Worthington Steel Reports Third Quarter Fiscal 2026 Results

COLUMBUS, Ohio, March 25, 2026 – Worthington Steel, Inc. (NYSE: WS), a market-leading, value-added metals processing company, today reported financial results for the fiscal 2026 third quarter ended February 28, 2026.

Third Quarter Highlights (all comparisons to the third quarter of fiscal 2025):

“This was a challenging quarter from a macroeconomic standpoint, but our focus did not change,” said Geoff Gilmore, President and CEO of Worthington Steel. “We remained grounded in our safety-first culture, executed with discipline and continued to serve customers well. We also took an important step forward with our proposed acquisition of Kloeckner, which we believe will be transformational for Worthington Steel and support long-term value creation.”

Financial highlights for the fiscal 2026 periods and the comparative periods are as follows:

(In millions, except volume)

(Per diluted share amounts, after-tax)

Quarterly Results

Net sales for the third quarter of fiscal 2026 were $769.8 million, an increase of $82.4 million, or 12%, compared to the prior year quarter. This increase was driven primarily by higher direct volumes and higher average direct selling prices. The increases were partially offset by lower toll volumes. Direct tons sold increased by 4%, with the increase driven equally between the legacy business and the addition of Sitem Group. Direct selling prices increased 9% in the third quarter of fiscal 2026 compared to the prior year quarter. Toll volumes decreased 22% in the third quarter of fiscal 2026 compared to the prior year quarter. The decrease in toll volumes was due to a combination of closing the Cleveland-area Worthington Samuel Coil Processing (“WSCP”) facility in May 2025 as well as softening demand from mill customers. The mix of direct tons versus toll tons processed was 63% to 37% in the third quarter of fiscal 2026 compared to 57% to 43% in the prior year quarter.

Gross margin in the third quarter of fiscal 2026 was $76.1 million, a decrease of $5.1 million compared to the prior year quarter. The decrease was primarily driven by lower toll volumes and a $3.2 million unfavorable impact from Sitem Group, partially offset by higher direct spreads (sales less material costs). Toll spreads, down $6.4 million, were negatively impacted by $6.0 million due to lower volumes and by $0.4 million due to an unfavorable change in toll price. Direct spreads increased by $4.9 million due to higher direct volumes and a $3.3 million favorable change from an estimated $1.2 million inventory holding loss in the prior year quarter to an estimated $2.1 million inventory holding gain in the third quarter of fiscal 2026.

Operating income in the third quarter of fiscal 2026 was $3.1 million, a decrease of $15.2 million compared to the prior year quarter. The decrease was driven primarily by a $22.9 million increase in selling, general and administrative (“SG&A”) expense, and a $5.1 million decrease in gross margin, partially offset by a $6.9 million favorable change in restructuring and other (income), expense, net and a $5.9 million favorable change in asset impairment charges. The $22.9 million increase in SG&A expense, which included $4.8 million related to Sitem Group, was primarily attributable to $15.4 million of professional fees related to the proposed acquisition of Kloeckner. During the third quarter of fiscal 2026, the Company recognized a pre-tax gain of $6.0 million of restructuring and other income from the sale of assets at WSCP and $1.5 million of impairments related to certain internal-use software assets. During the third quarter of fiscal 2025, the Company recognized $0.9 million of restructuring and other expense in connection with TWB Company’s voluntary retirement program, and $7.4 million of asset impairments in connection with 1) an in-process research and development intangible asset and 2) the announced plans to combine WSCP’s toll processing manufacturing facility in Cleveland, Ohio into its existing manufacturing facility in Twinsburg, Ohio.

Net earnings attributable to controlling interest of $10.4 million in the third quarter of fiscal 2026 compares to $13.8 million in the prior year quarter. Net earnings per diluted share attributable to controlling interest of $0.20 per diluted share for its fiscal 2026 third quarter compares to $0.27 per diluted share in the prior year quarter.

Adjusted net earnings attributable to controlling interest of $13.6 million in the third quarter of fiscal 2026 compares to $17.6 million in the prior year quarter. Adjusted net earnings per diluted share attributable to controlling interest of $0.27 per diluted share compares to $0.35 per diluted share in the prior year quarter. The third quarter of fiscal 2026 adjusted results exclude a $1.2 million after-tax impairment, or $0.03 per diluted share, $2.9 million related to after-tax net gains in restructuring and other (income) expense, net, or $0.06 per diluted share, $6.9 million due to an unrealized after-tax gain on a Kloeckner purchase derivative, or $0.14 per diluted share, as well as an $11.8 million after-tax Kloeckner acquisition-related expenses adjustment, or $0.24 per diluted share. The prior year quarter adjusted results exclude a $3.4 million after-tax asset impairment, or $0.07 per diluted share, and a $0.4 million after-tax restructuring

and other expense, net, or $0.01 per diluted share. For additional information on non-GAAP financial measures, see the Non-GAAP Financial Measures / Supplemental Data section later in this release.

