Worthington Steel, Inc. (NYSE: WS) has reported its financial results for the fiscal 2024 fourth quarter and full fiscal year ended May 31, 2024. In the fourth quarter of fiscal 2024, net sales increased by 3% to $911.0 million compared to $884.0 million in the fourth quarter of fiscal 2023. However, operating income decreased to $67.3 million from $89.8 million in the same period last year. Net earnings attributable to controlling interest also declined to $53.2 million from $67.3 million. Adjusted EBIT (non-GAAP) dropped to $70.4 million from $98.4 million.
For the full fiscal year 2024, net sales amounted to $3,430.6 million, down from $3,607.7 million in fiscal 2023. Operating income, however, saw a substantial increase to $194.5 million from $120.3 million. Net earnings attributable to controlling interest also showed a significant rise, reaching $154.7 million compared to $87.1 million in fiscal 2023. Adjusted EBIT for the full fiscal year 2024 stood at $224.4 million, up from $136.1 million in the prior year.
The company's volume in tons for the fourth quarter of fiscal 2024 was 1,029,565, a decrease from 1,052,928 tons in the same period of fiscal 2023. For the full fiscal year 2024, the volume was 4,007,373 tons, up from 3,954,575 tons in fiscal 2023.
The company declared a quarterly dividend of $0.16 per share payable on September 27, 2024, to shareholders of record on September 13, 2024.
Worthington Steel recognized a decline in gross margin, which decreased by $19.2 million over the prior year quarter to $131.0 million. The decrease was attributed to lower direct spreads and lower volume. Operating income decreased by $22.5 million over the prior year quarter to $67.3 million, primarily due to a decline in gross margin and an increase in selling, general and administrative expenses.
As of May 31, 2024, the company had cash and cash equivalents of $40.2 million. It generated cash flow from operations of $35.6 million during the fourth quarter of fiscal 2024, compared to $79.2 million in the prior year period. Worthington Steel had negative free cash flow of $9.2 million in the fourth quarter of fiscal 2024, a decrease from $70.2 million in the prior year quarter.
The company ended the fourth quarter of fiscal 2024 with a net debt position of $107.8 million, holding debt of $148.0 million under its revolving credit facility.
The board of directors declared a quarterly dividend of $0.16 per common share, payable on September 27, 2024, to shareholders of record at the close of business on September 13, 2024.
In the full fiscal year 2024, the company saw a notable increase in operating income, net earnings, and adjusted EBIT, despite a slight decrease in net sales. The decline in volume and negative free cash flow in the fourth quarter may raise concerns, but the company's strategic expansions in electrical steel operations in Mexico and Canada could be a potential driver for future growth. The market has reacted to these announcements by moving the company's shares 2.0% to a price of $33.36. Check out the company's full 8-K submission here.
