Group 1 - Worthington Steel, Inc. (NYSE: WS) experienced a significant share price increase of approximately 20.5% on June 26th following the release of its financial results for the final quarter [1] - The company is part of a sector that focuses on cash flow generation, particularly in oil and natural gas, indicating strong value and growth prospects [1] Group 2 - Crude Value Insights provides an investing service and community that emphasizes cash flow analysis and investment opportunities in the oil and gas sector [2] - Subscribers to Crude Value Insights benefit from access to a 50+ stock model account and in-depth cash flow analyses of exploration and production (E&P) firms [2]

Core Insights - Worthington Steel, Inc. (NYSE: WS) has experienced a strong performance following its separation from Worthington Enterprises (WOR) in the spring of last year [1]. Group 1 - The investing group "Value In Corporate Events" focuses on providing members with opportunities related to IPOs, mergers & acquisitions, earnings reports, and changes in corporate capital allocation [1]. - The service covers approximately 10 major events each month, aiming to identify the best investment opportunities [1].

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2025 was $87 million, slightly up from $86.5 million in the prior year quarter [4] - Earnings per share increased to $1.1 from $1.06 year-over-year [5][17] - Net sales decreased by $78 million or 9% year-over-year to $833 million, primarily due to lower direct selling prices [23] - Estimated pretax inventory holding gains were $20.8 million compared to losses of $3.4 million in the prior year quarter, a favorable swing of $24.2 million [20] Business Line Data and Key Metrics Changes - Automotive shipments increased by 5% year-over-year, contributing positively to overall performance [24] - Construction market volumes were down 5% year-over-year, consistent with historical fourth-quarter levels [26] - Agricultural market volumes decreased by 40% compared to the prior year quarter due to softness in agricultural equipment and increased competition [26] - Toll processing tons were down 11% year-over-year, impacted by various factors including customer decisions and the idling of a facility [27] Market Data and Key Metrics Changes - Market pricing for hot rolled coil started the year at just under $700 per ton, spiked to $950 per ton due to tariffs, and then fell to approximately $850 per ton [22] - The U.S. transformer market is expected to double over the next ten years, driven by electrification demand [9] Company Strategy and Development Direction - The company is focused on three strategic pillars: investments in electrical steel, margin-accretive growth through strategic CapEx and acquisitions, and base business improvements [7] - The acquisition of a 52% stake in CEDIM enhances the company's position in the European electric motor lamination market [10][30] - The company is embracing artificial intelligence to improve productivity and quality [13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macroeconomic environment and ongoing uncertainty around tariffs [15] - The company is focused on improving processes and gaining market share despite headwinds [15] - Management believes the right strategy and strong customer relationships will drive future growth [15] Other Important Information - The company announced a quarterly dividend of $0.16 per share payable on September 26, 2025 [29] - Cash flow from operations was $54 million, with free cash flow of $8 million [28] Q&A Session Summary Question: How did the company achieve a richer mix of direct tons and stronger metal spreads? - Management noted that Q4 is typically the strongest quarter, and while volume was flat year-over-year, there was a significant quarter-over-quarter increase [36][37] Question: What is the outlook for galvanized spreads moving into fiscal year 2026? - Management expressed cautious optimism, citing tariff impacts and increased anti-dumping measures that may improve market conditions [40][42] Question: How can the company continue to succeed in the automotive market despite OEM destocking? - Management highlighted significant market share gains and strong relationships with automotive customers as key factors for success [44][47] Question: What are the competitive dynamics in the Taylor welded blanks business? - Management explained that the market is highly technical with few players in North America, and they are focused on lightweighting and part consolidation [52][56]

