Core Insights - Worthington Steel, Inc. reported its financial results for the first quarter of fiscal 2026, which ended on August 31, 2025 [1] Financial Performance - The company disclosed its earnings and financial metrics for the specified quarter [1]

Earnings Report - Worthington Steel, Inc. is set to release its first-quarter earnings results on September 24, with analysts expecting earnings of 72 cents per share, an increase from 56 cents per share in the same period last year [1] - The company projects quarterly revenue of $736 million, down from $834 million reported a year earlier [1] Recent Performance - On June 25, Worthington Steel reported fourth-quarter earnings of $1.05 per share, surpassing the analyst consensus estimate of 82 cents per share [2] - Following this report, Worthington Steel shares increased by 0.3%, closing at $33.68 [2] Analyst Ratings - Keybanc analyst Matthew Gilmor maintained an Overweight rating and raised the price target from $34 to $36 on September 16, 2025, with an accuracy rate of 68% [7] - Seaport Global analyst Martin Englert initiated coverage on the stock with a Neutral rating on March 11, 2024, having an accuracy rate of 49% [7]

Group 1 - Worthington Steel (NYSE: WS) will host a webcast to discuss its First Quarter 2026 results [1] - The webcast is scheduled for September 25 at 8:30 a.m. ET [1]

Acquisition and Expansion - Worthington Steel acquired a 52% controlling equity stake in Italy-based Sitem Group on June 3, 2025, expanding its international presence[20] - Significant strategic capital investments are being made for large-scale plant expansions in Mexico and Canada to support anticipated growth in the electrical steel market[115] - The company purchased a new building in Columbus, Ohio, expected to serve as its corporate headquarters by fiscal 2027[164] Financial Performance - During fiscal 2025, Worthington Steel purchased approximately 2.44 million tons of steel, comprising 70% hot-rolled, 20% cold-rolled, and 10% galvanized[32] - The automotive industry represented the largest end market for Worthington Steel, with the top three customers accounting for approximately 33.0% of total net sales during fiscal 2025[21] - The automotive and construction industries account for approximately 52.0% and 11.0% of the company's net sales, respectively, indicating a significant reliance on these sectors[61] - Total capital expenditures for the fiscal year ended May 31, 2025, were approximately $130.4 million[114] - The company expects inventory holding gains of approximately $5 million to $10 million in the first quarter of fiscal 2026[212] Operations and Manufacturing - Worthington Steel operates 28 manufacturing facilities across the U.S., Canada, China, India, Germany, and Mexico, with 19 located in the U.S.[20] - The company employs over 20 metallurgical engineers to enhance its technical services and support, improving product quality and customer relationships[37] - Worthington Steel's manufacturing facilities hold ISO 14001 certifications, reflecting its commitment to effective environmental management[46] - The company operates four joint ventures, including a 63%-owned pickling facility and a 55%-owned joint venture supplying tailor welded solutions for the automotive industry[41] Market Conditions and Risks - The company has faced volatility in steel prices due to factors such as supplier consolidation and geopolitical events, which could adversely affect operating results[63] - Recent tariffs imposed by the U.S. government include a 50% duty on steel and aluminum imports, which may discourage foreign imports and impact domestic pricing[71] - The ongoing conflict between Russia and Ukraine has caused significant market disruptions, including volatility in commodity prices and supply chain interruptions[97] - Competition in the steel market is increasing, which may lead to decreased demand, reduced market share, and lower prices for the company's products[88] Employee and Workplace Culture - The company emphasizes a people-first philosophy, focusing on employee development and maintaining a diverse and inclusive workplace culture[50] - The company has established a Diversity, Equity, and Inclusion Council to strengthen its workforce and foster an inclusive culture[57] - As of May 31, 2025, the company employed approximately 4,800 individuals, with an additional 500 employees in an unconsolidated joint venture, and 22% of these employees are represented by collective bargaining units[49] Financial and Legal Considerations - The principal shareholder, John P. McConnell, owns approximately 34% of the outstanding common shares, potentially influencing shareholder votes and decisions[126] - The company self-insures most risks, including product liability and workers' compensation, which could adversely affect financial results if significant claims arise[124] - Legal proceedings or investigations could negatively affect the company's results of operations and liquidity[122] - The company is required to maintain effective internal controls over financial reporting, with potential consequences for non-compliance impacting investor confidence[142] Economic Environment - The company is sensitive to changes in economic conditions, with demand in key markets like automotive and construction being cyclical and influenced by broader economic factors[79] - U.S. GDP growth was 2.8% in fiscal 2025, slightly down from 3.0% in fiscal 2024[205] - The Detroit Three automakers produced 6,299 thousand vehicles in fiscal 2025, down from 6,799 thousand in fiscal 2024[205] Sustainability and Compliance - The company is actively working to comply with various climate-related regulations, which may lead to increased operational costs and compliance burdens[73] - The company is committed to sustainability initiatives, which may involve significant costs and evolving reporting standards[76] - The company may incur additional costs related to environmental compliance, which could negatively impact financial condition and results of operations[129] Shareholder Information - Worthington Steel had 5,797 registered shareholders as of July 25, 2025[180] - The company’s common shares began trading on the NYSE on December 1, 2023, with a starting value of $100[183] - As of May 31, 2025, the cumulative total shareholder return for Worthington Steel was $115.03, compared to $109.41 for the S&P Small Cap 600 Index[185]

