Worthington Steel, Inc.

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, the notes to the consolidated financial statements contained in Part I, Item 1 hereto, “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 1A. Risk Factors—Proposed Acquisition-Related Risks,” 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;

•

outlook, strategy or business plans;

•

expected financial and operational performance, and future opportunities;

•

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

•

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;

•

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

•

the ability to improve or maintain margins;

•

expected demand or demand trends;

•

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

•

expected benefits from transformation and innovation efforts;

•

the ability to improve performance and competitive position;

•

anticipated working capital needs, capital expenditures and asset sales;

•

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

•

projected profitability potential;

•

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;

•

our plans, objectives, expectations and intentions related to the Kloeckner Acquisition (as defined in Note 1 to the consolidated financial statements contained in Part I, Item 1 hereto) and the benefits of the Kloeckner Acquisition;

•

the expected outcomes of the Kloeckner Acquisition, including estimated cost, operations and commercial synergies and the timeline to realize such synergies;

•

the impact of the Kloeckner Acquisition on our earnings;

•

the expected timeline for the Domination and Profit and Loss Transfer Agreement (“DPLTA”) with Klöckner & Co SE (“Kloeckner”) becoming effective;

•

the expected timing, proceeds and consideration of the pending sale of our Becker operations, including the deferred consideration;

•

projected capacity and the alignment of operations with demand;

•

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

•

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;

•

expectations for inventories, jobs and orders;

ii

•

expectations for the economy and markets or improvements therein;

•

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

•

effects of judicial rulings, laws and regulations;

•

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

•

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

•

effects of public health emergencies and the various responses of governmental and nongovernmental authorities thereto on economies and markets, and our 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 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;

•

changing commodity prices and/or supply;

•

product demand and pricing;

•

changes in product mix, product substitution and market acceptance of our products;

•

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;

•

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

•

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

•

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

•

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

•

failure to maintain appropriate levels of inventories;

•

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

•

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

•

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;

•

restrictions on our interactions with Kloeckner may delay the implementation of our integration strategy and could adversely impact our results of operations;

•

the effects of the Kloeckner Acquisition on our and Kloeckner’s operations, including on our future financial condition and performance, operating results, strategy and plans, including anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, losses, future prospects, and business and management strategies for the management, expansion and growth of our operations;

•

if a DPLTA is established, we will be subject to ongoing financial obligations to Kloeckner and its minority shareholders that could adversely affect our business, financial condition, results of operations or cash flows;

•

the time and effort to successfully integrate our business and Kloeckner’s business in the expected timeframe may adversely affect our future results;

iii

•

the impact of limited financial flexibility and increased interest expense due to the Kloeckner Acquisition;

•

risks associated with litigation or appraisal proceedings relating to the Kloeckner Acquisition and/or any DPLTA, including proceedings concerning the adequacy of compensation to minority shareholders, may result in management distraction or financial exposure;

•

the ability to complete the pending sale of our Becker operations on the anticipated terms and timeline, and to realize the expected proceeds, including the deferred consideration;

•

the adverse impact of failing to continue to retain, recruit and motivate executives and other key employees;

•

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;

•

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

•

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

•

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;

•

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

•

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

•

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;

•

the impact of tariffs, the adoption of trade restrictions affecting our 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;

•

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

•

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

•

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

•

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

•

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

•

the level of imports and import prices in our markets and the foreign currency exchange rate exposure;

•

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 our ability to use or sell certain products;

•

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

•

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;

•

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

•

the effect of tax laws in the U.S. and potential changes to such laws, which may increase our costs and negatively impact our operations and financial results;

•

the operational, data privacy, security, regulatory and legal risks associated with our reliance on AI as well as our ability to stay abreast of technological advancements and our dependence on third parties who rely on AI technologies;

•

cybersecurity risks;

iv

•

the effects of privacy and information security laws and standards;

•

the cyclical nature of the steel industry;

•

our safety performance;

•

the effects of competition and price pressures from competitors; and

•

other risks described from time to time in Worthington Steel’s filings with the SEC, including those described in “PART II, Item 1A. Risk Factors” hereto and “PART I, Item 1A. Risk Factors” of the annual report on Form 10-K of Worthington Steel for the fiscal year ended May 31, 2026 (the “2026 Form 10-K”).

We note 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 currently available information as of the date of this Form 10-Q, and we assume 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.

v