Financial Performance - Net sales for the three months ended November 30, 2022, were $1,175,541, a decrease from $1,232,861 in the same period of 2021, representing a decline of approximately 4.6%[18] - Gross margin for the six months ended November 30, 2022, was $275,137, down from $403,965 in the prior year, indicating a decrease of about 31.8%[18] - Net earnings attributable to controlling interest for the three months ended November 30, 2022, were $16,218, a significant drop from $110,301 in the same period of 2021, reflecting a decline of approximately 85.3%[18] - Earnings per share attributable to controlling interest for the three months ended November 30, 2022, was $0.33, compared to $2.19 in the same period of 2021, a decrease of about 84.9%[18] - The company reported a comprehensive income of $16,281 for the three months ended November 30, 2022, compared to $55,327 in the same period of 2021, a decrease of about 70.7%[20] - Net earnings for the three months ended November 30, 2022, were $19,505,000, a decrease from $113,185,000 in the same period of 2021[22] - The Steel Processing segment reported direct sales of $807,259,000 for the three months ended November 30, 2022, down from $900,666,000 in the prior year, a decline of about 10.4%[29] - The company reported net earnings of $105,183,000 for the three months ended November 30, 2022, down 39.5% from $173,915,000 in the same period of 2021[35] - Net earnings attributable to controlling interest for the six months ended November 30, 2022, was $80,300, compared to $242,792 for the same period in 2021[54] Assets and Liabilities - Total assets as of November 30, 2022, were $3,390,660, down from $3,643,023 as of May 31, 2022, representing a decrease of approximately 6.9%[16] - Total current liabilities decreased to $660,891 as of November 30, 2022, from $932,261 as of May 31, 2022, a reduction of about 29.1%[16] - Total liabilities decreased to $1,751,368 as of November 30, 2022, from $2,029,061 as of May 31, 2022, indicating a reduction of about 13.7%[16] - Cash and cash equivalents increased to $129,596 as of November 30, 2022, from $34,485 as of May 31, 2022, reflecting a significant increase of approximately 276.5%[16] - Cash and cash equivalents at the end of the period were $129,596,000, compared to $225,194,000 at the end of the same period in 2021, indicating a decrease of approximately 42.5%[22] - Cash and cash equivalents decreased to $41,768,000 as of November 30, 2022, from $68,563,000 as of May 31, 2022[35] - As of November 30, 2022, the total equity balance was $1,639,290,000, reflecting a decrease from $1,646,970,000 as of August 31, 2022[46] Cash Flow and Investments - The company reported net cash provided by operating activities of $132,941,000 for the three months ended November 30, 2022, compared to a net cash used of $(119,104,000) in the same period of 2021[22] - Net cash provided by operating activities was $214.0 million, a significant improvement from a net cash outflow of $168.9 million in the prior year[145] - Cash used in investing activities was $30.7 million, down from $124.1 million in the prior year, mainly due to the acquisition of Level5 for $56.1 million[152] - Net cash used in financing activities was $88.2 million, compared to $122.1 million in the prior year, primarily due to repayments of short-term borrowings[154] Dividends and Stock Options - The company declared cash dividends of $0.31 per share for the three months ended November 30, 2022, up from $0.28 in the same period of 2021, an increase of approximately 10.7%[18] - The company declared cash dividends totaling $30,888,000 during the six months ended November 30, 2022, compared to $28,658,000 in the prior year, representing an increase of about 7.8%[48] - A total of 84,400 non-qualified stock options were granted with a weighted average exercise price of $46.39 per share, resulting in a pre-tax stock-based compensation expense of $1,381,000[48] - The company granted 308,000 service-based restricted common shares with a fair value of $51.09 per share, leading to a pre-tax stock-based compensation expense of $15,216,000[49] - Performance share awards covering an aggregate of 58,100 common shares were granted, with a calculated pre-tax stock-based compensation expense of $2,695,000 for the six months ended November 30, 2022[52] Separation and Restructuring - The company incurred separation costs of $9,246,000 during the three and six months ended November 30, 2022, related to the planned separation into two independent companies[27] - The company plans to complete the separation transaction by early 2024, subject to market conditions and regulatory approvals[27] - The total liabilities associated with restructuring activities as of November 30, 2022, are