v3.26.1
Segment Information and Geographic Data
 12 Months Ended
May 31, 2026
Segment Reporting [Abstract]  
Segment Information and Geographic Data

Note 20 – Segment Information and Geographic Data

Segment Information

The Company’s CODM is Worthington Steel’s CEO. 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 CODM reviews in evaluating company performance and determining how resources should be allocated, and how the Company releases information to the public and analysts. The CODM manages all business activities on a consolidated basis, and as a result, the Company has concluded that as of May 31, 2026, there is only one operating segment and therefore one reportable segment.

The Company’s one reportable segment 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 generates a substantial percentage of its revenue from selling 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 accounting policies of the one reportable segment are the same as those described in the Summary of Significant Accounting Policies (refer to “Note 1 – Description of Business, The Separation, and Basis of Presentation”). As the one reportable segment is managed on a consolidated basis, the measure of segment profit or loss is consolidated net income. The CODM uses consolidated net income to assess the performance of the Company’s one segment and decide how and where to allocate resources and reinvest profits into the business in areas such as capital expenditures, business and/or asset acquisitions, investments in market share expansion with our existing and potential new customers, talent, technology, the repurchase of the Company’s common shares, and/or the payment of dividends. Net earnings, and components of net earnings, are used to monitor actual performance and are compared to budgeted and forecasted results to assess the performance of the Company’s one reportable segment, set targets, and establish management’s incentive compensation. The measure of consolidated segment assets is reported on the Balance Sheets as total assets.

The Company regularly provides the CODM with a reporting package that is structured similarly to the statements of earnings, and the CODM reviews consolidated net earnings (loss) as a key performance measure of profit (loss) for the Company’s single reportable segment and reviews significant expenses on a consolidated basis consistent with the presentation on the consolidated statements of earnings, with the exception of cost of goods sold, which is further disaggregated. The CODM’s review is focused on the consolidated results for the Company.

The following table presents the significant expenses that are regularly provided to the CODM for the one reportable segment and the required disclosable amounts that are included in consolidated and combined net earnings for the past three fiscal years.

 

 

Fiscal Years Ended May 31,

 

(In millions)

2026

 

 

2025

 

 

2024

 

Net sales

$

3,443.8

 

 

$

3,093.3

 

 

$

3,430.6

 

Cost of goods sold:

 

 

 

 

 

 

 

 

Material cost

 

2,331.1

 

 

 

2,082.0

 

 

 

2,366.9

 

Direct labor, manufacturing expenses, and other (1)

 

709.4

 

 

 

622.7

 

 

 

623.9

 

Total cost of goods sold

 

3,040.5

 

 

 

2,704.7

 

 

 

2,990.8

 

Gross margin

 

403.3

 

 

 

388.6

 

 

 

439.8

 

Selling, general and administrative expense

 

297.4

 

 

 

231.6

 

 

 

224.4

 

Impairment of goodwill

 

53.8

 

 

 

-

 

 

 

-

 

Impairment of long-lived assets and other assets

 

60.5

 

 

 

7.4

 

 

 

1.4

 

Restructuring and other (income) expense, net

 

(7.0

)

 

 

2.6

 

 

 

-

 

Separation costs

 

-

 

 

 

-

 

 

 

19.5

 

Operating income (loss)

 

(1.4

)

 

 

147.0

 

 

 

194.5

 

Other income (expense):

 

 

 

 

 

 

 

 

Miscellaneous income, net

 

16.6

 

 

 

3.8

 

 

 

5.3

 

Interest expense, net

 

(28.4

)

 

 

(7.1

)

 

 

(6.0

)

Equity in net income of unconsolidated affiliate

 

20.3

 

 

 

4.4

 

 

 

22.4

 

Earnings before income taxes

 

7.1

 

 

 

148.1

 

 

 

216.2

 

Income tax expense

 

20.0

 

 

 

28.8

 

 

 

46.1

 

Net earnings (loss)

 

(12.9

)

 

 

119.3

 

 

 

170.1

 

Net earnings (loss) attributable to noncontrolling interests

 

(21.4

)

 

 

8.6

 

 

 

15.4

 

Net earnings attributable to controlling interest

$

8.5

 

 

$

110.7

 

 

$

154.7

 

 

(1)
Includes expenses related to manufacturing profit sharing and bonus.

 

Geographic Data

Net sales are attributed to geographic areas based on the destination to which products are shipped. The following table presents net sales by geographic region for the past three fiscal years:

 

(In millions)

2026

 

 

2025

 

 

2024

 

United States

$

2,560.8

 

 

$

2,436.3

 

 

$

2,752.0

 

Canada

 

392.1

 

 

 

330.8

 

 

 

392.6

 

Mexico

 

208.0

 

 

 

207.7

 

 

 

181.3

 

Rest of world

 

282.9

 

 

 

118.5

 

 

 

104.7

 

Total

$

3,443.8

 

 

$

3,093.3

 

 

$

3,430.6

 

The following table presents long-lived assets, excluding intangible assets, equity securities, investments in unconsolidated affiliates and deferred tax assets, by geographic region as of the end of the past two fiscal years:

 

(In millions)

2026

 

 

2025

 

United States

$

394.0

 

 

$

403.5

 

Canada

 

108.0

 

 

 

80.1

 

Mexico

 

99.6

 

 

 

84.2

 

Rest of world

 

133.0

 

 

 

53.0

 

Total

$

734.6

 

 

$

620.8