WOR - Earnings call transcript Q1 2023 | Worthington Industries, Inc.

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Operator

Good morning, and welcome to the Worthington Industries First Quarter Fiscal 2023 Earnings Conference Call. All participants will be able to listen-only until the question-and-answer session of the call. This conference is being recorded at the request of Worthington Industries. If anyone objects, you may disconnect at this time. I'd now like to introduce Marcus Rogier, Treasurer and Investor Relations Officer. Mr. begin. may you Rogier,

Marcus Rogier

Executive Good fiscal and our XXXX Andy and we Rob. Industries Gilmore, call will Hayek, Officer. Chief normal. be to separation first we have Chief President longer Worthington's Please quarter earnings and Rose, Joe morning, morning, you, welcome this business Operating made the everyone, than Worthington Worthington's today, Officer; Thank call. earlier Worthington's given our Officer; Chief announcement Financial Geoff note, prepared remarks On

our of initial for portion questions. Q&A we quarterly ask in their the For to allow questions ask limit participants call, the separation. opportunity questions results re-queue that to And then to our to related everyone order to the

provides more on separation. we planned have information a addition, to posted which our presentation the In website, slide Investor Relations

refer started, These remind XXXX this to of are meaning We certain we everyone within are those release from Act. I'd the risks issued today results uncertainties Before could to our suggested. results Please Reform earlier that statements forward-looking Today's earnings Litigation like cause kick this made statements actual that to the differ differ and subject it off. Private morning. Securities made be is those get to things detail on replay I worthingtonindustries.com available point, call turn a recorded will to being and materially. over will Andy cause to could later for factors that At call on our to actual more website. the

Andy Rose

Thank you, Good Marcus. morning, everyone.

two results It's in day a Joe new more going separation we with to Processing into our pursuing company, to of this the I'll quarter Worthington. we and creating a Steel first addition morning, announced exciting In our discuss are for distinct news an Joe? that first our detail. releasing is results companies. then quarter Business start exciting market-leading public separation

Joseph Hayek

resulted that earnings prior-year were prior with finally, annuitized, solid Andy, started lot per QX share primarily our a get of results, negatively $X.XX a activity we'll discuss year per benefited you, it. which our estate. acquisition. expenses Tools share several divestiture of ArtiFlex, share was non-core a $X.XX with recent morning We loss which to Restructuring in items in in restructuring our $X.XX incremental of quarter, that pension to Recognized in in year rates the related related right the included per current per We the due interest to in approximately quarter. quarter. gain everybody. following. non-cash per compared that by of inactive acquisition we impacted a We million, by have earnout portion periods per charge versus Gerstenslager earnings to an There of XX% plan, monetization rising recognized $X.XX good quarterly do a a the $X.XX that and $X.XX share fiscal share. And joint impacting after-tax associated the took and to to advantage morning, unique real the both We in non-core of venture gains the of $XX in Thank LevelX this interest resulted our so reporting divested for in was results of $X.XX share.

generated to items, unique those earnings $X.XX share current year. in compared we the the in of Excluding per a quarter prior $X.XX share

businesses. to for up or versus all was is million, in gross per million billion Tempel was year combined tons primarily primarily year. making inventory holding quarter in XX-month swing of to now higher Tempel our in Processing. the Gross of are up XX% sales last prices. selling inclusion the share quarter. Steel, Steel per XX% Adjusted ship Processing, inclusion to million, of were holding few on combined prices year-over-year. which $XXX quarter XX% selling And due million or million last spend billion holding gains to Increase across the had EBITDA were $XXX profit decreased In to QX $X.X million of prior in inventory QX, margin average In the from minutes EBITDA down JVs, a X%, up of Due $XX due average versus addition, year losses now higher in prior million $XXX in in XX.X%, $X.XX consolidated with up million our net total in year, X% from the inventory to to and the compared to per of $X.X Consolidated down from of we gains direct net sales lower that primarily is quarter. I'll of swing total in due XX% QX Steel from prior-year $X.XX share sales XX% share. tons $XX year, QX mix estimated with in to $XXX each with an million. billion $XXX tons the actually losses $X in trailing be the compared was $X Direct QX the segments. were Steel of of adjusted $XXX were the unfavorable $X.XX of last volumes

