Worthington Enterprises, Inc. (NYSE: WOR) reported net sales of
$257.3 million and net earnings from continuing operations of $24.3
million, or $0.48 per diluted share, for its fiscal 2025 first
quarter ended August 31, 2024. This compares to net sales of $311.9
million and net earnings from continuing operations of $26.8
million, or $0.54 per diluted share, in the first quarter of fiscal
2024. On a non-GAAP basis, adjusted net earnings from continuing
operations totaled $25.1 million for the first quarter of fiscal
2025, or $0.50 per diluted share, compared to $37.2 million, or
$0.75 per diluted share, in the prior year comparable
quarter. Reported results reflect the controlling interest
portion of continuing operations and were impacted by certain
items, as summarized in the table below.
(U.S. dollars in millions,
except per share amounts) |
1Q 2025 |
|
|
1Q 2024 |
|
|
|
After-Tax |
|
|
Per Share |
|
|
After-Tax |
|
|
Per Share |
|
Net earnings from continuing
operations |
|
$ |
24.3 |
|
|
$ |
0.48 |
|
|
$ |
26.8 |
|
|
$ |
0.54 |
|
Restructuring charges |
|
|
0.8 |
|
|
|
0.02 |
|
|
|
- |
|
|
|
- |
|
Corporate costs eliminated at
Separation (1) |
|
|
- |
|
|
|
- |
|
|
|
7.4 |
|
|
|
0.15 |
|
Separation costs |
|
|
- |
|
|
|
- |
|
|
|
1.8 |
|
|
|
0.04 |
|
Loss on extinguishment of
debt |
|
|
- |
|
|
|
- |
|
|
|
1.2 |
|
|
|
0.02 |
|
Adjusted net earnings from
continuing operations |
|
$ |
25.1 |
|
|
$ |
0.50 |
|
|
$ |
37.2 |
|
|
$ |
0.75 |
|
(1) References in this release to the “Separation” are to
the Company’s separation of its former steel processing business
into Worthington Steel, Inc. on December 1, 2023.
Financial highlights, on a continuing operations
basis, for the current year and prior year quarters are as
follows:
(U.S. dollars in millions, except per share amounts)
|
|
1Q 2025 |
|
|
1Q 2024 |
|
Net sales |
|
$ |
257.3 |
|
|
$ |
311.9 |
|
Operating loss |
|
|
(4.7 |
) |
|
|
(7.3 |
) |
Adjusted operating income
(loss) |
|
|
(3.5 |
) |
|
|
4.8 |
|
Net earnings from continuing
operations |
|
|
24.3 |
|
|
|
26.8 |
|
Adjusted EBITDA from
continuing operations |
|
|
48.4 |
|
|
|
65.9 |
|
EPS from continuing operations
- diluted |
|
|
0.48 |
|
|
|
0.54 |
|
Adjusted EPS from continuing
operations - diluted |
|
$ |
0.50 |
|
|
$ |
0.75 |
|
|
|
|
|
|
|
|
|
|
“We had another respectable quarter thanks to
our team’s focus on managing costs and serving our customers even
as persistent higher interest rates and macroeconomic uncertainty
continued to impact demand,” said Worthington Enterprises President
and CEO Andy Rose. “Consumer Products had a solid quarter
delivering year over year earnings growth despite flat volumes.
Building Products earnings were down on weak volumes in our heating
and cooking business, combined with lower contributions from
ClarkDietrich, which continued to face some margin compression. Our
teams are navigating the current environment well with a focus on
delivering value-added solutions and products for our
customers.”Consolidated Quarterly Results
Net sales for the first quarter of fiscal 2025
were $257.3 million, a decrease of $54.6 million, or 17.5%, from
the prior year quarter, driven by the impact of the deconsolidation
of the former Sustainable Energy Solutions (“SES”) segment during
the fourth quarter of fiscal 2024 combined with lower volume in the
Building Products segment. Net sales in the prior year first
quarter included $28.6 million related to SES, which is now an
unconsolidated joint venture, with the Company’s share of SES joint
venture results for the first quarter of fiscal 2025 reported
within equity income on the consolidated statement of earnings.
