Worthington Industries (WOR) 18 Dec 242025 Q2 Earnings call transcript

Good morning, and welcome to the Worthington Enterprises Second Quarter Fiscal 2025 Earnings Conference Call. [Operator Instructions] This conference is being recorded at the request of Worthington Enterprises. If anyone objects, you may disconnect at this time. I'd now like to introduce Marcus Rogier, Treasurer and Investor Relations Officer. Mr. begin. may you Rogier,

Hayek, Thank you, joining XXXX thank for Worthington's have everyone, Call. Officer; Chief and Colin Good for Worthington morning, Souza, Joe we us today, Fiscal Financial our and President Enterprises and On Executive Officer. you Chief call Regina. Worthington's Second Earnings Quarter

are forward-looking and Litigation I'd results of the meaning that started, get that Reform we the These to note risks certain Private within Securities subject statements could cause Before like made uncertainties Act. statements today to are earnings XXXX to to results for that market refer differ issued actual factors from those actual it release closed. differ We suggested. materially. to more our those cause the detail on yesterday after could Please

today of and being include A our available appropriate available later will measures. Investor the on included most the is website. discussion these is will with GAAP press Today's financial reconciliation Worthington recorded, measure website. comparable is enterprises.com on a our made Relations earnings replay in non-GAAP addition, be In which measures release, our call

I will point, to call the remarks. this At Joe for over opening turn

Quarter morning, you, Fiscal Second Thank to Earnings Worthington Call. good Welcome XXXX Enterprises Marcus, everyone. and

culture our first embracing our I'd philosophy Our second marks our drive strong and for year their returns. this to foundation performance-based the shareholder end to hard as that Worthington for quarter a Enterprises. start team full of like entire thanking by work people-first building prioritizes

adjusted but sequentially QX. year-over-year and share macro Financially, earnings and a we headwinds. We despite had EBITDA grew both quarter persistent solid mild from per

grow look the We're initiatives a and higher. our continue we do thinking more we QX, our things We're Worthington. pursuing across in set organization. results our with we pleased we're optimize taking as fresh a how we're margins sights like to startup, at While to

markets. expand businesses innovate to things help open XM the the with cylinder. and their Worthington understand our is with success, drive sets great to and and example them A partner of partnership our ability new is on that apart engineered our customers' to PowerCore One

prowess, launch PowerCore relentless engineering which construction make effective. more new approach adhesive October team's and remodel our to is using commercial and water-based and repair intended roofing enabled for energy work XM's cylinder, efficient and collaborative a Our of adhesive

of this is growth system Worthington a business like Innovation key strategy. element anchors the our that

We continue to named as And recently year's pizza was one Wine best innovate well. gifts of & in this HALO holiday the consumer our products for by oven Food magazine. season Versa

markets to number product XXXX, in to innovation have our of customers. we bring new planned launches and calendar to committed and We our continuing a are

equally important growth us. Inorganic is an growth driver for

strong balance we're sheet and integration most strengths and and on the believe the the completed acquisitions competitive We've as and to Our and us are enhance operating in Europe through of free solutions most one we focused position and Ragasco, recent cash liquidity team businesses what in sophisticated we that leverage grow is market-leading acquisition, of position. our well LPG portfolio margins, acquiring flows our world. comprehensive very our ample with

a Worthington first Amtrol-Alfa, has ArcelorMittal's bring the with in will Portugal, strategic obligation see located steel. propane footprint lower announced Yesterday, low-carbon We is traditional Business of and XX% component as carbon System which market an that both made or source emission we key Another and sustainability. than to produce for the cylinder a green us. sustainability advantage of sustainable steel,

environmental from to calling that Cooking West initiative $X initiative Last hope XXX month, a the for million commitment along million Foundation where traditional still cooking, Clean we Fund industry announced that we, with partners, with Company's Worthington an a along the our we're presents Africa and will health, cooking with over safe and region in clean biomass significant of which dependent deforestation adoption the facilitate are and people encourage LPG on risks.

