Worthington Steel(US:WS)2025-12-19 21:23Financial 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]