
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$ |
872.9 |
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Operating income |
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56.0 |
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48.3 |
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Net earnings (loss) from continuing operations attributable to controlling interest |
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(7.0 |
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36.8 |
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Adjusted EBIT (Non-GAAP)(1) |
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78.5 |
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55.5 |
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Adjusted EBITDA (Non-GAAP)(1) |
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111.0 |
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78.8 |
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Equity in net income of unconsolidated affiliate |
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5.3 |
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6.4 |
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(Per diluted share amounts, after-tax)
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1Q 2027 |
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1Q 2026 |
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Diluted EPS – Continuing Operations |
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$ |
(0.14 |
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$ |
0.73 |
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Restructuring and other (income), net |
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(0.03 |
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(0.01 |
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Kloeckner purchase derivative |
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0.01 |
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- |
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Kloeckner acquisition-related expenses |
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0.37 |
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- |
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Kloeckner securities investment loss, net |
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0.24 |
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- |
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Debt issuance cost write-off |
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0.02 |
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- |
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Pension adjustments |
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(0.01 |
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- |
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Sitem Group acquisition completion bonus payment |
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- |
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0.03 |
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Deferred tax asset adjustment |
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0.11 |
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0.02 |
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Adjusted Diluted EPS – Continuing Operations (Non-GAAP)(1) |
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$ |
0.57 |
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$ |
0.77 |
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Three Months Ended |
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Three Months Ended |
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August 31, 2026 |
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August 31, 2025 |
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Consolidated |
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Legacy Worthington Steel (2) |
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Consolidated |
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Volume (tons) - Total |
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1,943,340 |
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921,234 |
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928,866 |
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Volume (tons) - Direct |
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1,501,949 |
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604,289 |
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585,073 |
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Volume (tons) - Toll |
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441,391 |
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316,945 |
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343,793 |
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Net Sales |
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$ |
2,726.6 |
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$ |
953.9 |
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$ |
872.9 |
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EBIT (Non-GAAP)(1) |
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43.9 |
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15.7 |
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53.1 |
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Adjusted EBITDA (Non-GAAP)(1) |
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111.0 |
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75.1 |
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78.8 |
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Kloeckner Acquisition
On June 3, 2026, the Company completed the Kloeckner Acquisition in which it acquired a controlling equity stake. Kloeckner’s results are included in the consolidated financial statements beginning on the acquisition date, with the portion of Kloeckner not owned by the Company reflected as noncontrolling interests.
Following the transformational acquisition of Kloeckner and the related acquisition financing, the Company has updated the adjusted EBITDA metric to include the full adjusted EBITDA of our consolidated operations, including noncontrolling interests, to better reflect the economics of our consolidated business. As a result, adjusted EBITDA amounts for prior year periods have been recast, as applicable to conform to this presentation.
In connection with the Kloeckner Acquisition, the Company acquired certain Kloeckner business units that met the held-for-sale criteria as of the acquisition date (the “Disposal Group”). Kloeckner management has committed to a plan to sell the Disposal Group, and the Company expects the sale to be completed within one year of the Kloeckner Acquisition. The results of this Disposal Group are reported as discontinued operations in the accompanying interim consolidated financial statements for all periods in fiscal 2027 and onward. Unless otherwise indicated, the discussion and analysis of our results of operations included in this release relates to continuing operations and excludes the results of discontinued operations. Prior-period amounts have been recast, as applicable, to conform to this presentation.
Consolidated Quarterly Results
Net sales and volume
Net sales for the first quarter of fiscal 2027 were $2,726.6 million, an increase of $1,853.7 million, or 212%, compared to the prior year quarter. Kloeckner contributed $1,772.7 million to net sales in the first quarter of fiscal 2027.
Excluding the impact of Kloeckner, net sales increased $81.0 million or 9% compared to the prior year quarter. This $81.0 million increase was driven primarily by higher direct volumes, and, to a lesser extent, higher average direct selling prices. Direct net sales increased $81.7 million. Direct tons sold increased by 3% and direct selling prices increased 6% in the first quarter of fiscal 2027 compared to the prior year quarter. Toll processing net sales decreased $0.7 million, or 2%, in the first quarter of fiscal 2027 compared to the prior year quarter. Toll volumes decreased 8% and toll selling prices increased 6% in the first quarter of fiscal 2027 compared to the prior year quarter.
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The consolidated mix of direct tons versus toll tons processed was 77% to 23% in the first quarter of fiscal 2027 compared to 63% to 37% in the prior year quarter. Excluding the impact of Kloeckner, the mix of direct tons versus toll tons processed was 66% to 34% in the first quarter of fiscal 2027 compared to 63% to 37% in the prior year quarter.
Gross margin
Gross margin in the first quarter of fiscal 2027 was $261.2 million, an increase of $146.0 million compared to the prior year quarter. The Kloeckner Acquisition contributed $144.0 million to gross margin in the first quarter of fiscal 2027. The gross margin attributable to Kloeckner was impacted due to an approximately $43 million net inventory fair value step-up recognized in connection with the acquisition of Kloeckner.
Excluding the impact of Kloeckner, gross margin increased $2.0 million compared to the prior year quarter. The increase was primarily driven by higher direct spreads (calculated as sales less material costs), partially offset by higher manufacturing expenses and lower toll spreads. Direct spreads increased by $13.9 million primarily due to the $7.6 million impact of higher direct volumes, and to a lesser extent, the $6.5 million favorable change from an estimated $5.6 million inventory holding gain in the prior year quarter to an estimated $12.1 million inventory holding gain in the first quarter of fiscal 2027. This was partially offset by a $0.2 million unfavorable direct spread impact from pricing. Toll spreads decreased $0.9 million. Manufacturing expenses increased $11.1 million, primarily related to increased wages and benefits.
Operating Income
Operating income in the first quarter of fiscal 2027 was $56.0 million, an increase of $7.7 million compared to the prior year quarter. The Kloeckner Acquisition increased operating income by $24.2 million in the first quarter of fiscal 2027.
Excluding the impact of Kloeckner, operating income decreased by $16.5 million compared to the prior year quarter. The decrease was driven primarily by a $17.6 million increase in selling, general and administrative expense (“SG&A”) and a $1.0 million unfavorable change in restructuring and other (income), expense, net, partially offset by a $2.0 million increase in gross margin. The $17.6 million increase in SG&A was primarily attributable to an increase of $18.6 million in professional fees. This increase in professional fees incurred by Legacy Worthington Steel was primarily related to the Kloeckner Acquisition. The prior year restructuring and other (income), net represents a gain on the sale of an asset related to the previously announced closure of Worthington Samuel Coil Processing’s toll processing facility in Cleveland, Ohio.
During the first quarter of fiscal 2027, Kloeckner recognized a gain of $3.6 million in restructuring and other (income), expense, net, due to various restructuring programs. These items included early retirement and severance costs, facility exit and other costs, and sales of fixed assets in Louisiana and Switzerland.
Net earnings (loss) and adjusted net earnings (loss)
Net loss from continuing operations attributable to controlling interest of $7.0 million in the first quarter of fiscal 2027 compared with net earnings of $36.8 million in the prior year quarter. Diluted loss per share from continuing operations attributable to controlling interest was $0.14, compared with diluted earnings per share of $0.73 in the prior year quarter.
Adjusted net earnings from continuing operations attributable to controlling interest were $29.1 million in the first quarter of fiscal 2027, compared with $38.8 million in the prior year quarter. Adjusted diluted earnings per share were $0.57, compared with $0.77 in the prior year quarter.
Certain amounts disclosed within the Company’s quarterly results have been adjusted to conform to the current presentation due to the update to estimated tax rates on Non-GAAP adjustments in fiscal 2026. The adjustments had an immaterial impact to the presented results.
For additional information on non-GAAP financial measures, see the Use of Non-GAAP Financial Measures and Definitions section later in this release.
Balance Sheet, Cash Flow and Capital Allocation
As of August 31, 2026, the Company had cash and cash equivalents of $248.2 million. During the first quarter of fiscal 2027, net cash used in operating activities was $6.0 million compared to net cash used in operating activities of $6.3 million in the prior year quarter. Investment in property, plant and equipment during the first quarter of fiscal 2027 was $63.0 million compared to $29.4 million in the prior year quarter. The Company had negative free cash flow (as defined in the Use of Non-GAAP Financial Measures and Definitions section later in this release) of $69.0 million in the first quarter of fiscal 2027 compared to negative free cash flow of $35.7 million in the prior year quarter.
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The Company ended the first quarter of fiscal 2027 with total debt of $2,196.4 million and $248.2 million in cash and cash equivalents, resulting in a net debt (as defined in the Use of Non-GAAP Financial Measures and Definitions section later in this release) position of $1,948.2 million.
The Company’s board of directors declared a quarterly dividend of $0.16 per common share. The dividend is payable on December 28, 2026, to shareholders of record at the close of business on December 14, 2026.
Conference Call
The Company will review fiscal 2027 first quarter results during its quarterly conference call on October 7, 2026, beginning at 8:30 a.m., Eastern Time. Conference call details are available through Events & Presentations in the Investors section of the Company’s website at WorthingtonSteel.com, or by registering online at https://events.q4inc.com/attendee/682402066 for the live conference.
About Worthington Steel
Worthington Steel (NYSE: WS) is one of North America's leading value-added metals processing and manufacturing companies. The Company partners with customers to deliver specialized, highly technical solutions across carbon flat-rolled steel, aluminum, stainless steel, long products, heavy plate and electrical steel, to solve complex challenges across a broad range of industries.
Worthington Steel employs approximately 12,000 people and operates approximately 150 facilities, primarily in North America, with additional operations in Europe and Asia. The Company combines extensive processing expertise with advanced manufacturing technologies, including galvanizing, pickling, configured blanking, specialty cold reduction, electrical steel laminations, fabrication and precision processing.
