Worthington Steel(US:WS)2026-03-26 10:30Financial Performance - Net sales for Q3 2026 were $769.8 million, a 12% increase from $687.4 million in Q3 2025[4] - Operating income decreased to $3.1 million in Q3 2026 from $18.3 million in Q3 2025[4] - Net earnings attributable to controlling interest were $10.4 million in Q3 2026, down from $13.8 million in Q3 2025[9] - Adjusted EBIT for Q3 2026 was $20.0 million, compared to $25.3 million in Q3 2025[4] - Gross margin for Q3 2026 was $76.1 million, a decrease of $5.1 million compared to the prior year[7] - Net sales for the three months ended February 28, 2026, were $769.8 million, an increase of 12% compared to $687.4 million for the same period in 2025[23] - Gross margin decreased to $76.1 million for the three months ended February 28, 2026, down from $81.2 million in the same period of 2025, reflecting a margin of 9.9%[23] - Operating income for the nine months ended February 28, 2026, was $73.1 million, a decrease of 9% from $80.6 million for the same period in 2025[23] - Net earnings attributable to controlling interest for the nine months ended February 28, 2026, were $66.0 million, compared to $55.0 million for the same period in 2025, representing a 20% increase[23] - Net earnings for the nine months ended February 28, 2026, increased to $70.9 million, up from $60.4 million in the same period of 2025, representing a growth of approximately 8.3%[29] - Adjusted EBITDA for the nine months ended February 28, 2026, was $170.0 million, compared to $128.1 million for the same period in 2025, indicating a growth of approximately 32.7%[39] - The company reported a net earnings margin of 2.6% for the nine months ended February 28, 2026, compared to 2.4% for the same period in 2025, showing a slight improvement[39] Cash and Debt Position - Cash and cash equivalents as of February 28, 2026, were $90.0 million, with net cash provided by operating activities at $63.3 million[12] - The company reported a net debt position of $161.4 million as of February 28, 2026[13] - Cash, cash equivalents, and restricted cash at the end of the period were $90.0 million, a decrease from $63.3 million in 2025, indicating a decline of approximately 29.5%[29] - The company reported a net cash provided by operating activities of $156.3 million for the nine months ended February 28, 2026, compared to $176.4 million in 2025, a decrease of about 11.4%[29] - As of February 28, 2026, total debt amounts to $251.4 million[46] - Short-term borrowings are $192.7 million, while current maturities of long-term debt are $27.1 million[46] - Long-term debt stands at $31.6 million, contributing to the total debt figure[46] - The net debt as of February 28, 2026, is $161.4 million[46] Dividends and Shareholder Returns - The company declared a quarterly dividend of $0.16 per share, payable on June 26, 2026[4] - The company declared cash dividends of $0.48 per share for the nine months ended February 28, 2026, consistent with the previous year[23] Business Developments - The company entered into a Business Combination Agreement with Kloeckner, offering €11 per share, with completion expected in H2 2026[4] - The company is pursuing a proposed acquisition of Kloeckner, which may impact future financial performance and operational strategies[20] - Kloeckner acquisition-related expenses amounted to $20.3 million for the nine months ended February 28, 2026, which are excluded from adjusted results to facilitate comparability[37] Inventory and Assets - Total inventories increased to $435.6 million as of February 28, 2026, from $422.0 million as of May 31, 2025[25] - Total assets rose to $2,315.5 million as of February 28, 2026, compared to $1,961.8 million as of May 31, 2025, indicating a growth of 18%[25] - Total current liabilities rose to $745.6 million as of February 28, 2026, compared to $631.5 million in 2025, reflecting an increase of about 18.1%[27] - Total liabilities increased to $958.1 million in 2026 from $763.9 million in 2025, marking a rise of approximately 25.5%[27] - The company’s total equity reached $1,260.6 million as of February 28, 2026, compared to $1,197.9 million in 2025, reflecting an increase of about 5.2%[27] Sales Volume - Direct tons sold increased by 4% in Q3 2026, while toll volumes decreased by 22%[6] - The volume of sales for the nine months ended February 28, 2026, was 2,648,228 tons, down from 2,811,572 tons in the same period of 2025, a decrease of about 5.8%[39] Other Financial Metrics - Adjusted net earnings per diluted share attributable to controlling interest for the three months ended February 28, 2026, was $0.27, compared to $0.35 in the same period of 2025, a decrease of approximately 22.9%[35] - Free cash flow for the third quarter of 2026 was $33.3 million, compared to $74.6 million in the second quarter of 2026, indicating a decrease[43] - The trailing 12 months adjusted EBITDA was reported at $257.0 million, reflecting stable performance over the fiscal year[41] - The company invested $84.1 million in property, plant, and equipment during the nine months ended February 28, 2026, similar to the $84.9 million invested in 2025[29] - The company recognized a $0.5 million pre-tax loss due to a small fire incident at Tempel Canada, which is excluded from adjusted results[36]