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Once a year, publicly traded companies issue a comprehensive report of their business, called a 10-K. A component mandated in the 10-K is the ‘Risk Factors’ section, where companies disclose any major potential risks that they may face. This dashboard highlights all major changes and additions in new 10K reports, allowing investors to quickly identify new potential risks and opportunities.

Risk Factors - WOR

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Item 1A. – Risk Factors” of this Annual Report on Form 10-K.

We note these factors for investors as contemplated by the Act. It is impossible to predict or identify all potential risk factors. Consequently, you should not consider the foregoing list to be a complete set of all potential risks and uncertainties. Any forward-looking statements in this Annual Report on Form 10-K are based on current information as of the date of this Annual Report on Form 10-K, and we assume no obligation to correct or update any such statements in the future, except as required by applicable law.

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PART I

As used in this Annual Report on Form 10-K (this "Form 10-K"), unless otherwise indicated, all Note references contained in Part I of this Form 10-K refer to the Notes to the Consolidated Financial Statements included in “Part II – Item 8. – Financial Statements and Supplementary Data” of this Form 10-K.

Item 1. — Business

General Overview

Worthington Industries, Inc. is a corporation formed under the laws of the State of Ohio (individually, the “Registrant” or “Worthington Industries” or, collectively with the subsidiaries of Worthington Industries, Inc., “we,” “our,” “Worthington” or the “Company”). Founded in 1955, Worthington is an industrial manufacturing company, focused on value-added steel processing and manufactured metal products. Founded in 1955, Worthington is primarily a diversified metals manufacturing company, focused on value-added steel processing and manufactured metal products. Our manufactured metal products include: pressure cylinders for liquefied petroleum gas (“LPG”), compressed natural gas (“CNG”), oxygen, refrigerant and other industrial gas storage; water well tanks for commercial and residential uses; hand torches and filled hand torch cylinders; propane-filled camping cylinders; helium-filled balloon kits; specialty tools; and, through our joint ventures, complete ceiling grid solutions; laser welded blanks; light gauge steel framing for commercial and residential construction; current and past model automotive service stampings; and engineered cabs and operator stations and cab components. Our manufactured metal products include: pressure cylinders for liquefied petroleum gas (“LPG”), compressed natural gas (“CNG”), oxygen, refrigerant and other industrial gas storage; water well tanks for commercial and residential uses; hand torches and filled hand torch cylinders; propane-filled camping cylinders; helium-filled balloon kits; steel tanks and processing equipment primarily for the oil and gas industry; cryogenic pressure vessels for liquefied natural gas (“LNG”) and other gas storage applications; and, through our joint ventures, complete ceiling grid solutions; laser welded blanks; light gauge steel framing for commercial and residential construction; current and past model automotive service stampings; and engineered cabs and operator stations and cab components.

Worthington is headquartered at 200 Old Wilson Bridge Road, Columbus, Ohio 43085, telephone (614) 438-3210. The common shares of Worthington Industries are traded on the New York Stock Exchange under the symbol WOR.

Worthington Industries maintains an Internet web site at www.worthingtonindustries.com. This uniform resource locator, or URL, is an inactive textual reference only and is not intended to incorporate Worthington Industries’ web site into this Annual Report on Form 10-K. Worthington Industries’ Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports, filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as Worthington Industries’ definitive proxy materials for annual meetings of shareholders filed pursuant to Section 14 of the Exchange Act, are available free of charge, on or through the Worthington Industries web site, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).

Segments

As of May 31, 2021, we, together with our unconsolidated affiliates, operated 68 manufacturing facilities in 22 states and 8 countries. Twenty-one of these facilities are operated by wholly-owned and consolidated subsidiaries of the Company. Twenty-six of these facilities are operated by wholly-owned and consolidated subsidiaries of the Company. The remaining facilities are operated by our consolidated and unconsolidated joint ventures.