Guided by its people-first Philosophy and a commitment to safety, innovation and continuous improvement, Worthington Steel creates long-term value by delivering trusted solutions for customers, opportunities for employees, returns for shareholders and strength for the communities where it operates.
Important Information: On September 8, 2026, Worthington Steel and Kloeckner & Co entered into a DPLTA, which remains subject to approval by Kloeckner shareholders and the registration with the competent commercial register before becoming effective. Until the DPLTA becomes effective, Kloeckner continues to operate independently. The employee and facility counts above reflect the expected combined organization following the DPLTA becoming effective.
Safe Harbor Statement
Selected statements contained in this release constitute “forward-looking statements,” as that term is used in the Private Securities Litigation Reform Act of 1995 (the “Act”). The Company wishes to take advantage of the safe harbor provisions included in the Act. Forward-looking statements reflect the Company’s current expectations, estimates or projections concerning future results or events. These statements are often identified by the use of forward-looking words or phrases such as “believe,” “expect,” “anticipate,” “may,” “could,” “should,” “would,” “intend,” “plan,” “will,” “likely,” “estimate,” “project,” “position,” “strategy,” “target,” “aim,” “seek,” “foresee” and similar words or phrases. These forward-looking statements include, without limitation, statements relating to: future or expected cash positions, liquidity and ability to access financial markets and capital; outlook, strategy or business plans; expected financial and operational performance and future opportunities; the tax treatment of the Company’s separation from Worthington Enterprises, Inc. (the “Separation”); future or expected growth, growth potential, forward momentum, performance, competitive position, sales, volumes, cash flows, earnings, margins, including the Company’s long-term adjusted EBITDA margin target, balance sheet strengths, debt, financial condition or other financial measures; pricing trends for raw materials and finished goods and the impact of pricing changes; the ability to improve or maintain margins; expected demand or demand trends; industry and market forecasts and expected trends relating to electricity usage, data center growth, vehicle electrification, decarbonization, infrastructure investment and electric-grid modernization and expansion; additions to product lines and opportunities to participate in new markets; expected benefits from transformation, innovation, artificial intelligence, machine learning and other technology initiatives; the ability to improve performance and competitive position at the Company’s operations; anticipated working capital needs, capital expenditures and asset sales; anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing, the supply chain and corporate functions and the results thereof; projected profitability potential; capital allocation priorities, including the payment of dividends and opportunistic share repurchases; the ability to make acquisitions, form joint ventures and consolidate operations, and the projected timing, results, benefits, costs, charges and expenditures related to acquisitions, joint ventures, headcount reductions and facility dispositions, shutdowns and consolidations; the Company’s plans and objectives related to its acquisition of Kloeckner, including the Company’s path to eventual operating control of Kloeckner and expected value capture, anticipated cost, operating, commercial, revenue and working capital synergies, integration plans, and the anticipated effects on the Company’s market position, geographic footprint, product and service offerings, earnings and margins; the Company’s expected pro forma net leverage ratio and deleveraging goals following the Kloeckner Acquisition; the DPLTA, including the approval, timing and effectiveness of the DPLTA and the anticipated combination and integration of the Company and Kloeckner; projected capacity and the alignment of operations with
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demand; the ability to operate profitably and generate cash in down markets; the ability to capture and maintain market share and to develop or take advantage of future opportunities, customer initiatives, new businesses, new products and new markets; expectations for Company and customer inventories, jobs and orders; expectations for the economy and markets or improvements therein; expectations for generating improving and sustainable earnings, earnings potential, margins or shareholder value; effects of judicial rulings, laws and regulations; anticipated improvements in business and efficiencies to be gained from the use of artificial intelligence and machine learning and other technologies; effects of cybersecurity breaches and other disruptions to information technology infrastructure; effects of public health emergencies and the various responses of governmental and nongovernmental authorities thereto on economies and markets and on the Company’s customers, counterparties, employees and third-party service providers; and other non-historical matters.
Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected, and forward-looking statements are not guarantees of future performance. Any number of factors could affect actual results, including, without limitation, those that follow: the effect of conditions in national and worldwide financial markets, including inflation, increases in interest rates and economic recession, and the ability of financial institutions to provide capital; the risks, uncertainties and impacts related to public health emergencies, the duration, extent and severity of which are impossible to predict, and actions taken by governmental authorities or others in connection therewith; changing commodity prices and supply; product demand and pricing; changes in product mix, product substitution and market acceptance of the Company’s products; changes in or the failure to realize anticipated trends in electricity usage, data center growth, vehicle electrification, decarbonization, infrastructure investment and electric-grid modernization and expansion; the possibility that industry forecasts, market projections and other estimates or assumptions included in this release may prove inaccurate; volatility or fluctuations in the pricing, quality or availability of raw materials, particularly steel, supplies, transportation, utilities, energy, labor and other items required by operations; effects of sourcing and supply chain constraints, including interruptions in deliveries of raw materials and supplies or the loss of key supplier relationships; the outcome of adverse claims experience with respect to workers’ compensation, product recalls or product liability, casualty events or other matters; effects of critical equipment failures, facility closures and the consolidation of operations; the effect of financial difficulties, consolidation and other changes within the steel, automotive, construction and other industries in which the Company participates; failure to maintain appropriate levels of inventories; financial difficulties, including bankruptcy filings, of original equipment manufacturers, end-users and customers, suppliers, joint venture partners and others with whom the Company does business; the ability to realize targeted expense reductions from headcount reductions, facility closures and other cost reduction efforts; the ability to realize cost savings and operational, sales and sourcing improvements and efficiencies and other expected benefits from transformation initiatives on a timely basis; the effects of the Kloeckner Acquisition on the Company’s and Kloeckner’s operations, including their future financial condition and performance, operating results, strategy and plans, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, losses, future prospects and business and management strategies; the possibility that anticipated synergies, working capital reductions, cost savings, revenue opportunities, operational improvements, deleveraging, liquidity, integration benefits, margin expansion and other benefits of the Kloeckner Acquisition may not be realized when expected or at all, may be less than anticipated or may cost more to achieve than expected; the time and effort required to integrate the Company’s and Kloeckner’s businesses and the risk that the businesses may not be integrated successfully or within the expected timeframe; the impact of limited financial flexibility and increased interest expense resulting from the Kloeckner Acquisition; the Company’s ongoing financial obligations under the DPLTA to Kloeckner and its minority shareholders; risks associated with litigation or appraisal proceedings relating to the Kloeckner Acquisition or the DPLTA; the adverse impact of failing to continue to retain, recruit and motivate executives and other key employees; the overall success of, and the ability to integrate, newly acquired businesses and joint ventures, maintain and develop their customers, and achieve synergies and other expected benefits and cost savings therefrom; the ability to realize expected benefits of strategically deployed capital expenditures; capacity levels and efficiencies, within facilities, within major product markets and within the industries in which the Company participates as a whole; the effect of disruption in the business of suppliers, customers, facilities and shipping operations due to adverse weather, casualty events, equipment breakdowns, labor shortages, interruption in utility services, civil unrest, international conflicts, terrorist activities or other causes; changes in customer demand, inventories, spending patterns, product choices, and supplier choices; risks associated with doing business internationally, including economic, political and social instability, foreign currency exchange rate exposure and the acceptance of the Company’s products in global markets; the effect of national, regional and global economic conditions generally and within major product markets, including significant economic disruptions from public health emergencies, the actions taken in connection therewith and the implementation of related fiscal stimulus packages; the impact of tariffs, the adoption of trade restrictions affecting the Company’s products, suppliers or customers, a United States withdrawal from or significant renegotiation of trade agreements, the occurrence of trade wars, the closing of border crossings and other changes in trade regulations or relationships; the ability to improve and maintain processes and business practices to keep pace with the economic, competitive and technological environment; the effect of inflation, interest rate increases and economic recession, which may negatively impact the Company’s operations and financial results; deviation of actual results from estimates or assumptions used by the Company, including in the application of its significant accounting policies; impairment of the recorded value of inventory, equity investments, fixed assets, goodwill and other assets; competitive pressure on sales and pricing, including pressure from imports and substitute materials; the level of imports and import prices in the Company’s markets and foreign currency exchange rate exposure; the impact of environmental laws and regulations or the actions of the United States Environmental Protection Agency or similar regulators that increase costs or limit the Company’s ability to use or sell certain products; the impact of increasing environmental, greenhouse gas
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emission and sustainability regulations; the impact of judicial rulings and governmental regulations, both in the United States and abroad, including those adopted by the United States Securities and Exchange Commission (the “SEC”) and other governmental agencies; the effect of healthcare laws in the United States and potential changes for such laws, which may increase the Company’s healthcare and other costs and negatively impact the Company’s operations and financial results; the effect of tax laws in the United States and potential changes for such laws, which may increase the Company's costs and negatively impact its operations and financial results; the operational, data privacy, security, regulatory and legal risks associated with the Company’s reliance on artificial intelligence and machine learning technologies, its ability to stay abreast of technological advancements and its dependence on third parties that rely on such technologies; cybersecurity risks; the effects of privacy and information security laws and standards; the cyclical nature of the steel industry; the Company’s safety performance; the effects of competition and price pressures from competitors; the Company’s ability to pay dividends or repurchase shares, which is subject to business performance, capital requirements, financing arrangements, applicable law and the discretion of the Company’s Board of Directors; and other risks described from time to time in the Company’s filings with the SEC, including those described in “Part I – Item 1A. – Risk Factors” of the Company’s most recent Annual Report on Form 10-K and its subsequent filings with the SEC.