direct markets. the construction X% and our in end at Excluding up due the closed impact increases were we year-over-year Alabama, of volumes facility to and automotive Tempel Decatur

predict, navigating a million team mentioned and net losses $X of $XXX Large the quarter earnings in hard losses was write QX, fallen decrease which June. $XXX future last at gains inventory in since million QX an down and end. expected to a of million. to quarter EBIT great a million spreads, the $XX steel over charge in be Our compared lower I inventory In to steel generated due impacted by chain The having of customers. to year, manage $XX holding be value by year-over-year the late for continue year. to prior negatively compared inflation call $X unfavorable estimated to ton direct million in programs prices swing driven they earlier, volatile the continues inventory our decline included job $XX prices to of million this steel Steel realizable do quarter holding adjusted challenges to our effectively in complex supply as were

quarter. Given losses the $XX we loss XX% In higher driven estimated $XXX million, XXXX. QX higher of in had in from average steel QX, meaningful was we decline in prior QX as by selling inventory million the Increase prices, steep could will $XXX or overall which in prices have than holding be the Adjusted the was believe business the Consumer recent EBIT net in million QX LevelX high were Products, value. higher in negatively we sales the million year of quarter. XX.X% related the was and of up $X XX.X% to million current last consumer start in inventory quarter expenses of impacted compared to EBIT at the LevelX acquisition, fair year. for of acquisition million write-up Adjusted the from and benefited which by $XX the and $XX market was volumes, Tools and to EBIT included margin

production delays a wages drag input higher and addition, quarter. including for inflationary pressures ongoing on the In and margins costs were

The growing consumer The in for and XX% generated reduction and by adjusted well and selling prices. pressures which been to selling end businesses. has the XX.X% driven well, $XXX While focused our from compared was those margin adjusted in wholly-owned environment products new our by this inflationary on business for prior provide by million $XX a year. improvement in higher wholly-owned million executed products was million in partially and generated of Building business, was to value $XX higher quarter margin team innovative sales business prices. increase primarily that continues with our and in quarter products challenging of year. consumers. QX, EBIT have for the overall very be $XXX benefit million last our better average the Building that as EBIT driven QX average partners up net XX.X%, in of The offset EBIT driven cost adjusted was of could

of contributions by WAVE. $X year the Our partially at a QX, of million in ClarkDietrich as increase were offset $XX an contributed EBIT Products Building decline from higher over million prior quarter JVs

as EBIT an moderate of in While up million inflation, burden QX the of to exceptionally compared million the and ClarkDietrich reported selling XX% very quarter, continues were current net to to Business in a operating to the sales we Solutions, perform year the loss population. to be a adjusted Europe Energy expect the continues compared steel forward. $XX Sustainable on results $X difficult, $X prior place of shortages with war dislocations continue million fuel volumes prices. higher increase environment $XX in due moving declining The prices, in quarter prior average to to entire well, that do in million In and loss related year.

for in results Solutions near remain financial the the As term. a consequence, likely to Energy are challenged Sustainable

about for the excited are we end However, above very continue long term. SES's markets, be which average over to growth poised

the very integrated $XX generated and the Our two quarters. million We've cash from respect the in in quarter us energy. our last to cash solutions flows balance cash was free million. to With free and hydrogen flow ecosystem sheet, operations and over position $XX flows adjacent well in enable flows cash was sustainable $XXX now million

JVs. we during our the have Dividends, proceeds in in our were and capital on to $XX quarter, as paid received million spent from out $XX unconsolidated prior received we exceeded that quarter, earnings in normalize projects, sales million their started LevelX distributed earnings pay working invested they year. in $XX asset their During from million acquire million the to million fiscal levels equity $XX to the unconsolidated $XX and from were dividends, able received Tools, capital dividends JVs not

