Financial Performance - Net sales for Q2 2026 were $871.9 million, an increase of 18% compared to $739.0 million in Q2 2025[4] - Operating income rose to $21.7 million, up from $18.9 million in the prior year quarter[4] - Net earnings attributable to controlling interest increased to $18.8 million, compared to $12.8 million in Q2 2025[8] - Adjusted EBIT for Q2 2026 was $26.6 million, significantly higher than $14.3 million in Q2 2025[4] - Gross margin improved by $13.2 million to $93.2 million, driven by higher direct volumes and spreads[6] - Free cash flow for Q2 2026 was $74.6 million, compared to $33.2 million in the prior year quarter[11] - Net sales for the three months ended November 30, 2025, were $871.9 million, an increase of 17.9% compared to $739.0 million for the same period in 2024[21] - Gross margin for the six months ended November 30, 2025, was $208.4 million, up from $180.4 million in 2024, reflecting a 15.5% increase[21] - Operating income for the three months ended November 30, 2025, was $21.7 million, compared to $18.9 million in 2024, representing a 14.8% increase[21] - Net earnings attributable to controlling interest for the six months ended November 30, 2025, were $55.6 million, up from $41.2 million in 2024, a growth of 34.9%[21] - Net earnings for the six months ended November 30, 2025, increased to $60.1 million, up from $48.3 million in the same period of 2024, representing a growth of 24%[27] - Adjusted net earnings per diluted share attributable to controlling interest for the six months ended November 30, 2025, was $1.15, up from $0.76 in the same period of 2024, a growth of 51%[33] - The company’s adjusted EBITDA for the six months ended November 30, 2025, was $82.2 million, compared to $56.1 million in the prior year, representing a 46% increase[33] - Adjusted EBITDA for the three months ended November 30, 2025, was $48.3 million, compared to $30.6 million in the same period of 2024, marking a significant increase of 57.0%[35] - The net earnings margin improved to 3.2% for the six months ended November 30, 2025, up from 2.6% in 2024[35] - Adjusted EBIT margin for the three months ended November 30, 2025, improved to 3.1%, compared to 1.9% in the same period of 2024[35] - Adjusted EBITDA margin for the six months ended November 30, 2025, was 7.1%, up from 5.5% in 2024[35] Cash and Debt Management - As of November 30, 2025, the company had cash and cash equivalents of $89.8 million and net debt of $92.3 million[12] - Cash and cash equivalents increased to $89.8 million as of November 30, 2025, compared to $38.0 million as of May 31, 2025[23] - Total cash, cash equivalents, and restricted cash at the end of the period was $89.8 million, compared to $52.0 million at the end of the previous year, indicating a 73% increase[27] - Total debt as of November 30, 2025, was $182.1 million, with net debt calculated at $92.3 million after accounting for cash and cash equivalents of $89.8 million[43] - The company reported a net cash used in financing activities of $41.9 million, compared to $55.6 million in the same period last year, showing a 25% improvement[27] Shareholder Returns - The company declared a quarterly dividend of $0.16 per share, payable on March 27, 2026[12] - The company declared cash dividends of $0.16 per share for both the three and six months ended November 30, 2025[21] Asset Management - Total assets as of November 30, 2025, were $2,150.0 million, an increase from $1,961.8 million as of May 31, 2025[23] - Current liabilities decreased to $584.9 million as of November 30, 2025, from $631.5 million as of May 31, 2025[25] - The company’s total shareholders' equity attributable to controlling interest increased to $1,117.1 million as of November 30, 2025, from $1,074.1 million as of May 31, 2025[25] Operational Efficiency - Direct tons sold increased by 13%, while toll volumes decreased by 24% compared to the prior year quarter[5] - The company reported a volume of 901,838 tons for the three months ended November 30, 2025, down from 936,069 tons in the same period of 2024, indicating a decrease of 3.6%[35] - The company reported an impairment of assets of $0.6 million for the three months ended November 30, 2025[21] - The company incurred a bad debt expense of $0.2 million in the current period, a significant decrease from $2.1 million in the prior year[27] - The company reported a depreciation and amortization expense of $42.0 million for the six months ended November 30, 2025, compared to $32.5 million in 2024, reflecting a 29% increase[27] Future Outlook - The company anticipates that its focus on higher-value solutions will continue to strengthen its earnings profile as market conditions evolve[2]

Company Overview - Worthington Steel, Inc. is a newly public company that has been spun out of Worthington Industries, focusing on value-added steel processing for automotive, construction, and industrial customers [1] - The company is also expanding into the production of electrical steel parts used in transformers, indicating a diversification of its product offerings [1] Investment Focus - The analysis primarily targets small- to mid-cap companies, which are often overlooked by many investors, while also occasionally reviewing large-cap companies to provide a broader market perspective [1]

