Worthington Steel Reports First Quarter Fiscal 2027 Results

Includes financial results from Kloeckner & Co following majority acquisitionCOLUMBUS, Ohio--(BUSINESS WIRE)--Worthington Steel, Inc. (NYSE: WS), a market-leading, value-added metals processing company, today reported financial results for the fiscal 2027 first quarter ended August 31, 2026. Except as otherwise noted, reported results reflect the impact of the Company’s acquisition of a majority interest in Klöckner & Co SE (“Kloeckner”). First Quarter Highlights (all comparisons to the first quarter of fiscal 2026 on a continuing operations basis unless otherwise indicated): Net sales of $2,726.6 million increased 212% compared to $872.9 million. Operating income of $56.0 million compared to $48.3 million. Net loss attributable to controlling interest of $7.0 million compared to net earnings of $36.8 million in the prior year quarter. Diluted loss per share attributable to controlling interest (“Diluted EPS – Continuing Operations”) of $0.14, compared with Diluted EPS – Continuing Operations of $0.73 in the prior year quarter. Adjusted Diluted EPS – Continuing Operations per share of $0.57 compared to $0.77 in the prior year quarter. Adjusted EBIT of $78.5 million compared to $55.5 million. On June 3, 2026, subsequent to the end of fiscal 2026, the Company completed settlement of the offer and its acquisition of a majority interest in Kloeckner, securing approximately 62% of Kloeckner’s outstanding shares (the “Kloeckner Acquisition”), representing a significant milestone toward eventual operating control and value capture. On July 15, 2026, the Company commenced a public delisting tender offer for all outstanding Kloeckner shares not already held by the Company at a price of €11.00 per share. On August 12, 2026, the acceptance period ended and Kloeckner’s shares were delisted from the regulated market of the Frankfurt Stock Exchange at market closing. Upon settlement of the delisting tender offer, the Company acquired additional Kloeckner shares, increasing the ownership interest to approximately 62.11%. On September 8, 2026, subsequent to the end of the first quarter of fiscal 2027, the Company entered into a Domination and Profit and Loss Transfer Agreement (“DPLTA”) with Kloeckner. Effectiveness of the DPLTA remains subject to the required shareholder approvals and registration with the commercial register at Kloeckner’s registered seat and cannot occur before January 1, 2027. Declared a quarterly dividend of $0.16 per share payable on December 28, 2026, to shareholders of record at the close of business on December 14, 2026. “This quarter marks an important milestone for Worthington Steel as we report our first results including Kloeckner,” said Geoff Gilmore, president and CEO. “The addition of Kloeckner significantly expands our capabilities and positions us as a more diversified metals processing and manufacturing company. At the same time, our core Worthington Steel business delivered solid operating performance, driven by higher direct volumes and improved pricing. As we move forward, our priorities remain clear: serving our customers, improving our operations and creating long-term value for our shareholders.” Financial highlights for the fiscal 2027 and comparative periods are as follows: (In millions, except volume) 1Q 2027 1Q 2026 Volume (tons) 1,943,340 928,866 Net sales $ 2,726.6 $ 872.9 Operating income 56.0 48.3 Net earnings (loss) from continuing operations attributable to controlling interest (7.0 ) 36.8 Adjusted EBIT (Non-GAAP)(1) 78.5 55.5 Adjusted EBITDA (Non-GAAP)(1) 111.0 78.8 Equity in net income of unconsolidated affiliate 5.3 6.4 (Per diluted share amounts, after-tax) 1Q 2027 1Q 2026 Diluted EPS – Continuing Operations $ (0.14 ) $ 0.73 Restructuring and other (income), net (0.03 ) (0.01 ) Kloeckner purchase derivative 0.01 - Kloeckner acquisition-related expenses 0.37 - Kloeckner securities investment loss, net 0.24 - Debt issuance cost write-off 0.02 - Pension adjustments (0.01 ) - Sitem Group acquisition completion bonus payment - 0.03 Deferred tax asset adjustment 0.11 0.02 Adjusted Diluted EPS – Continuing Operations (Non-GAAP)(1) $ 0.57 $ 0.77 Three Months Ended Three Months Ended August 31, 2026 August 31, 2025 Consolidated Legacy Worthington Steel (2) Consolidated Volume (tons) - Total 1,943,340 921,234 928,866 Volume (tons) - Direct 