Financial Performance - Net sales for Q4 2025 were $832.9 million, a decrease of 9% from $911.0 million in Q4 2024[5] - Operating income for Q4 2025 was $66.4 million, down from $67.3 million in the prior year quarter[5] - Net earnings attributable to controlling interest increased to $55.7 million, compared to $53.2 million in Q4 2024[5] - Adjusted net earnings per diluted share were $1.05, slightly down from $1.06 in the prior year quarter[5] - Gross margin decreased by $4.0 million to $127.0 million, primarily due to lower toll margins[8] - Net sales for the three months ended May 31, 2025, were $832.9 million, a decrease of 8.6% compared to $911.0 million for the same period in 2024[23] - Gross margin for the twelve months ended May 31, 2025, was $388.6 million, down from $439.8 million in 2024, reflecting a decrease of 11.6%[23] - Operating income for the twelve months ended May 31, 2025, was $147.0 million, a decline of 24.3% from $194.5 million in 2024[23] - Net earnings attributable to controlling interest for the twelve months ended May 31, 2025, were $110.7 million, down 28.5% from $154.7 million in 2024[23] - Adjusted EBITDA for the twelve months ended May 31, 2025, was $215.1 million, down 25.7% from $289.7 million for the twelve months ended May 31, 2024[37] - Adjusted EBIT for the twelve months ended May 31, 2025, was $149.1 million, compared to $224.4 million for the same period in 2024, reflecting a decline of 33.5%[49] Cash Flow and Debt - Free cash flow for Q4 2025 was $8.4 million, compared to negative free cash flow of $9.2 million in Q4 2024[12] - The company ended Q4 2025 with a net debt position of $113.5 million[13] - Cash, cash equivalents, and restricted cash at the end of the period were $92.9 million, up from $40.2 million at the beginning of the period, reflecting an increase of 131.7%[29] - The company reported a net cash provided by operating activities of $230.3 million for the twelve months ended May 31, 2025, compared to $199.5 million in 2024, an increase of 15.5%[29] - The trailing twelve months free cash flow as of May 31, 2025, was $99.9 million, indicating strong cash generation capabilities[43] - Total debt as of May 31, 2025, was $151.5 million, with net debt calculated at $113.5 million after accounting for $38.0 million in cash and cash equivalents[44] Dividends and Shareholder Returns - A quarterly dividend of $0.16 per share was declared, payable on September 26, 2025[14] - The company declared cash dividends of $0.64 per share for the twelve months ended May 31, 2025, compared to $0.32 per share in 2024, a 100% increase[23] Market Position and Recognition - The company gained market share in key sectors and was recognized as a top workplace for the 13th consecutive year[3] Operational Adjustments - The company incurred restructuring and other expenses of $1.0 million for the three months ended May 31, 2025, compared to none in the same period of 2024[37] - The company incurred restructuring and other expenses of $1.0 million in Q4 2025, compared to $0.5 million in Q3 2025, indicating ongoing operational adjustments[41] Performance Metrics - The volume of steel sold for the three months ended May 31, 2025, was 982,180 tons, a decrease of 4.6% from 1,029,565 tons in the same period of 2024[37] - The company reported a net earnings margin of 6.7% for the three months ended May 31, 2025, compared to 5.8% for the same period in 2024[37] - Interest expense for Q4 2025 was $1.0 million, a decrease from $1.4 million in Q3 2025, showing improved cost management[40] - The company reported an EBITDA of $89.8 million for Q4 2025, up from $36.8 million in Q3 2025, marking a 143% increase[40] - Adjusted EBITDA for Q4 2025 was $87.0 million, compared to $41.9 million in Q3 2025, reflecting a 107% quarter-over-quarter growth[40] - Net earnings attributable to controlling interest for Q4 2025 reached $55.7 million, a significant increase from $13.8 million in Q3 2025[40]

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]

Financial Performance - Worthington Steel's net sales for FY2025 were $3.093 billion[13, 74] - The adjusted EBITDA for FY2025 was $215 million, with a margin of 7.0%[13, 76] - Free cash flow for FY2025 was $99.9 million[13] - Capital expenditures for FY2025 were $130.4 million, representing 4.2% of sales[13, 91] Market Position and Strategy - Worthington Steel delivered 3.8 million tons of steel[13] - Automotive end-market accounts for 52% of net sales[14, 39] - The company has 32 manufacturing facilities primarily in North America[13, 27] - The company aims to achieve a 10%+ adjusted EBITDA margin through the Worthington Business System, product mix optimization, new product introductions, and strategic acquisitions[81, 82] Strategic Initiatives - The company is investing $85 million to expand xEV production capacity in Mexico, with 50% of the additional capacity already filled with new business and targeting start of production for fall 2025[64] - The company is investing $85 million to increase transformer core making capacity in Canada, with 80% already spent and targeting start of production for early CY2026[64] - The company acquired 52% ownership of Sitem Group to strengthen its electrical steel business globally[28, 70]