Core Points - Worthington Enterprises Inc. declared a quarterly dividend of $0.17 per share, payable on June 27, 2025, to shareholders of record on June 13, 2025, marking a continuous dividend payment since its IPO in 1968 [1] - Brant Standridge has been appointed as a new board member, bringing extensive experience in consumer behavior, trends, and M&A, which will be valuable for the company's growth [2][3] - The company will hold its quarterly earnings conference call on March 26, 2025, at 8:30 a.m. ET to discuss its fiscal third quarter results [3][5] Company Overview - Worthington Enterprises is a designer and manufacturer of market-leading brands that enhance safety, health, and expression in everyday life, operating in two primary segments: Building Products and Consumer Products [6] - The Building Products segment includes solutions for cooking, heating, cooling, and water, while the Consumer Products segment covers tools, outdoor living, and celebrations [6] - The company employs approximately 6,000 people across North America and Europe [7] - Founded in 1955, Worthington Enterprises follows a people-first philosophy, prioritizing shareholder earnings and community engagement through various initiatives [8]

Company Overview - Worthington Enterprises Inc. is a designer and manufacturer of market-leading brands that enhance safety, health, and expression in everyday life [4] - The company operates through two primary business segments: Building Products and Consumer Products [4] - The Building Products segment includes solutions for cooking, heating, cooling, water, architectural ceilings, and metal framing [4] - The Consumer Products segment offers tools, outdoor living, and celebration solutions, featuring brands like Balloon Time®, Bernzomatic®, and Coleman® [4] - Worthington Enterprises also participates in the global hydrogen ecosystem through a joint venture focused on fueling systems and gas containment [4] Employment and Corporate Philosophy - The company is headquartered in Columbus, Ohio, and employs approximately 6,000 people across North America and Europe [5] - Founded in 1955, Worthington Enterprises follows a people-first philosophy, prioritizing shareholder earnings while empowering employees to innovate and grow [6] - The company engages with local communities through volunteer efforts and workforce development programs, and it reports annually on corporate citizenship and sustainability [6] Upcoming Earnings Conference Call - Worthington Enterprises will hold its quarterly earnings conference call on March 26, 2025, at 8:30 a.m. ET [1][3] - The fiscal third quarter results will be released after market close on March 25, 2025 [1] - A live audio webcast will be available for registration, and a replay will be accessible on the company's website approximately two hours after the call [2]

Core Viewpoint - Worthington Enterprises Inc. is urging stakeholders to heed a safety advisory from the U.S. Department of Transportation regarding unsafe pressure cylinders primarily manufactured by non-U.S. companies, emphasizing the importance of compliance with safety standards [1][2]. Company Overview - Worthington Enterprises is the only American manufacturer of various sizes of steel cylinders used in critical infrastructure applications such as cooking, home heating, refrigeration, and insulation [1]. - The company operates two primary business segments: Building Products and Consumer Products, with a diverse portfolio of brands including Balloon Time®, Bernzomatic®, and Coleman® [4]. - Worthington Enterprises has manufacturing facilities across several states, including Kansas, Kentucky, Ohio, Rhode Island, and Wisconsin [3]. Industry Context - The safety advisory from PHMSA highlights concerns over non-compliant cylinders being sold online, which do not meet DOT specifications or UN standards, posing safety risks to consumers and technicians [2]. - The Compressed Gas Cylinder Safety and Oversight Improvements Act of 2023 aims to establish regulations for foreign-manufactured cylinders sold in the U.S., including facility inspections to ensure compliance [2][3]. - The proliferation of unsafe cylinders is attributed to companies in China and other countries undermining U.S. safety standards, which Worthington has adhered to for over 50 years [2]. Future Outlook - Worthington Enterprises is eager to collaborate with Congress and the Trump administration to enact safety reforms in 2025, emphasizing the need for consistent inspection and accountability in the industry [3].