1,501,949 604,289 585,073 Volume (tons) - Toll 441,391 316,945 343,793 Net Sales $ 2,726.6 $ 953.9 $ 872.9 EBIT (Non-GAAP)(1) 43.9 15.7 53.1 Adjusted EBITDA (Non-GAAP)(1) 111.0 75.1 78.8 _____________________________________________ (1) Results in both the current year period and prior year period were impacted by certain items, as further discussed and reconciled to the most directly comparable GAAP financial measure in the Use of Non-GAAP Financial Measures and Definitions section later in this release. (2) Results exclude the impact of the intercompany activity between Legacy Worthington Steel and Kloeckner that is eliminated in consolidation. Kloeckner Acquisition On June 3, 2026, the Company completed the Kloeckner Acquisition in which it acquired a controlling equity stake. Kloeckner’s results are included in the consolidated financial statements beginning on the acquisition date, with the portion of Kloeckner not owned by the Company reflected as noncontrolling interests. Following the transformational acquisition of Kloeckner and the related acquisition financing, the Company has updated the adjusted EBITDA metric to include the full adjusted EBITDA of our consolidated operations, including noncontrolling interests, to better reflect the economics of our consolidated business. As a result, adjusted EBITDA amounts for prior year periods have been recast, as applicable to conform to this presentation. In connection with the Kloeckner Acquisition, the Company acquired certain Kloeckner business units that met the held-for-sale criteria as of the acquisition date (the “Disposal Group”). Kloeckner management has committed to a plan to sell the Disposal Group, and the Company expects the sale to be completed within one year of the Kloeckner Acquisition. The results of this Disposal Group are reported as discontinued operations in the accompanying interim consolidated financial statements for all periods in fiscal 2027 and onward. Unless otherwise indicated, the discussion and analysis of our results of operations included in this release relates to continuing operations and excludes the results of discontinued operations. Prior-period amounts have been recast, as applicable, to conform to this presentation. Consolidated Quarterly Results Net sales and volume Net sales for the first quarter of fiscal 2027 were $2,726.6 million, an increase of $1,853.7 million, or 212%, compared to the prior year quarter. Kloeckner contributed $1,772.7 million to net sales in the first quarter of fiscal 2027. Excluding the impact of Kloeckner, net sales increased $81.0 million or 9% compared to the prior year quarter. This $81.0 million increase was driven primarily by higher direct volumes, and, to a lesser extent, higher average direct selling prices. Direct net sales increased $81.7 million. Direct tons sold increased by 3% and direct selling prices increased 6% in the first quarter of fiscal 2027 compared to the prior year quarter. Toll processing net sales decreased $0.7 million, or 2%, in the first quarter of fiscal 2027 compared to the prior year quarter. Toll volumes decreased 8% and toll selling prices increased 6% in the first quarter of fiscal 2027 compared to the prior year quarter. The consolidated mix of direct tons versus toll tons processed was 77% to 23% in the first quarter of fiscal 2027 compared to 63% to 37% in the prior year quarter. Excluding the impact of Kloeckner, the mix of direct tons versus toll tons processed was 66% to 34% in the first quarter of fiscal 2027 compared to 63% to 37% in the prior year quarter. Gross margin Gross margin in the first quarter of fiscal 2027 was $261.2 million, an increase of $146.0 million compared to the prior year quarter. The Kloeckner Acquisition contributed $144.0 million to gross margin in the first quarter of fiscal 2027. The gross margin attributable to Kloeckner was impacted due to an approximately $43 million net inventory fair value step-up recognized in connection with the acquisition of Kloeckner. Excluding the impact of Kloeckner, gross margin increased $2.0 million compared to the prior year quarter. The increase was primarily driven by higher direct spreads (calculated as sales less material costs), partially offset by higher manufacturing expenses and lower toll spreads. Direct spreads increased by $13.9 million primarily due to the $7.6 million impact of higher direct