Forward-looking statements should be construed in the light of such risks. The Company notes these factors for investors as contemplated by the Act. It is impossible to predict or identify all potential risk factors. Consequently, you should not consider the foregoing list to be a complete set of all potential risks and uncertainties. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. The Company does not undertake, and hereby disclaims, any obligation to update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.
6
WORTHINGTON STEEL, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In millions, except per share amounts)
(Unaudited)
|
|
Three Months Ended |
|
|||||
|
|
August 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net sales |
|
$ |
2,726.6 |
|
|
$ |
872.9 |
|
Cost of goods sold |
|
|
2,465.4 |
|
|
|
757.7 |
|
Gross margin |
|
|
261.2 |
|
|
|
115.2 |
|
Selling, general and administrative expense |
|
|
208.8 |
|
|
|
67.9 |
|
Restructuring and other income, net |
|
|
(3.6 |
) |
|
|
(1.0 |
) |
Operating income |
|
|
56.0 |
|
|
|
48.3 |
|
Other income (expense): |
|
|
|
|
|
|
||
Miscellaneous income (expense), net |
|
|
(10.5 |
) |
|
|
0.2 |
|
Interest expense, net |
|
|
(38.8 |
) |
|
|
(2.9 |
) |
Equity in net income of unconsolidated affiliate |
|
|
5.3 |
|
|
|
6.4 |
|
Earnings before income taxes |
|
|
12.0 |
|
|
|
52.0 |
|
Income tax expense |
|
|
12.1 |
|
|
|
13.4 |
|
Net earnings (loss) from continuing operations |
|
|
(0.1 |
) |
|
|
38.6 |
|
Net loss from discontinued operations |
|
|
(4.9 |
) |
|
|
- |
|
Net earnings (loss) |
|
|
(5.0 |
) |
|
|
38.6 |
|
Net earnings attributable to noncontrolling interests |
|
|
5.0 |
|
|
|
1.8 |
|
Net earnings (loss) attributable to controlling interest |
|
$ |
(10.0 |
) |
|
$ |
36.8 |
|
|
|
|
|
|
|
|
||
Amounts attributable to controlling interest: |
|
|
|
|
|
|
||
Net earnings (loss) from continuing operations |
|
$ |
(7.0 |
) |
|
$ |
36.8 |
|
Net loss from discontinued operations |
|
|
(3.0 |
) |
|
|
- |
|
Net earnings (loss) attributable to controlling interest |
|
$ |
(10.0 |
) |
|
$ |
36.8 |
|
|
|
|
|
|
|
|
||
Earnings (loss) per share – basic: |
|
|
|
|
|
|
||
Continuing operations |
|
$ |
(0.14 |
) |
|
$ |
0.74 |
|
Discontinued operations |
|
|
(0.06 |
) |
|
|
- |
|
Consolidated |
|
$ |
(0.20 |
) |
|
$ |
0.74 |
|
|
|
|
|
|
|
|
||
Earnings (loss) per share – diluted: |
|
|
|
|
|
|
||
Continuing operations |
|
$ |
(0.14 |
) |
|
$ |
0.73 |
|
Discontinued operations |
|
|
(0.06 |
) |
|
|
- |
|
Consolidated |
|
$ |
(0.20 |
) |
|
$ |
0.73 |
|
|
|
|
|
|
|
|
||
Weighted average common shares outstanding – basic |
|
|
50.0 |
|
|
|
49.6 |
|
Weighted average common shares outstanding – diluted |
|
|
50.0 |
|
|
|
50.6 |
|
|
|
|
|
|
|
|
||
Common shares outstanding at end of period |
|
|
50.1 |
|
|
|
49.6 |
|
|
|
|
|
|
|
|
||
Cash dividends declared per share |
|
$ |
0.16 |
|
|
$ |
0.16 |
|
7
WORTHINGTON STEEL, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
(Unaudited)
|
|
August 31, |
|
|
May 31, |
|
||
|
|
2026 |
|
|
2026 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
248.2 |
|
|
$ |
84.6 |
|
Receivables, less allowances of $1.6 and $1.1, respectively |
|
|
1,387.2 |
|
|
|
496.2 |
|
Inventories |
|
|
|
|
|
|
||
Raw materials |
|
|
935.9 |
|
|
|
168.5 |
|
Work in process |
|
|
182.1 |
|
|
|
145.9 |
|
Finished products |
|
|
592.4 |
|
|
|
101.3 |
|
Total inventories |
|
|
1,710.4 |
|
|
|
415.7 |
|
Income taxes receivable |
|
|
35.4 |
|
|
|
14.3 |
|
Assets held for sale |
|
|
9.1 |
|
|
|
9.1 |
|
Prepaid expenses and other current assets |
|
|
256.8 |
|
|
|
110.0 |
|
Current assets of discontinued operations |
|
|
180.1 |
|
|
|
- |
|
Total current assets |
|
|
3,827.2 |
|
|
|
1,129.9 |
|
Investment in unconsolidated affiliates |
|
|
106.7 |
|
|
|
123.4 |
|
Operating lease right-of-use assets |
|
|
366.0 |
|
|
|
77.8 |
|
Finance lease right-of-use assets, net of accumulated amortization of $4.7 and $4.4, respectively |
|
|
21.8 |
|
|
|
7.5 |
|
Goodwill |
|
|
44.5 |
|
|
|
44.5 |
|
Other intangible assets, net of accumulated amortization of $67.6 and $65.9, respectively |
|
|
75.0 |
|
|
|
77.3 |
|
Deferred income taxes |
|
|
81.9 |
|
|
|
12.7 |
|
Equity securities |
|
|
- |
|
|
|
122.2 |
|
Prepaid pension assets |
|
|
332.7 |
|
|
|
- |
|
Other assets |
|
|
45.8 |
|
|
|
7.8 |
|
Property, plant and equipment: |
|
|
|
|
|
|
||
Land |
|
|
277.0 |
|
|
|
57.2 |
|
Buildings and improvements |
|
|
393.9 |
|
|
|
272.5 |
|
Machinery and equipment |
|
|
1,185.6 |
|
|
|
1,065.0 |
|
Construction in progress |
|
|
118.1 |
|
|
|
105.9 |
|
Total property, plant and equipment |
|
|
1,974.6 |
|
|
|
1,500.6 |
|
Less: accumulated depreciation |
|
|
874.3 |
|
|
|
851.3 |
|
Total property, plant and equipment, net |
|
|
1,100.3 |
|
|
|
649.3 |
|
Non-current assets held for sale |
|
|
19.3 |
|
|
|
- |
|
Non-current assets of discontinued operations |
|
|
0.7 |
|
|
|
- |
|
Total assets |
|
$ |
6,021.9 |
|
|
$ |
2,252.4 |
|
8
WORTHINGTON STEEL, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
(Unaudited)
|
|
August 31, |
|
|
May 31, |
|
||
|
|
2026 |
|
|
2026 |
|
||
Liabilities, mezzanine equity, and equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
1,170.8 |
|
|
$ |
424.0 |
|
Short-term borrowings |
|
|
530.9 |
|
|
|
185.4 |
|
Accrued compensation, contributions to employee benefit plans and related taxes |
|
|
107.4 |
|
|
|
60.0 |
|
Dividends payable |
|
|
9.2 |
|
|
|
9.2 |
|
Other accrued items |
|
|
120.3 |
|
|
|
56.2 |
|
Current operating lease liabilities |
|
|
40.1 |
|
|
|
10.4 |
|
Current finance lease liabilities |
|
|
4.9 |
|
|
|
2.9 |
|
Income taxes payable |
|
|
6.6 |
|
|
|
0.7 |
|
Current maturities of long-term debt |
|
|
10.7 |
|
|
|
27.0 |
|
Current liabilities of discontinued operations |
|
|
108.4 |
|
|
|
- |
|
Total current liabilities |
|
|
2,109.3 |
|
|
|
775.8 |
|
Other liabilities |
|
|
83.3 |
|
|
|
51.5 |
|
Long-term debt |
|
|
1,654.8 |
|
|
|
44.4 |
|
Noncurrent operating lease liabilities |
|
|
338.8 |
|
|
|
78.7 |
|
Noncurrent finance lease liabilities |
|
|
14.4 |
|
|
|
5.5 |
|
Deferred income taxes |
|
|
112.0 |
|
|
|
33.6 |
|
Non-current liabilities of discontinued operations |
|
|
9.0 |
|
|
|
- |
|
Total liabilities |
|
|
4,321.6 |
|
|
|
989.5 |
|
|
|
|
|
|
|
|
||
Mezzanine equity: |
|
|
|
|
|
|
||
Redeemable noncontrolling interest |
|
|
63.8 |
|
|
|
65.3 |
|
Total mezzanine equity |
|
|
63.8 |
|
|
|
65.3 |
|
|
|
|
|
|
|
|
||
Shareholders’ equity - controlling interest: |
|
|
|
|
|
|
||
Preferred shares, without par value; authorized – 1,000,000 shares; no shares issued or outstanding |
|
|
- |
|
|
|
- |
|
Common shares, without par value; authorized – 150,000,000 shares; issued |
|
|
|
|
|
|
||
and outstanding 50,071,412 shares and 49,920,298 shares, respectively |
|
|
- |
|
|
|
- |
|
Additional Paid-in Capital |
|
|
926.1 |
|
|
|
919.4 |
|
Retained Earnings |
