Worthington Steel (WS) Q4 2024 earnings summary

Executive summary

• Q4 fiscal 2024 ended with strong operational and financial performance, net sales up 3% to $911 million, driven by higher direct selling prices and favorable mix despite lower volumes.

• Net earnings attributable to controlling interest were $53.2 million ($1.06 per share), down from $67.3 million ($1.37 per share) in the prior year.

• Emphasis on organic growth, strategic M&A, and continuous improvement through transformation initiatives.

• Company culture recognized with multiple awards, including Top Workplace in Columbus, GM Supplier of the Year, and John Deere Partner-level supplier.

• Completed separation from Worthington Enterprises, incurring related costs and ongoing stand-alone public company expenses.

Financial highlights

• Q4 earnings were $53.2 million ($1.06 per share), down from $67.3 million ($1.37 per share) in the prior year quarter.

• Adjusted EBIT was $70.4 million, down from $98.4 million year-over-year, mainly due to lower gross margin and unfavorable inventory holding losses.

• Net sales rose 3% to $911 million, driven by higher direct pricing and favorable toll processing mix; shipments just over 1 million tons, down 2% year-over-year.

• Q4 gross margin decreased by $19.2 million to $131.0 million, mainly due to a $36.0 million swing in inventory holding gains/losses.

• Q4 free cash flow was negative $9.2 million, compared to $70.2 million in the prior year quarter, due to $44.8 million in capital expenditures.

Outlook and guidance

• Expect higher estimated inventory holding losses ($15–$20 million pretax) in Q1 fiscal 2025 due to declining steel prices.

• Q1 typically sees a seasonal drop in volume after a strong Q4; automotive market expected to experience normal summer downtime.

• Optimism remains for automotive and electrical steel markets, with significant growth anticipated in electrical steel over the next 7–10 years.

• Management remains focused on executing strategy, driving organic growth, and pursuing strategic M&A.

• Emphasis on continuous improvement and transformation to support future growth.