Financial Performance - Worthington Enterprises reported a significant increase in adjusted EBITDA from continuing operations, reaching $XX million for the second quarter of fiscal 2024, compared to $XX million in the same period last year, reflecting a growth of XX%[17]. - The company achieved an adjusted diluted EPS from continuing operations of $X.XX for the second quarter of fiscal 2024, up from $X.XX in the prior year, indicating a year-over-year increase of XX%[18]. - Worthington Enterprises' net sales for the second quarter of fiscal 2024 were $XX million, representing a XX% increase compared to $XX million in the same quarter of fiscal 2023[19]. - For the three months ended November 30, 2024, GAAP net earnings were $28,260, compared to a loss of $17,934 for the same period in 2023, representing a significant turnaround[24]. - Non-GAAP diluted EPS for the three months ended November 30, 2024, was $0.60, up from $0.36 in the prior year, indicating a 66.67% increase[24]. - The company reported a GAAP operating income of $3,521 for the three months ended November 30, 2024, compared to an operating loss of $14,367 in the same period of 2023[24]. - Net earnings from continuing operations for the three months ended November 30, 2024, were $28.009 million, an increase of 56.3% from $17.934 million in the prior year[32]. - Basic EPS from continuing operations for the six months ended November 30, 2024, was $1.06, up from $0.91 in 2023, reflecting a growth of 16.5%[75]. - The company reported a comprehensive income of $24.689 million for the three months ended November 30, 2024, down from $42.613 million in the prior year[35]. Operational Efficiency - Worthington Enterprises reported a decrease in SG&A expenses as a percentage of net sales, improving operational efficiency and profitability margins[20]. - The adjusted EBITDA margin from continuing operations for the three months ended November 30, 2024, was 20.5%, compared to 18.5% in the same period of 2023, showing an improvement of 2 percentage points[27]. - The company incurred restructuring and other expenses of $2,620 for the three months ended November 30, 2024, compared to $6 for the same period in 2023, indicating a significant increase in restructuring costs[27]. Strategic Initiatives - The company is investing in new product development, with a budget allocation of $XX million aimed at expanding its product lines and entering new markets[21]. - Worthington Enterprises has established a $500 million unsecured revolving credit facility to support its liquidity and operational needs[17]. - The company is actively pursuing strategic acquisitions to bolster its market position, with a focus on enhancing capabilities and expanding its customer base[19]. - Worthington Enterprises has successfully completed the separation of its former steel processing business, effective December 1, 2023, which is expected to enhance operational focus and financial performance[22]. - The company acquired Ragasco for a total purchase price of $101,424, with potential additional cash consideration of up to $14,000 based on earnings targets through calendar year 2024[81]. Market Trends - U.S. residential construction spending increased by $28,422 million year-over-year to $918,113 million as of November 30, 2024[109]. - U.S. non-residential construction spending rose by $33,469 million year-over-year to $1,234,468 million as of November 30, 2024[109]. - The average price of hot-rolled steel decreased by $57 per ton to $690, while cold-rolled steel decreased by $40 per ton to $938[109]. - The Homebuilder's Market Index (HMI) increased by 12 points year-over-year to 46.0, indicating resilience in the residential construction market[111]. - The Core Consumer Price Index (CPI) increased by 3.30% compared to November 2023, reflecting ongoing inflationary pressures[114]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $193,805 as of November 30, 2024, from $244,225 as of May 31, 2024, a decrease of 20.56%[30]. - Net cash provided by operating activities for the three months ended November 30, 2024, was $49.053 million, compared to $134.990 million in the same period of 2023[37]. - The company has access to $500.0 million in unused committed lines of credit under its Credit Facility as of November 30, 2024[151]. - Net cash provided by operating activities decreased to $90.2 million for the six months ended November 30, 2024, down from $194.7 million in the prior year