On this page of StockholderLetter.com we present the 8/16/2024 shareholder letter from Worthington Steel, Inc. — ticker symbol WS. Reading current and past WS letters to shareholders can bring important insights into the investment thesis.

 •  8/16/2024 Letter Continued (Full PDF)
 •  8/15/2025 WS Stockholder Letter
 •  8/14/2026 WS Stockholder Letter
 •  More "Metals Fabrication & Products" Category Stockholder Letters
 •  WS Benford's Law Stock Score = 98

WS 8/16/2024 Shareholder/Stockholder Letter Transcript:

DRIVING
STEEL
FORWARD
WORTHINGTON STEEL / 2024 ANNUAL REPORT

FINANCIAL HIGHLIGHTS
MAY 31,
FISCAL YEARS ENDED (In millions, except per share amounts)
Net sales 1
Net earnings attributable to controlling interest
2024
2023
2022
$ 3,430.6
154.7
$ 3,607.7
87.1
$ 4,068.9
180.4
Earnings per share (diluted) 4

3.11

0.01


1.77
$ 3.66
Selected items included in Net earnings attributable to
controlling interest: 2
Impairment of long-lived assets (pre-tax)
Restructuring and other (income) expense, net (pre-tax)
Separation costs (pre-tax) 2

0.9
19.5
Adjusted earnings per share (diluted) 3, 4

0.30
1.9 $ 0.03
(2.4)
(0.03)
17.5
$ 3.42
Net earnings attributable to controlling interest
Interest expense, net
Income tax expense
Tax indemnification adjustment
Selected items (pre-tax) 2

Adjusted earnings before interest and taxes (Adjusted EBIT) 3
Depreciation and amortization

Adjusted earnings before interest, taxes, depreciation and
amortization (Adjusted EBITDA) 3

154.7
6.0
46.1
(2.8)
20.4

0.26
1.9 $ 0.03
(8.6)
(0.13)

$ 2.03
$ 3.56

87.1
3.0
29.0
17.1

180.4
3.0
54.0
(6.7)
224.4
65.3

136.1
69.6

230.7
59.5
289.7

205.7

290.2
Net earnings attributable to controlling interest as a percent
of net sales
Adjusted EBIT as a percent of net sales 3
4.5%
2.4%
4.4%
6.5%
3.8%
5.7%
Adjusted EBITDA as a percent of net sales 3
8.4%
5.7%
7.1%
Net cash provided by operating activities
Less: capital expenditures

199.5
Free cash flow

96.1
Cash dividends declared
Per share

16.1

(103.4)
315.0

(45.5)

39.5
(36.4)
269.5

n/a
$ 0.32

3.1
n/a



1
Excludes net sales from unconsolidated affiliates in accordance with accounting principles generally accepted in the United States. Net sales from unconsolidated
affiliates were as follows:
604.1
564.6
620.3
2
We use net earnings attributable to controlling interest, excluding selected items (impairment, restructuring and separation costs), as a measure of our normal
operating performance, which is factored into evaluations, planning and compensation payments.
3
Adjusted earnings per share, Adjusted EBIT and Adjusted EBITDA are non-GAAP financial measures and are used by management to evaluate the Company   s
performance, engage in financial and operational planning and determine incentive compensation. Management believes that these measures provide useful
information to investors because they provide additional perspective of the Company   s ongoing operations. These measures exclude the impact of the noncontrolling
interest, as well as the special items noted above.
4
Prior to the third quarter of fiscal 2024, reported weighted average common shares outstanding (Diluted) reflects the basic shares at the Separation. This share amount
is being utilized for the calculation of diluted earnings per share for periods presented prior to the Separation.
MAY 31,
AT FISCAL YEAR END (In millions, except per share amounts)
Net working capital
Net fixed assets
Total assets
Total debt 5
Shareholders    equity     controlling interest
Per share
Shares outstanding 4
Total debt to total capital 6, 7
5
2024

383.4
474.8
1,866.4
148.0
985.3
2023

502.5
414.4
1,764.4
22.8
1,029.0
2022

609.2
441.1
2,084.0
83.0
1,133.2
49.3
49.3
49.3
13.1%
2.2%
6.8%
Total debt includes short-term borrowings and current maturities of and long-term debt with the Former Parent.
6
These measures exclude noncontrolling interest.
7
Total capital is defined as total debt plus shareholders    equity attributable to controlling interest.


At Worthington Steel, our vision is to
boldly drive the metals industry into
a sustainable future as the most
trusted, most innovative and most
value-added metals processing
partner in North America and beyond.
It   s a big vision. The Company is poised to deliver by capitalizing on its unique position
in the steel supply chain while following the proven Worthington Business System of
Transformation, Innovation and Acquisitions to drive profitable growth.
Focused investments in the rapidly growing electrical steel market, expanded valueadded offerings through strategic capex and acquisitions and continuous
improvement initiatives fuel our momentum.
While our Company has evolved, what hasn   t changed is the foundation the Company
was built upon and has operated by for 69 years, a Philosophy and culture that puts
people first. Together, we are driving steel forward.

DEAR
FELLOW
SHAREHOLDERS,
On behalf of the Worthington Steel leadership team and our
approximately 5,000 employees, I am proud to share our progress
in the inaugural Worthington Steel Annual Report. We began fiscal
2024 as a part of Worthington Industries and ended the year as a
fully independent Company with a laser-like focus on being a leader in
the niche markets we serve as a unique, value-added steel processor.
Celebrating Our Heritage
Our name and our new logo are reflective of where it all began. Nearly 70 years ago,
our Company started as Worthington Steel, a pioneer in metals processing.
Throughout our history, we have followed a people-first philosophy, rooted in the
Golden Rule. We continue to prioritize strong attention to safety and doing the right
thing for our employees, customers, suppliers and shareholders.
Our Philosophy
remains the foundation
for how we operate
I see Our Philosophy in action every day in the way our employees
go the extra mile to take care of customers, collaborate with
suppliers, use the Transformation to reduce costs and increase
and make decisions. efficiencies, and give back to their communities.

Strategy to Drive Growth and Shareholder Value
As we honor our heritage, we are certainly not resting on our laurels. Worthington
Steel is a leader in several key markets, and we work every day to maintain those
positions and our award-winning, enduring customer relationships. At the same time,
we are identifying new niche markets where we can drive steel forward.
We continue to utilize our proven Worthington Business System
to drive profitable growth and shareholder value. With focused
investments in the rapidly growing electrical steel market,
we have and will continue to expand our capacity for highly
technical electrical steel products to meet the rising demand
for electric and hybrid vehicles and support growth and
improvements in the electric infrastructure. We are investing
to meet that demand by adding capacity at our electrical steel
facilities in Canada and Mexico, and we entered the European
market with an electrical steel acquisition last November.
We are working to drive margin-accretive growth by pairing
our commercial focus with disciplined capex and strategic
acquisitions. For instance, through a licensing agreement, our
TWB joint venture recently became one of only two companies to
offer patented ablation technology in the production of hot formed
tailored blanks. As one of the fastest growing segments in the tailored blank market,
this technology allows for welding of advanced high-strength steel, enhancing
strength and crash performance and reducing weight for automotive applications.
Business improvements also remain a significant focus through our Transformation
efforts. During the last fiscal year, the team placed more emphasis on crossfunctional alignment between Transformation, Data and Analytics and Information
Technology, employing increased use of data and system integrations for enhanced
machine learning and smart factory technology.

8/16/2024 Letter Continued (Full PDF)

 

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