expected to be paid in the next twelve months[38] - Separation costs of $9.2 million were incurred in connection with the planned separation of the Steel Processing business, reflecting direct and incremental costs[137] Market and Economic Conditions - U.S. GDP growth year-over-year decreased to 1.8% in Q3 2022 from 5.0% in Q3 2021, indicating a weaker economy[100] - Hot-rolled steel prices fell to $742 per ton in Q2 2023 from $1,888 per ton in Q2 2022, resulting in significant inventory holding losses expected in Q3 2023[100][102] - The automotive industry accounts for approximately 54% of the net sales in the Steel Processing segment, significantly impacting the company's performance[97] - The construction market represents about 11% of the net sales in the Steel Processing segment, influenced by various economic indicators including U.S. GDP[98] Legal and Compliance - The company is involved in various legal proceedings but does not expect any material adverse effects on its business or financial position[167] - Risk factors disclosed in the 2022 Form 10-K remain unchanged and could materially affect the company's future results[168] - Worthington Industries, Inc. maintained effective disclosure controls and procedures as of November 30, 2022, providing reasonable assurance for timely reporting[164] - There were no changes in internal control over financial reporting that materially affected the company during the quarterly period ended November 30, 2022[165] Acquisitions - The acquisition of Level5® Tools, LLC was completed for a total purchase price of $59,321,000, which includes a potential earnout of up to $25,000,000 based on future earnings targets through 2024[60] - Level5's results have been included in the consolidated statements of earnings since acquisition, with proforma results not materially different from reported results[61] - The identified intangible assets from the acquisition include a trade name valued at $13,500,000, customer relationships at $13,300,000, and technological know-how at $6,500,000, totaling $33,580,000[63] - The net identifiable assets acquired were valued at $43,525,000, resulting in goodwill of $15,947,000[67] Risk Management - The company manages interest rate risk through a mix of fixed-rate and variable-rate debt, utilizing interest rate swaps and treasury locks[69] - The company is exposed to foreign currency exchange rate risks and uses contracts to manage this exposure, although derivative financial instruments are not used for translation risks[70] - The company has entered into commodity contracts to hedge against price fluctuations, with a notional amount of $114,516,000 for commodity contracts maturing between December 2022 and December 2023[76] - For the three months ended November 30, 2022, the company recognized a loss of $19,265,000 in other comprehensive income related to cash flow hedges[77] - The total fair value of derivative financial instruments as of November 30, 2022, was $5,038,000 in assets and $20,295,000 in liabilities[73]

Financial Performance - Worthington Industries reported net sales of $5,242,219,000 for the fiscal year ended May 31, 2022, a 65.5% increase from $3,171,429,000 in 2021[280]. - The company's gross margin increased to $714,816,000 in 2022, up from $639,078,000 in 2021, reflecting improved operational efficiency[280]. - Operating income for the fiscal year was $329,268,000, compared to $167,473,000 in the previous year, indicating a significant growth in profitability[280]. - Net earnings for the fiscal year ended May 31, 2022, were $399,264 thousand, a decrease of 46.4% compared to $741,450 thousand in 2021[284]. - Earnings per share attributable to controlling interest was $7.60 for 2022, down from $13.73 in 2021, reflecting the impact of reduced net earnings[280]. - Comprehensive income attributable to controlling interest was $311,149 thousand in 2022, down from $804,399 thousand in 2021, reflecting a decline of 61.3%[284]. - The total comprehensive income for 2022 was $331,027 thousand, significantly lower than $822,054 thousand in 2021, marking a decrease of 59.8%[284]. Assets and Liabilities - Total assets increased to $3,643,023,000 as of May 31, 2022, compared to $3,373,245,000 in 2021, indicating growth in the company's asset base[275]. - Current liabilities rose to $932,261,000 in 2022 from $787,901,000 in 2021, reflecting increased operational activities[278]. - The total debt as of May 31, 2022, was $747,193,000, with long-term debt amounting to $696,345,000[383]. - The funded status of the defined benefit plans showed a deficit of $30,174 thousand at the end of fiscal year 2022, compared to a deficit of $8,059 thousand in 2021[424]. Cash Flow and Investments - Net cash provided by operating activities