Worthington Steel (WS) Q1 2027 earnings summary

Executive summary

• Q1 FY2027 included Kloeckner from June 3; sales rose 212% YoY to $2,726.6M, while continuing-operations net loss attributable to controlling interest was $7.0M.

• Adjusted EBIT was $78.5M and adjusted EBITDA was $111.0M; integration, synergy capture and debt reduction are key priorities.

Financial highlights

• Net sales were $2,726.6M, up $1,853.7M or 212% YoY; Kloeckner contributed $1,772.7M, while legacy sales rose 9%.

• Operating income was $56.0M vs. $48.3M; gross margin was $261.2M, including $144.0M from Kloeckner and an estimated $43M inventory fair-value step-up.

• Continuing-operations net loss attributable to controlling interest was $7.0M vs. earnings of $36.8M; diluted EPS was $(0.14) vs. $0.73.

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

• Net interest expense rose to $38.8M from $2.9M; SG&A was $208.8M, including $22.6M of acquisition-related expenses.

Outlook and guidance

• Combined FY2027 capex is estimated at $160M–$180M; spending timing will affect where investment falls within the range.

• Targeted 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 synergies, working-capital reductions and portfolio optimization.

• Q2 FY2027 legacy-business pre-tax inventory holding gains are estimated at $10M–$15M amid rising steel prices.

• Becker sale is expected to close in calendar 2026 for ~€75M (~$84M) total proceeds, including ~€48M cash and ~€27M deferred consideration.