Worthington Steel (NYSE:WS) Q2 2026 Earnings Call December 18, 2025 08:30 AM ET Company ParticipantsJohn Tumazos - PrincipalTim Adams - VP and CFOMelissa Dykstra - VP of Corporate Communications and Investor RelationsGeoff Gilmore - President and CEOConference Call ParticipantsPhil Gibbs - Managing Director and Metals Equity Research AnalystMartin Englert - Senior Equity Research AnalystOperatorGood morning and welcome to Worthington Steel's Second Quarter Fiscal Year 2026 Earnings Call. All lines have been ...

Financial Data and Key Metrics Changes - Net sales for the second quarter were $871.9 million, with adjusted EBITDA at $48.3 million and adjusted earnings per share at $0.38, reflecting a solid performance despite market headwinds [4][15] - Adjusted EBIT increased to $26.6 million, up from $14.3 million year-over-year, driven by higher direct volumes and improved direct spreads [15][16] - Earnings for the quarter were reported at $18.8 million or $0.37 per share, compared to $12.8 million or $0.25 per share in the prior year quarter [15][16] Business Line Data and Key Metrics Changes - Direct sales volume made up 65% of the mix in the current quarter, up from 55% in the prior year quarter, with direct volumes increasing by 13% year-over-year [16] - Automotive shipments increased by 26% year-over-year, reflecting market share gains and a return to normal production levels at a key OEM [16][17] - Energy shipments rose by 50% year-over-year, driven by project-based solar programs, while agriculture volume increased by 1% [17] Market Data and Key Metrics Changes - North American light vehicle output is expected to hold near 15.2 million units in calendar year 2025, essentially flat with 2024 [5] - The construction market remains stable but subdued, with pockets of strength in power and infrastructure [6] - The heavy truck and trailer market is expected to see a rebound beginning in late calendar year 2026 [6] Company Strategy and Development Direction - The company is focused on long-term strategies, including electrical steel growth plans, new product development, and business optimization through transformation [7][9] - Expansion projects for electrical steel are on track, with initial production in Mexico expected in the first quarter of calendar year 2026 [7][8] - The integration of CDEM is progressing well, enhancing the company's capabilities in stamping electrical steel laminations and improving competitiveness [9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for early 2026, anticipating improvements as interest rates ease and policy uncertainties subside [6][14] - The company is well-positioned to navigate uncertainty and act decisively when opportunities arise, maintaining a strong balance sheet and generating consistent cash flow [21][22] - Management highlighted the importance of transformation and artificial intelligence in driving operational efficiency and cost savings [10][50] Other Important Information - The company received recognition as a 2025 Supplier of the Year by Schaeffler Group USA and was named a Military Friendly Employer for the 11th consecutive year [11][12] - The 2025 Corporate Citizenship and Sustainability Report was released, showcasing progress in safety, emissions reduction, and community support [12] Q&A Session Summary Question: What is the nature of the SG&A increase? - The increase in SG&A was primarily due to higher compensation and benefits, with professional fees related to strategic projects being more one-time in nature [26][27] Question: What contributed to the automotive momentum? - The automotive momentum was largely due to market share gains from new programs reaching expected volumes, rather than solely from the cold-rolled strip segment [33][34] Question: What is the impact of compressed galvanized spreads? - Decreased demand, particularly in construction, has contributed to compressed galvanized spreads, but management expects margin expansion moving forward [45][46] Question: What are the top transformation initiatives for calendar year 2026? - Key initiatives include focusing on back-office transformation and leveraging artificial intelligence to drive operational efficiencies [49][50]