was $70.112 million, significantly lower than $336.726 million in the previous year[289]. - The company reported a net cash used by investing activities of $438.188 million, compared to a net cash provided of $468.510 million in fiscal year 2021[289]. - The company acquired Tempel Steel Company for approximately $272,208,000, with a fair value of customer relationships intangible asset amounting to $30,000,000[270]. - Investments in unconsolidated affiliates increased to $327,381,000 in 2022 from $233,126,000 in 2021, indicating a strategic focus on partnerships[275]. Market Risks and Derivatives - The company is exposed to market risks related to price fluctuations of steel, natural gas, copper, and zinc, and uses derivative financial instruments to manage this exposure[256]. - The fair value of total derivative financial instruments as of May 31, 2022, was $3.6 million, compared to $63.0 million in 2021, indicating a significant decrease[258]. - The company has a notional amount of $150 million in interest rate swaps to hedge against interest rate changes for its senior unsecured notes[252]. - The company does not use derivative financial instruments to manage foreign currency exchange risk but utilizes forward contracts for certain intercompany loans[254]. Strategic Initiatives and Future Outlook - The company anticipates improvements in operational efficiencies and cost management as part of its strategic initiatives[14]. - The company is focused on maintaining liquidity and accessing financial markets to support its operations and growth plans[14]. - The company plans to continue expanding its market presence and investing in new technologies[360]. Stock and Shareholder Information - The company declared cash dividends of $0.96 per share in 2020 and $1.03 per share in 2021, with a subsequent increase to $1.12 per share in 2022[287]. - The balance of common shares at May 31, 2022, was 48,380,112 shares, reflecting a reduction from 51,330,347 shares in 2021[287]. - During fiscal 2022, the company repurchased 3,235,000 common shares at an aggregate cost of $180,248,000[396]. - The company has authorized the repurchase of up to 6,065,000 common shares as of May 31, 2022[395]. Pension and Employee Benefits - Net periodic benefit cost for defined benefit pension and other postretirement benefit plans was $18,087 thousand in fiscal year 2022, an increase from $17,554 thousand in 2021[421]. - The company assumed approximately $40,160 thousand of net pension and other postretirement benefit obligations from the acquisition of Tempel on December 1, 2021[420]. - The company expects to contribute approximately $7,836,000 to the defined benefit and OPEB plans during fiscal 2023[428]. Taxation - The effective tax rate attributable to controlling interest for fiscal 2022 was 23.3%, compared to 19.6% in fiscal 2021[432]. - The total amount of unrecognized tax benefits increased to $4,706,000 as of May 31, 2022, from $3,836,000 in 2021[434]. - Deferred tax assets totaled $62,608,000 as of May 31, 2022, with net deferred tax assets amounting to $56,730,000[438].

Financial Performance - Net sales for fiscal 2021 were $3,171.4 million, an increase of 3.7% from $3,059.1 million in fiscal 2020[175]. - Operating income rose to $167.5 million in fiscal 2021, up $145.0 million from $22.5 million in fiscal 2020, driven by improved direct spreads in the Steel Processing segment[182]. - Net earnings attributable to controlling interest reached $723.8 million in fiscal 2021, significantly higher than $78.8 million in fiscal 2020[182]. - Total current assets increased to $1,968.0 million in fiscal 2021 from $983.2 million in fiscal 2020, reflecting a substantial growth in liquidity[175]. - Total debt remained relatively stable at $710.5 million in fiscal 2021 compared to $699.7 million in fiscal 2020[175]. - The company declared cash dividends of $55.1 million in fiscal 2021, slightly increasing from $53.7 million in fiscal 2020[175]. - The average diluted shares outstanding decreased to 53,917 thousand in fiscal 2021 from 55,983 thousand in fiscal 2020[175]. - The company experienced a significant reduction in impairment and restructuring charges, down $22.9 million from the prior year[182]. - The estimated annual effective tax rate decreased to 19.6% from 25.1% in fiscal 2020, influenced by significant pre-tax income increases and losses from divestitures[32]. Acquisitions and Divestitures - In January 2021, the company acquired PTEC Pressure Technology GmbH for $10.8 million, enhancing its Pressure Cylinders segment[29]. - In June 2021, the company acquired Shiloh Industries U.S. BlankLight® business for approximately $105.0 million, expanding its laser welded products capacity[34]. - The company completed several strategic