The operating loss of $4.7 million for the first
quarter of fiscal 2025 was favorable by $2.6 million compared to
the prior year quarter, which included $2.4 million of
non-recurring Separation costs and $9.7 million of SG&A expense
that was eliminated post-Separation. Excluding restructuring and
the aforementioned effects of the Separation in the prior year
quarter, the Company generated an operating loss of $3.5 million
compared to operating income of $4.8 million in the first quarter
of fiscal 2024. The year-over-year decrease was driven by lower
gross margin in Building Products partially offset by the lack of
the operating loss generated by the former SES segment in the prior
year quarter.
Equity income decreased $9.9 million from the
prior year quarter to $35.5 million, driven by lower contributions
from ClarkDietrich, which was down $8.0 million from the prior year
quarter combined with a $1.8 million loss generated from the newly
formed SES joint venture.
Income tax expense was $6.8 million in the first
quarter of fiscal 2025 compared to $9.0 million in the prior year
quarter. The decrease was driven by lower pre-tax earnings from
continuing operations. Tax expense in the first quarter of fiscal
2025 reflects an estimated annual effective rate of 24.5% compared
to 25.1% in the prior year quarter.
Balance Sheet
Total debt of $300.0 million at first quarter
end was consistent with the balance at May 31, 2024. The Company
ended the quarter with cash of $178.5 million, down $65.7 million
from May 31, 2024, primarily driven by the purchase of Hexagon
Ragasco.
Quarterly Segment Results
Consumer Products generated net sales of $117.6
million during the first quarter of fiscal 2025, up $0.2 million,
from the prior year quarter on marginally higher
volume. Adjusted EBITDA of $17.8 million, was up $3.5 million
from the prior year quarter, driven by improved gross margin.
Building Products generated net sales of $139.7
million during the first quarter of fiscal 2025, down $26.2
million, or 15.8%, from the prior year quarter because of lower
volume and an unfavorable shift in product mix, partially offset by
contributions from Hexagon Ragasco. Adjusted EBITDA of $39.7
million decreased by $20.0 million from the prior year quarter,
driven by the impact of lower volume and unfavorable mix combined
with lower contributions of equity income, primarily from
ClarkDietrich. Adjusted EBITDA for the first quarter of fiscal 2025
includes $1.9 million of incremental expense related to the Hexagon
Ragasco acquisition resulting primarily from the step up of
inventory to fair value.
Recent Developments
- On June 3, 2024, the Company acquired Hexagon Ragasco, a
leading global manufacturer of composite propane cylinders. The
purchase price was approximately $100.3 million, net of cash
acquired, with a future earnout of up to approximately $14.0
million.
- During the first quarter of fiscal 2025, the Company
repurchased a total of 150,000 of its common shares for $6.8
million, at an average purchase price of $45.35.
- On September 24, 2024, the Company’s Board of Directors
declared a quarterly dividend of $0.17 per common share payable on
December 27, 2024, to shareholders of record at the close of
business on December 13, 2024.
Outlook
“We have a positive long-term outlook especially
with the recent recalibration of interest rates. Our market-leading
products and brands are well-positioned to take advantage of
long-term secular trends and should benefit when near-term
headwinds subside and demand normalizes,” Rose said. “We are also
equipped with a strong balance sheet and the ability to drive
long-term growth and reward shareholders as we leverage the
Worthington Business System of transformation, innovation and
M&A.”
Upcoming Investor Events
- CJS Securities Investor Briefings (Virtual Non-Deal Roadshow),
October 9, 2024
- Baird 2024 Global Industrial Conference, November 12, 2024
Conference Call
The Company will review fiscal 2025 first
quarter results during its quarterly conference call on September
25, 2024, 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™, 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.