every Newsweek Worthington they people that very proud these as Finally, America's to responsible society. in are honors I'm of one committed our doing part and companies. earn work with just because again being thoughtful day creative, to recognized Enterprises most to

we us. best Looking our days are believe ahead XXXX, into of

market-leading brands, outstanding propositions culture, to they Worthington we commitment well who tenets are our the core system people-first are, Our value and and us very position of forward. business moving

provide Colin, it I'll now details over quarter. in turn our on some to the will who you performance financial with

our $X operations share net million eliminated at and the executive steel retirement. year time due year Results to quarter. everyone. corporate $X.XX $X.XX were good The the pretax to In primarily per current in including or was due items, an charges being morning, restructuring versus to the $X.XX that earnings negatively were of you, prior the impacted impacted we continuing our with There business. a the separation several negatively Joe, per GAAP QX, costs reported results, associated unique quarterly separating Thank charges following. quarter related share of transaction in items from prior processing by largest costs by per $X.XX few and quarter share, of impacted

a Cabs equity by venture. divestiture income joint offset pretax a gain partially within were from These in our

of declared due we to adjusted two of current quarter from negatively in compared the also prior impacted increase million or earnings an Excluding continuing quarter generated debt to our current $X $X.XX bankruptcy. to $X.XX recently share share operations per the reserve per in in was bad year. $X.XX customers who items, per these share by QX The specific

Energy which the in year the $XXX sales decrease quarter. in largely Solutions of The prior X.X% million deconsolidation decreased net million quarter $XX in the $XXX driven segment, sales former by contributed in the Consolidated from was prior million year. of our Sustainable

in million the increased increased the in million million $XX prior margin million sequentially to million, in the year and slightly to quarter, from was quarter XX% $XX of gross gross for last QX. in year compared XXX QX profit up points current to $XX EBITDA basis Adjusted Our approximately quarter. $XX from up QX $XX and in

is is TTM million TTM adjusted $XXX and Our EBITDA EBITDA now adjusted margin XX.X%.

our flow was million cash cash million. the cash to $XX operations flow from sheet, and $XX respect in was quarter balance free flows With and

common included projects, million dividends our paid of spent XXX,XXX $XX million which received repurchase During cash our on shares rate modernization our on in dividends $XX.XX. at quarter, and in to We the million to We $X the of conversion XXX% an million $X projects. $XX equity $X JVs million from we capital which income. related stock a average during invested unconsolidated price quarter, represents that facility

sheet and $XXX We along an million Turning funded the quarter with million with of in to cash. at closed balance X.X%, our interest in rate debt long-term $XXX liquidity. average

adjusted supported undrawn future. million in us quarter positioning remains well credit $XXX leverage X.X of bank debt Our resulting to $XXX than million, leverage the by ample for extremely low facility, net less turn. debt ratio liquidity at Net a was EBITDA trailing a with end

spend per Yesterday, of March businesses. now the Worthington Enterprises payable XXXX. quarterly a of We'll $X.XX share few on Board in the each dividend Directors of minutes a declared

debt In EBITDA Consumer was X% down by EBITDA and results, EBITDA achieving a to in respectively, adjusted delivered to Products, adjusted product mix year. Despite was macro X% an earlier. our $X in compared growth were EBITDA million prior reserve QX continued the of for headwinds, bad The and year-over-year in primarily increase I an shift million, impacted year-over-year, increased solid margins. the despite segment sales million million negatively mentioned $XXX with a margin in quarter consumer $XX XX.X% $XX net due due to XX.X%, volumes. Adjusted current team

products bullish essential strong and retail outdoor for very a providing and improvement. growth are conditions celebrations partnerships We improve, on the commitment as home to potential market business' bolstered by living,

