Oct 7, 2026 earnings call — Kloeckner acquisition and integration progress
Reported results include Kloeckner; net sales were $2.7 billion and adjusted EBITDA was $111 million.
Revenue $2.7B (est $3.1B) · EPS $0.57 (est $0.92)
Key quotes
"We closed the transaction on June 3. Kloeckner's shares were delisted from the Frankfurt Stock Exchange on August 12, and the Domination and Profit and Loss Transfer Agreement, or DPLTA, was signed on September 8."
"Simply put, this is one of the most challenging steel supply environments most of us have ever seen. Supply remains tight, lead times are long, production schedules are shifting, and securing the right material for customers has been difficult."
"Purchase accounting required us to record Kloeckner's acquired inventory at fair value. As that inventory was sold, the step-up reduced first quarter gross margin and adjusted EBITDA by an estimated $43 million."
Analyst Q&A 3
Reason for volume beat
Q (Samuel McKinney · KeyBanc): Analyst asked why Legacy Worthington volumes fell less than normal seasonality and asked whether market share wins explain the beat. He also asked if galvanized spreads will hold as hot-rolled prices rise.
A: Management said the volume outperformance was driven by market share gains in heavy truck, agriculture, and automotive, and they probably missed another 30,000 tons of shipment this quarter due to supply chain constraints. On galvanized spreads, management said the market is tight with limited imports and they expect sustainability, but most of the benefit will show up when new contracts start on January 1 because 90% or more of their business is contractual.
"It's definitely the market share gains that have continued to grow, you know, be layered in here over time, whether it be heavy truck, agriculture, as well as automotive." — Geoffrey Gilmore (CEO)
German law and inventory/margins
Q (John Tumazos · John Tumazos Very Independent): Analyst asked how the German DPLTA affects the 38% minority holders — can they keep their shares and for how long. He also asked how inventory turnover and gross margin differ between Kloeckner and Worthington.
A: Management said once the DPLTA is approved and declared effective by German courts, minority shareholders get a put option to sell their shares to Worthington at EUR 11 per share, and if they remain they would receive annual guaranteed cash compensation of 6% or EUR 0.66 per share. They said minority holders could hold their shares as long as they like. On margins and inventory, management said Worthington Steel will have higher gross margins because of higher value-added processes like galvanized and pickling, and they expect working capital synergies of $150 million largely tied to inventory management, though they did not give past inventory turnover numbers.
"The DPLTA states they would receive an annual guaranteed cash compensation of 6% or EUR 0.66 per share." — Geoffrey Gilmore (CEO)
Kloeckner EBITDA and regions
Q (Martin Englert · Seaport): Analyst asked for Kloeckner's normalized Q1 EBITDA excluding the $43 million purchase accounting inventory step-up, and asked for earnings color across North America and Europe.
A: Management said they are not disclosing segment-level or pro forma data at this time. They confirmed the $43 million was purchase accounting (non-cash) and said you could add back the $43 million to the $111 million to get to $150 million that's more representative of EBITDA. They also said Kloeckner sources about 99% of purchases from domestic mills and that the footprint is complementary to Worthington's.
"You could add back the $43 million to the $111 million to get to, you know, $150 million that's more representative of EBITDA." — Timothy Adams (CFO)