Our operations are managed principally on a products and services basis and are comprised of two primary operating segments which correspond with our reportable business segments: “Steel Processing” and “Pressure Cylinders”. Steel Processing consists of the Worthington Steel business unit (“Worthington Steel”) which operates nine manufacturing facilities (eight of which were being operated as of May 31, 2021, and one of which was acquired in June of 2021); and four consolidated joint ventures: Spartan Steel Coating, L. Steel Processing consists of the Worthington Steel business unit (“Worthington Steel”) which operates eight manufacturing facilities; and four consolidated joint ventures: Spartan Steel Coating, L. L.C. (“Spartan”), which operates a cold-rolled, hot-dipped coating line in Monroe, Michigan; TWB Company, L. (“Spartan”), which operates a cold-rolled, hot-dipped galvanizing line in Monroe, Michigan; TWB Company, L. L.C. (“TWB”), which operates eleven laser welded blank facilities (eight of which were being operated as of May 31, 2021, and three of which were acquired in June of 2021) and is headquartered in Monroe, Michigan; Worthington Samuel Coil Processing LLC (“Samuel” or the “Samuel joint venture”), which operates three tolling facilities and is headquartered in Cleveland, Ohio; and Worthington Specialty Processing (“WSP”), which processes wide-sheet steel for the auto industry and operates two facilities in Michigan. Pressure Cylinders consists of the Worthington Cylinders business unit (“Worthington Cylinders”) which operates 13 manufacturing facilities.

We hold equity positions in nine joint ventures, which are further discussed in the Joint Ventures section below. Of these, Spartan, TWB, Samuel and WSP are consolidated with their operating results reported within Steel Processing.

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During the fiscal year ended May 31, 2021 (“fiscal 2021”), Steel Processing and Pressure Cylinders served approximately 760 and 4,400 customers, respectively, located primarily in the United States. International operations accounted for approximately 7% of our consolidated net sales during fiscal 2021 and were comprised primarily of sales to customers in Europe. Sales to one customer in the automotive industry accounted for 11.2% of our consolidated net sales in fiscal 2021.

Refer to “Note P – Segment Data” for a full description of our reportable business segments.

Recent Developments

On June 3, 2020, Nikola Corporation (“Nikola”) became a public company through a reverse merger with a subsidiary of VectoIQ Acquisition Corporation, a NASDAQ listed publicly-traded company. The Company owned 19,048,020 shares of Nikola common stock following the reverse merger and subsequently sold all of the Company’s shares, resulting in pre-tax gains of $655.1 million, which was comprised of $634.4 million in cash proceeds and $20.7 million in value from Nikola shares contributed to the Worthington Industries Foundation. See “Note C – Investment in Nikola” for additional information.

Pursuant to a leadership succession plan announced on June 24, 2020 by the Company, effective September 1, 2020, B. Andrew Rose became Chief Executive Officer (“CEO”) of Worthington Industries, in addition to continuing to serve as President, and John P. Andrew Rose will become Chief Executive Officer (“CEO”) of Worthington Industries, in addition to continuing to serve as President, and John P. McConnell, the prior CEO, became Executive Chairman. McConnell, the current CEO, will become Executive Chairman.

In October 2020, the Company sold its cryogenic trailer and hydrogen trailer business, including the Theodore, Alabama manufacturing site, to Chart Industries, Inc. and the cryo-science and microbulk storage unit business to IC Biomedical US, LLC. The combined sales proceeds from the two transactions was $21.2 million, resulting in a pre-tax loss of $7.1 million within restructuring and other expense, net.

On January 4, 2021, the Company acquired PTEC Pressure Technology GmbH (“PTEC”), a leading independent designer and manufacturer of valves and components for high-pressure hydrogen and compressed natural gas storage, transport and onboard fueling systems. The total purchase price was $10.8 million. The PTEC business is being operated as part of the Company’s Pressure Cylinders segment. For additional information, refer to “Note Q – Acquisitions”. For additional information, refer to “NOTE V – Subsequent Events”. For additional information, refer to “NOTE V – Subsequent Events”.

On January 29, 2021, the Company sold its oil & gas equipment business to an affiliate of Ten Oaks Group. The Company retained the real estate associated with the business and received nominal consideration at closing, resulting in a pre-tax loss of $27.7 million within restructuring and other expense, net.

On January 29, 2021, the Company acquired General Tools & Instruments Company LLC (“GTI”), a provider of feature-rich, specialized tools in various categories including environmental health & safety, precision measurement & layout, home repair & remodel, lawn & garden and specific purpose tools. The total purchase price was $120.4 million, after adjustment for final working capital. The GTI business is being operated as part of the Company’s Pressure Cylinders segment. For additional information, refer to “Note Q – Acquisitions”. For additional information, refer to “NOTE V – Subsequent Events”. For additional information, refer to “NOTE V – Subsequent Events”.