WORTHINGTON ENTERPRISES, INC.CONSOLIDATED
STATEMENTS OF EARNINGS(In thousands, except per
share amounts) |
|
|
|
|
|
|
Three Months Ended |
|
|
|
August 31, |
|
|
|
2024 |
|
|
2023 |
|
Net sales |
|
$ |
257,308 |
|
|
$ |
311,918 |
|
Cost of goods sold |
|
|
194,813 |
|
|
|
242,288 |
|
Gross profit |
|
|
62,495 |
|
|
|
69,630 |
|
Selling, general and administrative expense |
|
|
66,036 |
|
|
|
74,544 |
|
Restructuring and other expense, net |
|
|
1,158 |
|
|
|
- |
|
Separation costs |
|
|
- |
|
|
|
2,410 |
|
Operating loss |
|
|
(4,699 |
) |
|
|
(7,324 |
) |
Other income (expense): |
|
|
|
|
|
|
Miscellaneous income, net |
|
|
486 |
|
|
|
299 |
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
(1,534 |
) |
Interest expense, net |
|
|
(489 |
) |
|
|
(1,074 |
) |
Equity in net income of unconsolidated affiliates |
|
|
35,492 |
|
|
|
45,424 |
|
Earnings before income taxes |
|
|
30,790 |
|
|
|
35,791 |
|
Income tax expense |
|
|
6,782 |
|
|
|
8,960 |
|
Net earnings from continuing operations |
|
|
24,008 |
|
|
|
26,831 |
|
Net earnings from discontinued operations |
|
|
- |
|
|
|
72,872 |
|
Net
earnings |
|
|
24,008 |
|
|
|
99,703 |
|
Net
earnings (loss) attributable to noncontrolling interests |
|
|
(245 |
) |
|
|
3,597 |
|
Net
earnings attributable to controlling interest |
|
$ |
24,253 |
|
|
$ |
96,106 |
|
|
|
|
|
|
|
|
Amounts attributable to controlling interest: |
|
|
|
|
|
|
Net
earnings from continuing operations |
|
$ |
24,253 |
|
|
$ |
26,831 |
|
Net
earnings from discontinued operations |
|
|
- |
|
|
|
69,275 |
|
Net
earnings attributable to controlling interest |
|
$ |
24,253 |
|
|
$ |
96,106 |
|
|
|
|
|
|
|
|
Earnings per share from continuing operations - basic |
|
$ |
0.49 |
|
|
$ |
0.55 |
|
Earnings per share from discontinued operations - basic |
|
|
- |
|
|
|
1.42 |
|
Net
earnings per share attributable to controlling interest -
basic |
|
$ |
0.49 |
|
|
$ |
1.97 |
|
|
|
|
|
|
|
|
Earnings per share from continuing operations - diluted |
|
$ |
0.48 |
|
|
$ |
0.54 |
|
Earnings per share from discontinued operations - diluted |
|
|
- |
|
|
|
1.39 |
|
Net
earnings per share attributable to controlling interest -
diluted |
|
$ |
0.48 |
|
|
$ |
1.93 |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic |
|
|
49,487 |
|
|
|
48,842 |
|
Weighted average common shares outstanding - diluted |
|
|
50,365 |
|
|
|
49,886 |
|
|
|
|
|
|
|
|
Cash dividends declared per share |
|
$ |
0.17 |
|
|
$ |
0.32 |
|
CONSOLIDATED BALANCE SHEETSWORTHINGTON
ENTERPRISES, INC.(In thousands) |
|
|
|
|
|
|
|
|
|
August 31, |
|
|
May 31, |
|
|
|
2024 |
|
|
2024 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
178,547 |
|
|
$ |
244,225 |
|
Receivables, less allowances of $508 and $343 at August 31,
2024 |
|
|
|
|
|
|
and May 31, 2024, respectively |
|
|
168,497 |
|
|
|
199,798 |
|
Inventories |
|
|
|
|
|
|
Raw materials |
|
|
77,577 |
|
|
|
66,040 |
|
Work in process |
|
|
10,053 |
|
|
|
11,668 |
