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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended August 31, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ___________ to ___________
	Commission File Number: 001-41830

WORTHINGTON STEEL, INC.

(Exact name of registrant as specified in its charter)


Ohio		92-2632000
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

100 W. Old Wilson Bridge Road, Columbus, Ohio		43085
(Address of principal executive offices)		(Zip Code)

     (614) 840-3462

    

     (Registrant’s telephone number, including area code)

    

     Not Applicable

    

     (Former name, former address and former fiscal year, if changed since last report)

    

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, Without Par Value	WS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

On October 7, 2025, the number of common shares, without par value, of the registrant issued and outstanding was 50,833,057.

Table of Contents

TABLE OF CONTENTS


			Page

Cautionary Note Regarding Forward-Looking Statements			ii

Part I. Financial Information

	Item 1.	Financial Statements

		Consolidated Balance Sheets – August 31, 2025 and May 31, 2025	1

		Consolidated Statements of Earnings – Three Months Ended August 31, 2025, and August 31, 2024	3

		Consolidated Statements of Comprehensive Income – Three Months Ended August 31, 2025, and August 31, 2024	4

		Consolidated Statements of Cash Flows – Three Months Ended August 31, 2025, and August 31, 2024	5

		Consolidated Statements of Equity and Mezzanine Equity – Three Months Ended August 31, 2025, and August 31, 2024	6

		Condensed Notes to Consolidated Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38

	Item 4.	Controls and Procedures	38

Part II. Other Information

	Item 1.	Legal Proceedings	39

	Item 1A.	Risk Factors	39

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

	Item 3.	Defaults Upon Senior Securities	39

	Item 4.	Mine Safety Disclosures	39

	Item 5.	Other Information	40

	Item 6.	Exhibits	40

Signatures			41

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING StatementS

Selected statements made by Worthington Steel, Inc. (“Worthington Steel” and, together with its consolidated subsidiaries, the “Company,” “we,” “us,” or “our”) contained in this Quarterly Report on Form 10-Q (this “Form 10-Q”), including, without limitation, in “PART I – Item 1. – Note 5 – Contingent Liabilities and Commitments” and in “PART I – Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations,” constitute “forward-looking statements,” as that term is used in the Private Securities Litigation Reform Act of 1995, as amended (the “PSLRA”). Forward-looking statements reflect the Company’s current expectations, estimates or projections concerning future results or events. These statements are often identified by the use of forward-looking words or phrases such as “believe,” “expect,” “anticipate,” “may,” “could,” “should,” “would,” “intend,” “plan,” “will,” “likely,” “estimate,” “project,” “position,” “strategy,” “target,” “aim,” “seek,” “foresee,” or other similar words or phrases. These forward-looking statements include, without limitation, statements relating to:

•

future or expected cash positions, liquidity and ability to access financial markets and capital;

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outlook, strategy or business plans;

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anticipated benefits of Worthington Enterprises, Inc.’s separation of its steel processing business into Worthington Steel as a stand-alone, publicly traded company on December 1, 2023 (the “Separation”);

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expected financial and operational performance, and future opportunities;

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the tax treatment of the Separation;

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future or expected growth, growth potential, forward momentum, performance, competitive position, sales, volumes, cash flows, earnings, margins, balance sheet strengths, debt, financial condition or other financial measures;

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pricing trends for raw materials and finished goods and the impact of pricing changes;

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the ability to improve or maintain margins;

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expected demand or demand trends;

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additions to product lines and opportunities to participate in new markets;

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expected benefits from transformation and innovation efforts;

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the ability to improve performance and competitive position;

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anticipated working capital needs, capital expenditures and asset sales;

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anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing and the supply chain and the results thereof;

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projected profitability potential;

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the ability to make acquisitions, form joint ventures and consolidate operations, and the projected timing, results, benefits, costs, charges and expenditures related to acquisitions, joint ventures, headcount reductions and facility dispositions, shutdowns and consolidations;

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projected capacity and the alignment of operations with demand;

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the ability to operate profitably and generate cash in down markets;

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the ability to capture and maintain market share and to develop or take advantage of future opportunities, customer initiatives, new businesses, new products and new markets;

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expectations for inventories, jobs and orders;

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expectations for the economy and markets or improvements therein;

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expectations for generating improving and sustainable earnings, earnings potential, margins or shareholder value;

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effects of judicial rulings, laws and regulations;

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anticipated improvements in business and efficiencies to be gained from the use of artificial intelligence and machine learning (“AI”) and other technologies;

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effects of cybersecurity breaches and other disruptions to information technology infrastructure;

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effects of public health emergencies and the various responses of governmental and nongovernmental authorities thereto on economies and markets, and the Company’s customers, counterparties, and employees and third-party service providers; and

•

other non-historical matters.

Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected. Any number of factors could affect actual results, including, without limitation, those that follow:

•

the uncertainty of obtaining regulatory approvals in connection with the Separation, including rulings from the Internal Revenue Service;

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the ability to successfully realize the anticipated benefits of the Separation;

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the effect of conditions in national and worldwide financial markets, including inflation, increases in interest rates, and economic recession, and with respect to the ability of financial institutions to provide capital;

•

the risks, uncertainties and impacts related to public health emergencies – the duration, extent and severity of which are impossible to predict, and actions taken by governmental authorities or others in connection therewith;

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changing commodity prices and/or supply;

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product demand and pricing;

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changes in product mix, product substitution and market acceptance of the Company’s products;

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volatility or fluctuations in the pricing, quality or availability of raw materials (particularly steel), supplies, transportation, utilities, energy, labor and other items required by operations;

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effects of sourcing and supply chain constraints, including interruptions in deliveries of raw materials and supplies or the loss of key supplier relationships;

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the outcome of adverse claims experience with respect to workers’ compensation, product recalls or product liability, casualty events or other matters;

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effects of critical equipment failures, facility closures and the consolidation of operations;

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the effect of financial difficulties, consolidation and other changes within the steel, automotive, construction, and other industries in which the Company participates;

•

failure to maintain appropriate levels of inventories;