On March 12, 2021, the Company sold its Structural Composites Industries, LLC business located in Pomona, California to Luxfer Holdings PLC. The Company received net proceeds of $19.1 million, resulting in a pre-tax loss of $7.2 million within restructuring and other expense, net.

On March 24, 2021, the Company announced an additional share repurchase authorization covering 5,618,464 common shares.

On May 31, 2021, the Company sold its LPG fuel storage business, located in Poland, to Westport Fuel Systems, Inc. The Company received total consideration of approximately $6.0 million, resulting in a pre-tax loss of $11.0 million, subject to closing adjustments, within restructuring and other expense, net.

On June 8, 2021, the Company acquired the Shiloh Industries U.S. BlankLight® business, a provider of laser welded solutions, for cash consideration of approximately $105.0 million, subject to closing adjustments. The acquisition includes three facilities that will expand the capacity and capabilities of our TWB joint venture’s laser welded products business and an additional blanking facility that will support the Company’s core steel processing operations.

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On June 9, 2021, the Company’s consolidated joint venture, WSP, sold the remaining assets of its Canton, Michigan, facility for cash proceeds of approximately $20.0 million. The Company will recognize a gain of approximately $12.0 million in the first quarter of the fiscal year ending May 31, 2022 (“fiscal 2022”) related to the divestiture. WSP continues to operate locations in Jackson and Taylor, Michigan.

On June 10, 2021, the Company announced that its Pressure Cylinders segment was being divided into three new reportable segments: Consumer Products, Building Products and Sustainable Energy Solutions, effective at the start of fiscal 2022. The three new reportable segments are in addition to the Company’s Steel Processing segment.

Steel Processing

Steel Processing consists of the Worthington Steel business unit, and our consolidated joint ventures, Samuel, Spartan, TWB, and WSP. For fiscal 2021, fiscal 2020 and fiscal 2019, the percentage of our consolidated net sales generated by Steel Processing was approximately 65%, 61% and 65%, respectively.

Worthington Steel is one of the largest independent intermediate processors of flat-rolled steel in the United States. It occupies a niche in the steel industry by focusing on products requiring exact specifications. These products cannot typically be supplied as efficiently by steel mills to the end-users of these products.

As of May 31, 2021, Steel Processing, including Spartan, TWB, Samuel and WSP, operated 22 manufacturing facilities located in Ohio (8), Michigan (4), Tennessee (2), Alabama (1), Indiana (1), Kentucky (1), New York (1), Canada (1) and Mexico (3). As noted above, Steel Processing acquired four additional facilities in June of 2021 (one in Kentucky being operated by the Worthington Steel business unit; and two in Ohio and one in Michigan being operated by TWB).

Steel Processing serves approximately 760 customers in many markets including automotive, aerospace, agricultural, appliance, construction, container, hardware, heavy-truck, HVAC, lawn and garden, leisure and recreation, office furniture, and office equipment. The automotive industry is one of the largest consumers of flat-rolled steel, and thus the largest end market for Steel Processing. For fiscal 2021, Steel Processing’s top three customers represented approximately 30% of the operating segment’s total net sales.

Steel Processing buys coils of steel from integrated steel mills and mini-mills and processes them to the precise type, thickness, length, width, shape and surface quality required by customer specifications. Computer-aided processing capabilities include, among others:

cold reducing, which achieves close tolerances of thickness;

configured blanking, which mechanically stamps steel into specific shapes;

coil fed laser blanking, which uses lasers to cut coils of steel, aluminum and other metals into specific shapes;

cutting-to-length, which cuts coils into sheets of exact length;

dry-lube, the process of coating steel with a dry, soap-based lubricant;

hot dip coating, which coats steel with either zinc, zinc alloy or aluminum and silicon through a hot dip process;

hydrogen annealing, a thermal process that changes the hardness and certain metallurgical characteristics of steel;

laser welding, which joins steel or aluminum blanks with different thicknesses, coatings or material strength;

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pickling, a chemical process using an acidic solution to remove surface oxide which develops on hot-rolled steel;

slitting, which cuts steel coils or steel sheets to specific widths;

oscillate slitting, a slitting process that spools together several narrow coils welded end-to-end into one larger coil;

temper rolling, which is the process of light cold-rolling steel;

tension leveling, a method of applying pressure to achieve precise flatness tolerances; and

non-metallic coating, including acrylic and paint coating.