volumes, and to a lesser extent, the $6.5 million favorable change from an estimated $5.6 million inventory holding gain in the prior year quarter to an estimated $12.1 million inventory holding gain in the first quarter of fiscal 2027. This was partially offset by a $0.2 million unfavorable direct spread impact from pricing. Toll spreads decreased $0.9 million. Manufacturing expenses increased $11.1 million, primarily related to increased wages and benefits. Operating Income Operating income in the first quarter of fiscal 2027 was $56.0 million, an increase of $7.7 million compared to the prior year quarter. The Kloeckner Acquisition increased operating income by $24.2 million in the first quarter of fiscal 2027. Excluding the impact of Kloeckner, operating income decreased by $16.5 million compared to the prior year quarter. The decrease was driven primarily by a $17.6 million increase in selling, general and administrative expense (“SG&A”) and a $1.0 million unfavorable change in restructuring and other (income), expense, net, partially offset by a $2.0 million increase in gross margin. The $17.6 million increase in SG&A was primarily attributable to an increase of $18.6 million in professional fees. This increase in professional fees incurred by Legacy Worthington Steel was primarily related to the Kloeckner Acquisition. The prior year restructuring and other (income), net represents a gain on the sale of an asset related to the previously announced closure of Worthington Samuel Coil Processing’s toll processing facility in Cleveland, Ohio. During the first quarter of fiscal 2027, Kloeckner recognized a gain of $3.6 million in restructuring and other (income), expense, net, due to various restructuring programs. These items included early retirement and severance costs, facility exit and other costs, and sales of fixed assets in Louisiana and Switzerland. Net earnings (loss) and adjusted net earnings (loss) Net loss from continuing operations attributable to controlling interest of $7.0 million in the first quarter of fiscal 2027 compared with net earnings of $36.8 million in the prior year quarter. Diluted loss per share from continuing operations attributable to controlling interest was $0.14, compared with diluted earnings per share of $0.73 in the prior year quarter. Adjusted net earnings from continuing operations attributable to controlling interest were $29.1 million in the first quarter of fiscal 2027, compared with $38.8 million in the prior year quarter. Adjusted diluted earnings per share were $0.57, compared with $0.77 in the prior year quarter. Certain amounts disclosed within the Company’s quarterly results have been adjusted to conform to the current presentation due to the update to estimated tax rates on Non-GAAP adjustments in fiscal 2026. The adjustments had an immaterial impact to the presented results. For additional information on non-GAAP financial measures, see the Use of Non-GAAP Financial Measures and Definitions section later in this release. Balance Sheet, Cash Flow and Capital Allocation As of August 31, 2026, the Company had cash and cash equivalents of $248.2 million. During the first quarter of fiscal 2027, net cash used in operating activities was $6.0 million compared to net cash used in operating activities of $6.3 million in the prior year quarter. Investment in property, plant and equipment during the first quarter of fiscal 2027 was $63.0 million compared to $29.4 million in the prior year quarter. The Company had negative free cash flow (as defined in the Use of Non-GAAP Financial Measures and Definitions section later in this release) of $69.0 million in the first quarter of fiscal 2027 compared to negative free cash flow of $35.7 million in the prior year quarter. The Company ended the first quarter of fiscal 2027 with total debt of $2,196.4 million and $248.2 million in cash and cash equivalents, resulting in a net debt (as defined in the Use of Non-GAAP Financial Measures and Definitions section later in this release) position of $1,948.2 million. The Company’s board of directors declared a quarterly dividend of $0.16 per common share. The dividend is payable on December 28, 2026, to shareholders of record at the close of business on December 14, 2026. Conference CallRead the full story here

Worthington Steel Reports First Quarter Fiscal 2027 Results

Şirketle ilgili diğer haberler