Financial Data and Key Metrics Changes - Net sales for the second quarter were $871.9 million, with adjusted EBITDA at $48.3 million and adjusted earnings per share at $0.38, reflecting a solid performance despite market headwinds [4][17] - Adjusted EBIT increased to $26.6 million, up $12.3 million from the prior year quarter, driven by higher direct volumes and improved direct spreads [18] - Earnings for the quarter were reported at $18.8 million or $0.37 per share, compared to $12.8 million or $0.25 per share in the prior year quarter [17] Business Line Data and Key Metrics Changes - Direct sales volume increased by 13% year over year, making up 65% of the sales mix, compared to 55% in the prior year [18] - Automotive shipments increased by 26% year over year, reflecting market share gains and a return to normal production levels at an OEM customer [19] - Energy shipments rose by 50% year over year, driven by project-based solar programs, while agriculture volume was up 1% [19] Market Data and Key Metrics Changes - North American light vehicle output is expected to hold near 15.2 million units in calendar year 2025, essentially flat with 2024 [5] - The construction market remains stable but subdued, with pockets of strength in power and infrastructure [6] - The heavy truck and trailer market is expected to see a rebound beginning in late calendar year 2026 [6] Company Strategy and Development Direction - The company is focused on long-term strategies, including electrical steel growth plans, new growth opportunities through CapEx and acquisitions, and continuous improvement through transformation [7][10] - Expansion projects for electrical steel are on track, with initial production in Mexico expected in the first quarter of calendar year 2026 [8] - The integration of CDEM is progressing well, enhancing competitiveness in advanced mobility and industrial markets [10] Management's Comments on Operating Environment and Future Outlook - The management expressed cautious optimism for early 2026 and a positive outlook for the second half of the calendar year, despite a mixed macroeconomic environment [6][15] - The company anticipates improvements in market conditions as interest rates ease and policy uncertainties subside [6] - Management highlighted the importance of transformation and AI integration in improving operational efficiency and financial discipline [11][12] Other Important Information - The company reported cash flow from operations of $99 million and free cash flow of $75 million for the quarter [23] - A quarterly dividend of $0.16 per share was announced, payable on March 27, 2026 [23] - Worthington Steel was recognized as a 2025 Supplier of the Year by Schaeffler Group USA and received the Military Friendly Employer Gold designation for the 11th consecutive year [12][13] Q&A Session Summary Question: What is the nature of the SG&A increase? - The increase in SG&A was primarily due to higher compensation and benefits, as well as professional fees related to strategic projects [28][34] Question: What contributed to the automotive momentum? - The automotive momentum was largely due to market share gains from new programs reaching expected volumes, rather than solely from the cold-rolled strip business [36] Question: What is the impact of decreased demand on galvanized spreads? - Decreased demand, particularly in construction, has created competitive rivalry, but management expects margin expansion going forward [48] Question: What are the top transformation initiatives for 2026? - Key initiatives include back office transformation and leveraging AI for operational improvements [52][53]

1 Investment Highlights Worthington Steel Investor Presentation | December 2025 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 statem ...

Core Insights - Worthington Steel, Inc. reported quarterly earnings of $0.38 per share, missing the Zacks Consensus Estimate of $0.48 per share, but showing an increase from $0.19 per share a year ago, resulting in an earnings surprise of -20.83% [1] - The company posted revenues of $871.9 million for the quarter ended November 2025, exceeding the Zacks Consensus Estimate by 11.35% and up from $739 million year-over-year [2] - Worthington Steel's shares have increased by approximately 11.4% since the beginning of the year, compared to a 15.6% gain in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.68 on revenues of $803 million, and for the current fiscal year, it is $2.72 on revenues of $3.39 billion [7] - The estimate revisions trend for Worthington Steel was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Steel - Specialty industry, to which Worthington Steel belongs, is currently ranked in the top 15% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

COLUMBUS, Ohio--(BUSINESS WIRE)--Worthington Steel, Inc. (NYSE: WS) today reported financial results for the fiscal 2026 second quarter ended November 30, 2025. ...

Date: Thursday, December 18, 2025 Start Time: 8:30 a.m. ET Conference ID: 5714141 Toll-Free Dial-In Number: 888.510.2553 ...

Core Insights - Worthington Steel, Inc. is set to release its quarterly earnings on December 17, 2025, with anticipated earnings per share of $0.48 and revenue of approximately $797.25 million, which are critical for assessing the company's financial health [1][6] Group 1: Company Recognition - Worthington Steel has been recognized as one of the best places to work in IT, highlighting its commitment to a positive work environment that can enhance employee satisfaction and productivity [2][6] Group 2: Financial Metrics - The company has a price-to-earnings (P/E) ratio of 15.15, indicating reasonable market valuation in terms of earnings [3][6] - Worthington Steel's price-to-sales ratio is 0.59, suggesting that its market value is relatively low compared to its sales, which may attract value-seeking investors [3] - The enterprise value to sales ratio stands at 0.67, reflecting the company's total valuation in relation to its revenue [4] - An enterprise value to operating cash flow ratio of 12.28 indicates how the market values the company's cash flow and overall operations [4] Group 3: Financial Stability - The debt-to-equity ratio of 0.30 indicates a low level of debt compared to equity, suggesting that the company is not overly reliant on borrowing [5][6] - A current ratio of 1.66 reflects good liquidity, allowing the company to cover its short-term liabilities effectively [5]