$XXX million our revolving $XX up of and levels our it on in ample average At liquidity quarter at dividend due to a over for is expense this Yesterday, with at facilities, credit decreased $X and of payable short-term associated during quarter, $X.XX million debt funded cash turn borrowings the for the $XX availability of declared position, million with Andy. share Interest point, sheet future. debt the million Board of which million per higher quarter. was ended with QX to Looking sequentially. $XXX us December We liquidity balance positioning slightly I XXXX. back the in under will end

Andy Rose

accomplishments Thanks, in second ever. quarter million share are throughout challenges off XXXX, earnings start the chains. continued with the face our $XXX good Joe. and declining best of solid EBITDA supply first fiscal a steel our and $X.XX of of prices We're Adjusted in per to

with interest our in quarter. ArtiFlex the We ownership the continue our sale to during of XX% pair non-strategic assets

We We products the during this underperforming and are our and end net market our cash but of non-core changes volatility returning flow in for operations, demand very and growth to to exiting steady multi-year is markets. process outlook, almost products recent most approaching $XX rates debt and million markets. the market beginning quarter businesses markets End lead this our EBITDA higher and of had various by times. in X.X invest free as to remained of could higher at of repositioning impact across modest

Our we side has attractive New Building to with to years. of few separately traded business and now the positions. Today, products to announced market-leading the public better Sustainable above employees This Steel continue our for beyond growth Energy. markets over company. into align own services our our to broader faced to leverage strong develop are customers, was deliver business which Consumer Products market for despite past our plan Processing and go world recently strategies remaining and re-segmented serves its in calling separate Worthington has exciting many challenges the we an the it and business The Products,

company. tech creation multiples. are capitalize and New former Steel and is outdoor levering will asset shareholder remodeling we Rule Geoff will its high Worthington technology, to robust Both poised provide is team. qualified and He a material living Geoff as answer to that both companies, own and solutions pipeline infrastructure earnings best-in-class and margins historic of join the on Pressure Gilmore its innovation leverage disrupt Steel with lower for our to light-weighting ran mindset new It public Chief is in and New Geoff us Steel Worthington sustainable electrification, to and intensity mature modest Officer set well capital Cylinders. the opportunities its premium will key opportunity sector for us. enabled previously sustainability, our continue to of product skill will ample markets. in any capital Golden This electrical be positioned to growth and opportunities. leadership believe sustainability laminations, to take excellent with of We and for broad accelerate and the and deserves is its a well. growth trends the and platform to Steel by currently, construction, and run value Processing Worthington's Worthington later strategies. as well lead fast not philosophy spending. We transformation, processor growing business be This business and here to and and run steel has value. solutions will growth questions structure automotive in advantage is existing continue do steel Operating for future and principles anticipate likely calls is system allocation our and similar changes decision acquisitions utilize liquidity drive with a and businesses own trends

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Operator

Your first Instructions] line Englert question of from [Operator comes Research. the Martin from Seaport

is line Your open.

Martin Englert

everyone. morning, Hi. Good

Andy Rose

morning. good Martin,

Martin Englert

million value, for absolute was clarify, the about So just in holding losses steel to the quarter $X.X for correct?

Joseph Hayek

of if that, that you QX, was That forward of into we have losses that is could to of brought and in bring going a correct. And bit part we up forward will we Martin, QX a those $X identify knew we were million.