|
|
121.8 |
|
|
|
140.0 |
|
Accumulated other comprehensive income (loss), net of taxes of $(1.0) and $(2.3), respectively |
|
|
(15.6 |
) |
|
|
3.9 |
|
Total Shareholders’ equity – controlling interest |
|
|
1,032.3 |
|
|
|
1,063.3 |
|
Noncontrolling interests |
|
|
604.2 |
|
|
|
134.3 |
|
Total equity |
|
|
1,636.5 |
|
|
|
1,197.6 |
|
Total liabilities, mezzanine equity, and equity |
|
$ |
6,021.9 |
|
|
$ |
2,252.4 |
|
9
WORTHINGTON STEEL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
|
|
Three Months Ended |
|
|||||
|
|
August 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Operating activities: |
|
|
|
|
|
|
||
Net earnings (loss) |
|
$ |
(5.0 |
) |
|
$ |
38.6 |
|
Adjustment to reconcile net earnings (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
||
Loss from discontinued operations, net |
|
|
4.9 |
|
|
|
- |
|
Depreciation and amortization |
|
|
27.8 |
|
|
|
20.3 |
|
Benefit from deferred income taxes |
|
|
(4.4 |
) |
|
|
(1.4 |
) |
Bad debt expense (income) |
|
|
0.2 |
|
|
|
(0.1 |
) |
Equity in net income of unconsolidated affiliate, net of distributions |
|
|
16.7 |
|
|
|
(6.4 |
) |
Net gain on sale of assets |
|
|
(4.7 |
) |
|
|
(0.8 |
) |
Stock-based compensation |
|
|
2.3 |
|
|
|
7.4 |
|
Realized loss on equity investment |
|
|
15.5 |
|
|
|
- |
|
Noncash restructuring and other expense |
|
|
1.0 |
|
|
|
- |
|
Changes in assets and liabilities, net of impact of acquisitions: |
|
|
|
|
|
|
||
Receivables |
|
|
(42.4 |
) |
|
|
(15.9 |
) |
Inventories |
|
|
(42.9 |
) |
|
|
(16.4 |
) |
Accounts payable |
|
|
30.7 |
|
|
|
(46.7 |
) |
Accrued compensation and employee benefits |
|
|
(8.5 |
) |
|
|
(0.2 |
) |
Other operating items, net |
|
|
2.8 |
|
|
|
15.3 |
|
Net cash used in operating activities |
|
|
(6.0 |
) |
|
|
(6.3 |
) |
|
|
|
|
|
|
|
||
Investing activities: |
|
|
|
|
|
|
||
Investment in property, plant and equipment |
|
|
(63.0 |
) |
|
|
(29.4 |
) |
Acquisitions, net of cash acquired |
|
|
(545.2 |
) |
|
|
(1.6 |
) |
Proceeds from sale of assets, net of selling costs |
|
|
20.1 |
|
|
|
1.4 |
|
Other investing activities |
|
|
1.3 |
|
|
|
- |
|
Net cash used in investing activities |
|
|
(586.8 |
) |
|
|
(29.6 |
) |
|
|
|
|
|
|
|
||
Financing activities: |
|
|
|
|
|
|
||
Proceeds from (repayments of) short-term borrowings, net |
|
|
(170.0 |
) |
|
|
15.0 |
|
Proceeds from revolving credit facility borrowings - swing loans |
|
|
336.7 |
|
|
|
437.4 |
|
Repayments of revolving credit facility borrowings - swing loans |
|
|
(286.0 |
) |
|
|
(441.6 |
) |
Proceeds from long-term debt, net of issuance costs |
|
|
1,568.7 |
|
|
|
22.6 |
|
Principal payments on long-term debt |
|
|
(642.1 |
) |
|
|
(2.7 |
) |
Payments of tax withholdings, net of proceeds from issuance of common shares |
|
|
(2.7 |
) |
|
|
(1.6 |
) |
Payments to noncontrolling interests |
|
|
(10.5 |
) |
|
|
- |
|
Dividends paid |
|
|
(8.2 |
) |
|
|
(8.1 |
) |
Purchase of noncontrolling interest in Kloeckner |
|
|
(15.9 |
) |
|
|
- |
|
Payments of debt issuance costs |
|
|
(34.4 |
) |
|
|
- |
|
Net cash provided by financing activities |
|
|
735.6 |
|
|
|
21.0 |
|
|
|
|
|
|
|
|
||
Cash Flows from Discontinued Operations: |
|
|
|
|
|
|
||
Net cash provided by operating activities of discontinued operations |
|
|
15.5 |
|
|
|
- |
|
Net cash provided by investing activities of discontinued operations |
|
|
5.9 |
|
|
|
- |
|
Net cash provided by discontinued operations |
|
|
21.4 |
|
|
|
- |
|
|
|
|
|
|
|
|
||
Effects of exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
(0.6 |
) |
|
|
0.3 |
|
Increase (decrease) in cash, cash equivalents and restricted cash |
|
|
163.6 |
|
|
|
(14.6 |
) |
Cash, cash equivalents, and restricted cash at beginning of period |
|
|
84.6 |
|
|
|
92.9 |
|
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
248.2 |
|
|
$ |
78.3 |
|
10
WORTHINGTON STEEL, INC.
GAAP / NON-GAAP FINANCIAL RECONCILIATIONS / SUPPLEMENTAL DATA
(In millions, except volume and per share amounts)
The following tables reconcile the non-GAAP financial measures presented in this release to their respective most directly comparable financial measures calculated and presented in accordance with GAAP. These non-GAAP measures should be considered together with, and not as substitutes for or superior to, the comparable GAAP financial measures.
For more information regarding the non-GAAP financial measures, refer to the Use of Non-GAAP Financial Measures and Definitions section of this release.
The following table reconciles the applicable GAAP financial measures to adjusted net earnings from continuing operations attributable to controlling interest and adjusted EPS.
|
|
Three Months Ended August 31, 2026 |
|
|||||||||||||||||
|
|
Operating |
|
|
Earnings Before Income Taxes |
|
|
Income Tax Expense |
|
|
Net Earnings (Loss) – Continuing Operations (1) |
|
|
Diluted EPS – Continuing Operations |
|
|||||
GAAP |
|
$ |
56.0 |
|
|
$ |
12.0 |
|
|
$ |
12.1 |
|
|
$ |
(7.0 |
) |
|
$ |
(0.14 |
) |
Restructuring and other (income), net |
|
|
(3.6 |
) |
|
|
(3.6 |
) |
|
|
(0.9 |
) |
|
|
(1.7 |
) |
|
|
(0.03 |
) |
Kloeckner purchase derivative |
|
|
- |
|
|
|
0.9 |
|
|
|
0.2 |
|
|
|
0.7 |
|
|
|
0.01 |
|
Kloeckner acquisition-related expenses |
|
|
22.6 |
|
|
|
22.6 |
|
|
|
2.5 |
|
|
|
18.8 |
|
|
|
0.37 |
|
Kloeckner securities investment loss, net |
|
|
- |
|
|
|
15.5 |
|
|
|
3.4 |
|
|
|
12.1 |
|
|
|
0.24 |
|
Debt issuance cost write-off |
|
|
- |
|
|
|
1.6 |
|
|
|
0.4 |
|
|
|
1.2 |
|
|
|
0.02 |
|
Pension adjustments |
|
|
- |
|
|
|
(1.2 |
) |
|
|
- |
|
|
|
(0.6 |
) |
|
|
(0.01 |
) |
Deferred tax asset adjustment |
|
|
- |
|
|
|
- |
|
|
|
(5.6 |
) |
|
|
5.6 |
|
|
|
0.11 |
|
Non-GAAP |
|
$ |
75.0 |
|
|
$ |
47.8 |
|
|
$ |
12.1 |
|
|
$ |
29.1 |
|
|
$ |
0.57 |
|
|
|
Three Months Ended August 31, 2025 |
|
|||||||||||||||||
|
|
Operating |
|
|
Earnings Before Income Taxes |
|
|
Income Tax Expense |
|
|
Net Earnings – Continuing Operations (1) |
|
|
Diluted EPS – Continuing Operations |
|
|||||
GAAP |
|
$ |
48.3 |
|
|
$ |
52.0 |
|
|
$ |
13.4 |
|
|
$ |
36.8 |
|
|
$ |
0.73 |
|
Restructuring and other (income), net |
|
|
(1.0 |
) |
|
|
(1.0 |
) |
|
|
(0.1 |
) |
|
|
(0.5 |
) |
|
|
(0.01 |
) |
Sitem Group acquisition completion bonus payment |
|
|
4.6 |
|
|
|
4.6 |
|
|
|
1.3 |
|
|
|
1.7 |
|
|
|
0.03 |
|
Deferred tax asset adjustment |
|
|
- |
|
|
|
- |
|
|
|
(0.8 |
) |
|
|
0.8 |
|
|
|
0.02 |
|
Non-GAAP |
|
$ |
51.9 |
|
|
$ |
55.6 |
|
|
$ |
13.8 |
|
|
$ |
38.8 |
|
|
$ |
0.77 |
|
|
11
The following table provides supplemental operating data, including volume and net sales, together with a reconciliation of net earnings from continuing operations attributable to controlling interest to EBIT, adjusted EBIT and adjusted EBITDA, and presents the related net earnings from continuing operations attributable to controlling interest, adjusted EBIT and adjusted EBITDA margins.