Financial Data and Key Metrics Changes - Adjusted EBITDA for the fourth quarter was $87 million, slightly up from $86.5 million in the prior year quarter [5] - Earnings per share increased to $1.1 from $1.06 year-over-year [6] - Net sales decreased by $78 million or 9% to $833 million compared to the prior year quarter [24] - Cash flow from operations was $54 million, with free cash flow at $8 million [30] - The company ended the quarter with $38 million in cash and outstanding debt of $152 million, resulting in net debt of $114 million [31] Business Line Data and Key Metrics Changes - Automotive shipments increased by 5% year-over-year, contributing positively to overall performance [25] - Heavy truck market saw volume increases due to market share gains, despite a slowdown in the truck and trailer market [27] - Construction volume decreased by 5% year-over-year, consistent with historical fourth-quarter levels [27] - Agricultural market volumes were down 40% compared to the prior year quarter, primarily due to softness in the agricultural equipment market [28] Market Data and Key Metrics Changes - Market pricing for hot rolled coil started the year at just under $700 per ton, spiked to $950 per ton due to tariffs, and then dropped to approximately $850 per ton [23] - Estimated pretax inventory holding gains for the fourth quarter were $20.8 million, compared to losses of $3.4 million in the prior year quarter [21] - Direct sales volume made up 60% of the mix in the current year quarter, up from 58% in the prior year quarter [24] Company Strategy and Development Direction - The company is focused on three strategic pillars: investments in the electrical steel market, margin-accretive growth through strategic CapEx and acquisitions, and base business improvements [8] - The acquisition of a 52% stake in CEDIM enhances the company's position in the European electric motor lamination market [10][11] - The company is integrating artificial intelligence into operations to improve productivity and quality [14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macroeconomic environment, noting uncertainty around policy and economic conditions [15] - The company is focused on improving processes and gaining market share despite headwinds [16] - Management believes the right strategy and strong customer relationships will drive future growth [16] Other Important Information - The company was named a 2024 Supplier of the Year by General Motors, marking the fourth time in five years [12] - The addition of Mark Davis to the Board of Directors is expected to enhance governance and strategic direction [15] Q&A Session Summary Question: How did the company achieve a richer mix of direct tons and stronger metal spreads? - Management noted that the fourth quarter typically sees strong volume, and while year-over-year volume was flat, quarter-over-quarter volume was up significantly, indicating solid market conditions [38][39] Question: What is the outlook for the galvanized spreads market? - Management expressed cautious optimism, citing tariff impacts and anti-dumping cases that may limit imports and improve spreads over time [42][44] Question: How can the company continue to succeed in the automotive market despite OEM destocking? - Management highlighted significant market share gains in the automotive sector, which helped offset declines in OEM build rates [49][50] Question: What are the competitive dynamics in the Taylor welded blanks business? - Management explained that the market is highly technical with few players in North America, and the company is focused on growth through acquisitions and technical advancements [54][56]

Worthington Steel Investor Presentation | June 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 statements are often identified by ...

Group 1 - Worthington Steel has experienced significant declines in its stock performance, attributed to broader economic concerns and ongoing fundamental weaknesses [1] - The company operates within the steel industry, which is currently facing challenges that have negatively impacted shareholder value [1] Group 2 - Crude Value Insights provides an investment service focused on oil and natural gas, emphasizing cash flow and companies with growth potential [1] - The service includes a stock model account, detailed cash flow analyses of exploration and production firms, and live discussions about the sector [2]