Martin Englert

Okay. losses prior that or I which the potentially were $XX.X is your forward-looking million, comment exceeding was think gains, And comparable then was correct? year

Joseph Hayek

in we but of QX $XX be gain, had so what So invasion the they larger we given were it, and that prices, coming decline way the then we've $XXX. steep -- then, popped to down know, into Ukraine, and that seen $X,XXX, all million, we -- actually said year, that's $XX that larger, is losses your number decline the than really of in last as right, steep because we since the was $X,XXX as could they in it that had steel QX is rather in just they've thinking they their back of the resumed right which number exactly were then 'XX, million we're under Russian up about

Martin Englert

Got it.

books margin, backlog there the Steel what some thanks million, order the quite commentary how seeing changing, -- that of changing there -- at something is XQ as was well the looking, color a activity that's how a demand for are was year, this both potentially greater. loss That's bit for to still and COVID on of Can on in or So like little as business incrementally Consumer reporting provide the that that's you the $XX.X steel it's end of was clarifying, of you're that of helpful. exiting markets the Products, relative across Building all? out if bit of

Joseph Hayek

Sure.

one the and there businesses, then that the prices some by market, things end is in also inherent higher where all to little of you you really costs. higher but unique that's things inflation, to So much of each. see are market are entire the see But

nothing Ag. that our higher being that of are signs All life. mentioned are back. Everybody have and are Construction as in call slowing down mentioned, is but where month solutions, have in some and people's can in the margins right to so. you're that the reasonable, we're have declare in there a -- and in have things Building direct higher Products, priced costs so, of excluding have declining increases you that inflationary is in Steel Products holding the LevelX limitations steep and bit Consumer the starting other markets prices in cetera. on and can the catastrophic. slowing But them purchase rapidly to impact Andy Products semiconductor because happening a prices same get Consumer is acquisition, signs you things rapidly that rising some accounting And is I Detroit have Building nothing actually said, saw show last et the supply potentially economy more that but of EBIT are the to decreases and as you of has Products, terms see specifically, prices trends and are We're dollars, EBIT and in chain seems the for that's saw reflection an then is behavior we markets, growth. ready very environment back. sort evidence, unique seeing. that just way not things of or and over Three Automotive across you

and I eye with results happening. And other the those businesses in some Tempel, in, to our infrastructure. well that good markets the GDP that then of continue see, what's a just everything, where it's for got really to decarbonization because electrification, have will grow kind of exceptionally respect of you thing and they're would those we've regardless think on So, markets feel is

we're we're part, we So, end that we're or where and, market not but six about conditions and certainly months. lots that the for aware we markets of XX are we markets may the things but the next of most may of really lots follow, end and that over to in, good go feel in months where

Martin Englert

high construction level of be auto you if bit but it this you Ag? it on little a mean about construction other margin. Ag, I you and steel, pertains comment margin to what from in seems a slowing about like here, When about things incrementally are on seeing Were better think kind bit markets a the as end might key the and

Joseph Hayek

specific say, decline, really Nothing, or Martin. growth strong that would we

Martin Englert

right. that back color. All Okay. Thank you queue. in get I'll for

Joseph Hayek

Sure.

Operator

Your the Gibbs Phil of KeyBanc Markets. Capital comes next from question from line

Your line is open.

Phil Gibbs

Hey. morning. Good

Andy Rose

morning, Good Phil.

Phil Gibbs

the Question may could year. that the and like, consumer last and -- over the XX the through there I volumes box I and mean months the seeing be you consumer into to had are and just that flow are just out anything have big of been the months the Target that to reading of I have be extent, inventories on Walmart to was resilient. then seeing your very know the saying taking down portfolio guys, some we're businesses? you what XX are how just And

Joseph Hayek

customers at is said have mean, you our levels Phil. true, Inventory Yeah. I increased. everything

products retailers back to to those shortage them weeks those on of chains that thinking Tools at a look camping as fuel products. inventory time That's, to longer we causes that more end a and a that's things has on business travel and have a continues seen kind bit little outsized or we benefit our of have of in job spend so and they -- bit of to is good bit be and like a doing really that's (ph) countercyclical is Sometimes that supply actually our It probably more solutions And our people to Torch helium how and a Those business. those to do they're impact up they home, then pair about at what to decide that. helium of there solid. less going business believe, very worldwide. if a want

good happening -- fortunate to able and behaving they're are with consumers retailers that and are so of are things relationships producing and as folks a we really differently. We domestically that kind as bit and are have continue then

good and our alarming where got data, good respond pretty able insights all, on as have pretty we're we've we be appropriate, stay it but vigilant. but We nothing certainly to said, we'll think and I to eye and it's seems at

