Worthington Steel Inc Q2 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Philip Gibbs - KeyBanc - Analyst : You'd mentioned in the SG&A increase in your remarks, Tim, that compensation and benefits up $5.9 million and higher professional fees of $2.3 million. So I'm wondering what out of that larger increase or more -- is more onetime in nature? Because I know you had called out a Sitem fee, I also know that some of this is related to some of the M&A that you're potentially working on? So just trying to think about what may be core because clearly, it was elevated this quarter.

Question: Philip Gibbs - KeyBanc - Analyst : What about the $2.5 million that you had called out from just the Sitem, I believe it was like an earn-out --

Question: Philip Gibbs - KeyBanc - Analyst : Okay. So that wasn't a onetime payment. That was their underlying results.

Question: Philip Gibbs - KeyBanc - Analyst : Okay. So the higher professional fees of $2.3 million, and that's largely related to the M&A, and that could obviously be somewhat more volatile and unpredictable.

Question: Philip Gibbs - KeyBanc - Analyst : And then on the -- just the automotive momentum that you had on the direct side, pretty impressive, Geoff or was the primary catalyst behind that, the cold-rolled strip piece. I thought I heard you mention that earlier in the call.

Question: Philip Gibbs - KeyBanc - Analyst : How do we tease out or think about how much of of that, which is on the come that you just mentioned is related to the tariffs from just imported foreign steel, but also how much eventually is related to onshoring of just OE platforms overall. So I'm trying to tease out the short term versus the long term.

Question: John Tumazos - John Tumazos Very Independent Research LLC - Analyst : Could you walk us through the adoptions for your minority interest partners. They were a little smaller this quarter than last year.

Question: John Tumazos - John Tumazos Very Independent Research LLC - Analyst : With the disappearance of the Cleveland facility in the Samuel JV, what happens to the machinery? Do you move it to other Worthington plants? Does it get sold for scrap? Just what happens to the equipment.

Question: Martin Englert - Seaport Research Partners - Analyst : The compressed galvanized spreads in recent history, what do you think is contributing to that?

Question: Martin Englert - Seaport Research Partners - Analyst : Have prime scrap spreads relative to obsolete had any negative impact on your business recently.

Question: Martin Englert - Seaport Research Partners - Analyst : Okay. And last one that I have is calendar year 2026, what are your top transformation initiatives that you're focused on?

Question: Martin Englert - Seaport Research Partners - Analyst : Do you have an estimate of any type of annualized savings that you've achieved, I guess, since targeting the back office with the transformation? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 18, 2025 / 1:30PM, WS.N - Q2 2026 Worthington Steel Inc Earnings Call