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financial difficulties (including bankruptcy filings) of original equipment manufacturers, end-users and customers, suppliers, joint venture partners and others with whom the Company does business;

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the ability to realize targeted expense reductions from headcount reductions, facility closures and other cost reduction efforts;

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the ability to realize cost savings and operational, sales and sourcing improvements and efficiencies, and other expected benefits from transformation initiatives, on a timely basis;

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the overall success of, and the ability to integrate, newly acquired businesses and joint ventures, maintain and develop their customers, and achieve synergies and other expected benefits and cost savings therefrom;

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the ability to realize expected benefits of strategically deployed capital expenditures;

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capacity levels and efficiencies, within facilities, within major product markets and within the industries in which the Company participates as a whole;

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the effect of disruption in the business of suppliers, customers, facilities and shipping operations due to adverse weather, casualty events, equipment breakdowns, labor shortages, interruption in utility services, civil unrest, international conflicts, terrorist activities, or other causes;

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changes in customer demand, inventories, spending patterns, product choices, and supplier choices;

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risks associated with doing business internationally, including economic, political and social instability, foreign currency exchange rate exposure and the acceptance of the Company’s products in global markets;

iii

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the effect of national, regional and global economic conditions generally and within major product markets, including significant economic disruptions from public health emergencies, the actions taken in connection therewith and the implementation of related fiscal stimulus packages;

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the impact of tariffs, the adoption of trade restrictions affecting the Company’s products, suppliers or customers, a United States (“U.S.”) withdrawal from or significant renegotiation of trade agreements, the occurrence of trade wars, the closing of border crossings, and other changes in trade regulations or relationships;

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the ability to improve and maintain processes and business practices to keep pace with the economic, competitive and technological environment;

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the effect of inflation, interest rate increases and economic recession, which may negatively impact the Company’s operations and financial results;

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deviation of actual results from estimates and/or assumptions used by the Company in the application of its significant accounting policies;

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impairment of the recorded value of inventory, equity investments, fixed assets, goodwill and other assets;

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competitive pressure on sales and pricing, including pressure from imports and substitute materials;

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the level of imports and import prices in the Company’s markets and the foreign currency exchange rate exposure;

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the impact of environmental laws and regulations or the actions of the U.S. Environmental Protection Agency or similar regulators which increase costs or limit the Company’s ability to use or sell certain products;

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the impact of increasing environmental, greenhouse gas emission and sustainability regulations;

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the impact of judicial rulings and governmental regulations, both in the U.S. and abroad, including those adopted by the U.S. Securities and Exchange Commission (the “SEC”) and other governmental agencies;

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the effect of healthcare laws in the U.S. and potential changes for such laws, which may increase the Company’s healthcare and other costs and negatively impact the Company’s operations and financial results;

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the effect of tax laws in the U.S. and potential changes for such laws, which may increase the Company’s costs and negatively impact its operations and financial results;

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cybersecurity risks;

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the effects of privacy and information security laws and standards;

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the cyclical nature of the steel industry;

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the Company’s safety performance;

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the effects of competition and price pressures from competitors; and

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other risks described from time to time in Worthington Steel’s filings with the SEC, including those described in “Part I – Item 1A. – Risk Factors” of the annual report on Form 10-K of Worthington Steel for the fiscal year ended May 31, 2025 (the “2025 Form 10-K”).

The Company notes these risk factors for investors as contemplated by the PSLRA. Forward-looking statements should be construed in the light of such risks. It is impossible to predict or identify all potential risk factors. Consequently, readers should not consider the foregoing list to be a complete set of all potential risks and uncertainties. Readers are cautioned not to place undue reliance on any forward-looking statements. Any forward-looking statements in this Form 10-Q are based on current information as of the date of this Form 10-Q, and the Company assumes no obligation to correct or update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.

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PART I. FINANCIAL INFORMATION

Item 1. – Financial Statements

WORTHINGTON STEEL, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except share amounts)


	(Unaudited)
	August 31,		May 31,
	2025		2025
Assets
Current assets:
Cash and cash equivalents	$	78.3	$	38.0
Restricted cash		-		54.9
Receivables, less allowances of $0.4 and $3.8, respectively		490.3		438.7
Inventories:
Raw materials		215.1		179.4
Work in process		169.5		165.6
Finished products		93.9		77.0
Total inventories		478.5		422.0
Income taxes receivable		1.6		0.1
Assets held for sale		11.2		11.5
Prepaid expenses and other current assets		88.6		83.3
Total current assets		1,148.5		1,048.5
Investment in unconsolidated affiliate		133.0		126.6
Operating lease right-of-use assets		87.3		72.6
Finance lease right-of-use assets, net of accumulated amortization of $0.5 and $–, respectively		8.4		-
Goodwill		101.7		79.6
Other intangible assets, net of accumulated amortization of $52.4 and $50.3, respectively		90.0		67.9
Deferred income taxes		10.4		11.4
Other assets		8.0		7.0
Property, plant and equipment:
Land		44.2		38.6
Buildings and improvements		217.8		190.4
Machinery and equipment		1,015.6		942.6
Construction in progress		151.7		132.7
Total property, plant and equipment		1,429.3		1,304.3
Less: accumulated depreciation		773.3		756.1
Total property, plant and equipment, net		656.0		548.2
Total assets	$	2,243.3	$	1,961.8

See condensed notes to consolidated financial statements.