Steel Processing also toll processes steel for steel mills, large end-users, service centers and other processors. Toll processing is different from typical steel processing in that the mill, end-user or other party retains title to the steel and has the responsibility for selling the end product. Toll processing enhances Worthington Steel’s participation in the market for wide sheet steel and large standard orders, a market generally served by steel mills rather than by intermediate steel processors.

The steel processing industry is fragmented and highly competitive. There are many competitors, including other independent intermediate processors. Competition is primarily on the basis of price, product quality and the ability to meet delivery requirements. Technical service and support for material testing and customer-specific applications enhance the quality of products (see the Technical Services section below). However, the extent to which technical service and support capability has improved Steel Processing’s competitive position has not been quantified. Steel Processing’s ability to meet tight delivery schedules is, in part, based on the proximity of our facilities to customers, suppliers and one another. The extent to which plant location has impacted Steel Processing’s competitive position has not been quantified. Processed steel products are priced competitively, primarily based on market factors, including, among other things, market pricing, the cost and availability of raw materials, transportation and shipping costs, and overall economic conditions in the United States and abroad.

Pressure Cylinders

Pressure Cylinders consists of the Worthington Cylinders business unit. The percentage of our consolidated net sales generated by Pressure Cylinders was approximately 35%, 37% and 32% in fiscal 2021, fiscal 2020 and fiscal 2019, respectively.

Pressure Cylinders manufactures and sells filled and unfilled pressure cylinders, tanks, hand torches, tools, well water and expansion tanks, along with various accessories and related products for diversified end-use market applications. The following is a description of these markets:

Industrial Products: This market sector includes high pressure and acetylene cylinders for industrial gases, refrigerant and certain propane gas (LPG) cylinders, alternative fuel cylinders and other specialty products. Cylinders in this market sector are generally sold to gas producers, cylinder exchangers and industrial distributors. Cylinders in this 4 market sector are generally sold to gas producers, cylinder exchangers and industrial distributors. Industrial gas cylinders hold fuel for uses such as cutting, brazing and soldering, and semiconductor production. Industrial gas cylinders hold fuel for uses such as cutting, brazing and soldering, semiconductor production, and beverage delivery. Refrigerant gas cylinders are used to hold refrigerant gases for commercial, residential and automotive air conditioning and refrigeration systems. LPG cylinders hold fuel for barbeque grills, recreational vehicle equipment, residential and light commercial heating systems, industrial forklifts and commercial/residential cooking (the latter, generally outside North America). Alternative fuel cylinders include composite and steel cylinders used to hold CNG and hydrogen for automobiles, buses, and light-duty trucks. Alternative fuel cylinders include composite and steel cylinders used to hold CNG and hydrogen for automobiles, buses, and light-duty trucks, and to hold propane/autogas for automobiles and light- and medium-duty trucks. Specialty products include a variety of fire suppression, life support and chemical tanks.

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Consumer Products: This market sector includes propane-filled cylinders for torches, camping stoves and other applications, hand-held torches, Balloon Time® helium-filled balloon kits, well water tanks and expansion tanks and specialized hand tools and instruments. These products are sold primarily to mass merchandisers, retailers and distributors.

While a large percentage of Pressure Cylinders sales are made to major accounts, this operating segment served approximately 4,400 customers during fiscal 2021. Sales to one customer represented approximately 10% of net sales for Pressure Cylinders during fiscal 2021.

As of May 31, 2021, Pressure Cylinders operated 13 manufacturing facilities located in Kansas, Kentucky, Maryland, New Jersey, Ohio (3), Rhode Island, Wisconsin, Austria, Germany, Poland, and Portugal.

For sales in the United States and Canada, high-pressure and low-pressure cylinders are primarily manufactured in accordance with United States Department of Transportation and Transport Canada specifications. Outside the United States and Canada, cylinders are manufactured according to European norm specifications, as well as various other international standards. Other products are produced to applicable industry standards including, as applicable, those standards issued by the American Petroleum Institute, ASME and UL.