returned million, contributed to a and by by sales million but by EBITDA in million million, our the in Building the $XXX our growth softness large-format Products in for million This quarter the compared in XX% $XXX year-over-year there. last $XX was to reported respectively, was heating production quarter EBITDA for volumes, primarily growth margin X% which adjusted Adjusted to Ragasco, offset gas grill growth, quarter, of was due recent of modernization increase business partially sales we same of prior completed $XX XX%, with limitations tank The project that cooking. as offset $XX facility QX year. the heating particularly an and year. the in acquisition lower net from driven business some

from the contributed by and done from quarter. earnings current quarter million WAVE. prior from the job higher $XX was European team offsetting demand in QX. are primarily EBITDA environment, Sequentially, improvement has the adjusted to compared and in and increasing year challenging navigating XX% the EBITDA over adjusted XX.X% margin by with year-over-year and million remaining in in of solid $XX improvement $X business driven in a we Ragasco, ClarkDietrich an showed million, the million The business $XX increase admirable the year-over-year encouraged added sequential inclusion equity The QX. which declines ClarkDietrich

earnings $XX from continues the as million for Building million continued quarter, that the quarter a performance, navigating current strong year its equity at is WAVE the Products to well. delivering up environment The high execute level. $XX team prior in team in

market We customers responsive with reliable in new and service, proposition have products to us strengthened value share. our to enabling gain

our and half into fiscal positioned seeing the head as of We also are second we our are joint steady performance year. ventures, from we well very

At this any point, to are happy questions. we take

will Research first from of question the Thompson Kathryn [Operator Instructions] come Group. Thompson with Our line

is larger the the help touched destocking what really quarter higher have, rank healthy looking to clip than recent up or if another, off you shift could definitely get environment? or kicked And drivers at a half on understand better of but you've from Just your you most mix just margins, even the in some on say, aspects from it but categories margin comp, prepared I wanted gross performance. quarters. First, M&A which the us were help some in order and drove commentary,

Kathryn. thing, Sure

more The XXX few points. a basis margin just gross So there. was details up

XXX sales a from product And shift SES which prior of unit, acquired we recall, some recall items. you of in here venture in margin positive to that expansion a our approximately a led And that, Ragasco, points then And business our on higher-margin had products. then addition in If excluding June. in joint we inclusion those of of which we with also formed year just and to then the QX. margin really the we layer mix we're kind quarter. And our basis in

to be where pleased would with quarter are expect And at at this our of overall margins margins this what that's about time. we XX%. kind we're So

look addition structurally with Helpful. Ragasco, how focus shift just we given of overall kind about as just this different SG&A, and Okay. kind should we year, think the And forward? of of

So right? the Kathryn, so fruit. about the running when And context things business, are of how we're strategically really a that it's SG&A, we've think bearing been after we the lot in of

partners our the storms. the consumer data as over with look weather the they business, have year, value to we they and inventory in You so continue prepare and point-of-sale partnership adequate that propositions last talked bring for the strengthened them of at analytics our about to winter or way can we that we've XM work levels

that's so think things. helping really about And

kind focused earlier did the on inherited we You of think return Worthington, to really things sort course. and The the as we to flat kind the going did, successful about Ragasco, things and we that demand taking fresh steady this markets in from about large-format great one when thinking is in us that having of think, going a any on in we obviously, When mention discipline that a in some optimizing little things. environment. But think a that's itself, that allow about propane and tanks. SG&A of thinking And we we're more some about comes be when really growth, run manifest step we'd have but back But we to taken destocking we're sequentially. SG&A, we're growing kind to we at That's characterize its of things. now, differently. of on look the and participate

Great. Okay.