Andy Rose

Maybe were on pound time, we product cylinder other for were Phil, behind. comment, propane one we business, one of the a allocating long just because kind

the so which volume on in benefit thing, talking We allocation, some some sure for levels I'm highest related quarter retailers but And then be that that we really natural at but are like not product. the inventory never about, probably are the the longer Florida. does have. from other no I product to there'll and this business disasters in excessive of that That's hurricane uptick

Phil Gibbs

Andy. U.S. what question North portfolio, outside you seeing then the the may -- it's know a it I it but Thanks, of on just lot is be it's there, And all of diversified, think I some industrial here America, reasonably because are last

the side talk industrial I'll seeing in out So what jump then of and here. things about you're maybe Thanks.

Andy Rose

Sure.

Building I you're about right? Products, think talking

Phil Gibbs

was industrial-type thinking more cylinders. about your I of

Andy Rose

Sure.

are differently. -- to those the JVs our Products. Building benefit distinct, end little so yeah, and to bit continue in to good are grow Those exposure markets behave from rather of larger I'm teams propane ClarkDietrich a sort Phil, nicely, going So, really WAVE to our continuing that cylinders embedded and are work

more to relative bit been well. I mentioned they are ClarkDietrich susceptible declines remarks our steel prices. exceptionally think to we in prepared that But has doing a

we as dynamics doing pricing some to year do and to think execution their strong, job to remains of a execution the going as lagging their expect I for good demand well. we had Their continue a they bit indicators WAVE outlook that a so expect some forward. WAVE. the do does and very them moderate they ago lap, And and results to had had relative

other overall, other a are pockets be The while will and adhesive, anything product could of foam there that oriented of lines obviously to businesses do there or that that things else, we issues we refrigerant, solid are and through businesses share better to can And hope we products. bunch things. feel like and relative our and GDP specific about enhance than those to be always taking growers thinking

Phil Gibbs

Thanks, guys.

Andy Rose

Sure.

Operator

question comes of Rosenfeld the next Paribas. Your from line Seth BNP from

open. is line Your

Seth Rosenfeld

Good morning. Thanks questions. for my taking

earlier you've follow On the we demand as across what side, seen up comments on to can your Europe.

Just late, regard a year, bit of autumn color [indiscernible] on with energy weakness in started in what Thank recently to much of in through increase, looking the cost scale you've activity of just or winter? levels you. decrease and witnessed earlier kick your when that and does the ahead to first

Andy Rose

It's at Long-term, Europe. but economy, better a that six fuels don't and have this people happening was other than is in economy for say slow window One the going be are pay fair weather for a to two you of that moving it, it to to question, the months general you get adoption pain a amount alternative have is of mentioned, lightly, it's hydrogen a it as accelerate there energy and what's more to and We term, economies hardship really Short us. forward probably alternative dislocation that. with economic I raw ago. know obviously, all as going But we will energies. reasons challenged and it months and to hydrogen, real and you look materials, we even issues scarcity into the things great some lot a respect for energy, Seth the and economy, all about. nine we obviously, for is of for there to attention businesses. have and some colder CNG like When anticipate be of most Sure. solutions, to that you

and I we to they don't are and they everywhere. of relatively an would but their kind of because think of take we where care than of magnitude it customers But happening, have been, getting business are down and that's our of kind order available be incremental probably businesses don't Our source our but people, doing everything it is care I there an take has worse terribly can, think see things it much. not try is specific,

Joseph Hayek

The other it's huge thing component of exposure not Seth, business for a revenue our there. there overall is, the