transactions, including the acquisition of General Tools & Instruments Company for approximately $120.4 million and the acquisition of PTEC Pressure Technology GmbH for about $10.8 million[187]. - The company sold its oil & gas equipment business in January 2021, resulting in a pre-tax loss of $27.7 million[30]. - The company also divested its LPG fuel storage business for net proceeds of approximately $6.0 million, resulting in a pre-tax loss of $11.0 million[187][189]. Market and Customer Insights - The company served approximately 760 customers in Steel Processing and around 4,400 customers in Pressure Cylinders during fiscal 2021[24][49]. - Sales to one customer in the automotive industry represented 11.2% of consolidated net sales in fiscal 2021[24]. - The automotive market accounted for approximately 57% of net sales in the Steel Processing segment, with North American vehicle production increasing by 11% in fiscal 2021[188][196]. - Demand for most products remained strong throughout fiscal 2021, with sales typically peaking in the fourth quarter[62]. - The COVID-19 pandemic has caused significant volatility in demand for the company's products, impacting financial position and cash flows[79]. Operational Insights - The company operates 68 manufacturing facilities across 22 states and 8 countries as of May 31, 2021[20]. - Worthington operates four consolidated and five unconsolidated joint ventures to develop new products and expand markets[64]. - The company is obligated to make aggregate operating and financing lease payments of $41.0 million and $7.3 million, respectively, under lease agreements as of May 31, 2021[114]. - The company operates 21 manufacturing facilities and 9 warehouses, totaling approximately 10,000,000 square feet, with 8,800,000 square feet dedicated to manufacturing and distribution[142]. - The company has a total of 47 manufacturing facilities operated by its consolidated and unconsolidated joint ventures as of May 31, 2021[146]. Challenges and Risks - The company faces intense competition, which may lead to decreased demand, market share, and pricing pressures[84]. - Financial difficulties and bankruptcy filings by customers could negatively impact the company's sales and financial results[85]. - Fluctuations in raw material prices, particularly steel, could significantly affect operating results and financial performance[87]. - A significant loss of business from key customers, especially in the automotive sector, could adversely affect sales and financial results[96]. - Increased competition from both domestic and foreign companies could negatively impact financial results and market share[101]. - The company faces challenges in attracting and retaining qualified personnel, which could impair operations and competitiveness[122]. - Business disruptions from various factors, including severe weather and pandemics, could adversely impact operations and financial results[109]. Shareholder and Capital Management - The company announced a share repurchase authorization covering 5,618,464 common shares on March 24, 2021[33]. - Worthington Industries has a history of strategic acquisitions and mergers, enhancing its market position[155]. - The company’s Board of Directors authorized the repurchase of up to 10 million shares of common stock, reflecting a commitment to returning value to shareholders[189]. - Worthington Industries had 6,592 registered shareholders as of July 23, 2021[165]. - The company has paid a dividend every quarter since becoming public in 1968, although future payments are not guaranteed[166]. Capital Expenditures and Investments - Total capital expenditures for the five-year period ended May 31, 2021, were approximately $862.4 million, indicating a capital-intensive business model[114]. - Capital expenditures, including acquisitions, were $211.8 million in fiscal 2021, up from $126.3 million in fiscal 2020[175]. - Future investment activities may be reduced or eliminated based on economic conditions, with no assurance that acquisition opportunities will arise[214]. - Cash outflow for Pressure Cylinders included $8.8 million for new production lines and $3.8 million for equipment updates[213]. Environmental and Regulatory Considerations - The company is subject to various federal, state, local, and foreign environmental regulations, which may lead to substantial operating costs and potential liabilities[126]. - Risks associated with foreign operations include potential adverse changes in local political climates and economic conditions, which could negatively impact international financial results[110]. - Changes in global data privacy laws, such as GDPR, may increase operational costs and impact the company's ability to transfer data across borders[136].