growth to the just tougher are digits And calendar continues that next WAVE, as this well, talk of perform expand we the quarters. double think just on should face follow-up performance? about trends but year? -- office and X to X for a we the Just on -- more WAVE how going about past comps than Obviously, there's driving you JV could

and Sure. that the know, Well, ourselves a to And terrific between one to value you their both that a reasons really do it's think Armstrong WAVE, reliably back save are great I create leadership great team, companies their well their comes business as proud contractors is and they to able supply is of. and to with as solutions able customers continue they're can proposition, very of being understanding a and end-user which as labor. JV time that and

a an is installing you're And But can WAVE product, ceilings so in is which areas, as the labor of different cost even bigger portion buy then your the you spend. overall spend. those

commercial is stations about or seen extent care, continued the an a you're we centers little this train specifically to to as on applies right, think education, so health strength, well, and We've -- things transportation, And but larger that. or soft. like data office and airports ClarkDietrich

I JVs. be of based the think we a think to around next both the see, here the a expect can quarters WAVE steady with ClarkDietrich we side, an for goes kind of of -- both to so prices. she happens being what And couple -- on we steel for on WAVE as would ClarkDietrich caveat But with on what sequentially

the the you activity. businesses? X you've past better your definite terms value over are pickup in contacts industrial months, trends have is field recently Okay. in there in are a of to others? are Perfect. into of And in chain X performing What then that seen that terms versus the and we more then but areas just of and lackluster seen talking a kind some question. some construction summer, to industry One Or of just our the thing seeing spring that final are the in

Thank a through. walked Yes, bit I you, a of just it's think probably that one answer the to Kathryn. little we similar

persistent of spending the allocated think ago, infrastructure projects the has of some that now the has a from, way projects, some being of infrastructure-oriented for larger X helped Act I its into to gosh, make projects some couple CHIPS with some these But out of there. that's and it started that will some of the them, and money the X, years stimulus there's of agree when talking would shoots it into residential are starting green I about some as areas. to that get speaking, in see Generally are we like referred different. absolutely but some, but kind and still a things we that, mild spends little be certain to headwinds, we

from with comes the next Our Securities. Daniel question CJS Moore line of

expectations Products, start with is Products, just you're I from on say, smaller calendar the seasonally strongest we as seeing. kind elaborate and just in generally, large heating the side Building the think I are the what cooking space more but on of consumer and one And not of bottoming period. guess, Building and format other. between, say Maybe the maybe about you 'XX? what seeing this and differentiate I should But terms know on I maybe

question. And we Great when heating Colin mentioned talk about Yes. cooking. it and

growth transformation. tenets return a have of One the we tank we to normal tanks. And core I propane our, market. smaller grill right, of gas growth and on pretty large our growth and the strategy resolutely return it, market, market, is focused saw the in the quarter more And the call barbecue seasonally heating in format been the to

produce on that ability handful to much as get In the the our project. done a of to facility we tanks, smaller quarter, we volume modernization in be And costs to. you needed had hampered that both in that. sales that like things are as are there had, and would have environment, because liked to a we also there manufacturing things matters, imagine conversion would and And as

So through upgraded and in project facility, that's that transformational robotics that automated completed, that we facility. as and put

And forward. that we feel about so that done, much project forward, as we moving is business and better look

in wins and Given share the project; market some two, that, had we one, that we've finished interim.

about elaborate feet. more in Really But couple of in terms kind you can CEO that And a any for was of a it if I'm to helm from where focused to back one that. helpful. startup. both differences comments wondering trying taking made up then perspective. the on And of been an maybe M&A like the and XX,XXX now meaningful of months you in talked you organically you're you've just of direction strategic at think

Sure.

huge culture. lead pretty great it's It's So It's our performance-based would to what's this we proud And people-first, us. of a that for that a advantage it's honor But pretty I also going privilege of. and we're change, leverage. not and protective with something culture. it's maybe company. start Again, something to we're a right,

people. great have We

talked strategies then Building and have solid I you what value and propositions. in also about the really example in we We Products gave talked We Consumer. about

those are we startup, a we're not we're of going and fundamental X-year-old things Worthington like very it's more but company as With who change. are, proud something to And and thinking so respect company, we're a XX-year-old to a we're to Enterprises.