|
Three Months Ended |
|
|||||
|
August 31, |
|
|||||
(In millions, except volume) |
2026 |
|
|
2025 |
|
||
Volume (tons) |
|
1,943,340 |
|
|
|
928,866 |
|
Net sales |
$ |
2,726.6 |
|
|
$ |
872.9 |
|
|
|
|
|
|
|
||
Net earnings (loss) from continuing operations attributable to controlling interest |
$ |
(7.0 |
) |
|
$ |
36.8 |
|
Interest expense, net(1) |
|
38.8 |
|
|
|
2.9 |
|
Income tax expense (benefit)(1) |
|
12.1 |
|
|
|
13.4 |
|
EBIT |
|
43.9 |
|
|
|
53.1 |
|
Restructuring and other (income), net(2) |
|
(2.6 |
) |
|
|
(0.6 |
) |
Kloeckner purchase derivative |
|
0.9 |
|
|
|
- |
|
Kloeckner acquisition-related expenses(3) |
|
21.4 |
|
|
|
- |
|
Kloeckner securities investment loss, net |
|
15.5 |
|
|
|
- |
|
Pension adjustments(4) |
|
(0.6 |
) |
|
|
- |
|
Sitem Group acquisition completion bonus payment(5) |
|
- |
|
|
|
3.0 |
|
Adjusted EBIT |
|
78.5 |
|
|
|
55.5 |
|
Depreciation and amortization(1) |
|
27.8 |
|
|
|
20.3 |
|
Net earnings attributable to noncontrolling interests |
|
5.0 |
|
|
|
1.8 |
|
EBITDA Adjustments – Noncontrolling interest impact(6) |
|
(0.3 |
) |
|
|
1.2 |
|
Adjusted EBITDA |
$ |
111.0 |
|
|
$ |
78.8 |
|
|
|
|
|
|
|
||
Net earnings (loss) from continuing operations attributable to controlling interest margin |
|
(0.3 |
%) |
|
|
4.2 |
% |
Adjusted EBIT margin |
|
2.9 |
% |
|
|
6.4 |
% |
Adjusted EBITDA margin |
|
4.1 |
% |
|
|
9.0 |
% |
|
12
The following table provides a reconciliation from net earnings (loss) from continuing operations attributable to controlling interest to the non-GAAP financial measures EBIT, adjusted EBIT, and adjusted EBITDA, for each of the five most recent fiscal quarters ended August 31, 2026.
|
|
First |
|
|
Fourth |
|
|
Third |
|
|
Second |
|
|
First |
|
|||||
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|||||
|
|
2027 |
|
|
2026 |
|
|
2026 |
|
|
2026 |
|
|
2026 |
|
|||||
Net earnings (loss) from continuing operations attributable to controlling interest |
|
$ |
(7.0 |
) |
|
$ |
(57.5 |
) |
|
$ |
10.4 |
|
|
$ |
18.8 |
|
|
$ |
36.8 |
|
Interest expense, net(1) |
|
|
38.8 |
|
|
|
20.7 |
|
|
|
2.1 |
|
|
|
2.7 |
|
|
|
2.9 |
|
Income tax expense (benefit)(1) |
|
|
12.1 |
|
|
|
(1.1 |
) |
|
|
3.5 |
|
|
|
4.2 |
|
|
|
13.4 |
|
EBIT |
|
|
43.9 |
|
|
|
(37.9 |
) |
|
|
16.0 |
|
|
|
25.7 |
|
|
|
53.1 |
|
Impairment of goodwill, long-lived assets, and other assets(2) |
|
|
- |
|
|
|
83.1 |
|
|
|
1.5 |
|
|
|
0.6 |
|
|
|
- |
|
Restructuring and other (income), net(3) |
|
|
(2.6 |
) |
|
|
- |
|
|
|
(3.8 |
) |
|
|
- |
|
|
|
(0.6 |
) |
Kloeckner purchase derivative |
|
|
0.9 |
|
|
|
11.5 |
|
|
|
(9.1 |
) |
|
|
- |
|
|
|
- |
|
Kloeckner acquisition-related expenses(4) |
|
|
21.4 |
|
|
|
15.5 |
|
|
|
15.4 |
|
|
|
4.9 |
|
|
|
- |
|
Kloeckner securities investment (income) loss, net |
|
|
15.5 |
|
|
|
(17.2 |
) |
|
|
(0.2 |
) |
|
|
- |
|
|
|
- |
|
Pension adjustments(5) |
|
|
(0.6 |
) |
|
|
(0.7 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Sitem Group acquisition completion bonus payment(6) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3.0 |
|
Other loss, net |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.3 |
|
|
|
- |
|
Adjusted EBIT |
|
|
78.5 |
|
|
|
54.3 |
|
|
|
19.8 |
|
|
|
31.5 |
|
|
|
55.5 |
|
Depreciation and amortization(1) |
|
|
27.8 |
|
|
|
20.6 |
|
|
|
21.6 |
|
|
|
21.7 |
|
|
|
20.3 |
|
Net earnings attributable to noncontrolling interests |
|
|
5.0 |
|
|
|
(26.3 |
) |
|
|
0.4 |
|
|
|
2.7 |
|
|
|
1.8 |
|
EBITDA Adjustments – Noncontrolling interest impact(7) |
|
|
(0.3 |
) |
|
|
28.4 |
|
|
|
(2.2 |
) |
|
|
- |
|
|
|
1.2 |
|
Adjusted EBITDA |
|
$ |
111.0 |
|
|
$ |
77.0 |
|
|
$ |
39.6 |
|
|
$ |
55.9 |
|
|
$ |
78.8 |
|
|
The following provides a reconciliation of net cash provided by (used in) operating activities to the non-GAAP financial measure free cash flow for each of the five most recent fiscal quarters ended August 31, 2026.
|
|
First |
|
|
Fourth |
|
|
Third |
|
|
Second |
|
|
First |
|
|||||
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|
Quarter |
|
|||||
|
|
2027 |
|
|
2026 |
|
|
2026 |
|
|
2026 |
|
|
2026 |
|
|||||
Net cash provided by (used in) operating activities |
|
$ |
(6.0 |
) |
|
$ |
44.9 |
|
|
$ |
63.3 |
|
|
$ |
99.3 |
|
|
$ |
(6.3 |
) |
Investment in property, plant and equipment |
|
|
(63.0 |
) |
|
|
(37.1 |
) |
|
|
(30.0 |
) |
|
|
(24.7 |
) |
|
|
(29.4 |
) |
Free cash flow |
|
$ |
(69.0 |
) |
|
$ |
7.8 |
|
|
$ |
33.3 |
|
|
$ |
74.6 |
|
|
$ |
(35.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Trailing 12 months free cash flow |
|
$ |
46.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
The following table presents the reconciliation of total debt to the non-GAAP financial measure net debt.
|
|
August 31, |
|
|
May 31, |
|
||
|
|
2026 |
|
|
2026 |
|
||
Short-term borrowings |
|
$ |
530.9 |
|
|
$ |
185.4 |
|
Current maturities of long-term debt |
|
|
10.7 |
|
|
|
27.0 |
|
Long-term debt |
|
|
1,654.8 |
|
|
|
44.4 |
|
Total debt |
|
$ |
2,196.4 |
|
|
$ |
256.8 |
|
Less: cash and cash equivalents |
|
|
(248.2 |
) |
|
|
(84.6 |
) |
Net debt |
|
$ |
1,948.2 |
|
|
$ |
172.2 |
|
13
WORTHINGTON STEEL, INC.
USE OF NON-GAAP FINANCIAL MEASURES AND DEFINITIONS
NON-GAAP FINANCIAL MEASURES
The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). These materials also include certain financial measures that are not calculated and presented in accordance with GAAP (“non-GAAP financial measures”).
Management uses these non-GAAP financial measures, together with the most directly comparable GAAP financial measures, to evaluate the Company’s performance, engage in financial and operational planning, and determine incentive compensation and believes these non-GAAP financial measures provide useful information to investors because they provide additional perspective on the performance of the Company’s ongoing operations. Additionally, management believes these non-GAAP financial measures provide useful information to investors because they allow for meaningful comparisons and analysis of trends in the Company’s business and enable investors to evaluate operations and future prospects in the same manner as management. These non-GAAP financial measures are not intended to represent, and should not be considered as, an alternative to GAAP financial measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. These measures may exclude items that are significant to understanding the Company’s financial results and condition, and other companies may define or calculate similarly titled non-GAAP financial measures differently. Accordingly, the non-GAAP financial measures presented should be considered in conjunction with, and not as a replacement for, the comparable GAAP financial measures.
The following provides definitions of the non-GAAP financial measures presented in these materials:
Adjusted operating income (loss) is defined as operating income (loss) excluding the items described below under Exclusions from Non-GAAP Financial Measures to the extent such items are included in operating income (loss).
Adjusted earnings (loss) before income taxes is defined as earnings (loss) before income taxes excluding the pre-tax effect of the items described below under “Exclusions from Non-GAAP Financial Measures,” to the extent such items are reflected in earnings (loss) before income taxes.
Adjusted income tax expense (benefit) reflects income tax expense (benefit) adjusted for the income tax effects of the items excluded in determining the Company’s adjusted results, as well as separately identified discrete income tax items that management believes affect the comparability of the Company’s results across periods.
Adjusted net earnings from continuing operations attributable to controlling interest is defined as net earnings from continuing operations attributable to controlling interest excluding the after-tax effect of the items described below under “Exclusions from Non-GAAP Financial Measures,” including, as applicable, the portion of such adjustments attributable to noncontrolling interests.
Adjusted net earnings per diluted share from continuing operations attributable to controlling interest (“adjusted EPS”) is calculated using adjusted net earnings from continuing operations attributable to controlling interest and the diluted weighted-average common shares outstanding applicable to the adjusted results for the respective period. When the effect of potentially dilutive securities is anti-dilutive for purposes of GAAP earnings per share but dilutive based on adjusted net earnings, the calculation of adjusted EPS includes the effect of those securities.
EBIT is defined as net earnings (loss) from continuing operations attributable to controlling interest before interest expense, net, and income tax expense (benefit).
Adjusted EBIT is defined as EBIT excluding the items described below under “Exclusions from Non-GAAP Financial Measures,” to the extent applicable to the respective period. Adjustments attributable to noncontrolling interests are excluded from adjusted EBIT to reflect the portion of the applicable adjustment attributable to the Company’s controlling interest.