Balance Sheet, Cash Flow and Capital Allocation

As of February 28, 2026, the Company had cash and cash equivalents of $90.0 million. During the third quarter of fiscal 2026, net cash provided by operating activities was $63.3 million compared to $53.8 million in the prior year quarter. Investment in property, plant and equipment during the third quarter of fiscal 2026 was $30.0 million compared to $28.6 million in the prior year quarter. The Company generated free cash flow (as defined in the Non-GAAP Financial Measures / Supplemental Data section later in this release) of $33.3 million in the third quarter of fiscal 2026 compared to $25.2 million in the prior year quarter.

The Company ended the third quarter of fiscal 2026 with debt of $251.4 million and $90.0 million in cash and cash equivalents, resulting in a net debt (as defined in the Non-GAAP Financial Measures / Supplemental Data section later in this release) position of $161.4 million.

During the third quarter of fiscal 2026, the Company increased its short-term borrowings and used the proceeds to acquire $101.4 million of Kloeckner equity securities. As of February 28, 2026, the Company did not have a controlling interest in or significant influence over Kloeckner.

The Company’s board of directors declared a quarterly dividend of $0.16 per common share. The dividend is payable on June 26, 2026, to shareholders of record at the close of business on June 12, 2026.

Conference Call

The Company will review fiscal 2026 third quarter results during its quarterly conference call on March 26, 2026, beginning at 8:30 a.m., Eastern Time. Conference call details are available through Events & Presentations in the Investors section of the Company’s website at www.WorthingtonSteel.com, or by registering online at https://events.q4inc.com/attendee/556002709 for the live conference.

About Worthington Steel

Worthington Steel (NYSE:WS) is a metals processor that partners with customers to deliver highly technical and customized solutions. Worthington Steel’s expertise in carbon flat-roll steel processing, electrical steel laminations and tailor welded solutions is driving steel toward a more sustainable future.

As one of the most trusted metals processors in North America, Worthington Steel and its approximately 6,000 employees harness the power of steel to advance our customers’ visions through value-added processing capabilities including galvanizing, pickling, configured blanking, specialty cold reduction, lightweighting and electrical lamination. Headquartered in Columbus, Ohio, Worthington Steel operates 37 facilities in seven states and 10 countries. Following a people-first Philosophy, commitment to sustainability and proven business system, Worthington Steel’s purpose is to generate positive returns by providing trusted and innovative solutions for customers, creating opportunities for employees and strengthening its communities.

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 statements are often identified by the use of forward-looking words or phrases such as “believe,” “anticipate,” “may,” “could,” “should,” “would,” “intend,” “plan,” “will,” “likely,” “expect,” “estimate,” “project,” “position,” “strategy,” “target,” “aim,” “seek,” “foresee” and similar words or phrases. These forward-looking statements include, without limitation, statements relating to: future or expected cash positions, liquidity and ability to access financial markets and capital; outlook, strategy or business plans; the anticipated benefits of the Company’s separation from Worthington Enterprises, Inc. (the “Separation”); the expected financial and operational performance of, and future opportunities for, the Company following the Separation; the tax treatment of the Separation transaction; the leadership of the Company following the Separation; future or expected growth, growth potential, forward momentum, performance, competitive position, sales, volumes, cash flows, earnings, margins, balance sheet strengths, debt, financial condition or other financial measures; pricing trends for raw materials and finished goods and the impact of pricing changes; the ability to improve or maintain margins; expected demand or demand trends for the Company or its markets; additions to product lines and opportunities to participate in new markets; expected benefits from transformation and innovation efforts; the ability to improve performance and competitive position at the Company’s operations; anticipated working capital needs, capital expenditures and asset sales; anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing and the supply chain and the results thereof; projected profitability potential; the ability to make acquisitions and the projected timing, results, benefits, costs, charges and expenditures related to acquisitions, joint ventures, headcount reductions and facility dispositions, shutdowns and consolidations; the Company’s plans, objectives, expectations and intentions related to its proposed acquisition (the “Proposed Acquisition”) of Klöckner & Co SE (“Kloeckner”) through a voluntary public cash takeover offer to all of Kloeckner’s shareholders and the benefits of the Proposed Acquisition; the expected outcomes of the Proposed Acquisition, including estimated cost, operations and commercial synergies and the timeline to realize such synergies; the impact of the Proposed Acquisition on the Company’s earnings; the Company’s expected pro forma net leverage ratio following the transaction and net leverage ratio goals following the transaction; the expected timeline for completing the Proposed Acquisition; projected capacity and the alignment of operations with demand; the ability to operate profitably and generate cash in down markets; the ability to capture and maintain market share and to develop or take advantage of future opportunities, customer initiatives, new businesses, new products and new markets; expectations for Company and customer inventories, jobs and orders; expectations for the economy and markets or improvements therein; expectations for generating improving and sustainable earnings, earnings potential, margins or shareholder value; effects of judicial rulings, laws and regulations; anticipated improvements in business and efficiencies to be gained from the use of artificial intelligence and machine learning (“AI”) and other technologies; effects of cybersecurity breaches and other disruptions to information technology infrastructure; effects of public health emergencies and the various responses of governmental and nongovernmental authorities thereto on economies and markets, and on our customers, counterparties, employees and third-party service providers; and other non-historical matters.

Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected. Any number of factors could affect actual results, including, without limitation, those that follow: our ability to successfully realize the anticipated benefits of the Separation; the effect of conditions in national and worldwide financial markets, including inflation, increases in interest rates, and economic recession, and with respect to the ability of financial institutions to provide capital; the risks, uncertainties and impacts related to public health emergencies – the duration, extent and severity of which are impossible to predict, and actions taken by governmental authorities or others in connection therewith; changing commodity prices and/or supply; product demand and pricing; changes in product mix, product substitution and market acceptance of the Company’s products; volatility or fluctuations in the pricing, quality or availability of raw materials (particularly steel), supplies, transportation, utilities, energy, labor and other items required by operations (especially in light of ongoing global geopolitical and military conflicts); effects of sourcing and supply chain constraints, including interruptions in deliveries of raw materials and supplies or the loss of key supplier relationships; the outcome of adverse claims experience with respect to workers’ compensation, product recalls or product liability, casualty events or other matters; effects of critical equipment failures, facility closures and the consolidation of operations; the effect of financial difficulties, consolidation and other changes within the steel, automotive, construction, and other industries in which the Company participates; failure to maintain appropriate levels of inventories; financial difficulties (including bankruptcy filings) of original equipment manufacturers, end-users and customers, suppliers, joint venture partners and others with whom the Company does business; the ability to realize targeted expense reductions from headcount reductions, facility closures and other cost reduction efforts; the ability to realize cost savings and operational, sales and sourcing improvements and efficiencies, and other expected benefits from transformation initiatives, on a timely basis; the overall success of, and the ability to integrate, newly acquired businesses and joint ventures, maintain and develop their customers, and achieve synergies and other expected benefits and cost savings therefrom; the ability of the parties to successfully complete the Proposed Acquisition on the anticipated terms and timing, including obtaining required regulatory approvals and other conditions to the completion of the Proposed Acquisition; the ability of the parties to achieve the minimum requisite acceptance threshold of Kloeckner’s issued share capital at the end of the acceptance period, including as a result of any statutory right of Kloeckner shareholders who have tendered their Kloeckner shares to withdraw their acceptance of the offer until the expiration of the acceptance period; the ability of the parties to obtain the necessary financing arrangements relating to the Proposed Acquisition; the Company’s ability to establish day-to-day control over Kloeckner’s operations after the closing of the Proposed Acquisition on a timely basis or at all; the effects of the Proposed Acquisition

