Worthington Enterprises Reports Third Quarter Fiscal 2025 Results

COLUMBUS, Ohio, March 25, 2025 (GLOBE NEWSWIRE) -- Worthington Enterprises Inc. (NYSE: WOR), a market-leading designer and manufacturer of innovative products and solutions that serve customers in the building products and consumer products end markets, today reported results for its fiscal 2025 third quarter ended February 28, 2025.

Third Quarter Highlights (all comparisons to the third quarter of fiscal 2024):

• Net sales were $304.5 million, a decrease of 4%, reflecting the deconsolidation of the former Sustainable Energy Solutions segment ("SES”), partially offset by volume growth and contributions from the Ragasco business acquired in the first quarter of fiscal 2025.
• Earnings before income taxes increased 30% to $52.6 million, while adjusted EBITDA from continuing operations grew 10% to $73.8 million.
• Earnings per share ("EPS”) from continuing operations (diluted) increased 80% to $0.79 per share, while adjusted EPS from continuing operations (diluted) grew 14% to $0.91 per share.
• Operating cash flow grew 14% to $57.1 million, and free cash flow increased 11% to $44.4 million.
• Repurchased 150,000 shares of common stock for $6.2 million leaving 5,565,000 shares remaining on the Company's share repurchase authorization.
• Declared a quarterly dividend of $0.17 per share payable on June 27, 2025, to shareholders of record at the close of business on June 13, 2025.

"We delivered strong results in Q3, achieving year-over-year and sequential growth in revenue, adjusted EBITDA and adjusted EPS," said Worthington Enterprises President and CEO Joe Hayek. "Our growth in sales and earnings was driven by market share gains, a more favorable mix and improved gross margins in our wholly owned businesses, while our joint ventures remained steady despite a moderation in ClarkDietrich's results relative to last year's strong performance. These results reflect outstanding execution from our team, who continues to drive efficiencies, deliver value-added solutions for our customers, and effectively manage costs, even during an uncertain macroeconomic environment.”

Consolidated Quarterly Results

Net sales for the third quarter of fiscal 2025 decreased $12.2 million, or 3.9%, from the prior year quarter to $304.5 million. The decrease was driven by the deconsolidation of SES during the fourth quarter of fiscal 2024, partially offset by contributions from Ragasco and higher overall volumes. Net sales in the prior year quarter included $35.4 million related to SES, which is now operated as an unconsolidated joint venture and its results are reported within equity income on the consolidated statement of earnings beginning June 1, 2024.

Operating income increased $16.6 million to $20.9 million. The current year quarter was negatively impacted $5.4 million due to restructuring charges, compared to $3.7 million in the prior year quarter, which included both restructuring charges and one-time costs related to the separation of the former steel processing business ("Separation”). Excluding these items, adjusted operating income increased $18.3 million over the prior year quarter to $26.2 million on the combined impact of higher overall volumes and favorable product mix.

Equity income declined $11.2 million from the prior year quarter to $32.1 million, primarily due to lower contributions from ClarkDietrich, which decreased $8.3 million compared to a particularly strong prior year quarter.

Income tax expense decreased $5.2 million from the prior year quarter to $13.2 million driven by a lower estimated annual effective tax rate partially offset by higher pre-tax earnings. Current year quarter income tax expense reflects an estimated annual effective tax rate of 24.4%, down from 30.8%, driven by the discrete tax effects of the Separation in the prior year quarter. The adjusted effective tax rate was 22.2% in the current year quarter compared to 23.1% in the prior year quarter.

Balance Sheet and Cash Flow

The Company ended the quarter with cash of $222.8 million, a decrease of $21.4 million from May 31, 2024. During the third quarter, the Company generated operating cash flow of $57.1 million, of which $12.7 million was invested in capital expenditures, resulting in free cash flow of $44.4 million up from $40.1 million in the prior year quarter. Capital expenditures in the current year quarter included approximately $7.6 million related to ongoing facility modernization projects.

Total debt at quarter end consisted entirely of long-term debt and was relatively unchanged from May 31, 2024, at $293.9 million. The Company had no borrowings under its revolving credit facility as of February 28, 2025, leaving $500.0 million available for future use.

Quarterly Segment Results

Consumer Products generated net sales of $139.7 million in the third quarter of fiscal 2025, an increase of $6.5 million, or 4.9%, over the prior year quarter, driven by higher volumes. Adjusted EBITDA increased $3.0 million over the prior year quarter to $28.6 million on the combined impact of higher volumes and gross margin improvement, partially offset by higher SG&A expenses.

