Worthington Steel, Inc.

Thank you for standing by and welcome to Worthington Steel's fourth quarter fiscal 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I would now like to turn the call over to Melissa Dykstra, Vice President of Corporate Communication and Investor Relations. Melissa, please go ahead.

Thank you, operator. Good morning and welcome to Worthington Steel's fourth quarter fiscal year 2026 earnings call. On our call today, we have Geoff 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 materially from those suggested. We issued our earnings release yesterday after the market closed. Please refer to it for more detail on 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 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 Geoff Gilmore.

Good morning and thank you for joining us. Before I get into the quarter, I want to start with the most important development since our last call. On June 3rd, we completed the Klockner & Company transaction and became the majority shareholder of the company. This is the largest acquisition in Worthington Steel's history and it is a defining step in building our future. I want to say thank you to our teams across Worthington Steel and to our new colleagues at Klockner. This was a demanding quarter with a lot happening at once. Through it all, our team stayed focused on safety, serving customers, and executing every day while we took a major strategic step as a company. The transaction builds directly on what we have been working towards since becoming a standalone public company, a business anchored in value-added processing, disciplined capital allocation, and continuous improvement through the Worthington business system. The Collector Acquisition materially expands our scale, our capabilities, and our reach. It gives us a broader set of products and processing capabilities, a larger and more complementary footprint, and increased end market diversification. Klockner brings an established footprint and a portfolio that broadens our offerings to include aluminum, stainless, long products, plate and fabrication, while complementing our strengths in carbon flat rule and our growing position in electrical steel. Put simply, this transaction gives us more ways to serve our customers, more avenues for profitable growth, and further strengthens our ability to deliver strong performance through cycles. That diversification matters. A broader, more balanced portfolio paired with more value-added processing can improve the quality of earnings through the cycle and reduce reliance on any single end market or product category. We also see a clear opportunity to create value over time through practical levers we understand well, operating discipline, procurement scale, network efficiency, and best practice sharing. As we continue integration planning, these opportunities are becoming even more evident and we remain confident about our ability to achieve our synergy targets as we move through the required process and achieve operational control. With that in mind, I also want to spend a few minutes on where we are in the Klockner takeover process. As you know, the transaction closed on June 3rd and Worthington owns approximately 62% of Klockner's outstanding shares. There are still several steps to take before Worthington Steel and Klockner operate as one company. In late March, we announced our intention to pursue a Domination and Profit and Loss Transfer Agreement, or DPLTA. At a high level, this is a German corporate structure that, once approved and effective, allows the parent company to direct the management board of the subsidiary and assures alignment across the combined organization. For Worthington Steel, the practical benefit is that it supports more effective coordination, helps us move faster once the appropriate approvals are in place, and creates a clear path to realizing a lot of the synergies we identified. Like the tender offer process, approval of a DPLTA has to follow the required German legal steps, including shareholder approval, but we believe it is an important part of bringing the companies together in a disciplined way. Additionally, we have announced our intention to pursue a delisting of Klockner shares. Now that the transaction is closed, we believe the business is better positioned as part of Worthington Steel's operating platform as a non-listed company. Over time, delisting should simplify the structure, eliminate public company requirements, and reduce administrative burden. It should give us greater flexibility to focus on operating performance, customer service, integration, and value creation. It does not change the fundamentals of why we pursued the acquisition. We remain focused on building a stronger, more diversified metals processing company with a clear path to long-term value. With the close behind us, our focus turns to execution. Integration is not something you just announce, it is something you deliver. Our teams are focused on day one readiness, integration governance, and aligning priorities so we can bring the organizations together effectively and begin capturing the value we've committed to. We will be deliberate, we will protect customer service, we will focus on cultural integration, and we will share more each quarter. Before we move on to discuss the corridor, I want to recognize the teams who got us here. Closing a highly structured cross-border transaction, raising more than $1 billion of new capital, and securing regulatory approvals sooner than expected requires real discipline and intense coordination across legal, finance, treasury, operations, IT, HR, communications, and many other functions. I want to thank everyone on our team who had a hand in bringing the transaction to a successful close. With that, let's turn to our results for the fourth quarter. As we mentioned during our last call, we expected several non-recurring items related to the Klockner transaction. In addition, we also recorded one-time non-cash impairment charges related to the impairment of certain electrical steel assets in both Europe and the United States. Our results reflect that and Tim will walk through those items in more detail. Net sales increased by 12% to $929.2 million. Adjusted EBITDA was $75.2 million and adjusted earnings per share were $0.74. From a macro standpoint, the quarter reflected stable to soft conditions. Customers remain deliberate and inventory disciplined, and we continue to see sensitivity to interest rates and broader uncertainty. Trade policy continues to be an important factor, and the industry needs consistency. Customers make long-term sourcing and investment decisions based on rules that must be reliable. As we head toward USMCA negotiations, we