years think And about what to X us so ultimately gives it to the want to like. optimize and and the of what look look you a historically And we're a And as next sometimes to do is opportunity have bit trying back and we lot. think done sort you reset need differently we that optimize, matters about grow the little company. things things way to the

in optimize us And things really from able to, to growth as going XX that ultimately if business to us to of of to able the want to current is that in end for ourselves look environment, XX to going what's environment we possible kind we growth. margin markets. But to the it's next be things as we we now a and trying some lead really way perspective, particularly good do way prepare the months on at are focus returns in to our but to any our really the position

quick two That's helpful. Maybe ones. one or

housekeeping, Just above JV sustainable the but now was energy just breakeven.

those remain You around expect levels. to

to drag to be about wondering you modest the or it sort quarters? Just think X next contributor of we modest X a if a expect as

on. right say flattish. I'd It you're be will probably

relatively at buyback perspective depressed your words, back capital from yours, million then you still perspective, what going authorization. be on wondering XXX,XXX forward? aggressiveness X over allocation might And valuations. shares, well have but remaining still trading a not bought from it. Got Shares lastly, the My

we bias And a have about capital when growth. question, think allocation, great a for Dan. we still it's No,

If the to I'll CapEx you was on, CapEx look call at $X run in of million it, $X our million, quarter our QX. in top closer on rate

rating kind we be CapEx you're run a to amount able modernization through to $XX-ish $XX of free at going million projects, our facility cash additional million sales. so a to And get When level flow. relative to of our fair of we're generate

talked goals -- free out kind flow we for rates are have that And there. our have conversion of as we we've cash about,

M&A think about out market stubbornly was have look big turned bias it and expected and rates was when a that's past But going XXXX of to allocation, M&A, election, we we're breaking that So we the still there around interest in logjam, growth. the for when be to the a then capital high, at some uncertainty us. were

And so more that now are folks I 'XX M&A. a think active that be suggesting market of will for lot

I we M&A our and cash from expect buyback about authorization criteria, our a is, and price or to and if our we will if us Our always go ultimately, beyond dilution. ability us it But that I how talked margins is can still stock that's versus expensive M&A our least a forth like improve above healthy, pull how deem shares can companies think about, flows. we've look anything better is at buyback that attainable that, would toggle lever that we appropriate. to or M&A make at have we back think our we and looks what But offset free that that on. pretty

with from Goldman Sachs. Susan line Our will of next Maklari question the come

your on both of Congrats and there. new Colin you roles to

you of say. nice Thank you. Very to

we price My first think about deflation that's as the through cost talk steel. you bit come about question a is, can

the realizing look couple we quarters? price next And are thinking you're process of how where moves? that of then about to as Just we in those

Sure.

we I approach would things costs speaking, for expect and right, talking how approach inputs, of So mostly to you're steel. for be manufacturing, purchasing relatively how part like the how is us, environment, transformation we Relatively deflationary probably we about think that. thinking year-over-year. approach us flat our that about input ultimately We

okay. put can that. like would out our kind down, for the need we everything pricing products say, efficiencies our of getting generally into cost decrease is, we doing things what door market absolutely are and We I But to with to keep the to

wants think it more reignited X comes don't that I We'll months that a new is with the macroeconomic in But that of nobody administration. inflation. what see I the statement don't sensitive working back there next efficiencies significantly our anticipate going very, end to trying very that's prices the out up as we're and and be to because on on the well. our we elasticity think

will helpful that thinking And that then That's administration implement. in some year the next color. of maybe they policies the about and Okay. could come

the environment how you As come tariffs that? you come the global about some think Worthington? there or business that mean Just things to other through, some positioning to and the within How potential what for relative competitive together? that for on could could you actions are trade any thoughts strategically operate

don't don't on their want roots a likely And I that want field speculate it's the administration's But our sense is which think level think great merits. their And is their tariffs. playing everybody people. compete we the that question. a playing think for we same businesses I Well, actions. And incoming field. wants thing, level to anybody so can or actually they instead goals they're But smart on that