|
Finished products |
|
|
99,669 |
|
|
|
86,907 |
|
Total inventories |
|
|
187,299 |
|
|
|
164,615 |
|
Income taxes receivable |
|
|
4,711 |
|
|
|
17,319 |
|
Prepaid expenses and other current assets |
|
|
37,383 |
|
|
|
47,936 |
|
Total current assets |
|
|
576,437 |
|
|
|
673,893 |
|
Investment in unconsolidated affiliates |
|
|
140,467 |
|
|
|
144,863 |
|
Operating lease assets |
|
|
27,109 |
|
|
|
18,667 |
|
Goodwill |
|
|
373,375 |
|
|
|
331,595 |
|
Other intangibles, net of accumulated amortization of |
|
|
|
|
|
|
$87,024 and $83,242 at August 31, 2024 and May 31, 2024,
respectively |
|
|
250,376 |
|
|
|
221,071 |
|
Other assets |
|
|
21,611 |
|
|
|
21,342 |
|
Property, plant and equipment: |
|
|
|
|
|
|
Land |
|
|
8,676 |
|
|
|
8,657 |
|
Buildings and improvements |
|
|
129,254 |
|
|
|
123,478 |
|
Machinery and equipment |
|
|
344,250 |
|
|
|
321,836 |
|
Construction in progress |
|
|
33,841 |
|
|
|
24,504 |
|
Total property, plant and equipment |
|
|
516,021 |
|
|
|
478,475 |
|
Less: accumulated depreciation |
|
|
260,125 |
|
|
|
251,269 |
|
Total property, plant and equipment, net |
|
|
255,896 |
|
|
|
227,206 |
|
Total assets |
|
$ |
1,645,271 |
|
|
$ |
1,638,637 |
|
|
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
82,768 |
|
|
$ |
91,605 |
|
Accrued compensation, contributions to employee benefit plans and
related taxes |
|
|
30,536 |
|
|
|
41,974 |
|
Dividends payable |
|
|
9,443 |
|
|
|
9,038 |
|
Other accrued items |
|
|
34,486 |
|
|
|
29,061 |
|
Current operating lease liabilities |
|
|
7,353 |
|
|
|
6,228 |
|
Income taxes payable |
|
|
1,652 |
|
|
|
470 |
|
Total current liabilities |
|
|
166,238 |
|
|
|
178,376 |
|
Other liabilities |
|
|
57,918 |
|
|
|
62,243 |
|
Distributions in excess of investment in unconsolidated
affiliate |
|
|
110,522 |
|
|
|
111,905 |
|
Long-term debt |
|
|
300,009 |
|
|
|
298,133 |
|
Noncurrent operating lease liabilities |
|
|
20,166 |
|
|
|
12,818 |
|
Deferred income taxes |
|
|
87,177 |
|
|
|
84,150 |
|
Total liabilities |
|
|
742,030 |
|
|
|
747,625 |
|
Shareholders' equity - controlling interest |
|
|
901,353 |
|
|
|
888,879 |
|
Noncontrolling interests |
|
|
1,888 |
|
|
|
2,133 |
|
Total equity |
|
|
903,241 |
|
|
|
891,012 |
|
Total liabilities and equity |
|
$ |
1,645,271 |
|
|
$ |
1,638,637 |
|
WORTHINGTON ENTERPRISES, INC.CONSOLIDATED
STATEMENTS OF CASH FLOWS(In
thousands) |
|
|
|
|
|
|
Three Months Ended |
|
|
|
August 31, |
|
|
|
2024 |
|
|
2023 |
|
Operating activities: |
|
|
|
|
|
|
Net earnings |
|
$ |
24,008 |
|
|
$ |
99,703 |
|
Adjustments to reconcile net earnings to net cash provided by
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
11,830 |
|
|
|
28,325 |
|
Impairment of long-lived assets |
|
|
- |
|
|
|
1,401 |
|
Benefit from deferred income taxes |
|
|
(5,537 |
) |
|
|
(5,453 |
) |
Loss on extinguishment of debt |
|
|
- |
|
|
|
1,534 |
|
Bad debt income |
|
|
(8 |
) |
|
|
(799 |
) |