period, primarily due to lower net earnings and a $26.2 million decrease in dividends from unconsolidated joint ventures[155]. Shareholder Returns - Cash dividends declared per common share decreased to $0.17 for the three months ended November 30, 2024, down from $0.32 in the same period of 2023[32]. - The Board declared a quarterly dividend of $0.17 per common share payable on March 28, 2025, with a total of $0.32 per common share declared during the second quarter of fiscal 2024[160]. - The company has paid dividends every quarter since becoming public in 1968, but there is no guarantee that this will continue in the future[165]. Asset Management - Total current assets decreased to $602,999 as of November 30, 2024, from $673,893 as of May 31, 2024, a decline of 10.48%[30]. - The company’s total assets increased to $1,657,017 as of November 30, 2024, compared to $1,638,637 as of May 31, 2024, an increase of 1.12%[30]. - The total equity increased from $891,012 million at May 31, 2024, to $912,958 million at November 30, 2024, reflecting a net earnings increase of $28,009 million during this period[67]. - The company reported a pension liability adjustment of $9 million for the six months ended November 30, 2024, compared to a loss of $3 million in the same period of 2023[66]. Risk Management - The company is closely monitoring raw material pricing trends, particularly for steel, and is implementing strategies to mitigate cost fluctuations[16]. - The company has established strict counterparty credit guidelines to manage counterparty credit risk associated with its derivative financial instruments[89]. - The company reported a total loss of $91 million from economic (non-designated) derivative financial instruments for the three months ended November 30, 2024[96].

Financial Performance - Net sales for Q2 fiscal 2025 were $274.0 million, a decrease of 8.1% from $298.2 million in Q2 fiscal 2024, primarily due to the deconsolidation of the former Sustainable Energy Solutions segment[2][4] - Adjusted EPS from continuing operations increased by 5% to $0.60, while adjusted EBITDA rose by 2% to $56.2 million despite lower net sales[2][3] - Operating income improved to $3.5 million, a favorable change of $17.9 million compared to the operating loss of $14.4 million in the prior year quarter[5] - Net earnings from continuing operations for the three months ended November 30, 2024, were $28,009,000, up from $17,934,000 in the prior year, representing a 56.5% increase[23] - Earnings per share from continuing operations for the three months ended November 30, 2024, were $0.57, compared to $0.36 for the same period in 2023, marking a 58.3% increase[23] - The company reported a net earnings attributable to controlling interest of $28,260,000 for the three months ended November 30, 2024, compared to $24,302,000 in the prior year, an increase of 8.0%[23] - Net earnings for the three months ended November 30, 2024, were $28,009,000, compared to $28,167,000 for the same period in 2023, a decrease of 0.6%[27] Segment Performance - Consumer Products segment net sales were $116.7 million, down 2.2% year-over-year, while adjusted EBITDA increased by $2.8 million to $15.5 million[10] - Building Products segment net sales increased by 4.0% to $157.3 million, with adjusted EBITDA rising by $1.4 million to $47.2 million, driven by contributions from Ragasco[11] - Consumer Products segment net sales for the three months ended November 30, 2024, were $116,748 million, down from $119,389 million year-over-year, a decline of 2.2%[34] - Building Products segment net sales for the three months ended November 30, 2024, were $157,298 million, compared to $151,303 million in the prior year, an increase of 4.0%[34] Cash and Debt Management - The company ended the quarter with cash of $193.8 million, down $50.4 million from the previous quarter, primarily due to the acquisition of Ragasco[8] - Total debt remained stable at $295.7 million, with no borrowings under the revolving credit facility, leaving $500.0 million available for future use[9] - Cash and cash equivalents at the end of the period were $193,805,000, down from $430,906,000, representing a decrease of 55.0%[27] - Long-term debt decreased from $298,133,000 to $295,721,000, a decline of about 0.5%[25] Dividends and Shareholder Returns - The company declared a quarterly dividend of $0.17 per share, payable on March 28, 2025[2] - Cash dividends declared per share were $0.17 for