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WORTHINGTON STEEL, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except share amounts)


	(Unaudited)
	August 31,			May 31,
	2025			2025
Liabilities, mezzanine equity, and equity
Current liabilities:
Accounts payable	$	385.7		$	402.5
Short-term borrowings		160.0			149.2
Accrued compensation, contributions to employee benefit plans and related taxes		54.8			43.0
Dividends payable		9.1			9.3
Other accrued items		24.2			15.3
Current operating lease liabilities		10.6			7.7
Current finance lease liabilities		2.4			-
Income taxes payable		16.5			4.5
Current maturities of long-term debt		30.3			-
Total current liabilities		693.6			631.5
Other liabilities		48.8			32.8
Long-term debt		43.1			2.3
Noncurrent operating lease liabilities		80.9			68.7
Noncurrent finance lease liabilities		6.0			-
Deferred income taxes, net		40.0			28.6
Total liabilities		912.4			763.9

Mezzanine equity:
Redeemable noncontrolling interest (Redeemable NCI)		97.7			-
Total mezzanine equity		97.7			-

Shareholders’ equity – controlling interest:
Preferred shares, without par value; authorized – 1,000,000 shares; no shares issued or outstanding		-			-
Common shares, without par value; authorized – 150,000,000 shares; issued and outstanding – 49,635,244 shares and 49,548,895 shares, respectively		-			-
Additional Paid-in Capital (APIC)		915.3			913.9
Retained Earnings		192.5			164.2
Accumulated other comprehensive loss, net of taxes of $(2.0) and $(2.0), respectively		(2.9	)		(4.0	)
Total Shareholders’ equity – controlling interest		1,104.9			1,074.1
Noncontrolling interests (NCI)		128.3			123.8
Total equity		1,233.2			1,197.9
Total liabilities, mezzanine equity, and equity	$	2,243.3		$	1,961.8

See condensed notes to consolidated financial statements.

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WORTHINGTON STEEL, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended
	August 31,			August 31,
	2025			2024
Net sales	$	872.9		$	834.0
Cost of goods sold		757.7			733.6
Gross margin		115.2			100.4
Selling, general and administrative expense		67.9			57.0
Restructuring and other (income), net		(1.0	)		-
Operating income		48.3			43.4
Other income (expense):
Miscellaneous income (expense), net		0.2			(5.9	)
Interest expense, net		(2.9	)		(2.6	)
Equity in net income of unconsolidated affiliate		6.4			1.3
Earnings before income taxes		52.0			36.2
Income tax expense		13.4			4.0
Net earnings		38.6			32.2
Net earnings attributable to noncontrolling interests		1.8			3.8
Net earnings attributable to Worthington Steel	$	36.8		$	28.4
Deemed dividend of redeemable noncontrolling interest		0.5			-
Net earnings attributable to Worthington Steel shareholders	$	36.3		$	28.4

Basic
Weighted average common shares outstanding		49.6			49.4
Earnings per share attributable to Worthington Steel shareholders	$	0.73		$	0.57

Diluted
Weighted average common shares outstanding		50.6			50.4
Earnings per share attributable to Worthington Steel shareholders	$	0.72		$	0.56

Common shares outstanding at end of period		49.6			49.4

Cash dividends declared per share	$	0.16		$	0.16

See condensed notes to consolidated financial statements.

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WORTHINGTON STEEL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)


	Three Months Ended
	August 31,		August 31,
	2025		2024
Net earnings attributable to Worthington Steel	$	36.8	$	28.4
Net earnings attributable to noncontrolling interests		1.8		3.8
Net earnings		38.6		32.2
Other comprehensive income, net of tax
Foreign currency translation		1.1		2.1
Cash flow hedges		-		0.1
Other comprehensive income		1.1		2.2
Comprehensive income		39.7		34.4
Comprehensive income attributable to noncontrolling interests		1.8		3.8
Comprehensive income attributable to Worthington Steel	$	37.9	$	30.6

See condensed notes to consolidated financial statements.

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WORTHINGTON STEEL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Three Months Ended
	August 31,			August 31,
	2025			2024
Operating activities:
Net earnings	$	38.6		$	32.2
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization		20.3			16.2
Benefit from deferred income taxes		(1.4	)		(0.9	)
Bad debt income		(0.1	)		(0.2	)
Equity in net income of unconsolidated affiliate, net of distributions		(6.4	)		(1.3	)
Net (gain) loss on sale of assets		(0.8	)		0.1
Stock-based compensation		7.4			2.4
Changes in assets and liabilities, net of impact of acquisitions:
Receivables		(15.9	)		28.5
Inventories		(16.4	)		13.2
Accounts payable		(46.7	)		(25.5	)
Accrued compensation and employee benefits		(0.2	)		(13.2	)
Other operating items, net		15.3			3.1
Net cash (used in) provided by operating activities		(6.3	)		54.6

Investing activities:
Investment in property, plant and equipment		(29.4	)		(21.5	)
Acquisitions, net of cash acquired		(1.6	)		-
Proceeds from sale of assets, net of selling costs		1.4			-
Net cash used in investing activities		(29.6	)		(21.5	)

Financing activities:
Proceeds from (repayment of) short-term borrowings		15.0			(15.0	)
Proceeds from revolving credit facility borrowings - swing loans		437.4			146.6
Repayment of revolving credit facility borrowings - swing loans		(441.6	)		(157.4	)
Proceeds from long-term debt, net of issuance costs		22.6			-
Principal payments on long-term debt		(2.7	)		-
Proceeds from issuance of common shares, net of tax withholdings		(1.6	)		(1.6	)
Payments to noncontrolling interests		-			(1.9	)
Dividends paid		(8.1	)		(8.0	)
Net cash provided by (used in) financing activities		21.0			(37.3	)

Effects of exchange rate changes on cash, cash equivalents, and restricted cash		0.3			-
Decrease in cash, cash equivalents and restricted cash		(14.6	)		(4.2	)
Cash, cash equivalents, and restricted cash at beginning of period		92.9			40.2
Cash, cash equivalents, and restricted cash at end of period	$	78.3		$	36.0

See condensed notes to consolidated financial statements.

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WORTHINGTON STEEL, INC.

