Debt

9 Months Ended

Feb. 28, 2026

Debt Disclosure [Abstract]

Debt

Note 9 – Debt

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

		Rate			February 28,		May 31,
(In millions)	Security	Type	Rate	Maturity	2026		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		21.8		-
AMIC Loan	Unsecured	Fixed	0% until June 2028, 5.97% thereafter	May 2032		1.8		-
Sitem Group Term Loans:
Sitem Group Term Loan 2	Unsecured	Fixed	1.50%	March 2027		1.0		-
Sitem Group Term Loan 3	Secured	Fixed	1.94%	September 2030		4.1		-
Sitem Group Term Loan 4	Unsecured	Fixed	0.36%	February 2029		0.5		-
Sitem Group Term Loan 6	Unsecured	Fixed	0.55%	December 2028		0.7		-
Sitem Group Term Loan 8	Secured	Variable	Euribor 1m/360 + 1.65%	May 2026		0.5		-
Sitem Group Term Loan 10	Secured	Variable	Euribor 3m/360 + 1.20%	September 2026		0.3		-
Sitem Group Term Loan 11	Unsecured	Variable	Euribor 3m/360 + 1.65%	March 2028		3.5		-
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		22.1		-
Total						58.7		2.3
Less: current maturities of long-term debt	–	–	–	–		27.1		-
Long-term debt, net of current maturities					$	31.6	$	2.3
Short-term borrowings and current maturities:
Revolving credit facility	Secured	Variable	Various	November 2028	$	192.7	$	149.2
Current maturities of long-term debt	–	–	–	–		27.1		-
Total short-term borrowings and current maturities						219.8		149.2
Total Debt					$	251.4	$	151.5

Foreign currency-denominated borrowings are translated at the applicable reporting period exchange rates, with translation adjustments recorded in accumulated other comprehensive income (loss) (“AOCI”).

The following table provides the maturities of long-term debt in the next five years and the remaining years thereafter as of February 28, 2026:

(In millions)
Year 1	$	27.1
Year 2		4.3
Year 3		3.0
Year 4		2.8
Year 5		2.5
Thereafter		19.0
Total	$	58.7

As of February 28, 2026, there are $192.7 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 February 28, 2026 and May 31, 2025, there were $192.7 million and $149.2 million, respectively, of outstanding borrowings drawn against the Credit Facility. After accounting for the eligible borrowing base, at February 28, 2026 and May 31, 2025, availability under the Credit Facility was $150.5 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 February 28, 2026 and May 31, 2025, the swing loan rate was equal to 7.25% and 8.00%, respectively. 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.

On January 15, 2026, the Company amended the Credit Facility when it entered into the Second Amendment to the Company’s Revolving Credit and Security Agreement (“Second Amendment to the Credit Facility”). The Second Amendment to the Credit Facility, among other things, permits the Company to consummate the Offer. The Company incurred immaterial costs associated with the amendment. For additional information, see “Note 2 – Acquisitions.”

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 February 28, 2026, the Company was in compliance with the financial covenants of the Credit Facility.

As of February 28, 2026 and May 31, 2025, the weighted average interest rate on the outstanding interest-bearing debt under the Credit Facility was 5.40% and 5.98%, respectively.

Long-Term Debt

Canadian Government Regional Economic Growth Loan

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 $2.6 million as of February 28, 2026) (“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 February 28, 2026 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 $42.2 million as of February 28, 2026) (“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. As extended in the third quarter of fiscal 2026, the draw period for the BDC Loan will lapse on June 30, 2026, unless further 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 $29.3 million as of February 28, 2026), 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 beginning May 31, 2026.

As of February 28, 2026, the amount outstanding under the BDC Loan was $21.8 million, while there were no amounts drawn and outstanding as of May 31, 2025.

Canadian Advanced Manufacturing and Innovation Competitiveness 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 $3.7 million as of February 28, 2026) (“AMIC Loan”) to support building and equipment expansion at the Burlington Property. During fiscal 2026, the Company received total distributions of CAD $2.5 million (approximately USD $1.8 million as of February 28, 2026). The remaining amount of the loan 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 February 28, 2026) of the principal may be forgiven if certain performance targets are met. The Company will continue to recognize the full liability until such time as the conditions for forgiveness are satisfied. There were no debt issuance costs associated with the AMIC Loan.

As of February 28, 2026, the amount outstanding under the AMIC Loan was $1.8 million.

Sitem Group

The Company assumed the liabilities of Sitem Group as part of the acquisition and recorded Sitem Group liabilities within the Company’s consolidated balance sheets. Sitem Group’s obligations include various Euro-denominated term loans, which have varying maturities, interest rates and 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 February 28, 2026.

During the third quarter of fiscal 2026, Sitem Group fully repaid four of its loan agreements prior to the maturity date totaling €12.4 million (approximately USD $14.3 million at the time of payment) with cash on hand. Upon repayment of one of the loan agreements, the associated interest rate swap was terminated. For additional information, see “Note 14 – Derivative Financial Instruments and Hedging Activities.” Additionally, during the third quarter of fiscal 2026, a fifth loan was fully repaid at the expected maturity date.

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 $22.1 million as of February 28, 2026). 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 4.0 million (approximately USD $5.2 million as of February 28, 2026), tested monthly beginning April 30, 2025. Stanzwerk AG was in compliance with these covenants as of February 28, 2026.

Other Debt

Other – Debt Financing Commitment

The Company intends to fund the consideration and related transaction costs for the Proposed Acquisition with a combination of cash on hand and new debt financing expected to consist of senior secured indebtedness, which will be issued subject to market conditions and other factors. In connection and concurrently with the entry into the Offer for the Proposed Acquisition, the Company obtained debt financing commitments (“Bridge Nonrevolving Loan Commitment”) in an aggregate amount not to exceed $1.9 billion from a group of lenders, with Wells Fargo Bank, National Association, as administrative agent, to support the expected permanent financing.