the three months ended November 30, 2024, down from $0.32 in the same period last year[23] Operational Efficiency - Gross profit increased to $74,059,000 for the three months ended November 30, 2024, compared to $63,278,000 for the same period in 2023, reflecting a gross margin improvement[23] - The company experienced a decrease in cost of goods sold to $199,987,000 for the three months ended November 30, 2024, from $234,951,000 in the same period last year, a reduction of 15.0%[23] - Net cash provided by operating activities for the three months ended November 30, 2024, was $49,053,000, compared to $134,990,000 for the same period in 2023, a decrease of 63.6%[27] Strategic Focus - The company is focused on transformation, innovation, and M&A to drive sustainable growth and deliver long-term value to shareholders[12] - The company incurred separation costs of $7,056,000 in the three months ended November 30, 2023, which were not present in the current quarter[23] - The company eliminated corporate costs at separation, which amounted to $9,671 million in the previous year[36] Non-GAAP Measures - Non-GAAP net earnings for the three months ended November 30, 2023, were $28,514,000, with diluted EPS of $0.57[29] - Non-GAAP adjusted EBITDA from continuing operations for the six months ended November 30, 2024, was $104,649 million, reflecting a margin of 19.7%[36] - Adjusted net earnings from continuing operations for the six months ended November 30, 2024, were $68,395 million, up from $60,333 million in the previous year[36] Equity Income - Equity income decreased by $4.1 million to $34.6 million, impacted by lower contributions from ClarkDietrich and a prior year gain related to divestiture[6] - Equity in net income of unconsolidated affiliates was $34,556,000 for the three months ended November 30, 2024, compared to $38,668,000 in the same period last year, indicating a decrease of 10.9%[23] - Equity income from unconsolidated affiliates for the three months ended November 30, 2024, was $24,564 million, compared to $21,428 million in the same period last year, an increase of 10.0%[34]

Group 1 - The core investment thought on Worthington Enterprises (NYSE: WOR) is a hold rating due to anticipated headwinds that may pressure the company's growth ability [1] - The investment approach focuses on long-term investments while incorporating short-term shorts to uncover alpha opportunities, emphasizing a bottom-up analysis of individual companies' fundamental strengths and weaknesses [1] - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

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Financial Data and Key Metrics Changes - GAAP earnings from continuing operations increased to $0.56 per share from $0.36 in the prior year quarter [17] - Adjusted earnings from continuing operations rose to $0.60 per share compared to $0.57 per share in Q2 of the prior year [19] - Consolidated net sales decreased to $274 million, down 8.1% from $298 million in the prior year [19] - Gross profit increased to $74 million from $63 million in the prior year, with gross margin rising approximately 580 basis points to 27% [20][21] - Adjusted EBITDA was $56 million, slightly up from $55 million in Q2 of last year [21] - Cash flow from operations was $49 million, and free cash flow was $34 million [22] - Long-term funded debt stood at $296 million with a net debt to trailing adjusted EBITDA leverage ratio of less than half a turn [24] Business Line Data and Key Metrics Changes - Consumer products net sales were $117 million, down 2% year-over-year, despite a 3% increase in volumes [25] - Adjusted EBITDA for consumer products was $15 million with an adjusted EBITDA margin of 13.3%, up from $13 million and 10.7% in the prior year [25] - Building products reported Q2 net sales of $157 million, a 4% increase from $151 million in the prior year, driven by the acquisition of Ragasco [27] - Adjusted EBITDA for building products was $47 million, with an adjusted EBITDA margin of 30% [28] Market Data and Key Metrics Changes - The consumer products segment faced challenges due to a shift in product mix, but retail partnerships remain strong [26] - Building products experienced growth in large format heating, but softness in the gas grill tank business due to production limitations [28] Company Strategy and Development Direction - The company is focused on a people-first, performance-based culture to drive shareholder returns [8] - There