Overview

• Quarterly net loss driven by impairment charges and acquisition-related expenses

• U.S. metals processor's fiscal Q4 net sales grew 12% yr/yr, adjusted EPS rose

• Company completed acquisition of majority stake in Kloeckner after quarter-end

Outlook

• Worthington Steel did not provide specific financial guidance for the upcoming quarter or full year

Result Drivers

• HIGHER DIRECT VOLUMES AND PRICES - Revenue growth was driven by increased direct volumes, including the addition of Sitem Group, and higher average direct selling prices

• IMPAIRMENT CHARGES - Operating loss was primarily due to $94.5 mln in goodwill and long-lived asset impairments in the Electrical Steel unit, reflecting weakened demand and increased foreign competition

• HIGHER ACQUISITION-RELATED EXPENSES - SG&A expenses rose, mainly due to $15.5 mln in professional fees related to the Kloeckner acquisition

Company press release: ID:nBw7WSrnda

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q4 Revenue	Miss	$929.20 mln	$992 mln (1 Analyst)
Q4 Adjusted EPS	Beat	$0.74	$0.73 (1 Analyst)
Q4 Net Income		-$48.70 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the iron & steel peer group is "buy"

• Wall Street's median 12-month price target for Worthington Steel Inc is $46.00, about 15.7% above its June 23 closing price of $39.76

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 14 three months ago

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