Worthington Steel, Inc.

Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to Worthington Steel's second quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. And after the speaker's remarks, there'll be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star one. Thank you. And I would now like to turn the conference over to Melissa Dykstra, Vice President of Corporate Communications and Investor Relations. Melissa, you may begin.

Thank you, operator. Good morning and welcome to Worthington Steel's second quarter fiscal year 2025 earnings call. On our call today, we have Jeff Gilmore, Worthington Steel's President and Chief Executive Officer, and Tim Adams, Vice President and Chief Financial Officer. Before we begin, I'd like to remind everyone that certain statements made today are forward-looking within the meaning of the 1995 Private Securities Litigation Reform Act. These statements are subject to risks and uncertainties that could cause actual results to differ from those suggested. We issued our earnings release yesterday after the market closed. Please refer to it for more detail on the factors that could cause actual results to differ materially. Unless noted as reported, today's discussion will reference non-GAAP financial measure, which adjusts for certain items included in our GAAP results and which are presented on a standalone basis. You can find definitions of each non-GAAP measure and GAAP to non-GAAP reconciliations within our earnings release. Today's call is being recorded and a replay will be available later today on worthingtonsteel.com. Now I'll turn it over to Jeff Gilmore.

Thanks, Melissa. Good morning, everyone, and thank you for joining us. As we celebrate our first full year of being a publicly traded standalone company, I am pleased to report we generated solid quarterly earnings despite some sizable headwinds and uncertainty across a number of end markets. In the second quarter, We generated adjusted EBITDA of $30.6 million compared with $23 million in the prior year quarter. Earnings per share came in at 25 cents versus a loss of 12 cents per share in the same period last year. Results were impacted by both lower volumes and lower average selling prices for the quarter. There were several highlights this quarter as Worthington Steel continued to work safely, implement our strategy, reach new milestones, and earn accolades as a best place to work. Last month, we named Cliff Larravee president of Flat Road Steel Processing, separating this role from Jeff Klingler's COO position. Cliff's work leading our commercial and purchasing teams has strengthened our partnerships with customers and suppliers. This move recognizes Cliff's leadership strengths and the talented team he built, and allows Jeff Klingler to sharpen his focus on our growing global business operations. Further, Worthington Steel continues to make strides implementing our strategy. Earlier this month, we made a move toward growing our high-value-added business through selective acquisitions when we announced our agreement to acquire a 52% stake in Seedum Group. Seedum strengthens our presence in Europe, which is vital to growing our electrical steel lamination business. Europe remains a high-growth market for electric vehicles, and it is expected that by 2030, 80% of the vehicles produced in Europe will be battery electric or hybrids. Like Temple, Seedem stamps laminations for both automotive and industrial motors. More importantly, Seedem gives Worthington access to world-class tool and die making and significant expertise in press automation. which we will be able to leverage across our electrical steel plants. Seedum is one of the largest and most respected electrical steel lamination producers in Europe, and this partnership provides an expanded footprint required for our long-term success. Bringing together our compatible cultures and best practices allows us to fulfill customer expectations and solidify our global presence in electrical steel laminations. We expect this transaction to close in early 2025 after regulatory approvals and customary closing conditions. I am excited to begin serving our customers with the combined expertise of our Temple and Seatham Group employees. Rounding out our strategy is transformation, our system of continuous improvement. The transformation mindset drives our employees to always look for ways to improve quality and service, find efficiencies, free up capacity, and eliminate unnecessary costs. This is an ongoing process for Worthington Steel, and in the second quarter, we saw teams come together to reduce scrap, streamline purchasing processes, and more efficiently manage our IT contractors. The transformation mindset often carries over to our interactions with customers. Over the quarter, we developed an analytics tool to help both Worthington Steel and a key customer improve inventory control and order lead times, thereby reducing inventory. On the new product front, we continue to receive interest from customers about new capabilities at TWB using our licensed ablation technology and are filling our pipeline of potential opportunities. The equipment is being installed and tested, and we remain on schedule. I'd like to thank our teams for all they do each quarter to support the Worthington Steel Strategy. We rounded out the period with significant momentum in other areas of our business. In October, we released our first corporate citizenship and sustainability report, highlighting key achievements such as the safety record nearly two times better than the industry average, a decrease in carbon emissions, and the support of 73 nonprofit organizations through the Worthington Companies Foundation. Our ESG approach is based on our philosophy of doing the right thing for our employees, customers, suppliers, shareholders, and communities, and we work hard each day to improve our efforts. We were named a military-friendly employer for the 10th year in a row by the Victory Organization. Workforce development and a commitment to our military members and veterans is incredibly special to me, and this was a proud moment for our company. Another accolade for Worthington Steel as an employer was announced just last week when Computer World included our company in its annual list of top places to work in IT. Our IT team deserves special recognition this year. The team separated infrastructure, end-user business applications, and security systems as we became a standalone public company and kicked off the ERP implementation at Temple all while working to improve every day and ensuring our day-to-day IT dependent operations perform. Yesterday, we added a new member to our board of directors. Scott Kelly brings a great background in operations in the energy industry and adds a new and diverse voice to our board. I'm pleased to welcome him to Worthington Steel, and I look forward to working with him. As I mentioned earlier, we saw some sizable headwinds during the quarter in several markets, including automotive, construction, and heavy trucks. Some of these headwinds may persist for the next few quarters, especially in the automotive market. Looking ahead, we are cautiously optimistic about this segment as OEMs make moves to adjust their commercial strategy and rebuild market share. The headwinds could be offset by lower interest rates and lower inflation. We saw some positive signs in November when overall U.S. vehicle sales reached their highest levels since May of 2021. Lower interest rates and decreasing inflation also provide positive momentum for the construction market. We continue to expect moderate growth in the construction market areas we supply, such as data centers and manufacturing in calendar year 2025. We expect heavy truck to remain relatively slow in the first half of calendar year 2025, but we believe regulatory requirements will help fuel growth in the second half of the year and into 2026. Overall, we are feeling positive about the tailwinds as we enter our second year as a standalone publicly traded company. We have already accomplished so much in a relatively short period of time. We have strong customer relationships, an experienced leadership team, and a sound strategy. We have an amazing team of employees with a strong commitment to safety, and we are recognized consistently as the best place to work. I am grateful and energized every day to work with everyone on the Worthington Steel team. Now I'll turn things over to Tim Adams to discuss financials.