And and from know price manufacture Susan, domestically. products majority in so of our we context, that in U.S. comes revenue imports. this, face And do we competition the absolutely that the from you

that create field level playing help a potentially we sustain And manufacturing. net of and that so and actions beneficiary be U.S. support

best case in which good of spent But for more that on wouldn't field various we bottom any and lot the preparing would that we positioned a we're dynamics line, themselves. pretty is that inflationary scenarios around so be not as igniting we'll playing creating new which we're we And think, -- the scenario, is is level think we your on continue to can anticipate really well that question, and confident have is scenario. pretty they while effectively present incoming administration anybody. think time for trade policy what that which be We the focused I also this, pressures, adjust think and

Canaccord from Genuity. McNamara with [Operator the Instructions] next our comes line of Brian question And

And this Colin X% anything the congrats of the financial X% and promotions. the particularly was growth terms targets, longer-term in of top does curious, I'm on succession? all along of change line all, of plan target? kind First terms Joe in your to to

Well, Yes. plant a nice The the is ultimately to right that, happens. typically before you're plan plan say Brian. --

we're continue But -- that our drive and that and to sales. is entire grateful And blessed to do. our we we're teams SG&A on I other that grow to so those very to timing-wise, trying would your goal business, question, the for and the the percentage the appreciative as business based of and to our did work look the optimize gross trying forward, down targets, say our Andy way margins, ultimately time, we're kind work of maintain or over a and as

us. to is goals that's that of committed there kind place on that those going margin to expansion really, next but XX to help right? a a look as something we that have we're maybe year-over-year, be to tomorrow, markets XX we're note happening this the out to markets going months, we XX need And to flat for into out of function That's that that's create only little doing. the flat we are think Again, we isn't just You'll steady. relatively and the where pretty themselves,

but markets one I've and heard think this, actually, but mentioned remodel her slow. in maybe of think repair I is steady notes, this Susan the I

having destocking so course. our propositions our value more those ability is around share. run growth and environments certainly its It's around to And our take in

those will X to right? won't for it linear, catch think get and So much we easier a flat you're will necessarily be to to it ultimately, there's up be about at targets, if if -- point. years, some be likely couple, But you

that's that we've us to where that's so X% isn't But M&A making in. which organically, probably the Brian, right will they gets as But And good now some of the line and it, get as talked, to not we're on drive look decisions, I stock some organic. where the top that hopefully we're would because of right now. of clearly thing one really certainly at as mostly you is, and at markets X% we're And that from us on rest. like markets strategic focused M&A that's be, the we're really say we'd of kind help

Great.

just margin, confirm, think want that Colin XX% I Secondly, to hear on I gross forward. to Did moving where you is I be right? expect said

of be forward. mentioned as year-over-year in yes, giving we "guidance", were place as XX%. that will sort the we forward, go dynamics he look the Yes, without we at were comp And that

one in in a then bigger consumer, today? three opportunities particularly want consumer as you're outdoor And the do you where final with of them one M&A different living, Where of see on end And are M&A, just markets in priority? kind pretty celebrations. order and you tools, presence

Sure. It's a great question.

Our consumer their doing proposition business is exceptionally is sophisticated. value so well, and

And one, about about when consumer, really, think we companies we so our it's to we think companies can umbrella, that when adding make better.

of or more distribution is And so going channel. the it's our the kind partners professional partners if that into utilizing our relationships retail with either

consumer a this, know in happen that do-it-yourselfers various Brian, of shop contractors in places. or space customers lot You they're our the are to

markets more I it's as of going And others in they But on opposed are. those today. we're -- so be that to tools and focused the value-added we want some would it's again, the where to in be say, space to

And that back will call Joe conclude over to hand any And the our question-and-answer I'll closing Hayek session. remarks. for

Thank Please you, speaking happy to and safe Regina, a to holiday look and thank morning. forward for we and you, a joining again everybody season, have everyone, soon. this very us

Thank does all you conclude our call for joining. That today.

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