Adjusted EBIT margin is calculated by dividing adjusted EBIT by net sales. Net earnings margin, calculated by dividing net earnings (loss) from continuing operations attributable to controlling interest by net sales, is presented as the corresponding GAAP-based measure.
EBITDA is defined as net earnings (loss) from continuing operations attributable to controlling interest before interest expense, net, income tax expense (benefit), depreciation and amortization.
Adjusted EBITDA is defined as adjusted EBIT plus depreciation and amortization. Adjusted EBITDA therefore excludes the items described below under “Exclusions from Non-GAAP Financial Measures,” to the extent applicable to the respective period. Adjustments attributable to noncontrolling interests are added back from adjusted EBIT to reflect the consolidated results.
Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by net sales. Net earnings margin is presented as the corresponding GAAP-based measure.
Free cash flow is a non-GAAP liquidity measure defined as net cash provided by (used in) operating activities less investment in property, plant and equipment. Free cash flow is a non-GAAP financial measure that management believes measures the Company’s ability to generate cash beyond what is required for its business operations and capital expenditures.
Trailing 12-month free cash flow is calculated as the sum of free cash flow for the four most recent fiscal quarters.
Net debt is a non-GAAP financial measure calculated as total debt, consisting of short-term borrowings, current maturities of long-term debt and long-term debt, less cash and cash equivalents.
14
EXCLUSIONS FROM NON-GAAP FINANCIAL MEASURES
The Company may also exclude other items that management determines affect the comparability of operating results, with such items separately identified and described in the applicable reconciliation.
15
###
16
Worthington Steel Investor Presentation | October 2026 Exhibit 99.2
Safe Harbor Statement Selected statements contained in this presentation constitute "forward-looking statements," as that term is used in the Private Securities Litigation Reform Act of 1995 (the "Act"). The Company wishes to take advantage of the safe harbor provisions included in the Act. Forward-looking statements reflect the Company's current expectations, estimates or projections concerning future results or events. These statements are often identified by the use of forward-looking words or phrases such as "believe," "expect," "anticipate," "may," "could," "should," "would," "intend," "plan," "will," "likely," "estimate," "project," "position," "strategy," "target," "aim," "seek," "foresee" and similar words or phrases. These forward-looking statements include, without limitation, statements relating to: future or expected cash positions, liquidity and ability to access financial markets and capital; outlook, strategy or business plans; expected financial and operational performance and future opportunities; future or expected growth, growth potential, forward momentum, performance, competitive position, sales, volumes, cash flows, earnings, margins, balance sheet strengths, debt, financial condition or other financial measures; pricing trends for raw materials and finished goods and the impact of pricing changes; the ability to improve or maintain margins; expected demand or demand trends; industry and market forecasts and expected trends relating to vehicle electrification, decarbonization and electric-grid modernization and expansion; additions to product lines and opportunities to participate in new markets; expected benefits from transformation, innovation, artificial intelligence, machine learning and other technology initiatives; the ability to improve performance and competitive position at the Company's operations; anticipated working capital needs, capital expenditures and asset sales; anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing, the supply chain and corporate functions and the results thereof; projected profitability potential; capital allocation priorities, including the payment of dividends; the ability to make acquisitions, form joint ventures and consolidate operations, and the projected timing, results, benefits, costs, charges and expenditures related to acquisitions, joint ventures, headcount reductions and facility dispositions, shutdowns and consolidations; the Company's plans and objectives related to its acquisition of Klöckner & Co SE ("Kloeckner") (the "Kloeckner Acquisition"), including the Company's path to eventual operating control of Kloeckner and expected value capture, anticipated cost, operating, commercial, revenue and working capital synergies, integration plans, and the anticipated effects on the Company's market position, geographic footprint, product and service offerings, earnings and margins; the Company's expected pro forma net leverage ratio and deleveraging goals following the Kloeckner Acquisition; the Domination and Profit and Loss Transfer Agreement with Kloeckner (the "DPLTA"), including the approval, timing and effectiveness of the DPLTA and the anticipated combination and integration of the Company and Kloeckner; projected capacity and the alignment of operations with demand; the ability to operate profitably and generate cash in down markets; the ability to capture and maintain market share and to develop or take advantage of future opportunities, customer initiatives, new businesses, new products and new markets; expectations for Company and customer inventories, jobs and orders; expectations for the economy and markets or improvements therein; expectations for generating improving and sustainable earnings, earnings potential, margins or shareholder value; effects of judicial rulings, laws and regulations; anticipated improvements in business and efficiencies to be gained from the use of artificial intelligence and machine learning and other technologies; effects of cybersecurity breaches and other disruptions to information technology infrastructure; effects of public health emergencies and the various responses of governmental and nongovernmental authorities thereto on economies and markets and on the Company's customers, counterparties, employees and third-party service providers; and other non-historical matters. Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected, and forward-looking statements are not guarantees of future performance. Any number of factors could affect actual results, including, without limitation, those that follow: the effect of conditions in national and worldwide financial markets, including inflation, increases in interest rates and economic recession, and the ability of financial institutions to provide capital; the risks, uncertainties and impacts related to public health emergencies, the duration, extent and severity of which are impossible to predict, and actions taken by governmental authorities or others in connection therewith; changing commodity prices and supply; product demand and pricing; changes in product mix, product substitution and market acceptance of the Company's products; changes in or the failure to realize anticipated trends in vehicle electrification, decarbonization and electric-grid modernization and expansion; the possibility that industry forecasts, market projections and other estimates or assumptions included in this presentation may prove inaccurate; volatility or fluctuations in the pricing, quality or availability of raw materials, particularly steel, supplies, transportation, utilities, energy, labor and other items required by operations; effects of sourcing and supply chain constraints, including interruptions in deliveries of raw materials and supplies or the loss of key supplier relationships; the outcome of adverse claims experience with respect to workers' compensation, product recalls or product liability, casualty events or other matters; effects of critical equipment failures, facility closures and the consolidation of operations; the effect of financial difficulties, consolidation and other changes within the steel, automotive, construction and other industries in which the Company participates; failure to maintain appropriate levels of inventories; financial difficulties, including bankruptcy filings, of original equipment manufacturers, end-users and customers, suppliers, joint venture partners and others with whom the Company does business; the ability to realize targeted expense reductions from headcount reductions, facility closures and other cost reduction efforts; the ability to realize cost savings and operational, sales and sourcing improvements and efficiencies and other expected benefits from transformation initiatives on a timely basis; the effects of the Kloeckner Acquisition on the Company's and Kloeckner's operations, including their future financial condition and performance, operating results, strategy and plans, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, losses, future prospects and business and management strategies; the possibility that anticipated synergies, working capital reductions, cost savings, revenue opportunities, operational improvements, deleveraging, liquidity, integration benefits, margin expansion and other benefits of the Kloeckner Acquisition may not be realized when expected or at all, may be less than anticipated or may cost more to achieve than expected; the time and effort required to integrate the Company's and Kloeckner's businesses and the risk that the businesses may not be integrated successfully or within the expected timeframe; the impact of limited financial flexibility and increased interest expense resulting from the Kloeckner Acquisition; the Company's ongoing financial obligations under the DPLTA to Kloeckner and its minority shareholders; risks associated with litigation or appraisal proceedings relating to the Kloeckner Acquisition or the DPLTA; the adverse impact of failing to continue to retain, recruit and motivate executives and other key employees; the overall success of, and the ability to integrate, newly acquired businesses and joint ventures, maintain and develop their customers, and achieve synergies and other expected benefits and cost savings therefrom; the ability to realize expected benefits of strategically deployed capital expenditures; capacity levels and efficiencies, within facilities, within major product markets and within the industries in which the Company participates as a whole; the effect of disruption in the business of suppliers, customers, facilities and shipping operations due to adverse weather, casualty events, equipment breakdowns, labor shortages, interruption in utility services, civil unrest, international conflicts, terrorist activities or other causes; changes in customer demand, inventories, spending patterns, product choices, and supplier choices; risks associated with doing business internationally, including economic, political and social instability, foreign currency exchange rate exposure and the acceptance of the Company's products in global markets; the effect of national, regional and global economic conditions generally and within major product markets, including significant economic disruptions from public health emergencies, the actions taken in connection therewith and the implementation of related fiscal stimulus packages; the impact of tariffs, the adoption of trade restrictions affecting the Company's products, suppliers or customers, a United States withdrawal from or significant renegotiation of trade agreements, the occurrence of trade wars, the closing of border crossings and other changes in trade regulations or relationships; the ability to improve and maintain processes and business practices to keep pace with the economic, competitive and technological environment; the effect of inflation, interest rate increases and economic recession, which may negatively impact the Company's operations and financial results; deviation of actual results from estimates or assumptions used by the Company, including in the application of its significant accounting policies; impairment of the recorded value of inventory, equity investments, fixed assets, goodwill and other assets; competitive pressure on sales and pricing, including pressure from imports and substitute materials; the level of imports and import prices in the Company's markets and foreign currency exchange rate exposure; the impact of environmental laws and regulations or the actions of the United States Environmental Protection Agency or similar regulators that increase costs or limit the Company's ability to use or sell certain products; the impact of increasing environmental, greenhouse gas emission and sustainability regulations; the impact of judicial rulings and governmental regulations, both in the United States and abroad, including those adopted by the United States Securities and Exchange Commission (the "SEC") and other governmental agencies; the effect of healthcare laws in the United States and potential changes for such laws, which may increase the Company's healthcare and other costs and negatively impact the Company's operations and financial results; the effect of tax laws in the United States and potential changes for such laws, which may increase the Company's costs and negatively impact its operations and financial results; the operational, data privacy, security, regulatory and legal risks associated with the Company's reliance on artificial intelligence and machine learning technologies, its ability to stay abreast of technological advancements and its dependence on third parties that rely on such technologies; cybersecurity risks; the effects of privacy and information security laws and standards; the cyclical nature of the steel industry; the Company's safety performance; the effects of competition and price pressures from competitors; the Company's ability to pay dividends, which is subject to business performance, capital requirements, financing arrangements, applicable law and the discretion of the Company's Board of Directors; and other risks described from time to time in the Company's filings with the SEC, including those described in "Part I – Item 1A. – Risk Factors" of the Company's most recent Annual Report on Form 10-K and its subsequent filings with the SEC. Forward-looking statements should be construed in the light of such risks. The Company notes these factors for investors as contemplated by the Act. It is impossible to predict or identify all potential risk factors. Consequently, you should not consider the foregoing list to be a complete set of all potential risks and uncertainties. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. The Company does not undertake, and hereby disclaims, any obligation to update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law. Non-GAAP Financial Measures This presentation includes certain financial measures that are not calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP"), including EBIT, adjusted EBIT, adjusted EBITDA, adjusted EBITDA margin, adjusted diluted EPS, free cash flow, net debt and net leverage. These non-GAAP financial measures should be considered together with, and not as substitutes for or superior to, the most directly comparable GAAP financial measures, and may not be comparable to similarly titled measures used by other companies. Definitions of these measures and reconciliations to the most directly comparable GAAP financial measures are included in the "Reconciliation of Non-GAAP Financial Measures" slides in the Appendix to this presentation. The Company does not provide a reconciliation of forward-looking non-GAAP financial measures, including targeted net leverage, because it cannot do so without unreasonable efforts due to the inherent difficulty of predicting the occurrence and financial impact of excluded items.