Seth Rosenfeld

the might any you're Great. back give many scale Can looking continued Thank your pickup pickup we think Any color on are additional you of expected the question in on as witnessing? color delay orders. you. telling your to been what peers in other Maybe, of the I just the the coming from earlier and customers anticipate scale additional year. the on would much you happen forward well? feedback

Andy Rose

get as Seth, solved it's same by sequentially, and see supply products is seems OEMs of think low time, so, their there those from chain for to but founded most things We Yeah. their At the it challenges, sequentially the should automotive other up actually lots a produce pretty and though better. flat, have different or address semiconductor and ability shortages we base. are slightly shortages

half upside, And searching the XXXX think… I better. call first creeping would it some of bottom looks calendar certainly along I the So and for

Seth Rosenfeld

Thank very much. you

Andy Rose

folks which was commentary tomorrow lot the on of ends Some QX, of for so. a those

Operator

Katja Your next comes line from question from the Jancic BMO of Markets. Capital

line Your open. is

Katja Jancic

call. Good morning. Thank my you for Can taking you...

Andy Rose

morning Good Sure.

Katja Jancic

those? think, Can rest you little year, you. the any about actions please do you you taking could these Thank the and pressures, mitigate of how inflationary specifically, will bit a maybe are through develop that talk what of you the

Andy Rose

it's everywhere, the inflation others, like grocery seen at store, in or the at or have pump. We, business our Sure. whether

materials costs, labor And so, we have everything our taken from kind of that to actions have with across gone the understanding input board up.

months. we're But able XX%. for those think there, to pass happening least plan business pay relatively to don't that attention and seeing of we by costs, like we say, that will so high suffice and and down, several signs out it attention relatively tried I our the along see also have up we We we're pay going see it to going sequentially execute what's it to we at is to demand it feel next we don't elasticity but level, be at plateaued a we're on

Katja Jancic

Okay.

prices there more the delay a so or that Shouldn't one is maybe on a the Just benefit steel the down. that bit former -- be cylinder are at? looking should businesses coming we

Andy Rose

got That's months to take from very of for understand customers try and we contracts with right, there nine fixed our to year. we've a anywhere care exactly -- to price hard

down there. have delay that go the prices would in there anytime potential a so, And this, terms is a benefit bit absolutely like of of we

Katja Jancic

Thank very Okay. much. you

Andy Rose

Sure.

Operator

the from Your next comes JTI line Research. John question of Tumazos from

Your line open. is

John Tumazos

any… buy we Did Hi.

Andy Rose

Good morning, John.

John Tumazos

in shares the buy Did any current quarter? we back

Andy Rose

We did not.

John Tumazos

from Are vehicle leaving chip you programs the getting your you either or supplies given that busier Worthington a easing? in other is business, competitors output, rebound on the shortage that benefiting

Andy Rose

feel these We definitely our market bit, manage up solutions you a and are share our like When see our direct to actually Yeah. well is believe our are customers. volumes gain. increasingly ability it, complex attractive done to that's, we have we

And because months. volume don't pretty challenges automotive that last worse we John. any just six those so, the they rise good or supply feel won't are pre- do than we months be levels to or But there have post-COVID anticipate recovering chain persisting, nine been

Joseph Hayek

is end mean, I good. demand still market pretty Yeah,

inventory. very the to in is are lots SARS low million, mid-XXs. I respect think still But the dealer $XX rate with

for So, some will steel least be the the sales the softness at we expect if there quarters business. several demand even in is side, next on good that

John Tumazos

entirely? ArtiFlex gone in be quarter the Will November

Andy Rose

Yes.

