Worthington Enterprises Reports Second Quarter Fiscal 2025 Results

Worthington Enterprises, Inc., a market-leading designer and manufacturer of innovative products and solutions that serve customers in the building products and consumer products end markets, reported results for its fiscal 2025 second quarter ended November 30, 2024.

Second Quarter Highlights

(all comparisons to the second quarter of fiscal 2024):

• Net sales of $274.0 million, decreased 8% driven by the deconsolidation of the former Sustainable Energy Solutions segment (“SES”)
• Adjusted EPS of $0.60 from continuing operations (diluted), up 5% and adjusted EBITDA of $56.2 million, up 2%, despite lower net sales
• Repurchased 200,000 shares of common stock for $8.1 million leaving 5,715,000 shares remaining on the Company’s share repurchase authorization
• Declared a quarterly dividend of $0.17 per share payable on March 28, 2025, to shareholders of record at the close of business on March 14, 2025

“We delivered solid financial results for the quarter despite mild but persistent macro headwinds, achieving year over year and sequential growth in adjusted EBITDA and adjusted EPS,” said Worthington Enterprises President and CEO Joe Hayek. “Consumer Products’ earnings growth was driven by increased volumes and improved gross margins. Building Products generated higher earnings driven by the inclusion of Ragasco and stronger contributions from WAVE.”

Consolidated Quarterly Results

Net sales for the second quarter of fiscal 2025 were $274.0 million, a decrease of $24.2 million, or 8.1%, from the prior year quarter, primarily driven by the deconsolidation of SES during the fourth quarter of fiscal 2024. Net sales in the prior year quarter include $27.5 million related to SES, which is now operated as an unconsolidated joint venture and results are reported within equity income on the consolidated statement of earnings beginning June 1, 2024.

Operating income of $3.5 million was favorable $17.9 million to the operating loss in the prior year quarter due to certain nonrecurring effects of the separation of the former Steel Processing business (“Separation”) in the prior year, including one-time Separation costs and stranded corporate costs eliminated post-Separation, partially offset by higher restructuring and other expense in the current quarter. Excluding these items, adjusted operating income was $6.1 million, an increase of $3.8 million over the prior year quarter, primarily driven by the inclusion of Ragasco, which was acquired on June 3, 2024, along with higher overall gross margin.

Equity income decreased $4.1 million from the prior year quarter to $34.6 million, on lower contributions from ClarkDietrich in the current year quarter and the $2.8 million gain in the prior year quarter related to the divestiture of the Brazilian operations of the engineered cabs joint venture. These headwinds were partially offset by a $3.1 million increase in equity earnings from WAVE. ClarkDietrich contributed equity earnings of $9.7 million, down $4.0 million from the prior year quarter, but up $1.0 million sequentially from the first quarter of fiscal 2025.

Income tax expense was $9.1 million in the second quarter of fiscal 2025 compared to $6.6 million in the prior year quarter. The increase was driven by higher pre-tax earnings from continuing operations, partially offset by a lower estimated annual effective tax rate of 24.1%, down from 25.7% in the prior year quarter.

Balance Sheet and Cash Flow

The Company ended the quarter with cash of $193.8 million, down $50.4 million from May 31, 2024, primarily driven by the acquisition of Ragasco. During the second quarter, the Company generated operating cash flow of $49.1 million, of which $15.2 million was invested in capital projects, including approximately $4.9 million related to previously announced facility modernization projects.

Total debt at quarter end consisted entirely of long-term debt and was relatively unchanged from May 31, 2024, at $295.7 million. The Company had no borrowings under its revolving credit facility as of November 30, 2024, leaving $500.0 million available for future use.

Quarterly Segment Results

Consumer Products generated net sales of $116.7 million during the second quarter of fiscal 2025, down $2.6 million, or 2.2%, from the prior year quarter, primarily driven by a less favorable product mix that was partially offset by higher volumes. Adjusted EBITDA was $15.5 million, up $2.8 million over the prior year quarter, on the combined impact of higher volumes and gross margin improvement partially offset by higher SG&A expense.

Building Products generated net sales of $157.3 million during the second quarter of fiscal 2025, an increase of $6.0 million, or 4.0%, over the prior year quarter on contributions from Ragasco, partially offset by lower overall volumes. Adjusted EBITDA of $47.2 million, was up $1.4 million over the prior year quarter, as contributions from Ragasco and higher equity income from WAVE were partially offset by the combined impact of lower volumes and lower contributions of equity income from ClarkDietrich.

Outlook

“Our team continues to navigate the current environment effectively, maintaining a strong focus on delivering value-added solutions and products for our customers,” Hayek said. “While we are pleased with our performance, we continue to set our sights higher. We have improved our value propositions in multiple product lines over the last year, and we are very well positioned as growth returns to our end markets. Led by our people-first, performance-based culture, leveraging a solid balance sheet and a commitment to transformation, innovation and M&A, we are confident in our ability to optimize our business, drive sustainable growth and deliver long-term value to our shareholders.”

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About Worthington Enterprises

Worthington Enterprises (NYSE: WOR) is a designer and manufacturer of market-leading brands that help enable people to live safer, healthier and more expressive lives. The Company operates with three segments: Building Products, Consumer Products and Sustainable Energy Solutions. Worthington’s emphasis on innovation and transformation extends to building products including heating and cooling solutions, water systems, architectural and acoustical grid ceilings and metal framing and accessories, and consumer products in tools, outdoor living and celebrations categories sold under brand names Coleman®, Bernzomatic®, Balloon Time®, Level5 Tools®, Mag Torch®, Well-X-Trol®, General®, Garden-Weasel®, Pactool International®, HALO™ and Hawkeye™. The Company serves the growing global hydrogen ecosystem through on-board fueling systems and gas containment solutions. Headquartered in Columbus, Ohio, Worthington Enterprises employs approximately 5,000 people throughout North America and Europe. Founded in 1955 as Worthington Industries, Worthington Enterprises follows a people-first Philosophy with earning money for its shareholders as its first corporate goal. Worthington Enterprises achieves this outcome by empowering its employees to innovate, thrive and grow with leading brands in attractive markets that improve everyday life. The Company engages deeply with local communities where it has operations through volunteer efforts and The Worthington Companies Foundation, participates actively in workforce development programs and reports annually on its corporate citizenship and sustainability efforts. For more information, visit worthingtonenterprises.com.

Contact:

Sonya L. Higginbotham – Senior Vice President, Chief of Corporate Affairs, Communications and Sustainability – sonya.higginbotham@wthg.com – (614) 438-7391

Source: Worthington Enterprises, Inc.