CONSOLIDATED STATEMENTS OF EQUITY AND MEZZANINE EQUITY

(In millions, except per common share amounts)

(Unaudited)


	Shareholders’ Equity
																						Mezzanine
	Controlling Interest																					Equity

	Common Shares							AOCI,			Retained											Redeemable
	Shares		Amount		APIC			Net of Tax			Earnings			Total			NCI		Total			NCI
Balance at May 31, 2025		49,548,895	$	-	$	913.9		$	(4.0	)	$	164.2		$	1,074.1		$	123.8	$	1,197.9		$	-
Acquisition (Note 12)		-		-		-			-			-			-			-		-			99.2
Contribution of Tempel Nagold (Note 12)		-		-		(0.7	)		-			-			(0.7	)		-		(0.7	)		0.7
Net earnings (loss)		-		-		-			-			36.8			36.8			4.5		41.3			(2.7	)
Other comprehensive income		-		-		-			1.1			-			1.1			-		1.1			-
Common shares issued, net of withholding tax		86,349		-		(1.6	)		-			-			(1.6	)		-		(1.6	)		-
Theoretical common shares in non-qualified deferred compensation plans		-		-		0.1			-			-			0.1			-		0.1			-
Stock-based compensation		-		-		3.6			-			-			3.6			-		3.6			-
Redemption value adjustments on redeemable NCI		-		-		-			-			(0.5	)		(0.5	)		-		(0.5	)		0.5
Cash dividends declared ($0.16) per common share		-		-		-			-			(8.0	)		(8.0	)		-		(8.0	)		-
Balance at August 31, 2025		49,635,244	$	-	$	915.3		$	(2.9	)	$	192.5		$	1,104.9		$	128.3	$	1,233.2		$	97.7


	Shareholders’ Equity
																							Mezzanine
	Controlling Interest																						Equity

	Common Shares							AOCI,			Retained												Redeemable
	Shares		Amount		APIC			Net of Tax			Earnings			Total			NCI			Total			NCI
Balance at May 31, 2024		49,331,514	$	-	$	905.3		$	(6.1	)	$	86.1		$	985.3		$	132.2		$	1,117.5		$	-
Net earnings		-		-		-			-			28.4			28.4			3.8			32.2			-
Other comprehensive income		-		-		-			2.2			-			2.2			-			2.2			-
Common shares issued, net of withholding tax		93,217		-		(1.6	)		-			-			(1.6	)		-			(1.6	)		-
Stock-based compensation		-		-		3.0			-			-			3.0			-			3.0			-
Dividends to noncontrolling interests		-		-		-			-			-			-			(1.9	)		(1.9	)		-
Cash dividends declared ($0.16) per common share		-		-		-			-			(8.2	)		(8.2	)		-			(8.2	)		-
Balance at August 31, 2024		49,424,731	$	-	$	906.7		$	(3.9	)	$	106.3		$	1,009.1		$	134.1		$	1,143.2		$	-

See condensed notes to consolidated financial statements.

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WORTHINGTON STEEL, INC.

Condensed Notes to CONSOLIDATED Financial Statements

(Unaudited)

Note 1 – Description of Business and Basis of Presentation

Description of Business

The Company is one of North America’s premier value-added steel processors with the ability to provide a diversified range of products and services that span a variety of end markets. The Company maintains market-leading positions in the North American carbon flat-rolled steel and tailor welded blank industries and is one of the largest global producers of electrical steel laminations. For over 70 years, the Company has been delivering high quality steel processing capabilities across a variety of end-markets including automotive, heavy truck, agriculture, construction, and energy. The Company serves its customers primarily by processing flat-rolled steel coils, which are sourced primarily from various North American steel mills, into the precise type, thickness, length, width, shape, and surface quality required by customer specifications. The Company sells steel on a direct basis, whereby it is exposed to the risks and rewards of ownership of the material while in its possession. Additionally, the Company toll processes steel under a fee for service arrangement whereby it processes customer-owned material. The Company’s manufacturing facilities further benefit from the flexibility to scale between direct and tolling services based on demand dynamics throughout the year.

On December 1, 2023 at 12:01 a.m., Eastern Time, Worthington Enterprises, Inc., then known as Worthington Industries, Inc. (the “Former Parent”), completed the spin-off of its steel processing business, Worthington Steel, into a stand-alone publicly traded company. On November 30, 2023, in connection with the Separation, the Company entered into several agreements with the Former Parent that govern the relationship between the Former Parent and the Company following the Separation, including the Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement, Steel Supply and Services Agreement, and Transition Services Agreement.

Basis of Presentation

The consolidated financial statements include the accounts of Worthington Steel and its consolidated subsidiaries. Material intercompany accounts and transactions are eliminated.

On June 3, 2025, the Company, through its wholly owned subsidiary Tempel Steel Company, LLC (“Tempel”), completed its acquisition of 52% of the issued and outstanding capital stock of S.I.T.E.M. S.p.A., a joint stock company incorporated under the laws of Italy (“Sitem” and, together with its subsidiaries, Stanzwerk AG, Decoup S.A.S. and Sitem Slovakia spol. s r.o., the “Sitem Group”). The results of Sitem Group are included in the Company’s consolidated financial statements on a one-month reporting lag to allow for the timely completion of its financial reporting process. For additional information, see “Note 12 – Acquisitions.”

The Company owns controlling interests in the following four operating joint ventures: Spartan Steel Coating, L.L.C. (“Spartan”) (52% interest); TWB Company, L.L.C. (“TWB”) (55% interest); Worthington Samuel Coil Processing, L.L.C. (“WSCP”) (63% interest); and the Sitem Group (52% interest). The Company also owns a controlling interest (51% interest) in Worthington Specialty Processing (“WSP”), which became a nonoperating joint venture on October 31, 2022, when its remaining net assets were sold. These joint ventures are consolidated with the equity owned by the other joint venture members shown as noncontrolling interests on the Company’s consolidated balance sheets, and their portions of net earnings and other comprehensive income (loss) (“OCI”) shown as net earnings or comprehensive income attributable to noncontrolling interests in the Company’s consolidated statements of earnings and comprehensive income, respectively.

The Company owns a noncontrolling interest (50% interest) in one unconsolidated joint venture: Serviacero Planos, S. de R.L. de C.V. (“Serviacero Worthington”). The Company’s investment in its unconsolidated affiliate is accounted for using the equity method with the Company’s proportionate share of income or loss recognized within equity in net income (loss) of unconsolidated affiliate (“equity income”) in its consolidated statements of earnings. See further discussion of the Company’s unconsolidated affiliate in “Note 3 – Investment in Unconsolidated Affiliate.”