John Tumazos

company? JV, steel that the Is with only Serviacero, be will the processing

Andy Rose

in today Steel also JVs with Spartan, will certainly Steel, Samuel, majority WSP. are that embedded remain The TWB, owned

John Tumazos

match exceed you a distribution is Steel Reliance, Reliance, great position better the deal in new Processing at share of... With be think have to separation, Worthington to a company, seems large this been other of price. in in terms or terms irony will One do the outperformed

Andy Rose

part more focused here, is expect focused, more leadership I but -- and price, value allocation, control John, and we the mean obviously, of some the both don't the do teams to that's here thesis share there businesses. we unlock business for capital to intent its outperform, obviously is that accelerate hopefully, growth

John Tumazos

Thank you.

Operator

line of Englert And Partners. your next from question comes from Research Martin the Seaport

Your line open. is

Martin Englert

Hi.

separation? you're the on with some questions okay If taking

Andy Rose

John. absolutely. a us Yeah, segue, provided John ahead, Martin. great Go so,

Martin Englert

use? can or Any costs anticipated that. goalposts Thank we Excellent. you preparation that for

Andy Rose

were feel we posted. -- forward. don't we'll that we we you quarter to a will number, And absolutely not have as that. every that, We for but disclose go Yeah. disclose going keep great We're

Martin Englert

about loss aspect it? whether purchasing be the power overhead What separating of here, on synergies Okay. of it corporate thoughts or

Andy Rose

don't those those absolutely any We numbers We of material. real. that or Yeah. will believe amounts are be that know

Martin Englert

Okay.

Andy Rose

not Like, nothing that but (ph) they into to are goals. we'll obviously, reach we're we're they're confident impact assumptions, our it company's ability not and either will baking -- its that

Martin Englert

you I on Thank much. That's had Okay. all that. very

Operator

from of Seth from [Operator question Instructions] Paribas. BNP line Your the next comes Rosenfeld

Your open. is line

Seth Rosenfeld

questions again. the Thank you taking for

any stop separation. First, if I'll you the any is touch businesses? give the debt there, two they're with complete to order need on to of spin, please. it, that regard different refinance to the there Can in

Joseph Hayek

said you think understood correctly? I to the need I Seth, if refinance,

Seth Rosenfeld

please. Yes,

Joseph Hayek

all come both we use of structures financing growing capital plenty so, the be not not are with capitalized. businesses We attractive gate So either we modest we of to business. leverage We we phrase and preserve, ample the if have to companies company. can the that, for capital going finalized liquidity, that to What of of say on both expect very the to focused have needs conservatively to obviously in place. trying want is and be we meet most out the

refinanced. that will Hopefully have of to all of Some not be it.

Seth Rosenfeld

over there And losses exceptional, years a sharp think volatile and QX question Steel as adequately this have two a you. the reminder the perhaps Thank last going windfall in try business is more risk been for Is Worthington or industrial basis it separate that being effort would business Okay. that, do you we but of how to seen has an please, guidance how forward? and about operates historically don't Worthington you losses gains view a standalone and change the of limit management, inventory inventory do on strategy? see to stable a adjust you about, Steel in think

Andy Rose

trying not should related I in to is, change are inventory focused hence on or amount the reality amount anticipate this mean I earnings answer we a that. of Geoff strategy. in let and I minimize the volatility to price swings do but of always probably the question,

about our customer, it where But have volatility. of know, we contract, in system You get with we we position, inventory that's up we this this to a a balanced run tirelessly that the we've have we an team best sell of work to a talked mill we at and sales we're risk historically, kind of as team where and match can. the management always purchasing reality is, price day, minimize volatility some amazing team we and end But that a the have when to going it.

Seth Rosenfeld

clear. Thank very you. That's Okay.

