Worthington Steel Inc Q3 2025 Earnings Call Transcript

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

Question: Martin Englert - Seaport Global Securities LLC - Analyst : Hello, good morning, everyone.

Question: Martin Englert - Seaport Global Securities LLC - Analyst : Just wanted to see if you can discuss the impact that you're seeing thus far with the tariff policy. Maybe if you could run through positives and negatives and anything you're hearing from your customers in the supply chain.

Question: Martin Englert - Seaport Global Securities LLC - Analyst : Okay. Understood. I wanted to ask about TWB. There was a small charge in there, but I think it was a loss for the quarter, which was somewhat abnormal, I think, if I remember right, they are typically not susceptible or as susceptible to inventory holding gains and losses. So I just wanted to understand what's happening there.

Question: Martin Englert - Seaport Global Securities LLC - Analyst : All right. Stripping out the one-off items for the quarter, there regarding your expectations above underlying EBITDA -- unit EBITDA in steel and kind of the cadence or trajectory of normalization there? And again, stripping out one-off items, as well as inventory holding gains and losses, I guess what I'm asking for is your best guess based on visibility, whether this takes a quarter, two quarters, four quarters before things are kind of back to a normalized level on the underlying unit EBITDA.

Question: Martin Englert - Seaport Global Securities LLC - Analyst : When you say end of the year, do you mean calendar year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 20, 2025 / 12:30PM, WS.N - Q3 2025 Worthington Steel Inc Earnings Call

Question: Martin Englert - Seaport Global Securities LLC - Analyst : Okay. Any way to parse out the fixed -- unit fixed cost impact potentially that you're seeing maybe using this quarter as an example within steel

Question: Martin Englert - Seaport Global Securities LLC - Analyst : Okay. Any -- I mean, I guess pivoting to the JV there, typically, they do a bit better in a rising steel price environment. Any -- I think it was breakeven, if I remember right, for this quarter, but I would guess that it should step off the --

Question: Martin Englert - Seaport Global Securities LLC - Analyst : Yeah, Serviacero, yeah.

Question: Martin Englert - Seaport Global Securities LLC - Analyst : Okay, I appreciate the caller. Thank you for the time and good luck.

Question: Philip Gibbs - KeyBanc Capital Markets Inc. - Analyst : Hey, good morning.

Question: Philip Gibbs - KeyBanc Capital Markets Inc. - Analyst : Hey, Geoff, you had mentioned that February was reasonably strong, and we did see that in the MSCI data as well. What are you seeing in March thus far, I guess, following February?

Question: Philip Gibbs - KeyBanc Capital Markets Inc. - Analyst : You mentioned in your remarks that construction volumes, I think, specifically were down 20%, obviously, a very difficult comparison and not -- I don't think overall indicative of the demand drop itself in the marketplace. Is there going to be an effort to get some more market share back within construction? Or is it just some of the customers that you're serving at this point?

Question: Philip Gibbs - KeyBanc Capital Markets Inc. - Analyst : Thanks, Geoff. And any color on some of the newer customer awards within automotive? I wouldn't think that they would have been visible and in this quarter and maybe more visible as the year progresses, but maybe some color on the new awards there and whether or not you expect them to be accretive to your margin profile? Thank you.

Question: John Tumazos - John Tumazos Very Independent Research, LLC - Analyst : Thank you for taking my question, and for your service to the company.

Question: John Tumazos - John Tumazos Very Independent Research, LLC - Analyst : What fraction of the 16 million unit market last year or this year is US made? Lorenzo on the call said that last year was the first year that had a majority of foreign imports. But I did literature search, I found I had a different statistic, and maybe I just didn't find the right number.

Question: John Tumazos - John Tumazos Very Independent Research, LLC - Analyst : Let's just say for discussion that it's USD9 million, USD7 million abroad or $6 million or something. And Trump puts up a wall, if 16 million units were handed to the US companies on a platter, how much of it could they take? Could they make $1 million more, $2 million more? What's your best guess?

Question: John Tumazos - John Tumazos Very Independent Research, LLC - Analyst : Since I'm not smart enough to figure out.

Question: John Tumazos - John Tumazos Very Independent Research, LLC - Analyst : On Electrical, there was some electricity conference a year or two ago where the utility companies said, Oh, there's going to be 1% or 2% demand growth. Anyone must say it's going to be over 5%. You used a number of 6% today. What percent growth do you think the electric utility industry is in a position to supply? I don't think they're ready to make 6% more.