welcome steps that tighten enforcement and ensure the agreement delivers on its intent to support North American supply chains and North American manufacturing. At the same time, we remain cautiously optimistic that conditions will improve with the end of the war with Iran and the easing of macro uncertainty. The pace and timing will depend heavily on various factors. particularly the interest rate path and broader geopolitical stability. If those factors move in a constructive direction, we believe demand can improve as we move through the year. Let me break down what we saw in our key markets and what we were watching in the coming months. In automotive, the broader North American market has been steadier than many expected, even with the affordability and macro noise still out there. Production and build plans are holding up, and the mix continues to shift in a pragmatic way, with OEMs placing more emphasis on hybrids while EV growth has slowed as expected. For us, the takeaway is simple. This is an environment where execution and share matter, and we like how we are positioned in the programs and applications where quality and reliability win. In construction, conditions remain mixed. There are small pockets that continue to do well, including Dana Center-related activity, but we saw broader weakness as sustained improvement is still sensitive to interest rates and confidence. Until rates move down more meaningfully, customers are going to stay disciplined and selective. We will stay close to demand signals, protect mix, and be ready to move when the market turns. We saw improvements in the ag sector this quarter. Partially due to share gains, but looking more broadly, the ag market remains relatively weak. The tone is still cautious and recovery is likely to be gradual rather than immediate, influenced by farm economics and policy conditions. We are staying disciplined, supporting customers, and focusing on the work where we can add value, so we are positioned to benefit as the cycle improves. Our shipments to the heavy truck and trailer segment were down this quarter. However, we are seeing signs of improvement in the Class 8 sector and are more optimistic about the back half of calendar year 2026. We expect a rebound in the trailer market to push back into 2027. There are several other highlights I'd like to point out. On the transformation front, we continue to build repeatable operating capabilities that will improve performance across our network. Last quarter, I described using lean flow principles at our Delta Ohio facility to reduce inventory, improve cycle times, and lower working capital intensity by aligning material release and production directly to customer demand. This quarter, we successfully applied those same concepts at our Bowling Green Kentucky facility. Working closely with one of our largest customers and key supply chain partners, the team redesigned how raw material enters the operation, transitioning from a traditional push system to a demand-driven pull and replenish model. The result was roughly a 37% reduction in inventory while maintaining 100% on-time delivery performance. More importantly, the redesign removed a significant raw material storage constraint within the facility, freeing floor space and creating additional flexibility to support future demand and growth without additional capital investment. Importantly, the methodology is proving transferable. We are beginning to package the lessons learned from Delta and Bowling Green into a scalable operating model that can be deployed across our footprint. As we enter fiscal 2027, we are already expanding these flow concepts into our specialty strip business, while evaluating where these concepts may apply across the Klockner footprint. Over time, we believe this supports a broader objective of structurally lowering working capital, improving operating flexibility, accelerating acquisition synergies, and creating additional capacity for growth without relying on higher inventory levels. We also continue to make practical progress with artificial intelligence. This quarter, we expanded our automation work into customer order management at Spartan Steel Coating. Our teams developed an AI agent to process highly variable work orders from a key customer. This work historically required employees to review emails, interpret different order formats, identify specifications, and manually enter information into our ERP system. Because the orders varied so much, this was not a good fit for traditional rules-based automation. We created an AI agent trained with historical transaction data. The agent can understand multiple order formats, identify the correct specifications, and create transactions automatically. In testing, it achieved greater than 90% accuracy, and we expect to deploy it later this quarter. The important point is that we did not ask the customer to change how they do business with us. We built the tool to adapt to the work. This is where we see real opportunity with AI, improving scalability and controls, reducing manual effort, and freeing our teams to focus on higher value work that supports customers and growth. We also received important recognition from key customers I would like to highlight. Worthington Steel earned John Deere's partner-level supplier rating for the 14th consecutive year. We were also recognized earlier this month as a General Motors Supplier of the Year for 2025, our fourth time achieving that distinction and our third year in a row. Those recognitions matter because they reflect how we show up through safety, quality, delivery, partnership, and consistency over time. And I want to recognize the teams behind those results. To the team serving DR&GM, thank you. Those awards were earned by your hard work and superior performance. Another area of strong performance for Worthington Steel is our culture. We were selected for the 14th consecutive year as the top workplace in Central Ohio. This recognition is based on feedback directly from our employees, so I find it especially meaningful. Top Workplace is a designation that our colleagues at Klockner are recognized for as well, and I find it particularly inspiring as we bring our two cultures together over the coming months. To close, I would say this quarter reflects two things at once, steady execution in a mixed macro environment and a major strategic step forward with the completion of the Klockner transaction shortly after the fiscal year end. We remain focused on what we can control, safety, customer service, operational discipline, and transformation, and we will bring that same approach to integration. I'll now turn the call over to Tim for more detail on the quarter and the financials.