Organizational Structure and Operating Segment

The Company’s operations are managed principally on a products and services basis under a single group organizational structure. The Company has determined that it has only one operating segment and therefore one reportable segment after considering several sources of information, including the Company’s internal organizational structure, the basis on which budgets and forecasts are prepared, the financial information that the Company’s chief operating decision maker (“CODM”) reviews in evaluating company performance and

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determining how resources should be allocated, and how the Company releases information to the public and analysts. The Company’s CODM is Worthington Steel’s chief executive officer (“CEO”).

New Accounting Policy - Redeemable Noncontrolling Interest

During the first quarter of fiscal 2026, the Company entered into an agreement with certain minority interest holders of the Sitem Group that provides them with redemption rights (i.e., put options) that could require the Company to purchase the minority interest holders’ remaining 48% noncontrolling interests in the Sitem Group upon the occurrence of specified events. These redemption rights represent a new type of transaction for the Company, and accordingly the following accounting policy is being disclosed for the first time. As these redemption rights are not solely within the control of the Company such interests are classified as redeemable noncontrolling interest outside of permanent equity, in mezzanine equity, on the Company’s consolidated balance sheet.

At initial recognition, redeemable noncontrolling interests are recorded at their issuance-date, or acquisition date, fair value. Subsequently, redeemable noncontrolling interests that are currently redeemable, or probable of becoming redeemable, are adjusted to the greater of (i) current redemption value or (ii) initial carrying amount. Adjustments to redemption value are recorded through retained earnings or, in the absence of retained earnings, through additional paid-in capital. Upward adjustments are considered a deemed dividend, and would result in a reduction to earnings available to common shareholders for the calculation of earnings per common share. For additional information, see “Note 9 – Mezzanine Equity.”

Prior-period financial statements were not recast, as these redemption rights were not applicable in prior periods.

Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows as of the beginning and end of the periods presented:


	Three Months Ended
	August 31,		August 31,
(In millions)	2025		2024
Reconciliation of cash, cash equivalents, and restricted cash, beginning of period
Cash and cash equivalents		38.0		40.2
Restricted cash		54.9		-
Total cash and cash equivalents and restricted cash, at beginning of period	$	92.9	$	40.2

Reconciliation of cash, cash equivalents, and restricted cash, end of period
Cash and cash equivalents		78.3		36.0
Restricted cash		-		-
Total cash and cash equivalents and restricted cash, at end of period	$	78.3	$	36.0

Concentration of Net Sales

The Company sells its products and services to a diverse customer base and a broad range of end markets. The automotive industry is the largest end market for the Company, which is largely driven by the production schedules of Ford, General Motors and Stellantis North America (the “Detroit Three Automakers”).

While the Company’s business is not dependent on any one customer, net sales to certain customers were at least 10% of the Company’s consolidated net sales for the periods presented. A significant loss of, or decrease in, business from any of these customers could have a material adverse effect on the Company’s consolidated net sales and financial results if the Company was not able to obtain replacement business. Also, the Company’s sales may be increasingly sensitive to deterioration in the financial condition of, or other adverse developments with respect to, one or more of the Company’s largest customers.

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The following table summarizes the concentration percentage of consolidated net sales for the periods presented:


	Three Months Ended
	August 31,			August 31,
(Percentage of Net Sales)	2025			2024
End Market – Automotive		56	%		51	%
Detroit Three Automakers		35	%		32	%
Largest Automotive Customers:
Customer A		13	%		13	%
Customer B		15	%		13	%

Preparation of Financial Statements Including the Use of Estimates

These interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments that are of a normal and recurring nature necessary for a fair presentation of the consolidated financial statements for these interim periods have been included. Operating results for the first quarter of fiscal 2026 are not necessarily indicative of the results that may be expected for the entirety of fiscal 2026 or any other quarter. For further information, refer to the consolidated and combined financial statements and notes thereto included in the 2025 Form 10-K.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Reclassifications: Certain amounts disclosed within the Company’s consolidated statement of cash flow for the first quarter of fiscal 2026 earnings release have been reclassified to conform to the current presentation of the net (gain) loss on sale of assets and proceeds from sale of assets, net of selling costs. These reclassifications had no impact on total cash, cash equivalents, and restricted cash.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

There have been no new accounting standards adopted since the filing of the 2025 Form 10-K that have significance, or potential significance, to the interim condensed consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted

Disaggregation of Income Statement Expenses – In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards (“ASU”) Update 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). This guidance requires the disaggregation of certain expense captions into specified categories in disclosures within the notes to the financial statements to provide enhanced transparency into the expense captions presented on the statement of earnings. It is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. Adoption may be applied either prospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the impact of this guidance on the Company’s related disclosures.

Improvements to Income Tax Disclosures – In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which expands disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The ASU is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the effect the adoption of the ASU may have on its disclosures.

Note 2 – Revenue Recognition

The Company recognizes revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration it expects to receive for those goods or services, including any variable consideration.

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The Company generates revenue by processing steel to the precise type, thickness, length, width, shape, and surface quality required by customer specification. The Company can also toll process steel for steel mills, large end-users and service centers. Toll processing revenue is recognized over time. All other revenue is recognized at a point in time, generally upon shipment to the customer.

The following table summarizes net sales by product class for the periods presented:


	Three Months Ended
	August 31,		August 31,
(In millions)	2025		2024
Product class
Direct	$	839.5	$	789.9
Toll		33.4		44.1
Total	$	872.9	$	834.0

The following table summarizes the unbilled receivables and contract assets at the dates indicated:


		August 31,		May 31,
(In millions)	Balance Sheet Classification	2025		2025
Unbilled receivables	Receivables	$	4.7	$	4.0
Contract assets	Prepaid expenses and other current assets	$	8.5	$	7.0

The following table summarizes the changes in contract liabilities for the periods presented:


(In millions)
Balance at May 31, 2025	$	5.2
Unearned revenue from cash received during the period		1.4
Revenue recognized related to contract liability balance		(1.1	)
Balance at August 31, 2025	$	5.5

Note 3 – Investment in Unconsolidated Affiliate

Investments in affiliated companies that the Company does not control, either through majority ownership or otherwise, are accounted for using the equity method. The Company owns a noncontrolling interest (50% interest) in one unconsolidated joint venture, Serviacero Worthington. Serviacero Worthington provides steel processing services, such as pickling, blanking, slitting, multi-blanking and cutting-to-length, to customers in a variety of industries including automotive, appliance and heavy equipment.

