Worthington Enterprises (WOR) Q2 2025 earnings summary

Executive summary

• Net sales for Q2 FY2025 were $274 million, down 8.1% year-over-year, mainly due to SES deconsolidation, but adjusted EBITDA and EPS grew on margin gains and Ragasco contributions.

• Completed the acquisition of Hexagon Ragasco for ~$100M, strengthening the Building Products segment with lightweight LPG composite cylinders.

• Completed the spin-off of Worthington Steel on December 1, 2023; results now reflect only continuing operations.

• Share repurchases totaled 200,000 shares for $8 million in Q2, with a $0.17/share dividend declared for March 2025.

• Launched sustainability initiatives, including the first green propane cylinder and a $1 million commitment to the West Africa Clean Cooking Fund.

Financial highlights

• Q2 FY2025 consolidated net sales: $274 million (down 8.1% YoY); adjusted EBITDA: $56.2 million (20.5% margin); adjusted EPS: $0.60 (up from $0.57 YoY).

• Gross profit rose to $74 million, with gross margin up to 27.0% from 21.2% YoY.

• Net earnings from continuing operations were $28.3 million, up from $17.9 million YoY.

• Cash and equivalents at quarter-end: $193.8 million; no borrowings under $500 million credit facility.

• Free cash flow for Q2 was $34 million; operating cash flow was $49 million.

Outlook and guidance

• Expect gross margins to remain around 27%, with continued focus on margin optimization and sustainable growth.

• Maintain 6-8% long-term top-line growth target, with steady performance in JVs and core businesses.

• Positioned to benefit from secular trends in construction, environmental investment, and re-shoring.

• Residential construction spend grew 3.0% YoY; outlook remains cautiously optimistic despite high rates.

• Non-residential construction outlook is mixed, with some project delays but a strong planning queue.