A Historically Resilient Spread Business With Broader Reach and Scale 2 Performance built on a proven playbook We primarily earn a processing spread, not a commodity margin 1 A growth company at its core A leading value-added processor of flat-rolled carbon steel in North America, with growing capabilities in other metals and capabilities 3 Kloeckner adds scale, breadth and earnings potential Greater North American scale and downstream reach; adds aluminum, stainless, long products, plate and fabrication Executing the path to control and deleveraging Full control expected as early as January 2027; net leverage below 2.5x within 24 months of DPLTA effectiveness 4
Performance Built on a Proven Playbook
We Are a Value-Added Processor in the Steel Supply Chain 1 ~90% of direct-sale shipments run through at least two value-added processes. WORTHINGTON STEEL OPERATIONS Customized value-added services where we earn a processing spread Mills Melt Hot roll coil (HRC) Hot Roll Conversion Pickling / scale removal Hot dip galvanizing Specialty Processing Cold rolling, temper pass & annealing Heavy gauge & configured blanking Electrical steel laminations Tailor welded solutions Dimensional Processing Slitting to width Cutting to length Service Centers Warehouse / distribute WHY WE WIN Customized, value-added solutions1 ~90% of shipments run through at least two value-added processes Make-to-order, contract-based End-to-end supply chain management
Our Earnings and Cash Flow Have Been Resilient Despite Steel Price Volatility Net Sales ($M) & Volumes (M Tons) Adjusted EBITDA ($M) & Margin (%) Estimated Holding G/(L)1 ($3) ($10) $15 $22 Note: FY is fiscal year ended May 31. TTM ended August 31, 2026. Adjusted EBITDA is a non-GAAP measure; see Appendix. 1 Estimated inventory holding gains or losses in respective period. 5.3% Adj. EBITDA margin TTM2027 $625M Cumulative operating cash flow, FY2024 –Q1 FY2027 Countercyclical Working capital historically releases cash when steel prices fall
Mirrored Contracts and Disciplined Inventory Management Mitigate Steel Price Impact on Our Performance Worthington Business System to manage inventory Deployed to drive inventory lower within carbon flat-rolled locations; opportunities remain Inventory down on a tons basis Use firm-priced contracts where possible to lock in margin Customers choose contract mechanisms that best fit their business Mirror customer and supplier contract mechanisms (e.g., buy/sell on quarterly CRU) ~100% of contracts are mirrored Utilize steel futures when fixed pricing is not offered by a mill We Seek to Minimize Steel Holding Gains and Losses Note: Period ending May 31, 2026 – includes Legacy WS only Worthington Business System Helps Drive Down Inventory Transformation Launch Advanced Analytics Lean Flow + AI Predictive Lead Times Baseline Historical Hot-Rolled Steel Price ($/ton)
TRANSFORMATION: LEAN PRACTICES & TECHNOLOGY A Company-Wide System of Continuous Improvement Recent examples: Delta, OH: WIP coils cut 60%; cycle times cut 25% Bowling Green, KY: inventory down ~37%, 100% on time Customer kaizen: customer working capital cut 61% INNOVATION: TAILORED CUSTOMER SOLUTIONS Built With the Voice of the Customer 500+ lightweighting parts launched since 2000 Hot-stamped door rings, tailor-welded rails EV battery covers and deep-drawn battery trays ACQUISITION: ADDING CAPABILITIES FOR GROWTH Proven Success Across Multiple Acquisitions Tempel: electrical steel for decarbonization and the grid Shiloh BlankLight®: lightweighting and part consolidation Sitem: global presence in electrical steel Kloeckner: the next platform for our playbook Our Business System Is a Repeatable, Proven Playbook Our people-first Philosophy is rooted in the Golden Rule: We treat our employees, customers, suppliers and shareholders as we would like to be treated
Kloeckner Adds Scale, Breadth, and Earnings Potential
System fit: Kloeckner meets our acquisition criteria, including the opportunity to increase value through Transformation; the Worthington Business System playbook will be applied to Kloeckner following DPLTA effectiveness The Acquisition Adds Scale and Diversification to a Proven Operator Diversification: a broader, more balanced portfolio with more value-added processing can improve the quality of earnings through the cycle Scale and breadth: greater North American scale and downstream reach, with broader geographic and customer coverage; adds aluminum, stainless, long products, plate and fabrication Synergies: ~$150M of identified EBITDA and ~$150M of targeted working capital synergy opportunities: ~50% of run-rate synergies in the first full year after the DPLTA is effective; full run-rate by end of Year 2
Kloeckner Is Shifting Toward Value-Added Processing in North America ~37% → ~14% Distribution share of sales, 2021 to 2025¹ 86% Share of 2025 revenue from higher value-added and service center businesses¹ North America Europe ~40 U.S. and ~10 Mexico facilities Sold 8 low value-add U.S. distribution sites (Dec. 2025) Downstream-focused bolt-on acquisitions in the U.S. Growth projects: Columbus, MS aluminum processing (early 2027); Brandenburg, KY plate processing (ramping); Monterrey, MX transformer core (ramping through 2026) Includes facilities in Germany, Austria and Switzerland Exited non-core regions: UK, France, Belgium, the Netherlands Divested distribution-focused assets Expected sale of Becker Group in Germany 1906 Founded ~110 Locations across the U.S., Mexico, Germany, Austria and Switzerland $7.3B LTM revenue² $204M LTM EBITDA before material special effects² ~6,100 Employees “Localized” business model insulated from cross-border tariffs Source: Company filings. 1 Excl. U.S. sites sold Dec. 2025. 2 LTM 3/31/2026; non-IFRS measure; includes Becker; EUR/USD 1.159.