Operations and Facilities - Worthington Industries operates 74 manufacturing facilities across 22 states and 7 countries, with 26 facilities operated by wholly-owned subsidiaries[21]. - The company operates 16 manufacturing facilities across the United States and Europe, including locations in Alabama, California, and Poland[50]. - The company operates 26 manufacturing facilities and 9 warehouses, with a total of approximately 9,600,000 square feet of operational space[134]. - The Steel Processing segment operates eight manufacturing facilities, while the Pressure Cylinders segment has 16 facilities across various states and countries[137]. Financial Performance - Worthington Industries reported net sales of $3,059,119,000 for the fiscal year ended May 31, 2020, a decrease of 18.6% compared to $3,759,556,000 in 2019[165]. - The company's gross margin for 2020 was $443,337,000, down from $479,955,000 in 2019, reflecting a decline of 7.5%[165]. - Net earnings attributable to controlling interest decreased to $78,796,000 in 2020, a decline of 48.6% from $153,455,000 in 2019[165]. - Earnings per share (diluted) dropped to $1.41 in 2020, down 46% from $2.61 in the previous year[165]. - Total current assets decreased to $983,179,000 in 2020 from $1,165,913,000 in 2019, a decline of 15.7%[165]. - Total debt was reported at $699,665,000, down from $749,299,000 in 2019, indicating a reduction of 6.9%[165]. - Cash dividends declared increased slightly to $53,721,000 in 2020 from $53,391,000 in 2019, reflecting a growth of 0.6%[165]. - The company experienced an impairment of goodwill and long-lived assets amounting to $82,690,000 in 2020, compared to $7,817,000 in 2019[165]. - Worthington Industries' total assets decreased to $2,331,515,000 in 2020 from $2,510,796,000 in 2019, a decline of 7.1%[165]. - The company reported capital expenditures of $126,251,000 in 2020, an increase from $94,901,000 in 2019, representing a growth of 33%[165]. Market and Customer Dynamics - For fiscal 2020, Steel Processing generated approximately 61% of consolidated net sales, while Pressure Cylinders accounted for about 37%[39][46]. - Steel Processing served around 800 customers, while Pressure Cylinders served approximately 3,700 customers, primarily in the United States[25]. - The top three customers in Steel Processing represented approximately 23% of the segment's total net sales in fiscal 2020[42]. - In fiscal 2020, Pressure Cylinders served approximately 3,700 customers, with no single customer representing more than 10% of net sales[50]. - The automotive market accounted for approximately 53% of net sales in the Steel Processing segment, significantly impacted by North American vehicle production declines[180]. Impacts of COVID-19 - The COVID-19 pandemic has had significant adverse effects on the company's business, financial position, and results of operations[71]. - Sales are generally strongest in the fourth quarter, but fiscal 2020 saw weaker demand due to the COVID-19 pandemic[61]. - The company took measures to right-size its workforce, including furloughs and permanent reductions, in response to decreased demand due to COVID-19[176]. Acquisitions and Investments - The company completed the acquisition of Heidtman Steel Products' Cleveland facility for $29.6 million, enhancing its pickling and slitting capabilities[30]. - Capital expenditures totaled $95.5 million in fiscal 2020, with significant investments in Pressure Cylinders including $9.9 million for new production lines[205]. Risks and Challenges - Intense competition in the market may result in decreased demand, market share, and pricing pressures, adversely affecting financial outcomes[77]. - Financial difficulties and bankruptcy filings by customers could lead to reduced demand and changes in purchasing behavior, negatively impacting sales and cash flows[78]. - Volatility in natural gas and oil prices may adversely affect demand for oil and gas equipment products, impacting overall financial performance[79]. - The company faces risks from volatility in capital and credit markets, which could restrict access to credit and negatively affect customer purchasing capabilities[81]. - Fluctuations in raw material prices, particularly steel, could significantly impact costs and financial results if price increases cannot be passed on to customers[83]. - Interruptions in the supply of key raw materials could adversely affect manufacturing capabilities and financial performance[84]. - A significant loss of business from key automotive customers could negatively impact sales, as over half of net sales in Steel Processing are to automotive-related customers[90]. - Rising freight and energy costs could increase operating expenses, negatively impacting financial results if these costs cannot be fully recovered through price increases[100]. - The company relies on third parties for freight services, and any increase in transportation costs or lack of availability could adversely affect operations and customer relationships[101]. Shareholder and Governance - The principal shareholder, John P. McConnell, beneficially owns approximately 31% of the outstanding common shares, which may allow him to exert significant influence over shareholder votes[117]. - The company has maintained a revolving trade accounts receivable securitization facility, reducing its borrowing capacity from $50.0 million to $10.0 million as of January 13, 2020[213]. - The company has paid a dividend every quarter since becoming public in 1968, although future payments are not guaranteed[217]. Legal and Compliance - The company is subject to various legal and compliance risks, which could negatively impact results of operations and liquidity[111]. - The company is involved in various legal proceedings but does not expect any to have a material adverse effect on its financial position[141]. Economic Environment - The U.S. GDP growth rate for fiscal 2020 was 1.9%, down from 2.8% in fiscal 2019, indicating a weaker economic environment[183]. - Economic instability could result in future asset impairments, negatively affecting reported earnings and net worth[132].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended May 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number 1-8399 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of ...