Operator

from Phil Your next of Gibbs question Capital KeyBanc comes the Markets. from line

is open. line Your

Phil Gibbs

guys. Hey,

potential early the Will this terms sidelines is As the some those continue businesses a capital to in on opportunistic of we the arms to that and get your you want capital then, some also can in very and as you a with allocation essentially be moving done you forward? current structures M&A And be almost before separation focus the year occurs, business to in or XX In of as enterprise that usual XXXX, which past, as in your all separated? already mentality obviously you we perhaps we've work next they're way calendar you operate the stock how will around buybacks? the those then, time the structure to look things operate of before got as you've sort months, words, where half. put for other

Andy Rose

now we a we a and M&A, We've that's allocation say for answer, you will sort well paid to CapEx, focus capital both to the separate that's pursued make deployed back we strategy. right had I Yeah. really a historically bit tell And of capital balanced continue that that forward. will would of just mean I do is companies, we our there I in part companies. some capitalized, question our both both when very are that on to in strategy What dividends, sure well difficult bought we've of go Phil. businesses little stock DNA. likely is, trying

we just time, our generating our gas don't up want still set growth doesn't success. to returns to We to that At I want businesses for that just will and going pedal means stop going cognizant are capital, for mean sure shareholders. keep both the strong of and tell pursuing we're on we're you, businesses strategies. making deploy it that be Now to not the same

more a right little of for be that will delicate could to up same, mix change be balance also it -- trying there a to So which the bit. the but find things could

Seth Rosenfeld

Thanks.

Andy Rose

Sure.

Operator

your question And John JTI next Research. comes from the Tumazos line of from

open. is line Your

John Tumazos

rename the didn't my I by business way.

going three Dietrich business would acquired For industries or be ago, how Worthington became that old JV, new it acquisitions? the Worthington new companies clear will the business? a new JV, of considered over be like in For example, the decades your that was business new forward, terms demarcations subsequent an a

Andy Rose

it, than businesses. to kind markets, John, how margin automotive answer higher some sure, time we're to Steel just there frankly electrical more is The the continue call consuming core like, Steel pursuing Steel the absolutely downstream that growth Processing component say business, there other consolidation business, buy to a consolidate there. in not referring to of question, but a lot consolidation Dietrich When and are opportunities. lot a of they where long a and number for I'll may I'm that of a certainly is growth Processing -- strategy, business a light-weighting, welding, more may hub-and-spoke the Worthington steel some a laser than or we exactly it we that ago, were of steel there do bought and

and on also our at strong, high-growth Consumer the building focus Products Worthington, M&A Building and Sustainable looking new then in is For Energy. branded,

when is call stay probably are but New less a least capital intensive ClarkDietrich asset-light, businesses that with I'll spin, finding and focus pursuing more. at happens, Worthington. great for the our growth that will it it little So way,

John Tumazos

the in galvanized late not through was a prime described buying as take it business and framing in for dye metal public, non-prime and he that recall I automotive or it Bill 'XX for calling on to running the steel Dietrich before prime but buildings. bought Worthington

conceptualized business. a he business like the So, secondary Steel

a lot of cracks would. if there's So, you

In a of be make companies director overlaps? another same sure forward, terms one and going aren't a of bidding the deal the common against for to will the there new the two because companies two procedure

Andy Rose

if months as to XX months That's I between two the XX haven't don't about, separation there M&A conflict we expect much, going different any, you something be take the this businesses. strategies of really so. to talked or know actually is to

going their I think terms the thesis very growth this behind is is and focus of the part strategic we're that separation come from. different businesses in to are the of where

be expect So, that's an I don't going to issue.

Joseph Hayek

your question common directors. to Yeah. But on John, respect with

of of so who that right, company by will place. of been a inherent always both company, the piece largest owns and have will a shareholder, the in common we what One of will today our third companies things appreciated has own that the is and stay third

John Tumazos

Exactly. Thank you.

Operator

Worthington further time, Instructions] management closing for are [Operator some there And call I'll at over turn no this questions back remarks. to the Industries'

Andy Rose

today. Great. all Thank you us and This Worthington that an everyone us exciting day for of hope excitement. for is you're sharing joining here at

to develop, with you as look soon. posted you and keep will speaking things forward We

Operator

today's for your concludes you call. participation. conference This Thank

You may now disconnect.

Worthington Industries (WOR) 29 Sep 222023 Q1 Earnings call transcript