Equity in net income of unconsolidated affiliates, net of
distributions |
|
|
3,453 |
|
|
|
10,225 |
|
Net loss (gain) on sale of assets |
|
|
(18 |
) |
|
|
105 |
|
Stock-based compensation |
|
|
3,925 |
|
|
|
4,516 |
|
Changes in assets and liabilities, net of impact of
acquisitions: |
|
|
|
|
|
|
Receivables |
|
|
28,166 |
|
|
|
(8,843 |
) |
Inventories |
|
|
(6,406 |
) |
|
|
(64,327 |
) |
Accounts payable |
|
|
(13,093 |
) |
|
|
278 |
|
Accrued compensation and employee benefits |
|
|
(11,445 |
) |
|
|
(12,014 |
) |
Other operating items, net |
|
|
6,271 |
|
|
|
5,045 |
|
Net cash provided by operating activities |
|
|
41,146 |
|
|
|
59,696 |
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
Investment in property, plant and equipment |
|
|
(9,629 |
) |
|
|
(29,298 |
) |
Acquisitions, net of cash acquired |
|
|
(88,887 |
) |
|
|
- |
|
Proceeds from sale of assets, net of selling costs |
|
|
11,769 |
|
|
|
51 |
|
Investment in non-marketable equity securities |
|
|
(2,000 |
) |
|
|
(40 |
) |
Investment in note receivable |
|
|
- |
|
|
|
(15,000 |
) |
Net cash used by investing activities |
|
|
(88,747 |
) |
|
|
(44,287 |
) |
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
Dividends paid |
|
|
(8,116 |
) |
|
|
(15,725 |
) |
Repurchase of common shares |
|
|
(6,803 |
) |
|
|
- |
|
Proceeds from issuance of common shares, net of tax
withholdings |
|
|
(3,158 |
) |
|
|
(5,130 |
) |
Net repayments of short-term borrowings |
|
|
- |
|
|
|
(2,813 |
) |
Principal payments on long-term obligations |
|
|
- |
|
|
|
(243,757 |
) |
Payments to noncontrolling interests |
|
|
- |
|
|
|
(1,921 |
) |
Net cash used by financing activities |
|
|
(18,077 |
) |
|
|
(269,346 |
) |
Decrease in cash and cash equivalents |
|
|
(65,678 |
) |
|
|
(253,937 |
) |
Cash and cash equivalents at beginning of period |
|
|
244,225 |
|
|
|
454,946 |
|
Cash and cash equivalents at end of period
(1) |
|
$ |
178,547 |
|
|
$ |
201,009 |
|
(1) The cash flows related to discontinued
operations have not been segregated in the periods presented
herein. Accordingly, the consolidated statements of cash flows
include the results from continuing and discontinued
operations.
WORTHINGTON ENTERPRISES,
INC.NON-GAAP FINANCIAL
MEASURES(In thousands, except units and per share
amounts
The following provides a reconciliation of non-GAAP financial
measures, including adjusted operating income (loss), adjusted
earnings before income taxes, adjusted income tax expense
(benefit), adjusted net earnings (loss) from continuing operations
attributable to controlling interest, adjusted earnings per diluted
share from continuing operations attributable to controlling
interest and adjusted effective tax rate, from their most
comparable GAAP measure for the three months ended August 31,
2024, and August 31, 2023. Refer to the Use of Non-GAAP Measures
and Definitions section herein and non-GAAP footnotes below for
further information on these measures .