The Company did not receive any distributions from Serviacero Worthington during the three months ended August 31, 2025 or August 31, 2024.

The following tables summarize certain financial information of Serviacero Worthington as of the dates, and for the periods, presented:


	August 31,		May 31,
(In millions)	2025		2025
Cash and cash equivalents	$	29.3	$	16.0
Other current assets		225.3		219.4
Noncurrent assets		61.2		62.2
Total assets	$	315.8	$	297.6

Current liabilities		46.1		40.5
Other noncurrent liabilities		4.9		5.0
Equity		264.8		252.1
Total liabilities and equity	$	315.8	$	297.6

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	Three Months Ended
	August 31,		August 31,
(In millions)	2025		2024
Net sales	$	134.2	$	148.5
Gross margin		18.6		15.6
Operating income		14.5		11.7
Depreciation and amortization		1.0		1.1
Interest expense		-		-
Income tax expense		2.0		6.8
Net earnings		12.8		2.6

The following table presents the net earnings of Serviacero Worthington attributable to the Company for the periods presented:


	Three Months Ended
	August 31,		August 31,
(In millions)	2025		2024
Equity in net income of unconsolidated affiliate	$	6.4	$	1.3

Note 4 – Restructuring and Other (Income), Net

The Company considers restructuring activities to be programs whereby it fundamentally changes its operations, such as divestitures, closing or consolidating facilities, employee severance (including rationalizing headcount or other significant changes in personnel), and realignment of existing operations (including changes to management structure in response to underlying performance and/or changing market conditions).

A progression of the liabilities associated with the restructuring activities, combined with a reconciliation to the restructuring and other (income), net financial statement caption in the Company’s consolidated statement of earnings as of the dates presented, is summarized below:


(In millions)	Balance, as of		Expense								Balance, as of
	May 31, 2025		(Income)			Payments			Adjustments		August 31, 2025
Early retirement and severance	$	2.1	$	-		$	(0.8	)	$	-	$	1.3
Net gain on sale of assets				(1.0	)
Restructuring and other (income), net			$	(1.0	)

During the three months ended August 31, 2025, the following actions were taken related to our restructuring activities:

•

The Company made early retirement and severance payments of $0.4 million associated with a TWB voluntary retirement program (“VRP”). Under the terms of the VRP, eligible TWB employees in the U.S. who chose to participate in the program were offered severance based on their years of service. The VRP was closed to employee acceptance during the fourth quarter of fiscal 2025. The Company does not expect to incur additional material severance expenses in fiscal 2026 or beyond due to these announced plans.

•

The Company made severance payments of $0.4 million associated with its announced plans to consolidate WSCP’s remaining Cleveland, Ohio toll processing manufacturing facility into WSCP’s existing manufacturing facility in Twinsburg, Ohio. The Company does not expect to incur additional material severance expenses in fiscal 2026 or beyond due to these announced plans. During the first quarter of fiscal 2026, the Company sold machinery and equipment with a net book value of $0.3 million that was reported within assets held for sale for net cash proceeds of $1.3 million, resulting in a pre-tax gain of $1.0 million.

The total liability as of August 31, 2025, is expected to extend past the 12 months from August 31, 2025, due to the severance period.

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Note 5 – Contingent Liabilities and Commitments

Legal Proceedings

The Company is a defendant in certain legal proceedings that are incidental to its business. In the opinion of management, the outcome of these legal proceedings, which is not clearly determinable at the present time, individually and in the aggregate, would not have a material adverse effect on the Company, its consolidated financial position, future results of operations or cash flows. The Company has recorded a liability, as necessary, to provide for the anticipated costs, including legal defense costs, associated with the resolution of these legal proceedings. However, the possibility exists that the costs to resolve these legal proceedings could differ materially from the recorded estimates and, therefore, have a material effect on the Company, its consolidated financial position, future results of operations or cash flows for the periods in which they are resolved.

Note 6 – Guarantees

The Company does not have guarantees that it believes are reasonably likely to have a material current or future effect on its consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

At August 31, 2025, the Company had in place outstanding stand-by letters of credit in the aggregate amount of $2.4 million issued to third-party service providers. The fair value of the guarantee instruments, based on premiums paid, was not material and no amounts were drawn against it at August 31, 2025. These guarantee instruments are subject to annual renewal.

Note 7 – Debt

The following table summarizes the Company’s debt outstanding at the dates presented:


		Rate			August 31,		May 31,
(In millions)	Security	Type	Rate	Maturity	2025		2025
Long-term debt:
Canadian Expansion Loans:
FED DEV Loan	Unsecured	–	–	March 2032	$	2.3	$	2.3
BDC Loan	Secured	Variable	BDC Floating Base Rate minus 1.75%	June 2051		21.6		-
AMIC Loan	Unsecured	Fixed	0% until June 2028, 5.97% thereafter	May 2032		0.7		-