Worthington Cylinders has one principal domestic competitor in the low-pressure LPG cylinder market, and there are a number of foreign competitors in the LPG cylinder market and in the non-refillable refrigerant market. We believe that Worthington Cylinders has the largest market share in its domestic low-pressure cylinder markets. In the other cylinder markets, there are several competitors. Worthington Cylinders is a leading supplier to the European markets for both the high-pressure cylinders and the low-pressure non-refillable cylinders. Worthington Cylinders generally has a strong competitive position for its industrial, energy, retail and specialty products, but competition varies on a product-by-product basis. Worthington Cylinders generally has a strong competitive position for its industrial, energy, retail and specialty products, but competition varies on a product-by-product basis, and geographically for energy products. As with our other operating segment, competition is based upon price, service and quality.

Pressure Cylinders uses the trade names “Worthington Cylinders”, “AMTROL”, “Alfa”, “General”, “Garden Weasel”, and “PacTool” to conduct business.

The Company uses the registered trademark “Balloon Time®” to market helium-filled balloon kits; the registered trademark “BERNZOMATIC®” to market certain fuel cylinders and hand-held-torches; the trademark “WORTHINGTON PRO-GRADE” to market certain LPG cylinders, hand torches and camping fuel cylinders; the registered trademark “Coleman®” to market certain camping fuel cylinders; the registered trademarks “MAP-PRO®” and “Pro-Max®” to market certain hand torch cylinders; the registered trademark “Mag-Torch®” to market certain hand-held torches; the registered trademarks General®, Garden-Weasel® and Pactool International® to market certain tools; the registered trademarks “Therm-X-Trol®” and “Extrol®” to market thermal expansion tanks; the registered trademarks “Well X Trol®”, “Champion®”, and “Wel-Flo and Design®” to market well tanks; and the registered trademarks “Hydromax®” and “Boilermate®” to market indirect fired water heaters.

Each registered trademark has an original duration of 10 to 20 years, depending on the date it was registered and the country in which it is registered, and is subject to an indefinite number of renewals for a like period upon continued use and appropriate application. The Company intends to continue using the trade names and trademarks described above and to timely renew each of its registered trademarks that remains in use.

Other

The Other category includes the results of the Company’s former Engineered Cabs operating segment, on a historical basis through November 1, 2019, when the Company contributed substantially all of the related net assets to a then newly-formed joint venture, Taxi Workhorse Holdings, LLC (the “Cabs joint venture”) in which the Company owns a 20% non-controlling interest. The deconsolidated net assets included the two primary manufacturing facilities of the Engineered Cabs business located in Greeneville, Tennessee and Watertown, South Dakota. The remaining non-core assets of the Engineered Cabs business, including the fabricated products facility in Stow, Ohio, and the steel packaging facility in Greensburg, Indiana, were retained and have since been exited. The remaining non-core assets of the Engineered Cabs business, including the fabricated products facility in Stow, Ohio, and the steel packaging facility in Greensburg, Indiana, were retained, but the Company has finalized plans to exit those facilities.

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Segment Financial Data

Financial information for the reportable business segments is provided in “Note P – Segment Data”.

Suppliers

The primary raw material purchased by Worthington is steel. We purchase steel in large quantities at regular intervals from major primary producers of steel, both domestic and foreign. The amount purchased from any particular supplier varies from year to year depending on a number of factors including market conditions, then current relationships and prices and terms offered. In nearly all market conditions, steel is available from a number of suppliers and generally any supplier relationship or contract can and has been replaced with little or no significant interruption to our business. During fiscal 2021, we purchased approximately 2.45 million tons of steel (74.0% hot-rolled, 14.3% cold-rolled and 11.7% galvanized) on a consolidated basis. During fiscal 2020, we purchased approximately 2.4 million tons of steel (72% hot-rolled, 16% cold-rolled and 12% galvanized) on a consolidated basis.