|
Three Months Ended August 31, 2024 |
|
Operating Loss |
|
|
Earnings Before Income Taxes |
|
|
Income Tax Expense (Benefit) |
|
|
Net Earnings from Continuing Operations (1) |
|
|
Diluted EPS - Continuing Operations |
|
|
GAAP |
$ |
(4,699 |
) |
|
$ |
30,790 |
|
|
$ |
6,782 |
|
|
$ |
24,253 |
|
|
|
0.48 |
|
|
Restructuring and other expense, net |
|
1,158 |
|
|
|
1,158 |
|
|
|
(290 |
) |
|
|
868 |
|
|
|
0.02 |
|
|
Non-GAAP |
$ |
(3,541 |
) |
|
$ |
31,948 |
|
|
$ |
7,072 |
|
|
$ |
25,121 |
|
|
$ |
0.50 |
|
|
|
Three Months Ended August 31, 2023 |
|
Operating Income (Loss) |
|
|
Earnings Before Income Taxes |
|
|
Income Tax Expense (Benefit) |
|
|
Net Earnings from Continuing Operations (1) |
|
|
Diluted EPS - Continuing Operations |
|
|
GAAP |
$ |
(7,324 |
) |
|
$ |
35,791 |
|
|
$ |
8,960 |
|
|
$ |
26,831 |
|
|
$ |
0.54 |
|
|
Corporate costs eliminated at Separation |
|
9,672 |
|
|
|
9,672 |
|
|
|
(2,271 |
) |
|
|
7,401 |
|
|
|
0.15 |
|
|
Separation costs |
|
2,410 |
|
|
|
2,410 |
|
|
|
(566 |
) |
|
|
1,844 |
|
|
|
0.04 |
|
|
Loss on extinguishment of debt |
|
- |
|
|
|
1,534 |
|
|
|
(360 |
) |
|
|
1,174 |
|
|
|
0.02 |
|
|
Non-GAAP |
$ |
4,758 |
|
|
$ |
49,407 |
|
|
$ |
12,157 |
|
|
$ |
37,250 |
|
|
$ |
0.75 |
|
|
(1) Excludes the impact of noncontrolling interest.
To further assist in the analysis of segment
results for the three months ended August 31, 2024 and 2023 the
following supplemental information has been provided.
Reconciliations of adjusted EBITDA from continuing operations and
adjusted EBITDA margin from continuing operations to the most
comparable GAAP measures, earnings before income taxes and earnings
before income taxes margin.
|
|
Three Months Ended |
|
|
|
August 31, |
|
(in thousands) |
|
2024 |
|
|
2023 |
|
Volume |
|
|
|
|
|
|
Consumer Products |
|
|
16,171 |
|
|
|
16,032 |
|
Building Products |
|
|
3,094 |
|
|
|
3,809 |
|
Total reportable segments |
|
|
19,265 |
|
|
|
19,841 |
|
Other |
|
|
- |
|
|
|
106 |
|
Consolidated |
|
|
19,265 |
|
|
|
19,947 |
|
|
|
|
|
|
|
|
Net sales |
|
|
|
|
|
|
Consumer Products |
|
$ |
117,596 |
|
|
$ |
117,353 |
|
Building Products |
|
|
139,712 |
|
|
|
165,928 |
|
Total reportable segments |
|
|
257,308 |
|
|
|
283,281 |
|
Other |
|
|
- |
|
|
|
28,637 |
|
Consolidated |
|
$ |
257,308 |
|
|
$ |
311,918 |
|
|
|
|
|
|
|
|
Adjusted EBITDA from continuing operations |
|
|
|
|
|
|
Consumer Products |
|
$ |
17,775 |
|
|
$ |
14,275 |
|
Building Products |
|
|
39,729 |
|
|
|
59,692 |
|
Total reportable segments |
|
|
57,504 |
|
|
|
73,967 |
|
Other |
|
|
(9,067 |
) |
|
|
(8,052 |
) |
Consolidated |
|
$ |
48,437 |
|
|
$ |
65,915 |
|
|
|
|
|
|
|
|
Adjusted EBITDA margin from continuing
operations |
|
|
|
|
|
|
Consumer Products |
|
|
15.1 |
% |
|
|
12.2 |
% |
Building Products |
|
|
28.4 |
% |
|
|
36.0 |
% |
Consolidated |
|
|
18.8 |
% |
|
|
21.1 |
% |
|
|
|
|
|
|
|
Equity income by unconsolidated affiliate |
|
|
|
|
|
|
WAVE (1) |
|
$ |
27,901 |
|
|
$ |
28,315 |
|
ClarkDietrich (1) |
|
|
8,744 |
|
|
|
16,728 |
|
Other (2) |
|
|
(1,153 |
) |
|
|
381 |
|
Consolidated |
|
$ |
35,492 |
|
|
$ |
45,424 |
|
- Equity income contributed by Worthington Armstrong Venture
(“WAVE”) and ClarkDietrich is associated with our Building Products
segment.
