Worthington Steel (WS) Q4 2026 earnings summary

Executive summary

• Completed the largest acquisition in company history, acquiring a 62% stake in Klöckner & Co., expanding scale, capabilities, and end-market diversification.

• Net sales for Q4 FY26 rose 12% year-over-year to $929.2 million, driven by higher direct volumes and the addition of Sitem Group.

• Integration planning underway, with focus on synergy realization, operational discipline, and cultural alignment.

• Fourth quarter marked by steady execution amid mixed macro conditions and significant non-recurring items related to the acquisition and asset impairments.

• Recognized for supplier excellence and community engagement, and declared a quarterly dividend of $0.16 per share.

Financial highlights

• FY2026 net sales: $3.44B (+11% YoY); Q4 FY26 net sales: $929.2M (+12% YoY).

• Adjusted EBITDA for FY2026 was $246M (margin 7.2%); Q4 FY26 adjusted EBITDA was $75.2M (margin 8.1%).

• Q4 FY26 operating loss: $57.6M, mainly due to $94.5M in non-cash impairments and acquisition expenses.

• Reported net loss attributable to controlling interest was $48.7M ($0.98 per share); adjusted EPS was $0.74.

• Free cash flow for FY2026 totaled $80M; Q4 FY26 free cash flow was $7.8M; cash at period end: $84.6M; net debt: $172.2M.

Outlook and guidance

• Targeting adjusted EBITDA margin expansion to 10%+ through acquisitions, product mix, and operational improvements.

• Cautiously optimistic for demand improvement, contingent on interest rates and geopolitical stability.

• Synergy target of $150M EBITDA and $150M working capital opportunities from Klöckner integration by FY2028.

• Expecting to de-lever to less than 2.5x net leverage within 24 months post-Klöckner acquisition.

• Fiscal 2027 capital expenditures expected to be approximately $60M; annual capex targeted at $100–150M.