Worthington Enterprises (WOR) investor relations material

Executive summary

• Net sales rose 18% year-over-year to $304 million, driven by Building Products volume growth and the Elgen acquisition.

• Adjusted EBITDA increased to $65.1 million, up 34% year-over-year, with margin expanding to 21.4% from 18.8%.

• Diluted EPS improved to $0.70 from $0.48; adjusted EPS rose to $0.74 from $0.50.

• Growth was driven by higher volumes in Building Products and successful integration of acquisitions, notably Elgen.

• Free cash flow for the quarter was $27.9 million, down 12% year-over-year due to higher capital expenditures.

Financial highlights

• Gross profit increased to $82.3 million, with gross margin expanding to 27.1% from 24.3% year-over-year.

• Adjusted operating income reached $11.7 million, up from a loss of $3.5 million in the prior year quarter.

• Cash and cash equivalents at quarter end were $167 million, with no borrowings under the $500 million credit facility.

• Total debt stood at $306 million, all long-term, with an average interest rate of 3.6%.

• Free cash flow conversion for the trailing twelve months was 94%.

Outlook and guidance

• Management expects uneven near-term demand due to mixed macroeconomic conditions, but remains focused on organic growth, innovation, and strategic acquisitions.

• Facility modernization projects are expected to weigh on near-term free cash flow, with improvement anticipated as spending tapers off in fiscal 2026.

• Gross margin is targeted to exceed 30% over the medium term, with SG&A as a percent of sales aimed at 20%.

• Building Products EBITDA margin for wholly owned businesses expected to trend toward 12-13% over time.

• The Elgen acquisition is expected to strengthen the commercial HVAC position and broaden the building envelope reach.