Worthington Steel (WS) Q1 2027 earnings summary

Executive summary

• Q1 FY2027 included Kloeckner following the June 3 majority acquisition; net sales reached $2,726.6M, while continuing-operations net loss attributable to controlling interest was $7.0M.

• Kloeckner expands geographic reach, product breadth and North American scale; applying the established transformation playbook is central to expected value creation.

Financial highlights

• Net sales were $2,726.6M, up 212% YoY from $872.9M; Kloeckner contributed $1,772.7M.

• Adjusted EBIT was $78.5M versus $55.5M; adjusted EBITDA was $111.0M versus $78.8M, and adjusted diluted EPS was $0.57 versus $0.77.

• Continuing-operations net loss attributable to controlling interest was $7.0M, or $0.14 per diluted share, versus earnings of $36.8M, or $0.73, YoY.

• Operating income was $56.0M versus $48.3M; gross margin was $261.2M, up $146.0M YoY, including $144.0M from Kloeckner.

• Legacy net sales increased $81.0M, or 9%, YoY; shipments were ~921,000 tons, down 1%.

Outlook and guidance

• Target annual Kloeckner synergies are ~$150M by Year 2, with ~50% of run-rate expected in the first full year after DPLTA effectiveness; ~$50M of one-time integration costs are expected in the first 12 months.

• Target net leverage below 2.5x within 24 months of DPLTA effectiveness, supported by EBITDA growth, synergies, working-capital reductions and portfolio optimization.

• Combined FY2027 capital expenditures are planned at $160M–$180M; first-quarter spending is not representative of the full-year pace.

• Full Kloeckner operational control is expected as early as Jan. 1, 2027, subject to DPLTA registration; integration and synergy capture begin upon effectiveness.

• North American auto production is expected to remain essentially flat versus calendar 2025 through year-end 2026, with no significant near-term build inflection assumed.