Building Products generated net sales of $164.8 million in the third quarter of fiscal 2025, an increase of $16.6 million, or 11.2%, over the prior year quarter, driven by contributions from Ragasco and favorable product mix. Adjusted EBITDA increased slightly over the prior year quarter to $53.2 million, as the benefit from higher net sales was largely offset by lower equity income contributions from ClarkDietrich and WAVE.

Outlook

"As we look ahead, we remain confident in our ability to drive long-term growth and deliver shareholder value," Hayek said. "Our strong balance sheet, solid free cash flow and disciplined capital allocation strategy provide us the flexibility to invest in our businesses, pursue strategic M&A and return capital to shareholders with a focus on long-term value creation. While recent tariff announcements are creating some uncertainty across multiple markets, we are well-positioned as a domestic designer and manufacturer of market-leading brands, with strong customer relationships and an exceptional team who is committed to driving improvements throughout our business, as we navigate near-term dynamics and capitalize on future opportunities."

Conference Call

The Company will review fiscal 2025 third quarter results during its quarterly conference call on March 26, 2025, at 8:30 a.m. Eastern Time. Details regarding the conference call can be found on the Company website at www.WorthingtonEnterprises.com.

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 two primary business segments: Building Products and Consumer Products. The Building Products segment includes cooking, heating, cooling and water solutions, architectural and acoustical grid ceilings and metal framing and accessories. The Consumer Products segment provides solutions for the tools, outdoor living and celebrations categories. Product brands within the Worthington Enterprises portfolio include Balloon Time®, Bernzomatic®, Coleman® (propane cylinders), CoMet®, Garden Weasel®, General®, HALO™, Hawkeye™, Level5 Tools®, Mag Torch®, NEXI™, Pactool International®, PowerCore™, Ragasco®, Well-X-Trol® and XLite™, among others. The Company also serves the growing global hydrogen ecosystem via a joint venture focused on on-board fueling systems and gas containment solutions.

Headquartered in Columbus, Ohio, Worthington Enterprises and its joint ventures employ approximately 6,000 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.

Safe Harbor Statement

Selected statements contained in this release constitute "forward-looking statements,” as that term is used in the Private Securities Litigation Reform Act of 1995 (the "Act”). The Company wishes to take advantage of the safe harbor provisions included in the Act. Forward-looking statements reflect the Company's current expectations, estimates or projections concerning future results or events. These statements are often identified by the use of forward-looking words or phrases such as "believe,” "expect,” "anticipate,” "may,” "could,” "should,” "would,” "intend,” "plan,” "will,” "likely,” "estimate,” "project,” "position,” "strategy,” "target,” "aim,” "seek,” "foresee” and similar words or phrases. These forward-looking statements include, without limitation, statements relating to: future or expected cash positions, liquidity and ability to access financial markets and capital; outlook, strategy or business plans; the anticipated benefits of the separation of the Company's Steel Processing business (the "Separation); the expected financial and operational performance of, and future opportunities for, the Company following the Separation; the Company's performance on a pro forma basis to illustrate the estimated effects of the Separation on historical periods; the tax treatment of the Separation transaction; future or expected growth, growth potential, forward momentum, performance, competitive position, sales, volumes, cash flows, earnings, margins, balance sheet strengths, debt, financial condition or other financial measures; pricing trends for raw materials and finished goods and the impact of pricing changes; the ability to improve or maintain margins; expected demand or demand trends for the Company or its markets; additions to product lines and opportunities to participate in new markets; expected benefits from transformation and innovation efforts; the ability to improve performance and competitive position at the Company's operations; anticipated working capital needs, capital expenditures and asset sales; anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing and the supply chain and the results thereof; projected profitability potential; the ability to make acquisitions and the projected timing, results, benefits, costs, charges and expenditures related to acquisitions, joint ventures, headcount reductions and facility dispositions, shutdowns and consolidations; projected capacity and the alignment of operations with demand; the ability to operate profitably and generate cash in down markets; the ability to capture and maintain market share and to develop or take advantage of future opportunities, customer initiatives, new businesses, new products and new markets; expectations for Company and customer inventories, jobs and orders; expectations for the economy and markets or improvements therein; expectations for generating improving and sustainable earnings, earnings potential, margins or shareholder value; effects of judicial rulings; the ever-changing effects of the novel coronavirus ("COVID-19”) pandemic and the various responses of governmental and nongovernmental authorities thereto on economies and markets, and on our customers, counterparties, employees and third-party service providers; and other non-historical matters.

Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected. Any number of factors could affect actual results, including, without limitation, those that follow: the uncertainty of obtaining regulatory approvals in connection with the Separation, including rulings from the Internal Revenue Service; the Company's ability to successfully realize the anticipated benefits of the Separation; the risks, uncertainties and impacts related to the COVID-19 pandemic - the duration, extent and severity of which are impossible to predict, including the possibility of future resurgence in the spread of COVID-19 or variants thereof - and the availability, effectiveness and acceptance of vaccines, and other actual or potential public health emergencies and actions taken by governmental authorities or others in connection therewith; the effect of national, regional and global economic conditions generally and within major product markets, including significant economic disruptions from COVID-19, the actions taken in connection therewith and the implementation of related fiscal stimulus packages; the effect of conditions in national and worldwide financial markets, including inflation, increases in interest rates and economic recession, and with respect to the ability of financial institutions to provide capital; the impact of tariffs, the adoption of trade restrictions affecting the Company's products or suppliers, a United States withdrawal from or significant renegotiation of trade agreements, the occurrence of trade wars, the closing of border crossings, and other changes in trade regulations or relationships; changing oil prices and/or supply; product demand and pricing; changes in product mix, product substitution and market acceptance of the Company's products; volatility or fluctuations in the pricing, quality or availability of raw materials (particularly steel), supplies, transportation, utilities, labor and other items required by operations (especially in light of the COVID-19 pandemic and Russia's invasion of Ukraine); effects of sourcing and supply chain constraints; the outcome of adverse claims experience with respect to workers' compensation, product recalls or product liability, casualty events or other matters; effects of facility closures and the consolidation of operations; the effect of financial difficulties, consolidation and other changes within the steel, automotive, construction and other industries in which the Company participates; failure to maintain appropriate levels of inventories; financial difficulties (including bankruptcy filings) of original equipment manufacturers, end-users and customers, suppliers, joint venture partners and others with whom the Company does business; the ability to realize targeted expense reductions from headcount reductions, facility closures and other cost reduction efforts; the ability to realize cost savings and operational, sales and sourcing improvements and efficiencies, and other expected benefits from transformation initiatives, on a timely basis; the overall success of, and the ability to integrate, newly-acquired businesses and joint ventures, maintain and develop their customers, and achieve synergies and other expected benefits and cost savings therefrom; capacity levels and efficiencies, within facilities, within major product markets and within the industries in which the Company participates as a whole; the effect of disruption in the business of suppliers, customers, facilities and shipping operations due to adverse weather, casualty events, equipment breakdowns, labor shortages, interruption in utility services, civil unrest, international conflicts (especially in light of Russia's invasion of Ukraine), terrorist activities or other causes; changes in customer demand, inventories, spending patterns, product choices, and supplier choices; risks associated with doing business internationally, including economic, political and social instability (especially in light of Russia's invasion of Ukraine), foreign currency exchange rate exposure and the acceptance of the Company's products in global markets; the ability to improve and maintain processes and business practices to keep pace with the economic, competitive and technological environment; the effect of inflation, interest rate increases and economic recession, which may negatively impact the Company's operations and financial results; deviation of actual results from estimates and/or assumptions used by the Company in the application of its significant accounting policies; the level of imports and import prices in the Company's markets; the impact of environmental laws and regulations or the actions of the United States Environmental Protection Agency or similar regulators which increase costs or limit the Company's ability to use or sell certain products; the impact of increasing environmental, greenhouse gas emission and sustainability regulations and considerations; the impact of judicial rulings and governmental regulations, both in the United States and abroad, including those adopted by the United States Securities and Exchange Commission and other governmental agencies as contemplated by the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Consolidated Appropriations Act, 2021, the American Rescue Plan Act of 2021, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the effect of healthcare laws in the United States and potential changes for such laws, especially in light of the COVID-19 pandemic, which may increase the Company's healthcare and other costs and negatively impact the Company's operations and financial results; the effects of tax laws in the United States and potential changes for such laws, which may increase the Company's costs and negatively impact the Company's operations and financial results; cyber security risks; the effects of privacy and information security laws and standards; and other risks described from time to time in the Company's filings with the United States Securities and Exchange Commission, including those described in "Part I - Item 1A. - Risk Factors” of the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2024.

Forward-looking statements should be construed in the light of such risks. The Company notes these factors for investors as contemplated by the Act. It is impossible to predict or identify all potential risk factors. Consequently, readers should not consider the foregoing list to be a complete set of all potential risks and uncertainties. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. The Company does not undertake, and hereby disclaims, any obligation to update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.