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]

Financial Performance - 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[20] - Gross margin for the nine months ended February 28, 2025, was $261.6 million, down from $308.8 million in the same period of 2024, reflecting a decrease of 15.3%[20] - Operating income for the three months ended February 28, 2025, was $18.3 million, a decline of 72.3% from $66.3 million in the prior year[20] - 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, representing a decrease of 45.8%[20] - Comprehensive income attributable to controlling interest for the nine months ended February 28, 2025, was $45.7 million, down from $97.3 million in the same period of 2024, a decrease of 53.0%[23] - Basic earnings per common share attributable to controlling interest for the three months ended February 28, 2025, was $0.28, down from $0.99 for the same period in 2024[100] - For the nine months ended February 28, 2025, net earnings attributable to controlling interest was $55.0 million, compared to $101.5 million for the same period in 2024[102] - Adjusted EBIT for Q3 fiscal 2025 was $25.3 million, down $41.6 million (61.9%) from $66.9 million in Q3 fiscal 2024[184] - Year-to-date net sales totaled $2,260.4 million, a decrease of $259.2 million (10.3%) from the prior year period[186] - Year-to-date operating income was $80.6 million, down $46.6 million (36.6%) from $127.2 million in the prior year[187] Assets and Liabilities - Total current assets decreased to $912.6 million as of February 28, 2025, from $1,001.8 million as of May 31, 2024, a decline of 8.9%[14] - Total liabilities decreased to $656.6 million as of February 28, 2025, from $748.9 million as of May 31, 2024, a reduction of 12.3%[17] - 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%[14] - The balance of accumulated other comprehensive income (loss) as of February 28, 2025, was $(15.4) million, compared to $(6.1) million at May 31, 2024[96] - The carrying value of the Credit Facility was $110.0 million as of February 28, 2025, down from $148.0 million at May 31, 2024[127] Cash Flow and Dividends - 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%[26] - The company declared cash dividends of $0.16 per common share for the three months ended February 28, 2025, consistent with the same period in 2024[20] - The company declared a quarterly cash dividend of $0.16 per common share, payable on June 27, 2025, to shareholders of record as of June 13, 2025[159] - Net cash used in financing activities increased to $69.5 million from $57.0 million, driven by $23.9 million in dividends paid to shareholders[212] Operational Highlights - The automotive industry accounted for 52% of net sales for the three months ended February 28, 2025, with the Detroit Three Automakers representing 32% of total sales[52] - Total volume decreased by 11% compared to the prior quarter, with toll shipments down 15% and automotive shipments down 3% year-over-year[160] - North American vehicle production decreased by 9% in Q3 fiscal 2025 compared to Q3 fiscal 2024, while production from the Detroit Three Automakers fell by 15% in the same period[157] - The average price of hot-rolled steel was $702 per ton in Q3 fiscal 2025, down from $1,030 per ton in Q3 fiscal 2024, reflecting a significant price decline[168] Restructuring and Separation - The company plans to consolidate its Cleveland, Ohio toll processing manufacturing facility into its existing facility in Twinsburg, Ohio, with operations expected to be completed by the end of fiscal 2025[65] - Separation costs totaled $1.0 million for Q3 fiscal 2024 and $19.5 million for the nine months ended February 29, 2024[34] - No additional separation costs are expected following the finalization of the Separation on December 1, 2023[193] Investments and Acquisitions - Tempel entered into a Purchase Agreement to acquire approximately 52% of S.I.T.E.M. S.p.A. for approximately €51 million ($52.9 million) plus the contribution of its electrical steel facility in Germany[105][106] - The acquisition of Voestalpine Automotive Components Nagold was completed for net cash consideration of $21.0 million and the assumption of a $0.9 million pension liability[107] - The final purchase accounting for Voestalpine Nagold resulted in $12.6 million of property, plant and equipment and $8.2 million of net working capital, with $1.1 million recognized as goodwill[108] Debt and Financing - The company incurred $110.0 million in short-term borrowings under its revolving credit facility as of February 28, 2025, down from $148.0 million as of May 31, 2024[77] - The weighted average interest rate on outstanding interest-bearing debt under the credit facility was 5.91% as of February 28, 2025, compared to 6.92% as of May 31, 2024[84] - The company may seek additional capital through new debt or equity securities, but market conditions could impact the ability to obtain favorable terms[206] Tax and Regulatory - The Company's effective income tax rate was 26.7% for the third quarter of fiscal 2025, compared to 22.2% for the same period in fiscal 2024[98] - Income tax expense decreased to $12.6 million with an effective tax rate of 18.7%, down from 21.9% in the prior year, due to lower pre-tax earnings[199] Miscellaneous - The company recognized a pre-tax impairment charge of $1.3 million for an in-process research and development intangible asset deemed fully impaired during the third quarter of fiscal 2025[64] - The company has outstanding cash flow hedges with a notional amount of $13.3 million in commodity contracts and $6.1 million in foreign currency exchange contracts as of February 28, 2025[118]

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]