Financial Performance - Net sales for Q3 2025 were $687.4 million, a decrease of 15% from $805.8 million in Q3 2024[5] - Operating income fell to $18.3 million, down 73% from $66.3 million in the prior year quarter[5] - Net earnings attributable to controlling interest decreased to $13.8 million, compared to $49.0 million in Q3 2024[10] - Adjusted EBIT for Q3 2025 was $25.3 million, down from $66.9 million in Q3 2024[5] - Gross margin decreased by $38.9 million to $81.2 million, primarily due to lower direct spreads[8] - Net sales for the three months ended February 28, 2025, were $687.4 million, a decrease of 14.7% compared to $805.8 million for the same period in 2024[22] - Operating income for the three months ended February 28, 2025, was $18.3 million, significantly lower than $66.3 million for the same period in 2024, representing a decline of 72.4%[22] - Net earnings attributable to controlling interest for the nine months ended February 28, 2025, were $55.0 million, compared to $101.5 million for the same period in 2024, a decrease of 45.9%[22] - Adjusted EBITDA for the nine months ended February 28, 2025, was $128.1 million, a decline of 37.0% from $203.2 million for the same period in 2024[37] - Adjusted EBIT for the nine months ended February 28, 2025, was $79.0 million, compared to $154.0 million for the same period in 2024[49] Cash Flow and Assets - Cash and cash equivalents as of February 28, 2025, were $63.3 million, with net cash provided by operating activities at $53.8 million[12] - Free cash flow for Q3 2025 was $25.2 million, compared to $22.3 million in the prior year quarter[12] - Total current assets as of February 28, 2025, were $912.6 million, down from $1,001.8 million as of May 31, 2024, a reduction of 8.9%[25] - Cash and cash equivalents increased to $63.3 million as of February 28, 2025, compared to $40.2 million as of May 31, 2024, an increase of 57.7%[25] - The company reported a net cash provided by operating activities of $176.4 million for the nine months ended February 28, 2025, compared to $163.9 million for the same period in 2024, an increase of 7.6%[29] - Net cash provided by operating activities for Q3 2025 was $53.8 million, down from $68.0 million in Q2 2025[43] Dividends and Shareholder Returns - A quarterly dividend of $0.16 per share was declared, payable on June 27, 2025[5] - Cash dividends declared per share remained consistent at $0.16 for both the three months ended February 28, 2025, and February 29, 2024[22] Debt and Liabilities - Total liabilities decreased to $656.6 million as of February 28, 2025, from $748.9 million as of May 31, 2024, a decline of 12.3%[27] - Total debt as of February 28, 2025, was $112.2 million, with net debt calculated at $48.9 million after accounting for cash and cash equivalents of $63.3 million[44] - The company’s interest expense, net, for the nine months ended February 28, 2025, was $6.1 million, an increase from $3.6 million in the same period last year[37] - Interest expense for Q3 2025 was $1.4 million, compared to $2.1 million in Q2 2025[40] Operational Metrics - Direct tons sold decreased by 7% and toll tons sold decreased by 15% compared to the prior year quarter[7] - The volume of steel sold for the three months ended February 28, 2025, was 881,410 tons, down 10.6% from 985,668 tons in the same period last year[37] - The adjusted EBIT margin for the three months ended February 28, 2025, was 3.7%, compared to 8.3% for the same period in 2024[37] Impairments and Costs - The company incurred impairment of assets totaling $7.4 million for the nine months ended February 28, 2025, compared to $1.4 million for the same period in 2024[22] - The company experienced an impairment of assets of $7.4 million for the three months ended February 28, 2025, which was excluded from non-GAAP measures[35] - For the nine months ended February 28, 2025, the company incurred $19.5 million in separation costs, which are excluded from non-GAAP measures[34] Other Notable Events - The company is progressing on acquiring a controlling equity stake in Italy-based Sitem S.p.A., with regulatory approval received[5] - The company reported a pension settlement gain of $(2.7) million for the nine months ended February 28, 2025[49] - Net earnings attributable to controlling interest for Q3 2025 were $13.8 million, up from $12.8 million in Q2 2025, and $28.4 million in Q1 2025[40] - Adjusted EBITDA for Q3 2025 was $41.9 million, compared to $30.6 million in Q2 2025 and $55.6 million in Q1 2025[40] - Free cash flow for Q3 2025 was $25.2 million, a decrease from $33.2 million in Q2 2025 and $33.1 million in Q1 2025[43] - The trailing 12 months adjusted EBITDA as of February 28, 2025, was $214.6 million[40] - The company reported a GAAP net earnings per diluted share of $0.27 for the three months ended February 28, 2025, compared to $0.98 for the same period in 2024[35]

Financial Data and Key Metrics Changes - Adjusted EBITDA for the third quarter was $41.9 million, down from $82.8 million in the prior year quarter [5] - Earnings per share decreased to $0.27 from $0.98 in the same period last year, impacted by lower volumes and average selling prices [6] - Net sales were $687 million, a decrease of $118 million or 15% from the prior year quarter, primarily due to lower direct volumes and market pricing [24] Business Line Data and Key Metrics Changes - Shipments to the automotive market were down 3% year over year, with production cuts at a major OEM affecting results [25][27] - Construction market shipments decreased by 20% year over year, attributed to economic uncertainty and a prior year pivot to a construction-heavy mix [29] - Heavy truck market demand remained slow, but signs of improvement were noted, with expectations for GDP-type growth for the rest of 2025 [9] Market Data and Key Metrics Changes - The North American automotive market is forecasted to produce approximately 15.3 million units in 2025, showing flat builds year over year [7] - The construction market is expected to gain momentum in the second half of 2025, benefiting from anticipated interest rate cuts [8] - The agriculture market is expected to remain soft due to interest rates, commodity prices, and tariffs affecting farmers' purchasing decisions [9] Company Strategy and Development Direction - The company remains focused on investments in the electrical steel market, anticipating a 6% annual growth in power demand over the next 15 years [10] - Strategic capital expenditures and acquisitions are part of the growth strategy, with ongoing expansions in electrical steel capabilities in Canada and Mexico [12][13] - The company is exploring AI integration into its operating model to enhance efficiency and analytics [18] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the near term, with expectations for improved clarity in the second half of 2025 [18] - The company is closely monitoring macroeconomic conditions, including inflation and interest rates, which could impact demand [47] - Management noted that while there is uncertainty, they believe they are well-positioned for growth [19] Other Important Information - The company reported cash flow from operations of $54 million and free cash flow of $25 million for the quarter [31] - A quarterly dividend of $0.16 per share was announced, payable on June 27, 2025 [32] - The company is in the process of closing a transaction for a 52% ownership stake in a steel lamination manufacturer [11] Q&A Session Summary Question: Impact of tariff policy - Management anticipates very little impact on business from tariff policies, with localized strategies in place to mitigate risks [37][40] Question: TWB charges and performance - Special charges related to TWB included a write-off of R&D and early retirement program costs, impacting quarterly results [42][43] Question: Expectations for underlying EBITDA normalization - Management indicated that normalization of underlying EBITDA is uncertain and heavily driven by market demand and volume [46][47] Question: Performance of Servius Aero - Servius Aero faced demand compression similar to the U.S. market, with impacts from exchange rate movements and inventory holding losses [53][54] Question: Construction market share efforts - The company is actively pursuing more opportunities in the construction market to regain market share lost due to economic uncertainty [60] Question: New automotive customer awards - New automotive programs are expected to ramp up over the coming months, contributing positively to volume and margins [64][65]