Sitem Group Term Loans:
Sitem Group Term Loan 1 (a)	Unsecured	Variable	Euribor 3m/360 + 1.50%	June 2029		3.7		-
Sitem Group Term Loan 2	Unsecured	Fixed	1.50%	March 2027		1.3		-
Sitem Group Term Loan 3	Secured	Fixed	1.94%	September 2030		4.4		-
Sitem Group Term Loan 4	Unsecured	Fixed	0.36%	February 2029		0.2		-
Sitem Group Term Loan 5 (b)	Unsecured	Variable	Euribor 3m/360 +1.60%	March 2029		3.5		-
Sitem Group Term Loan 6	Unsecured	Fixed	0.55%	December 2028		0.8		-
Sitem Group Term Loan 7 (b)	Unsecured	Variable	Euribor 1m/360 + 1.40%	March 2027		1.1		-
Sitem Group Term Loan 8	Secured	Variable	Euribor 1m/360 + 1.65%	May 2026		1.3		-
Sitem Group Term Loan 9 (c)	Secured	Variable	Euribor 3m/360 + 1.90%	March 2030		6.5		-
Sitem Group Term Loan 10	Secured	Variable	Euribor 3m/360 + 1.20%	September 2026		0.5		-
Sitem Group Term Loan 11	Unsecured	Variable	Euribor 3m/360 + 1.65%	March 2028		4.0		-
Sitem Group Term Loan 12	Unsecured	Fixed	0.65%	November 2025		0.4		-
Sitem Group Term Loan 13	Secured	Fixed	0.90%	October 2026		0.1		-
Standstill Agreement – Sitem Group	Secured	Variable	SARON (subject to 0% floor) + 5.0%	June 2026		21.0		-
Total						73.4		2.3
Less: current maturities of long-term debt	–	–	–	–		30.3		-
Long-term debt, net of current maturities					$	43.1	$	2.3

Short-term borrowing and current maturities:
Revolving credit facility	Secured	Variable	Various	November 2028	$	160.0	$	149.2
Current maturities of long-term debt	–	–	–	–		30.3		-
Total short-term borrowings and current maturities						190.3		149.2
Total Debt					$	233.4	$	151.5

(a)

Sitem Group shall maintain a ratio of bank debt plus financial lease obligations less cash and cash equivalents (“Net Financial Position” or “NFP”) to net earnings before interest, tax, depreciation and amortization (“EBITDA”) less than or equal to 3, and a ratio of NFP to Equity less than or equal to 1.

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(b)

Sitem Group shall maintain a ratio of NFP to EBITDA less than or equal to 3, a ratio of NFP to Equity less than or equal to 1, a ratio of EBITDA to financial expenses less than or equal to 10, and a NFP less than or equal to €40.0 million (approximately USD $45.7 million as of August 31, 2025).

(c)

Sitem Group shall maintain a ratio of NFP to EBITDA less than or equal to 3.60, a ratio of NFP to Equity less than or equal to 1.20, a ratio of EBITDA to financial expenses less than or equal to 8, and a NFP less than or equal to €48.0 million (approximately USD $54.8 million as of August 31, 2025).

The following table provides the maturities of long-term debt in the next five years and the remaining years thereafter as of August 31, 2025:


(In millions)
Year 1	$	30.3
Year 2		8.0
Year 3		6.9
Year 4		5.6
Year 5		3.4
Thereafter		19.2
Total	$	73.4

As of August 31, 2025, there are $160.0 million of short-term borrowings under the Credit Facility due in fiscal 2026.

Short-Term borrowings

Revolving Credit Facility

On November 30, 2023, the Company entered into a senior secured revolving credit facility scheduled to mature on November 30, 2028, with a group of lenders (the “Credit Facility”). The Credit Facility provides capacity of up to $550.0 million, to the extent secured by eligible accounts receivable and inventory balances at period end, which consist primarily of U.S. dollar denominated account balances. At August 31, 2025 and May 31, 2025, there were $160.0 million and $149.2 million, respectively, of outstanding borrowings drawn against the Credit Facility. After accounting for the eligible borrowing base, at August 31, 2025 and May 31, 2025, availability under the Credit Facility was $279.6 million and $260.9 million, respectively. Individual amounts drawn under the Credit Facility accrue interest at rates equal to an applicable margin over the one-, three-, or six-month term Secured Overnight Financing Rate (“SOFR Rate”), plus a SOFR adjustment. The Company incurred approximately $2.7 million of issuance costs, of which $2.5 million will be amortized to interest expense over the expected five-year term of the Credit Facility and are reflected in other assets.

The Credit Facility permits borrowings under two types of borrowing mechanisms: (i) Term SOFR Rate Loans (as defined in the Credit Facility) and (ii) a swing loan. The Term SOFR Rate Loans permit the Company to draw a specific principal amount for a defined maturity of up to six months with the interest rate determined at the time of the draw, which equals an applicable margin over the applicable term SOFR Rate, plus a SOFR adjustment. Each Term SOFR Rate Loan has an individual, unique identifier and is distinguishable from the other Term SOFR Rate Loans drawn by the Company. At the end of each relevant interest period, the Company has the option to continue the same interest period for such Term SOFR Rate Loan or the Company can request a conversion to a new interest period for such Term SOFR Rate Loan. If no notice is given by the Company, the Term SOFR Rate Loan is deemed to continue with the same interest period.

The swing loan permits the Company to draw on the Credit Facility at any time up to a maximum of the greater of (i) $55 million and (ii) 10% of the then-maximum amount of the Credit Facility. The swing loan interest rate is variable based upon the interest rate market. As of August 31, 2025 and May 31, 2025, the swing loan rate was equal to 8.00%. Any amounts drawn on the swing loan mature on the same date as the maturity of the Credit Facility; however, it has been the practice of the Company to repay the outstanding draws on the swing loan within a short-term period.

The Credit Facility is secured by a first priority lien (subject to permitted liens and certain other exceptions) on certain working capital assets of the Company and the guarantors, including accounts and inventory, but excluding intellectual property, real property and equity interests, and subject to customary exceptions.

The Company currently has no material contractual or regulatory restrictions on the payment of dividends provided that no event of default exists under the Credit Facility and it meets the minimum availability threshold thereunder.

As of August 31, 2025 and May 31, 2025, the weighted average interest rate on the outstanding interest-bearing debt under the Credit Facility was 5.94% and 5.98%, respectively.

