Worthington Steel, Inc.

Good morning and welcome to Worthington Steel's second quarter fiscal year 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during that time, simply press star then the number one on your telephone keypad. I will now turn the call over to Melissa Dykstra, Vice President of Corporate Communications and Investor Relations. Please go ahead.

Thank you, operator. Good morning and welcome to Worthington Steel's second quarter fiscal year 2026 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 measures which adjust 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 made available later today on WorthingtonSteel.com. Now I'll turn it over to Jeff Gilmore.

Good morning, and thank you for joining Worthington Steel's second quarter fiscal year 2026 earnings call. Before we discuss our second quarter results, I want to thank our more than 6,000 employees across North America and Europe. Your commitment to safety, quality, and service every shift, every plan continues to set the standard. I'm proud of the work you're doing and grateful for it. On December 6th, we issued a statement regarding potential M&A activity. Consistent with that statement, we will not be providing additional detail or addressing related questions on this call. With that, let's turn to the second quarter. Net sales were $871.9 million. Adjusted EBITDA was $48.3 million. And adjusted earnings per share was $0.38. We delivered these results in a market that remains mixed, combined with compressed galvanized spreads. Even with those headwinds, our execution remains strong where it matters most, safety, shareholder value, customer service, and transformation. On the commercial front, our team continues to win and capture high margin business, particularly in Coldwell Strip. This quarter, we gained market share with new and existing customers. We saw all-time high shipments during the month of October to a key D3 automotive customer and one new business with a large Japanese OEM. While these programs will take some time to ramp up, this momentum fuels cautious optimism for early 2026 and a positive outlook for the second half of the calendar year. Looking more closely at our key markets, our sales to the automotive market were strong this quarter. Looking ahead, North American light vehicle output is expected to hold near 15.2 million units in calendar year 2025, essentially flat with 2024. Consumer demand is also expected to continue to drive growth in the electrified vehicle market, particularly hybrids, which suits our strategy and product mix very well. Construction is stable but subdued. We are seeing pockets of strength in areas related to power and infrastructure. In agriculture, we have been able to capitalize on our diverse customer base to partially offset continuing soft conditions. We are hopeful that ag starts to rebound later in calendar year 2026, but there are many variables that could impact this market. The heavy truck and trailer market continues to be slow. We expect to see the beginnings of rebound in late calendar year 2026. Stepping back, while the macro remains uncertain, we believe conditions are setting up for improvement in calendar year 2026 as interest rates ease and some policy uncertainty subsides. We're positioning the business so we're ready as demand grows. We are making good progress on our long-term strategy, executing on our electrical steel growth plans, pursuing new growth opportunities using CapEx and acquisitions, developing new products, and optimizing our business through transformation, our proven process of continuous improvement. We moved forward in each of these areas in the second quarter. Starting with electrical steel, our expansion projects are on track. In Mexico, where we make electrical steel laminations for traction motors, we're preparing for initial production in the first quarter of calendar year 2026. Those products will ship in the first or second quarter of the year, depending on OEM release schedules. Production and shipments will continue to ramp up as additional automotive platforms and supply chains come online. Our transformer core manufacturing expansion in Canada remains on schedule. We will transition production to our new facility in the first quarter of the calendar year. We have secured business to fill more than 60% of the new capacity and expect to begin seeing incremental revenue in the spring. We are well positioned to fill the remaining capacity quickly as we bring the new facility up to full production. You may recall we added a new slitter to Servicero, our joint venture in Mexico, a little over a year ago. We are well on our way to filling the capacity for that slitter, which is located in northern Mexico. And we are moving forward with adding a new slitter to our Servicero operation in central Mexico. We believe this will allow us to capture new market share and better serve our existing customers. On the M&A front with CEDUM, now part of the Worthington Steel family, integration is progressing well. Their capabilities in stamping electrical steel laminations, die casting, and automation complement our core, extend our European reach, and improve our competitiveness in advanced mobility and industrial markets. We see good cultural alignment and early collaboration across operations and commercial teams. Thank you to everyone who is involved in this integration. Shifting to new products, this quarter we announced an innovative technology related to our electrical steel laminations called full surface bonding. This patent pending technique creates a stronger bond between the laminations in the motor core, eliminating gaps and resulting in a motor that is more efficient, durable, and cost effective. All of this is underpinned by daily transformation. Transformation at Worthington Steel isn't a project. It's how we run the company. We measure it in safety, quality, delivery, cost, and revenue, and we work to make progress every day. This quarter was no exception. As a key tool in our transformation toolbox, artificial intelligence is becoming more integrated into our processes. We deployed two AI agents in our credit department, which allows us to speed up individual customer updates and cut down on the time it takes to process a new customer's credit application. These agents should eliminate more than 350 hours of manual efforts each year and strengthen our financial discipline and risk monitoring. Another success was the development of automation to improve advanced shipping notices to one of our key OEM customers. Automating this process increased the accuracy of our advanced shipping notice and resulted in improved payment timeliness. The common thread here is practical impact. Saved hours, higher accuracy, faster decisions, and better use of our assets. These efforts are key to holding operating expenses flat, even as volumes and complexity grow. For instance, in plants where we streamline changeovers and reduce scrap, service levels improve and cost per ton comes down. In shared services, where we automate manual reviews and postings, we redeploy talent to analysis. And in the supply chain, where we improve visibility, we integrate inventory more tightly with demand. These are small changes, but they are critical to building a stronger company quarter after quarter. In parallel with these improvements, our culture and customer relationships continue to shine and receive recognition. Last month, we were honored to be named a 2025 Supplier of the Year by Scheffler Group USA. receiving the America's Region Supply Chain Award, recognition for performance, collaboration, and service. Just as our customers are recognizing how we show up for them, others are recognizing how we show up for our people. We received the Military Friendly Employer Gold designation for the 11th consecutive year. We support those who have served our country through a range of programs, including focused recruitment, onboarding resources, and the internal veterans network that fosters belonging and connection across our company. Additionally, Computer World has named Worthington Steel to its 2026 Best Places to Work in IT for the eighth year in a row. I'm proud to see this recognition for our team's work this year to update global systems, introduce AI-driven tools, enhance our work, and support growth through integration and modernization projects. Finally, this quarter, we released our 2025 Corporate Citizenship and Sustainability Report, highlighting progress in safety, greenhouse gas emissions, and waste elimination, as well as our commitment to developing people through training and supporting communities. Our report sums up what makes Worthington Steel different, our culture and commitment to safety. In calendar year 2025, we also marked our 70th anniversary. In celebration, our employees set a goal they called 70 for Good to complete acts of service with 70 nonprofits in our communities, and I'm proud to share that we exceeded that goal. The program embodies who we are at Worthington Steel. It's a tangible expression of being strong for good, and it reflects our belief that investing in our people and communities makes the business stronger. So let me end where I began, with our people. Thank you to every Worthington Steel employee for your commitment to safety, quality, and service. To our customers for your trust and partnership, and to our shareholders for your continued support. We have a clear strategy, a resilient model, and a team that knows how to execute. As I said in my opening remarks, the environment is mixed today. We remain cautiously optimistic about the first half of 2026. We believe conditions are setting up for improvement in the back half of 2026, and we intend to be ready. I'll now turn the call over to Tim for more detail on the financials for the quarter.