Steel is primarily purchased and processed based on specific customer orders for Steel Processing, while Pressure Cylinders purchases steel to meet production schedules. For certain raw materials, there are more limited suppliers -- for example, helium and zinc, which are generally purchased at market prices. Since there are a limited number of suppliers in the helium and zinc markets, if delivery from a major supplier is disrupted due to a force majeure type occurrence, it may be difficult to obtain an alternative supply. Raw materials are generally purchased in the open market on a negotiated spot-market basis at prevailing market prices. Supply contracts are also entered into, some of which have fixed pricing and some of which are indexed (monthly or quarterly). During fiscal 2021, we purchased steel from the following major suppliers, in alphabetical order: Cleveland-Cliffs Inc. During fiscal 2020, we purchased steel from the following major suppliers, in alphabetical order: AK Steel Holding Corporation, a subsidiary of Cleveland-Cliffs Inc. ; NLMK USA; North Star BlueScope Steel, LLC; Nucor Corporation; Steel Dynamics, Inc.; ArcelorMittal; NLMK USA; North Star BlueScope Steel, LLC; Nucor Corporation; Steel Dynamics, Inc. ; and United States Steel Corporation (“U.S. Steel”). Major suppliers of aluminum to Pressure Cylinders in fiscal 2021 were, in alphabetical order: Arconic Inc.; DK Resources Limited; Geumsan Tech; Horizon; Meyer Aluminum; Norsk Hydro; Novelis Corporation; and Shanghai Everskill. Major suppliers of zinc to Steel Processing in fiscal 2021 were, in alphabetical order: Considar Metal Marketing Inc. (a/k/a HudBay); Glencore Ltd. (a/k/a HudBay); Glencore Ltd; Nexa Resources S. ; Teck Resources Limited; and Trafigura Trading LLC. Approximately 44.13 million pounds of zinc and 3.37 million pounds of aluminum were purchased in fiscal 2021. We believe our supplier relationships are favorable. Approximately 42.2 million pounds of zinc and 8.0 million pounds of aluminum were purchased in fiscal 2020. We believe our supplier relationships are favorable.

Technical Services

We employ a staff of engineers and other technical personnel, and we maintain fully-equipped laboratories to support operations. These facilities enable verification, analysis and documentation of the physical, chemical, metallurgical and mechanical properties of raw materials and products. Technical Service personnel also work in conjunction with the sales force to specify components and materials required to fulfill customer needs. Technical Service personnel also work in conjunction with the sales force to specify components and materials required to fulfill customer needs Laboratory facilities also perform metallurgical and chemical testing as dictated by International Organization for Standardization (ISO), ASTM International, and other customer and industry specific requirements. Laboratory facilities also perform metallurgical and chemical testing as dictated by International Organization for Standardization (ISO), ASTM International, and other customer and industry specific requirements.

Seasonality and Backlog

Demand for most of our products remained strong throughout fiscal 2021, but sales are generally strongest in the fourth quarter of our fiscal year as our operating segments are generally operating at seasonal peaks. Historically, sales have generally been weaker in the third quarter of our fiscal year, primarily due to reduced activity in the building and construction industry as a result of inclement weather, as well as customer plant shutdowns, particularly in the automotive industry, due to holidays. Historically, sales have generally been weaker in the third quarter of our fiscal year, primarily due to reduced activity in the building and construction industry as a result of inclement weather, as well as customer plant shutdowns, particularly in the automotive industry, due to holidays and such weakness was amplified in fiscal 2020 as a result of COVID-19. We do not believe backlog is a significant indicator of our business. We do not believe backlog is a significant indicator of our business.

Employees

As of May 31, 2021, we had approximately 9,000 employees, including those employed by our unconsolidated joint ventures. Approximately 8% of our consolidated labor force is represented by collective bargaining units. Worthington believes it has good relationships with its employees, including those covered by collective bargaining units.

Joint Ventures

As part of our strategy to selectively develop new products, markets and technological capabilities and to expand our international presence, while mitigating the risks and costs associated with those activities, as of May 31, 2021, we participated in four consolidated and five unconsolidated joint ventures.

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Consolidated

The results of the following four joint ventures have been consolidated with the financial results of the Company since the respective dates on which the Company acquired majority ownership or effective control. The equity owned by the other joint venture members is shown as noncontrolling interests on our consolidated balance sheets and their portions of net earnings are included as net earnings attributable to noncontrolling interests in our consolidated statements of earnings. The financial results of these four joint ventures are consolidated within Steel Processing. The financial results of all of our consolidated joint ventures are consolidated within Steel Processing.

Samuel, a 63%-owned joint venture with Samuel Manu-Tech Pickling Inc., operates three steel pickling facilities in Ohio.

Spartan is a 52%-owned consolidated joint venture with AK-Steel, a subsidiary of Cleveland-Cliffs Inc. Located in Monroe, Michigan, Spartan operates a cold-rolled, hot-dipped coating line for toll processing steel coils into galvanized, galvannealed and aluminized products intended primarily for the automotive industry. Located in Monroe, Michigan, Spartan operates a cold-rolled, hot-dipped galvanizing line for toll processing steel coils into galvanized and galvannealed products intended primarily for the automotive industry.