Financial Data and Key Metrics Changes - Adjusted EBITDA for the third quarter was $41.9 million, down from $82.8 million in the prior year quarter [5] - Earnings per share decreased to $0.27 from $0.98 in the same period last year, impacted by lower volumes and average selling prices [6][21] - Net sales were $687 million, a decrease of $118 million or 15% from the prior year quarter, primarily due to lower direct volumes and market pricing [24] Business Line Data and Key Metrics Changes - Shipments to the automotive market were down 3% year over year, with production cuts at a major OEM affecting results [7][25] - Construction market shipments decreased by 20% year over year, attributed to economic uncertainty and a prior year pivot towards construction due to an automotive strike [29] - Heavy truck market demand remains slow, but signs of improvement are noted, with expectations for GDP-type growth for the remainder of 2025 [9] Market Data and Key Metrics Changes - The North American automotive market is forecasted to produce approximately 15.3 million units in 2025, showing flat builds year over year [7] - The construction market is expected to gain momentum in the second half of 2025, benefiting from anticipated interest rate cuts [8] - The agriculture market is expected to remain soft due to interest rates, commodity prices, and tariffs affecting purchasing decisions [9] Company Strategy and Development Direction - The company remains focused on investments in the electrical steel market, anticipating a 6% annual growth in power demand over the next 15 years [10][11] - Strategic capital expenditures and acquisitions are ongoing, with expansions in electrical steel capabilities in Canada and Mexico [13] - The company is pursuing a transformation strategy aimed at improving operational efficiency and reducing costs [14][15] Management's Comments on Operating Environment and Future Outlook - Management expresses cautious optimism about the near term, with expectations for improved clarity in the second half of 2025 [18] - The company is closely monitoring macroeconomic conditions, including inflation and interest rates, which could impact demand [47] - Management believes they are well-positioned for growth, with a strong focus on safety, quality, and customer service [19] Other Important Information - The company reported cash flow from operations of $54 million and free cash flow of $25 million for the quarter [31] - A quarterly dividend of $0.16 per share was announced, payable on June 27, 2025 [32] - The company is exploring AI integration into its operating model and expanding its advanced analytics portfolio [18] Q&A Session Summary Question: Impact of tariff policy - Management anticipates minimal impact on business from tariff policies, with localized strategies in place to mitigate risks [37][40] Question: TWB performance and charges - Special charges related to TWB included a write-off of R&D and early retirement program costs, impacting quarterly results [42][44] Question: Normalization of underlying EBITDA - Management indicates uncertainty in demand makes it difficult to predict when underlying EBITDA will normalize, but they are cautiously optimistic for the end of the calendar year [46][48] Question: Construction market share efforts - Management acknowledges a tough comparison in construction volumes but is actively pursuing opportunities to regain market share [61] Question: New automotive customer awards - The company has gained share in the automotive market, with expectations for increased volume and margin impact from new programs over the coming months [63][65]

Group 1: Earnings Performance - Worthington Steel, Inc. reported quarterly earnings of $0.35 per share, missing the Zacks Consensus Estimate of $0.67 per share, and down from $0.99 per share a year ago, representing an earnings surprise of -47.76% [1] - The company posted revenues of $687.4 million for the quarter ended February 2025, missing the Zacks Consensus Estimate by 6.09%, compared to year-ago revenues of $805.8 million [2] - Over the last four quarters, Worthington Steel has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Worthington Steel shares have lost about 18% since the beginning of the year, while the S&P 500 has declined by -4.5% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.94 on $776 million in revenues, and for the current fiscal year, it is $2.26 on $3.13 billion in revenues [7] Group 3: Industry Context - The Steel - Specialty industry, to which Worthington Steel belongs, is currently in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]