is an emphasis on innovation and partnerships, such as with 3M for the PowerCore engineered cylinder [11] - The company aims for inorganic growth through acquisitions, with a strong balance sheet supporting this strategy [13] - Sustainability is viewed as both an obligation and a strategic advantage, with initiatives like the West Africa Clean Cooking Fund [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged mild but persistent macro headwinds affecting performance [8] - There is optimism about future growth, with a commitment to innovation and market expansion [15] - The company is preparing for various scenarios around trade policy and believes it is well-positioned for any potential changes [84] Other Important Information - The company declared a quarterly dividend of $0.17 per share payable in March 2025 [24] - The integration of the Ragasco acquisition has been completed, enhancing the company's portfolio in LPG solutions [13] Q&A Session Summary Question: What drove the gross margin performance? - Management indicated that the gross margin increase was due to the exclusion of sales from the SES business unit and the inclusion of Ragasco, along with a positive mix shift [36][37] Question: How should SG&A be viewed moving forward? - SG&A will be evaluated in the context of business operations, with a focus on optimizing and growing the company [39][41] Question: What trends are driving WAVE's performance? - WAVE's success is attributed to its strong value proposition and performance in sectors like education and healthcare [45] Question: What is the outlook for the heating and cooking space? - Management noted a return to growth in large format heating tanks, while smaller tanks faced production challenges [58] Question: How does the company view its capital allocation strategy? - The company maintains a bias for growth, with plans for share buybacks and M&A opportunities [70][71] Question: How is the company addressing input costs and pricing? - Management is focused on keeping costs down and does not anticipate significant price increases in the near term [80] Question: What is the company's position regarding potential tariffs and trade actions? - The company believes it is well-positioned to benefit from a level playing field in the competitive environment [83]

Y WORTHINGTON ENTERPRISES ENTERPRISES Q2 FY2025 EARNINGS SUMMARY DECEMBER 17, 2024 Building Products I Consumer Products ENABLING SAFER, HEALTHIER, MORE EXPRESSIVE LIVES. Notes to Investors FORWARD-LOOKING STATEMENTS. Selected statements in this presentation constitute "forward-looking statements," as that term is used in the Private Securities Litigation Reform Act of 1995 (the "Act"). Worthington Enterprises, Inc. (the "Company" or "Worthington") wishes to take advantage of the safe harbor provisions incl ...

Core Insights - Worthington Enterprises reported a net sales decrease of 8% to $274.0 million in Q2 FY2025, primarily due to the deconsolidation of the Sustainable Energy Solutions segment [2][3][4] - Adjusted EPS from continuing operations increased by 5% to $0.60, while adjusted EBITDA rose by 2% to $56.2 million despite lower net sales [2][3] - The company repurchased 200,000 shares for $8.1 million and declared a quarterly dividend of $0.17 per share [2][3] Financial Performance - Net sales for Q2 FY2025 were $274.0 million, down from $298.2 million in Q2 FY2024, a decrease of $24.2 million or 8.1% [2][3] - Operating income improved to $3.5 million, a favorable change of $17.9 million from a loss of $14.4 million in the prior year [5] - Net earnings from continuing operations were $28.3 million, compared to $17.9 million in the prior year [2][3] Segment Performance - Consumer Products segment generated net sales of $116.7 million, down 2.2% from the prior year, but adjusted EBITDA increased by $2.8 million to $15.5 million [10] - Building Products segment saw net sales rise by 4.0% to $157.3 million, with adjusted EBITDA increasing by $1.4 million to $47.2 million [11] Balance Sheet and Cash Flow - The company ended the quarter with cash of $193.8 million, down $50.4 million from the previous quarter, primarily due to the acquisition of Ragasco [8] - Total debt remained relatively unchanged at $295.7 million, with no borrowings under the revolving credit facility [9] Outlook - The company aims to optimize its business and drive sustainable growth, focusing on transformation, innovation, and M&A opportunities [12]