TWB is a 55%-owned consolidated joint venture with a subsidiary of Baoshan Iron & Steel Co., Ltd. TWB is a leading North American supplier of laser welded blanks, tailor welded aluminum blanks, laser welded coils and other laser welded products for use primarily in the automotive industry for products such as inner-door panels, body sides, rails and pillars. TWB operates facilities in Cambridge, Ontario, Canada; Glasgow, Kentucky; Puebla, Monterrey, and Silao, Mexico; Monroe and Canton, Michigan; Valley City, Ohio (2) and Antioch and Smyrna, Tennessee. TWB operates facilities in Cambridge, Ontario, Canada; Glasgow, Kentucky; Hermosillo, Puebla, Monterrey, and Silao, Mexico; Monroe, Michigan; and Antioch and Smyrna, Tennessee.

WSP, a 51%-owned joint venture with a subsidiary of U.S. Steel, operates two steel processing facilities located in Jackson, and Taylor, Michigan, which are managed by Steel Processing. WSP serves primarily as a toll processor for U.S. Steel and others. WSP’s services include slitting, blanking, cutting-to-length, laser blanking, tension leveling and warehousing.

Unconsolidated

Since we do not control the following five joint ventures, they are unconsolidated, and their results have been accounted for using the equity method. Accordingly, our investment is reflected on a single line in the consolidated balance sheets and our portion of their earnings is included as equity in net income of unconsolidated affiliates in our consolidated statements of earnings. As this equity is reflected below operating income, they are not included in any of the segment results.

ArtiFlex Manufacturing, LLC (“ArtiFlex”), a 50%-owned joint venture with ITS-H Holdings, LLC, provides an integrated solution for engineering, tooling, current and past model automotive service stamping, assembly and other services to customers primarily in the automotive industry. ArtiFlex operates five manufacturing facilities: three in Michigan and two in Ohio.

Clarkwestern Dietrich Building Systems LLC (“ClarkDietrich”), a 25%-owned joint venture with CWBS-MISA, Inc., is an industry leader in the manufacture and supply of light gauge steel framing products in the United States. ClarkDietrich manufactures a full line of drywall studs and accessories, structural studs and joists, metal lath and accessories, shaft wall studs and track, vinyl and finishing products used primarily in residential and commercial construction. This joint venture operates 13 manufacturing facilities, one each in Connecticut, Georgia, Illinois, Maryland and Missouri and two each in California, Florida, Ohio, and Texas.

Serviacero Planos, S. de R.L. de C.V. (“Serviacero Worthington”), a 50%-owned joint venture with Inverzer, S.A. de C.V., operates three steel processing facilities in Mexico, one each in Leon, Monterrey and Queretaro. Serviacero Worthington provides steel processing services, such as pickling, blanking, slitting, multi-blanking and cutting-to-length, to customers in a variety of industries including automotive, appliance and heavy equipment.

Taxi Workhorse Holdings, LLC, a 20%-owned joint venture with an affiliate of Angeles Equity Partners, LLC, is a non-captive designer and manufacturer of high-quality, custom-engineered open and enclosed cabs and operator stations and custom fabrications and packaging for heavy mobile equipment used primarily in the agricultural, construction, forestry, military and mining industries. The Cabs joint venture operates six manufacturing facilities, one each in Brazil, South Dakota and Tennessee and three in Minnesota.

WAVE, a 50%-owned joint venture with a subsidiary of Armstrong World Industries, Inc., is the largest of the four national North American manufacturers of ceiling suspension systems for concealed and lay-in panel ceilings used in commercial and residential ceiling markets. It competes with the other North American

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manufacturers and numerous regional manufacturers. WAVE operates six manufacturing facilities, one each in Georgia, Maryland, Michigan and Nevada and two in California.

See “Note D – Investments in Unconsolidated Affiliates” for additional information about our unconsolidated joint ventures.

Government Regulations

Our manufacturing facilities, generally in common with those of similar industries making similar products, are subject to many federal, state, local and foreign laws and regulations, including those relating to the protection of our employees and the environment. We examine ways to improve safety, reduce emissions and waste, and to decrease costs related to compliance with environmental and other government regulations. The cost of compliance or capital expenditures for environmental control facilities necessary to meet regulatory requirements are not anticipated to be material when compared with overall costs and capital expenditures and, accordingly, are not anticipated to have a material effect on our financial position, results of operations or cash flows, or on the competitive position of Worthington or any particular business segment. The cost of compliance or capital expenditures for environmental control facilities required to meet environmental requirements are not anticipated to be material when compared with overall costs and capital expenditures and, accordingly, are not anticipated to have a material effect on our financial position, results of operations or cash flows, or on the competitive position of Worthington or any particular business segment.

