The following is a summary of the Worthington Steel, Inc. (WS) Q2 2025 Earnings Call Transcript:

Financial Performance:

• Reported earnings of $12.8 million or $0.25 per share in Q2, compared to a $6 million loss or $0.12 per share in the previous year.

• Adjusted EBITDA increased to $30.6 million from $23 million in the prior year quarter.

• Net sales were $739 million, down $69 million or 9% from the prior year quarter, mainly due to lower direct volumes and lower direct market pricing.

Business Progress:

• Advanced in high value-added business by agreeing to acquire a 52% stake in Sitem Group, enhancing the electrical steel lamination business in Europe.

• Installed new product capabilities using licensed ablation technology at TWB, staying on schedule.

• Released the first Corporate Citizenship and Sustainability Report, showcasing achievements such as reduced carbon emissions and support for non-profits.

Opportunities:

• Optimistic about growth in the automotive and construction markets, influenced by lower interest rates and a recovery in demand.

• Potential regulatory changes expected to drive growth in heavy truck market segments in the latter part of the year.

Risks:

• Persistent headwinds in several markets including automotive, construction, and heavy truck which may affect future quarters.

• Noted potential risks from customer-specific financial instabilities that led to increased reserves and bad debt expenses.

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