Financial Data and Key Metrics Changes - Net sales for the third quarter were $769.8 million, with adjusted EBITDA at $41.6 million and adjusted earnings per share at $0.27 [6][19] - Earnings for the quarter were $10.4 million or $0.20 per share, down from $13.8 million or $0.27 per share in the prior year [20][21] - Adjusted EBIT decreased to $20 million, down $5.3 million from the prior year quarter [23] - Total shipments were approximately 818,000 tons, a decrease of 64,000 tons or 7% year-over-year [24] Business Line Data and Key Metrics Changes - Direct sales volume increased by 4% year-over-year, making up 63% of the total mix compared to 57% in the prior year [24] - Direct shipments to the automotive market increased by 10% year-over-year, reflecting market share gains [25] - Agriculture volume was up 9% due to improved OEM equipment demand, while container volume increased by 11% [25] - Toll processing volumes declined by 22% year-over-year, attributed to the closure of the Cleveland facility and demand headwinds [26] Market Data and Key Metrics Changes - The automotive market showed a cautious optimism heading into 2026, with expectations of a more robust market later in the year [8][11] - Agricultural market conditions are expected to improve, with a slow rebound anticipated starting late 2026 [10] - Construction market conditions remained flat, but growth is expected in data centers as lower interest rates take hold [10] - Heavy truck market started slowly in 2026, but a pickup is expected in the latter half of the year [11] Company Strategy and Development Direction - The proposed acquisition of Kloeckner is a significant strategic step, aimed at creating a larger, diversified metals processing platform [4][5] - The company is focused on investments in electrical steel growth, innovation, and transformation [11] - Efforts are being made to improve operational efficiency through automation and AI, with notable projects reducing inventory and manual work [14][18] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment was described as volatile and uneven, with compressed galvanized spreads and delayed industrial activity due to weather [7] - Management remains cautiously optimistic about the second half of 2026, with signs of growth and market share gains in key sectors [11][51] - The company is addressing underperformance in Europe through cost actions and operational adjustments [29] Other Important Information - Cash flow from operations was $63 million, with free cash flow at $33 million, benefiting from a reduction in working capital [30] - Capital expenditures for the quarter were $30 million, with expectations for fiscal 2026 CapEx to be in the range of $110 million-$115 million [30] - The company ended the quarter with $90 million in cash and net debt of $161 million, influenced by the purchase of Kloeckner shares [31] Q&A Session Summary Question: Direct volumes for the third quarter only up 3% year-over-year, but direct auto shipments increased by 10% - Management explained that the increase in automotive shipments reflects market share gains, despite overall automotive production being down slightly [36][37] Question: Clarification on the over $100 million of short-term debt used to purchase Kloeckner securities - Management confirmed that they increased their ABL to purchase shares in the open market, adhering to antitrust regulations [39][41] Question: Expectations for net working capital in the context of inventory holding gains - Management indicated that upward pressure on working capital is expected due to rising steel prices [42]

1 Investment Highlights Worthington Steel Investor Presentation | December 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 statem ...

Financial Performance - Worthington Steel's net sales for the trailing twelve months (TTM) were $3.132 billion[70, 104] - The adjusted EBITDA for the TTM period was $235 million, with a margin of 7.5%[11, 71, 104] - Free cash flow for the TTM period was $32.4 million[11, 104] - Capital expenditures for the TTM period were $138.3 million, representing 4.4% of sales[11] Market Position and Strategy - The company delivered 3.7 million tons of steel in the TTM period, with 2.2 million tons direct and 1.5 million tons toll[11] - Automotive accounts for 53% of net sales, followed by Construction at 11%[13, 34] - The company is targeting a 10%+ adjusted EBITDA margin through various strategies[76, 77] - The company has a strong balance sheet with net leverage at 0.66x and total liquidity of $355 million[88] Growth Initiatives - The company is investing $85 million in Mexico to increase motor lamination capacity for xEV demand, targeting production start in early CY 2026[55, 59] - The company is investing $85 million in Canada to increase transformer core making capacity, targeting production start in early CY 2026[56, 59] - The company acquired a 52% ownership in Sitem Group to strengthen its electrical steel business globally[62, 66]