Financial Data and Key Metrics Changes - Net sales for the second quarter were $871.9 million, with adjusted EBITDA at $48.3 million and adjusted earnings per share at $0.38, reflecting a solid operational performance despite market headwinds [4][15] - Adjusted EBIT increased to $26.6 million, up from $14.3 million in the prior-year quarter, driven by higher direct volumes and improved direct spreads [15][16] - Earnings for the quarter were reported at $18.8 million or $0.37 per share, compared to $12.8 million or $0.25 per share in the same quarter last year [15][16] Business Line Data and Key Metrics Changes - Direct sales volume made up 65% of the total mix, up from 55% in the prior-year quarter, with direct volumes increasing by 13% year-over-year [16] - Automotive shipments increased by 26% year-over-year, reflecting market share gains and a return to normal production levels at an OEM customer [16][17] - Energy shipments rose by 50% year-over-year, driven by project-based solar programs, while agriculture volume was up 1% [17] Market Data and Key Metrics Changes - North American light vehicle output is expected to hold near 15.2 million units in calendar year 2025, essentially flat with 2024 [5] - The construction market remains stable but subdued, with pockets of strength in power and infrastructure [6] - The heavy truck and trailer market is expected to see a rebound beginning in late calendar year 2026 [6] Company Strategy and Development Direction - The company is focused on long-term strategies, including electrical steel growth plans, new product development, and business optimization through transformation [7][9] - Expansion projects for electrical steel are on track, with initial production in Mexico expected in the first quarter of calendar year 2026 [7][8] - The integration of Sitem is progressing well, enhancing the company's capabilities in stamping electrical steel laminations and automation [9] Management's Comments on Operating Environment and Future Outlook - The management expressed cautious optimism for early 2026, anticipating improved conditions as interest rates ease and policy uncertainties subside [6][14] - The company remains focused on maintaining safety, quality, and service while navigating a mixed demand environment [15][22] - Management highlighted the importance of transformation initiatives and the integration of artificial intelligence to improve operational efficiency [10][50] Other Important Information - The company announced a quarterly dividend of $0.16 per share, payable on March 27, 2026 [21] - Worthington Steel was recognized as a 2025 Supplier of the Year by Schaeffler Group USA and received the Military Friendly Employer Gold designation for the 11th consecutive year [11][12] Q&A Session Summary Question: Inquiry about SG&A increase and one-time nature of costs - The increase in SG&A was primarily due to professional fees related to strategic projects, with Sitem's integration contributing to ongoing costs [26][30] Question: Automotive momentum and market share gains - The automotive market share gains were attributed to existing programs reaching expected volumes and not solely to cold rolled strip [33][34] Question: Impact of tariffs and onshoring on market share - A significant portion of recent market share gains is due to the onshoring of supply chains, with no immediate gains from announced onshoring manufacturing [35][36] Question: Deductions for minority interest partners - The smaller deductions were attributed to slower demand and the removal of the Worthington Samuel Coil Processing joint venture from the current year [39][40] Question: Compressed galvanized spreads and normalization - Decreased demand in construction has contributed to compressed spreads, but management expects margin expansion and normalization in the second quarter of the calendar year [45][46]