In connection with the Bridge Nonrevolving Loan Commitment, the Company incurred approximately $16.3 million of fees and costs, which were capitalized in prepaid expenses and other current assets and will remain unamortized until funding (in whole or in part) or until the commitment expires or is no longer applicable. The remaining fees and costs were expensed during the third quarter of fiscal 2026. The Bridge Nonrevolving Loan Commitment is subject to potential additional fees, including but not limited to, funding fees and drawn and undrawn duration fees. As of February 28, 2026, approximately $14.0 million of the fees remained accrued and were yet to be paid. Excluding any ongoing commitment fees, the Company will pay the substantial balance of those fees once the Bridge Nonrevolving Loan Commitment has been terminated, the Proposed Acquisition has closed, or the amounts available under the Bridge Nonrevolving Loan Commitment remain undrawn upon expiration.

If the Bridge Nonrevolving Loan Commitment is drawn, the obligations thereunder will be secured by a second-priority lien on the assets secured under the Company’s first-lien Credit Facility and a first-priority lien on the assets (other than real property) that are not currently secured by the Company’s Credit Facility (in each case, subject to customary exceptions).

If the Bridge Nonrevolving Loan Commitment is drawn, the loan matures 364 days from the draw date. If the Bridge Nonrevolving Loan Commitment remains undrawn, it expires at the earliest of (a) 10 business days after March 12, 2027 (unless prior thereto, (i) the Transaction (as defined in the BCA) (unless the closing date has occurred on or prior thereto) has occurred and (ii) settlement of the Offer has occurred), (b) settlement of the Offer with or without the borrowings under the commitment, (c) the date of the Offer is terminated or expires, or (d) at the election of the Company to terminate.

Borrowings under the Bridge Nonrevolving Loan Commitment incur interest at a rate per annum equal to, (i) at the election of the Company, either (A) a base rate of interest based on the administrative agent’s published Prime Rate, or (B) one, three, or six-month term SOFR plus (ii) an applicable margin ranging from 2.0% to 2.75% for loans based on the base rate or 3.0% to 3.75% for loans based on term SOFR, based on the funding date and the period for which the bridge loans remain outstanding after the initial funding date. The undrawn commitments under the Bridge Nonrevolving Loan Commitment will be subject to a commitment fee consistent with bridge acquisition financings of this type. The commitment to provide the Bridge Nonrevolving Loan Commitment is subject to certain conditions to funding consistent with bridge acquisition financings of this type.

As of February 28, 2026, the Bridge Nonrevolving Loan Commitment was undrawn and available. For additional information, see “Note 2 – Acquisitions.”

Other – Tempel China

Tempel owns a subsidiary in China (“Tempel China”), and Tempel China utilizes multiple short-term loan facilities, which are used to finance raw material purchases, and are collateralized by Tempel China property and equipment. There were no outstanding borrowings under the facilities at February 28, 2026 and May 31, 2025.

As of February 28, 2026, Tempel China had two active short-term loan facilities, for an aggregate amount of CNY 90.0 million (approximately USD $13.1 million and USD $12.5 million, as of February 28, 2026 and May 31, 2025, respectively). The first facility is for CNY 40.0 million (approximately USD $5.8 million as of February 28, 2026) and matures on September 10, 2026. The second facility is for CNY 50.0 million (approximately USD $7.3 million as of February 28, 2026) and matures on July 29, 2026.

Other – Tempel India

Tempel owns a subsidiary in India (“Tempel India”) which has two individual credit facilities with separate financial institutions, each of which contain a line of credit and standby letters of credit/letters of guarantee secured by applicable Tempel India current assets and fixed assets. The facilities are subject to annual renewals, which are effective as of the date of the annual renewal letter.

The aggregate size of the Tempel India credit facilities is INR 1,150.0 million (approximately USD $12.6 million and USD $14.0 million, as of February 28, 2026 and May 31, 2025, respectively), subject to adjustment pursuant to the security noted above. One credit facility is for INR 500.0 million (approximately USD $5.5 million as of February 28, 2026) and matures on January 7, 2027. The other credit facility is for INR 650.0 million (approximately USD $7.1 million as of February 28, 2026) and matures on December 15, 2026. Both of the credit facilities allow for borrowing on the lines of credit up to a sublimit of the total facility size, which was equal to an aggregate of INR 550.0 million (approximately USD $6.0 million and USD $7.0 million, as of February 28, 2026 and May 31, 2025, respectively). Interest is payable monthly and will accrue on the outstanding balance according to the lender’s base lending rate plus an applicable margin as determined by the lender. As of February 28, 2026 and May 31, 2025, there were no borrowings outstanding under Tempel India line of credit facilities.

Letters of credit may be drawn against the aggregate limit of these credit facilities, excluding any amounts drawn by the lines of credit. As of February 28, 2026 and May 31, 2025, no amounts under the Tempel India credit facilities were due to the financial institutions. The purchases, made in the normal course of business that are supported by the letters of credit, are recorded in accounts payable in the consolidated balance sheets as of February 28, 2026 and May 31, 2025.

Other – Sitem Slovakia

Tempel owns a majority interest in a subsidiary in Slovakia (“Sitem Slovakia”), and Sitem Slovakia has an overdraft line of credit in the amount of €0.3 million (approximately USD $0.4 million as of February 28, 2026), which is secured by Sitem Slovakia’s trade receivables. The overdraft line of credit matures in February 2027, and is reviewed annually for renewal. Outstanding borrowings carry an interest rate of 1-month Euribor plus 1.75%. There were no borrowings outstanding under the facilities as of February 28, 2026.