on the Company’s and Kloeckner’s operations, including on the Company’s future financial condition and performance, operating results, strategy and plans, including anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, losses, future prospects, and business and management strategies for the management, expansion and growth of the Company’s operations; the potential impact of the consummation of the Proposed Acquisition on relationships with customers, suppliers and other third parties; the Company’s ability to achieve the anticipated cost synergies or accretion to earnings per share once the Proposed Acquisition is consummated; the ability to realize expected benefits of strategically deployed capital expenditures; capacity levels and efficiencies, within facilities, within major product markets and within the industries in which the Company participates as a whole; the effect of disruption in the business of suppliers, customers, facilities and shipping operations due to adverse weather, casualty events, equipment breakdowns, labor shortages, interruption in utility services, civil unrest, international conflicts (especially in light of ongoing global geopolitical and military conflicts), terrorist activities or other causes; changes in customer demand, inventories, spending patterns, product choices, and supplier choices; risks associated with doing business internationally, including economic, political and social instability (especially in light of ongoing global geopolitical and military conflicts), foreign currency exchange rate exposure and the acceptance of the Company’s products in global markets; the effect of national, regional and global economic conditions generally and within major product markets, including significant economic disruptions from public health emergencies, the actions taken in connection therewith and the implementation of related fiscal stimulus packages; the impact of tariffs, the adoption of trade restrictions affecting the Company’s products, suppliers or customers, a U.S. withdrawal from or significant renegotiation of trade agreements, the occurrence of trade wars, the closing of border crossings, and other changes in trade regulations or relationships; the ability to improve and maintain processes and business practices to keep pace with the economic, competitive and technological environment; the effect of inflation, interest rate increases and economic recession, which may negatively impact the Company’s operations and financial results; deviation of actual results from estimates and/or assumptions used by the Company in the application of its significant accounting policies; impairment of the recorded value of inventory, equity investments, fixed assets, goodwill and other assets; competitive pressure on sales and pricing, including pressure from imports and substitute materials; the level of imports and import prices in the Company’s markets and the foreign currency exchange rate exposure; the impact of environmental laws and regulations or the actions of the United States Environmental Protection Agency or similar regulators which increase costs or limit the Company’s ability to use or sell certain products; the impact of increasing environmental, greenhouse gas emission and sustainability regulations; the impact of judicial rulings and governmental regulations, both in the United States and abroad, including those adopted by the U.S Securities and Exchange Commission (“SEC”) and other governmental agencies; the effect of healthcare laws in the United States and potential changes for such laws, which may increase the Company’s healthcare and other costs and negatively impact the Company’s operations and financial results; the effect of tax laws in the United States and potential changes for such laws, which may increase the Company's costs and negatively impact its operations and financial results; the operational, data privacy, security, regulatory and legal risks associated with the Company’s reliance on AI technologies as well as its inability to stay abreast of technological advancements and its dependence on third parties who rely on AI technologies; cybersecurity risks; the effects of privacy and information security laws and standards; the cyclical nature of the steel industry; the Company’s safety performance; the effects of competition and price pressures from competitors; risks associated with the proposed acquisition of Kloeckner; and other risks described from time to time in the Company’s filings with the SEC, including those described in “Part I – Item 1A. – Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2025 and in our subsequent filings with the SEC on Form 10-Q and Form 8-K.

Forward-looking statements should be construed in the light of such risks. The Company notes these factors for investors as contemplated by the Act. It is impossible to predict or identify all potential risk factors. Consequently, you should not consider the foregoing list to be a complete set of all potential risks and uncertainties. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. The Company does not undertake, and hereby disclaims, any obligation to update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.

WORTHINGTON STEEL, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In millions, except per share amounts)

(Unaudited)

WORTHINGTON STEEL, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)

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WORTHINGTON STEEL, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)

(Unaudited)

WORTHINGTON STEEL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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WORTHINGTON STEEL, INC.
NON-GAAP FINANCIAL MEASURES / SUPPLEMENTAL DATA
(In millions, except volume and per share amounts)

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company also presents certain non-GAAP financial measures including (a) adjusted operating income, (b) adjusted earnings before income taxes, (c) adjusted income tax expense, (d) adjusted net earnings attributable to controlling interest, (e) adjusted net earnings per diluted share attributable to controlling interest, (f) net earnings before interest and taxes attributable to controlling interest (“EBIT”), (g) adjusted net earnings before interest and taxes attributable to controlling interest (“adjusted EBIT”), (h) net earnings before interest, taxes, depreciation and amortization attributable to controlling interest (“EBITDA”), (i) adjusted net earnings before interest, taxes, depreciation and amortization attributable to controlling interest (“adjusted EBITDA”), (j) free cash flow, and (k) total debt less cash and cash equivalents (“net debt”).

These non-GAAP financial measures typically exclude impairment and restructuring charges (gains) but may also exclude other items that management believes are not reflective of, and thus should not be included when evaluating the performance of, the Company’s ongoing operations. Management uses these non-GAAP financial measures, together with the most directly comparable GAAP financial measures, to evaluate the Company’s performance, engage in financial and operational planning, and determine incentive compensation and believes these non-GAAP financial measures provide useful information to investors because they provide additional perspective on the performance of the Company’s ongoing operations. Additionally, management believes these non-GAAP financial measures provide useful information to investors because they allow for meaningful comparisons and analysis of trends in the Company’s business and enable investors to evaluate operations and future prospects in the same manner as management. These non-GAAP financial measures are not intended to represent, and should not be considered as, an alternative to GAAP financial measures. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. These measures may exclude items that are significant to understanding the Company’s financial results and condition, and other companies may define or calculate similarly titled non-GAAP financial measures differently. Accordingly, the non-GAAP financial measures presented should be considered in conjunction with, and not as a replacement for, the comparable GAAP financial measures.

For the purposes of the subsequent tables, the non-GAAP measures have been adjusted for the items identified below:

The following provides a reconciliation to the non-GAAP financial measures adjusted operating income, adjusted earnings before income taxes, adjusted income tax expense, adjusted net earnings attributable to controlling interest and adjusted net earnings per diluted share attributable to controlling interest from the most comparable GAAP measures for the three- and nine-month periods ended February 28, 2026, and February 28, 2025.