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Long-Term Debt

Canadian Government Regional Economic Growth Loan

Tempel, a wholly owned subsidiary of Worthington Steel, owns a subsidiary in Canada (“Tempel Canada”). On December 17, 2024, Tempel Canada entered into an agreement with the Federal Economic Development Agency for Southern Ontario, Canada, through the Canadian Government’s Regional Economic Growth Innovation program, which provided a 0% interest loan of up to CAD $3.5 million (approximately USD $2.5 million as of August 31, 2025) (“FED DEV Loan”) to be used for the purchase and installation of advanced manufacturing equipment at Tempel Canada’s Burlington, Ontario location. The first distribution to Tempel Canada was received in the third quarter of fiscal 2025 in the amount of CAD $3.2 million (approximately USD $2.2 million at the time of distribution), or 90% of the total available through the program. The remaining 10% is expected to be received upon project completion. The FED DEV loan is scheduled to be paid off in 60 equal installments beginning April 1, 2027 with the final payment due March 1, 2032. There were no debt issuance costs associated with the loan.

As of August 31, 2025 and May 31, 2025, the amount outstanding under the FED DEV Loan was $2.3 million.

Business Development Bank of Canada Canadian Loan

On March 25, 2025, Tempel Canada entered into a letter of offer (“BDC Letter”) with Business Development Bank of Canada (“BDC”). Pursuant to the terms of the BDC Letter, BDC committed to lend Tempel Canada up to CAD $57.5 million (approximately USD $41.8 million as of August 31, 2025) (“BDC Loan”), subject to the satisfaction of customary closing conditions and deliverables. The purpose of the BDC Loan is to fund the construction of a new manufacturing facility to be located in Burlington, Ontario, Canada (“Burlington Property”).

The BDC Loan is structured as a construction draw loan. The draw period for the BDC Loan will lapse on March 21, 2026, unless extended by BDC. Monthly interest only payments will be due until July 1, 2026, at which point the BDC Loan will also be subject to monthly amortization payments until maturity. The BDC Loan will accrue interest (a) during the construction period, at a per annum rate equal to BDC’s Floating Base Rate minus 1.75%, and (b) at all times thereafter, at a per annum rate equal to BDC’s Floating Base Rate minus 1.75% or BDC’s Base Rate minus 1.75%, at Tempel Canada’s election. The BDC Loan matures on June 1, 2051.

Worthington Steel guarantees the payment obligations of Tempel Canada in respect of the BDC Loan. As amended during the first quarter of fiscal 2026, the guarantee is for the full amount of the BDC Loan amount on the date of any demand. Provided that there has never been a breach of certain default conditions, the guarantee is reduced to 50% of the outstanding BDC Loan balance once the principal amount outstanding is less than CAD $40.0 million (approximately USD $29.1 million as of August 31, 2025), subject to the satisfaction of certain conditions. The Company will also provide customary cost overrun and completion guarantees in respect of the construction of the Burlington Property. The obligations of Tempel Canada under the BDC Letter are secured by a mortgage on the Burlington Property, an assignment of rents relating to the Burlington Property, and a lien on certain equipment and other personal property located on or used in connection with the Burlington Property.

The BDC Loan contains representations, covenants and events of default customary for transactions of this nature, including that Tempel Canada will maintain a total debt to tangible equity ratio of 1.0 to 1.0 and a fixed charge coverage ratio of 1.15 to 1.0, each tested annually.

As of August 31, 2025, the amount outstanding under the BDC Loan was $21.6 million, while there were no amounts drawn and outstanding as of May 31, 2025.

Canadian Advanced Manufacturing and Innovation Competitiveness (“AMIC”) Loan

On May 12, 2025, Tempel Canada entered into an agreement with the Province of Ontario’s Minister of Economic Development, Job Creation and Trade, which provided a loan for up to CAD $5.0 million (approximately USD $3.6 million as of August 31, 2025) (“AMIC Loan”) to support building and equipment expansion at the Burlington Property. The first distribution to Tempel Canada was received in the first quarter of fiscal 2026 in the amount of CAD $1.0 million (approximately USD $0.7 million in quarter received), or 20% of the total available through the loan. The remaining 80% is expected to be received in steps as project spending progresses. The AMIC Loan is interest free until June 1, 2028, at which point it will bear interest at a fixed rate of 5.97% per annum with interest due annually. The AMIC Loan is scheduled to be paid off in four equal annual installments beginning June 30, 2029 with the final payment due June 30, 2032. The AMIC Loan is structured with an incentive component that states up to CAD $0.5 million (approximately USD $0.4 million as of August 31, 2025) of the principal may be forgiven if certain performance targets are met. There were no debt issuance costs associated with the AMIC Loan.

As of August 31, 2025, the amount outstanding under the AMIC Loan was $0.7 million.

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Sitem Group

The Company assumed the liabilities of the Sitem Group as part of the acquisition and recorded the Sitem Group liabilities within the Company’s consolidated balance sheet. The Sitem Group’s obligations included various Euro-denominated term loans, which have varying maturities, varying interest rates, interest rate mechanisms, and have periodic payments due until maturity. The obligations, along with the relevant loan terms, are included in the summary table within this footnote. Sitem Group was in compliance with its financial covenants as of August 31, 2025.

Standstill Agreement – Sitem Group

Sitem Group, through its subsidiary Stanzwerk AG, entered into a standstill agreement (the “standstill agreement”) with UBS Switzerland AG, as agent and a syndicate of lenders in April 2025. The agreement relates to bilateral credit facilities originally provided to Stanzwerk AG in the aggregate principal amount of CHF 17.1 million (approximately USD $21.0 million as of August 31, 2025). Under the terms of the standstill agreement, the lenders agreed to maintain availability under the credit lines through June 30, 2026, and to forbear from exercising termination, enforcement, or acceleration rights with respect to scheduled repayments or collateral during the standstill period, subject to customary extraordinary termination rights upon events of default.

The standstill agreement provides for continued use of the facilities solely for loan advances and requires pro rata utilization of the credit lines across participating lenders. Borrowings bear interest at the applicable reference rate (which is based on the Swiss Average Rate Overnight and has a floor of zero) plus a 500 basis point margin, with an additional 0.25% quarterly commission on overdraft balances.

The standstill agreement contains financial covenants requiring Stanzwerk AG to maintain (i) a minimum equity ratio of 15%, tested quarterly beginning June 30, 2025, and (ii) minimum liquidity of CHF

Worthington Steel, Inc. 10-Q