Significant Synergy Opportunity in North America $150M targeted annual synergies by Year 2 ~$55M Procurement Sourcing optimization of direct and indirect spend Optimization of scrap management ~$40M Commercial process Cross-selling in electrical steel, aluminum, stainless and fabrication Streamlined portfolio eliminates lower-margin items ~$30M Operational efficiency Supply chain: integrate outside steel processing and galvanizing Manufacturing efficiency via shop-floor Transformation ~$25M Overhead reduction SG&A optimization Elimination of duplicative functions and public company costs Delivering the synergies ~50% of run-rate synergies in the first full year after the DPLTA is effective; full run-rate by end of Year 2 ~$50M of one-time costs to achieve synergies in the first 12 months of integration Integration Management Office drives capture using the WS Transformation approach +$150M of additional targeted working capital reductions (e.g., safety stock levels, inventory norms, payment terms)
Focused on Executing the Path to Control and Deleveraging
We Have a Clear Path to Full Operational Control Jan. 15, 2026 Definitive agreement signed Mar. 27, 2026 Notice of intent to enter into a DPLTA Apr. 14, 2026 Tender acceptance period ends with 61.87% secured Jun. 3, 2026 Acquisition closes (~62%); delisting tender offer announced Sep. 8, 2026 DPLTA signed Oct. 23, 2026 Kloeckner EGM vote on the DPLTA (75% of share capital represented at meeting must approve) ~Jan. 1, 2027 DPLTA effective: full control; integration begins Until the DPLTA Is Effective Worthington Steel owns ~62% of Kloeckner Influence through the right to name Supervisory Board members, which oversee and appoint the Management Board No operational control of Kloeckner When the DPLTA Is Effective Full control, including the ability to consolidate entities, direct cash flows and pledge Kloeckner assets Remaining minority shareholders effectively receive a fixed annual dividend and a put right at a fixed price Integration and synergy capture begin Note: Effective date depends on registration; January 1, 2027 is the earliest expected date. Combined guidance, margin targets and detailed synergy phasing will follow once the DPLTA is effective. Source: Company filings and presentations. Today July 4, 2026 New Kloeckner & Co Supervisory Board now includes 4 Worthington Steel employees and two independent directors Aug. 13, 2026 Kloeckner shares delisted
Disciplined Capital Allocation Balances Deleveraging and Growth 1 Deleveraging Our #1 priority over the next two years Targeting net leverage below 2.5x within 24 months of DPLTA effectiveness Driven by combined EBITDA, synergies and working capital reductions, and portfolio optimization 2 Capex and Tuck-in M&A Combined capex of ~$160–180M in fiscal 2027 Targeted growth investments, including Kloeckner’s value-added projects Tuck-in acquisitions that fit our criteria and our Transformation playbook 3 Dividend Intent to continue to pay dividends of $0.64 per share annually Supported by cash generation through the cycle
More than 200 Combined Years of Experience Managing Through Steel Price Cycles and Shifting Macroeconomic Climates with Proven Ability to Execute M&A One Team That Has Managed Cycles and Integrated Acquisitions Before CLIFF LARIVEY President, Flat-Rolled Steel Processing BILL WERTZ VP & Chief Information Officer GEOFF GILMORE President & Chief Executive Officer JEFF KLINGLER Executive VP & Chief Operating Officer TIM ADAMS VP & Chief Financial Officer JOE HEUER VP & General Counsel MELISSA DYKSTRA VP of Corporate Communications & Investor Relations BRAD KERN SVP of Operations NIKKI BALLINGER VP of Human Resources GWEN JOSEPH Corporate Controller ANDY REICH VP, Transformation
Investment Summary 2 A repeatable, proven playbook The Worthington Business System will be applied to Kloeckner 1 Earnings primarily follow the spread, not the steel price Mirrored contracts and inventory discipline keep earnings steady 3 A broader, more value-added portfolio Kloeckner adds new metals and value-added processing Cash generation that holds up in a downturn Working capital releases cash when steel prices or demand fall 5 Disciplined capital allocation Deleveraging first, while funding growth and the dividend 4
Appendix
Performance Summary (all comparisons to Q1 FY26) Net sales of $2,726.6 million increased 212% compared to $872.9 million. Operating income of $56 million compared to $48.3 million. Net loss from continuing operations attributable to controlling interest of $7.0 million, compared with net earnings of $36.8 million in the prior-year quarter. Diluted loss per share from continuing operations attributable to controlling interest of $0.14, compared with diluted earnings per share of $0.73 in the prior-year quarter. Adjusted diluted earnings per share of $0.57, compared with $0.77 in the prior-year quarter. Adjusted EBIT of $78.5 million compared to $55.5 million. Declared a quarterly dividend of $0.16 per share payable on December 28, 2026, to shareholders of record at the close of business on December 14, 2026. Q1 2027 Highlights
Impairment of goodwill, long-lived assets, and other assets – impairments of assets are excluded to facilitate period-to-period comparability of the Company’s operating performance, are inherently unpredictable in timing and amount, and are non-cash, so their exclusion facilitates the comparison of historical, current and forecasted financial results. Restructuring and other (income) expense, net- restructuring activities consist of items associated with the Company’s cost-optimization activities, such as divestitures, closing or consolidating facilities, employee severance (including rationalizing headcount or other significant changes in personnel), and realignment of existing operations (including changes to management structure in response to underlying performance and/or changing market conditions). These restructuring activities are excluded to facilitate period-to-period comparability of the Company’s operating performance. Separation costs - direct and incremental costs incurred in connection with the Separation from Former Parent, including audit, legal, and other fees paid to third-party advisors as well as direct and incremental costs associated with the separation of shared corporate functions which are not part of the Company’s ongoing operations. Tax indemnification adjustment - tax and indemnification adjustments reported in income tax expense and miscellaneous income, net, related to an indemnification agreement with the former owners of Tempel. These adjustments are the result of a first quarter fiscal 2025 favorable tax ruling. The indemnification agreement, which was entered into with the former Tempel owners at the time the Company acquired Tempel, provides protection to the Company from rulings by tax authorities through the acquisition date. Pension adjustments – pension-related impacts associated with discrete events impacting the Company’s pension plans. The exclusions from adjusted results facilitate period-to-period comparability of the Company’s operating performance as these gains reflect discrete pension-related events. A $1.2 million gain recognized in the first quarter of fiscal 2027, associated with a pension curtailment resulting from headcount reductions. A $1.4 million gain recognized in the fourth quarter of fiscal 2026, primarily associated with a pension curtailment resulting from headcount reductions. Gain on land sale - sale of unused land on the campus of the Tempel subsidiary in China, which resulted in a pre-tax gain in miscellaneous income (expense), net, is excluded from adjusted results to facilitate period-to-period comparability of the Company’s operating performance as it reflects the non-operational disposal of real property. Sitem group purchase derivative (gain) loss - mark-to-market gain on the economic (non-designated) foreign currency exchange contract entered into related to the purchase price for Sitem Group, which resulted in a pre-tax gain in miscellaneous income, net, and is excluded as it is not part of the Company’s ongoing operations. Sitem Group acquisition completion bonus payment - consists of the one-time bonus payment paid to key individuals upon the successful acquisition closing of Sitem Group. The acquisition completion bonus payment was included within SG&A expense. Reconciliation of Non-GAAP Financial Measures For additional information with respect to Worthington Steel, please refer to our most recent Form 8-K, 10-Q and 10-K. Kloeckner purchase derivative (gain) loss - consists of the change in the fair value of an economic (non-designated) cash flow derivative that was entered into to hedge a portion of the expected purchase price of the outstanding shares of Kloeckner in connection with the Kloeckner Acquisition. The change in the fair value is recorded in miscellaneous income (expense), net, and it is excluded from adjusted results to facilitate period-to-period comparability of the Company’s operating performance as it reflects non-operational activity. Kloeckner acquisition-related expenses – consists of the acquisition-related costs incurred in connection with the Kloeckner Acquisition, consisting primarily of advisory, legal, accounting, valuation and other professional fees, as well as certain integration and personnel expenses, and are expensed to SG&A, as incurred, in accordance with GAAP. Exclusion of these costs is appropriate because they are directly attributable to a specific strategic transaction that management expects to be transformative to the Company’s portfolio, scale and long-term operating profile and are not reflective of the Company’s ongoing operating performance for the periods presented. Exclusion facilitates period-over-period comparisons, and to assess performance excluding the impact of transaction-specific activities. Kloeckner securities investment income (loss), net – reflects the impact associated with the Company’s investment in Kloeckner equity securities, consisting of mark-to-market gains/losses, dividend income from the holding of Kloeckner equity securities prior to the closing of the Kloeckner Acquisition, impacts of previously held equity interests as a result of the Kloeckner Acquisition, and other costs, recorded in miscellaneous income (expense), net. Management excludes these items from adjusted results to improve comparability of the Company’s operating performance across periods. During the first quarter of fiscal 2027, as a result of the closing of the Kloeckner Acquisition, the Company remeasured the previously held equity interest in Kloeckner equity securities to €11.00 per share, resulting in a remeasurement loss of $15.5 million. During the third quarter and fourth quarter of fiscal 2026, the Company recognized investment income, net of $0.2 million and $17.2 million, respectively, consisting of mark-to-market gains, dividend income from the holding of Kloeckner securities prior to the closing of the Kloeckner Acquisition, and other costs. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by net sales. Free Cash Flow is defined as operating cash flows less capital expenditures.
Reconciliation of Non-GAAP Financial Measures
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EXHIBIT 99.3 |
Worthington Steel Declares Quarterly Dividend
COLUMBUS, Ohio, October 6, 2026 – The board of directors of Worthington Steel, Inc. (NYSE: WS) has declared a quarterly dividend of $0.16 per common share. The dividend is payable on December 28, 2026, to shareholders of record at the close of business on December 14, 2026.
Worthington Steel will host a conference call to discuss its fiscal 2027 first quarter results at 8:30 a.m. ET on Wednesday, October 7, 2026. The conference call can be accessed by registering online at the link below. A live webcast of the call will be available through Events & Presentations in the Investors section of the Company’s website at WorthingtonSteel.com and will be archived for one year.
Live Conference Call Schedule |
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Date: |
Wednesday, October 7, 2026 |
Start Time: |
8:30 a.m. ET |
Registration Link: |
https://events.q4inc.com/attendee/682402066 |
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About Worthington Steel
Worthington Steel (NYSE: WS) is one of North America's leading value-added metals processing and manufacturing companies. The Company partners with customers to deliver specialized, highly technical solutions across carbon flat-rolled steel, aluminum, stainless steel, long products, heavy plate and electrical steel, to solve complex challenges across a broad range of industries.
Worthington Steel employs approximately 12,000 people and operates approximately 150 facilities, primarily in North America, with additional operations in Europe and Asia. The Company combines extensive processing expertise with advanced manufacturing technologies, including galvanizing, pickling, configured blanking, specialty cold reduction, electrical steel laminations, fabrication and precision processing.
Guided by its people-first Philosophy and a commitment to safety, innovation and continuous improvement, Worthington Steel creates long-term value by delivering trusted solutions for customers, opportunities for employees, returns for shareholders and strength for the communities where it operates.
Important Information: On September 8, 2026, Worthington Steel and Kloeckner & Co entered into a Domination and Profit and Loss Transfer Agreement (“DPLTA”), which remains subject to approval by Kloeckner shareholders and the registration with the competent commercial register before becoming effective. Until the DPLTA becomes effective, Kloeckner continues to operate independently. The employee and facility counts above reflect the expected combined organization following the DPLTA becoming effective.
Safe Harbor Statement
Worthington Steel wishes to take advantage of the safe harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the “Act"). Statements by Worthington Steel which are not historical information constitute "forward looking statements" within the meaning of the Act. All forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those projected. Factors that could cause actual results to differ materially include risks, uncertainties and impacts described from time to time in Worthington Steel’s filings with the Securities and Exchange Commission.
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