Human Capital Management

Culture

In line with our people-first Philosophy, our employees have always been, and will always be, our most important asset. Worthington operates under a set of core values that are rooted in our long-standing Philosophy, which emphasizes the Golden Rule. These core values guide us as a company, including in our approach to human capital management. As such, we are continually focused on creating and maintaining a strong Company culture. Our culture provides employees with opportunities for personal and professional development, as well as community engagement, all of which we believe contribute to the Company’s overall success. We have repeatedly been recognized as a top place to work and we offer our employees competitive pay and above-market benefits, as compared to others in our industry, all while focusing on safety, wellness, and promoting a diverse and inclusive culture.

Employee Base

As of May 31, 2021, we had approximately 9,000 employees, including those employed by our unconsolidated joint ventures. Approximately 8% of our consolidated labor force is represented by collective bargaining units. Worthington believes that our open-door policy has created an environment which fosters open communication and serves to cultivate the good relationships we have with our employees, including those covered by collective bargaining units, which is evidenced by the results of recent employee engagement surveys. For example, in the fall of 2020, 71% of employees, excluding those employed by our unconsolidated joint ventures – nearly 4,300 people worldwide – participated in our engagement survey, and the Company’s results exceeded both manufacturing and global benchmarks in a number of categories, such as Employee Engagement (74%), Safety (89%), and Manager Effectiveness (74%).

Safety, Health and Wellness

We have always made the safety and well-being of our people a top priority, and we have regularly maintained an industry-leading safety record. For us, safety is about engagement, and our employees have adopted a culture where safety is everyone’s responsibility, and not just the safety of our employees, but the safety of everyone who enters our facilities. We also provide our employees and their families with access to above-market benefits, as compared to others in our industry, including a parental leave benefit that offers all new parents the opportunity for paid time off. Worthington has a broad array of other employee centered-benefits and programs, including a medical center, a pharmacy, chiropractic care, on-site fitness centers, free health screenings, health fairs, and other company-wide and location-specific wellness events and challenges. We believe our investments in safety, health and wellness are key to supporting and protecting our most important asset, our people.

8


Diversity, Inclusion and Equity

We believe that diversity, of all types, contributes to our success. Worthington is committed to increasing the diversity of our employee base at all levels of our organization because we believe our differences make us better and that diverse thought and experiences drive innovation and produce better results. With our Philosophy as our foundation, we are building an environment where diversity is valued, and where all employees feel they belong and are empowered to do their best work.

To further such efforts, we have established a Diversity, Equity and Inclusion Council (“Council”) chaired by our Senior Vice President and Chief Human Resources Officer. The Council has developed a strategy where our diversity, inclusion and equity efforts are focused on strengthening four primary pillars: workforce, workplace, community and partnership. These pillars serve as a foundation for continually building and fostering an inclusive culture. We are also working to establish employee resource groups (“ERGs”) that will each have executive sponsors. These ERGs will not only be tasked with raising awareness, but will also offer mentoring and development opportunities to their members.

Talent Development and Retention

Our ability to successfully operate, grow our business and implement our business strategies is largely dependent on our ability to attract, train and retain talented personnel at all levels of our organization. As a result, we offer our employees competitive compensation and benefits, as compared to others in our industry, which include opportunities to participate in profit sharing plans. The loss of employees or our inability to attract, train and retain additional personnel could reduce the competitiveness of our business or otherwise impair our operations or prospects. We also strive to provide our employees with continuous opportunities to learn the skills necessary to maximize their performance, and develop new skills that allow them to maximize their potential.

Item 1A. — Risk Factors

Future results and the market price for Worthington Industries’ common shares are subject to numerous risks, many of which are driven by factors that cannot be controlled or predicted. The following discussion, as well as other sections of this Annual Report on Form 10-K, including “PART II—Item 7. — Management’s Discussion and Analysis of Financial Condition and Results of Operations,” describe certain business risks. Consideration should be given to the risk factors described below as well as those in the Safe Harbor Statement at the beginning of this Annual Report on Form 10-K, in conjunction with reviewing the fo