- Other includes the Company’s share of the equity earnings of
Taxi Workhorse, LLC and the SES joint venture.
A reconciliation from net earnings before income taxes from
continuing operations to the non-GAAP financial measure of adjusted
EBITDA from continuing operations for the each of the periods
presented is provided below.
|
|
Three Months Ended |
|
|
|
August 31, |
|
(in thousands) |
|
2024 |
|
|
2023 |
|
Earnings before income taxes (GAAP) |
|
$ |
30,790 |
|
|
$ |
35,791 |
|
Less: net loss attributable to noncontrolling interest |
|
|
(245 |
) |
|
|
- |
|
Net
earnings before income taxes attributable to controlling
interest |
|
|
31,035 |
|
|
|
35,791 |
|
Interest expense, net |
|
|
489 |
|
|
|
1,074 |
|
EBIT (subtotal) |
|
|
31,524 |
|
|
|
36,865 |
|
Corporate costs eliminated at Separation |
|
|
- |
|
|
|
9,672 |
|
Restructuring and other expense, net |
|
|
1,158 |
|
|
|
- |
|
Separation costs |
|
|
- |
|
|
|
2,410 |
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
1,534 |
|
Adjusted EBIT (subtotal) |
|
|
32,682 |
|
|
|
50,481 |
|
Depreciation and amortization |
|
|
11,830 |
|
|
|
12,075 |
|
Stock-based compensation |
|
|
3,925 |
|
|
|
3,359 |
|
Adjusted EBITDA from continuing operations
(non-GAAP) |
|
$ |
48,437 |
|
|
$ |
65,915 |
|
|
|
|
|
|
|
|
Earnings before income taxes margin |
|
|
12.0 |
% |
|
|
11.5 |
% |
Non-GAAP adjusted EBITDA margin from continuing
operations |
|
|
18.8 |
% |
|
|
21.1 |
% |
|
|
|
|
|
|
|
|
|
WORTHINGTON ENTERPRISES,
INC.USE OF NON-GAAP MEASURES AND
DEFINITIONS
NON-GAAP MEASURES. These
materials include certain financial measures that are not
calculated and presented in accordance with accounting principles
generally accepted in the United States (“GAAP”). The non-GAAP
financial measures typically exclude items that management believes
are not reflective of, and thus should not be included when
evaluating the performance of the Company’s ongoing operations.
Management uses the non-GAAP financial measures to evaluate the
Company’s performance, engage in financial and operational
planning, and determine incentive compensation. Management believes
these non-GAAP measures provide useful supplemental information and
additional perspective on the performance of the Company’s ongoing
operations and should not be considered as an alternative to the
comparable GAAP measure. Additionally, management believes these
non-GAAP measures allow for meaningful comparisons and analysis of
trends in the Company’s businesses and enables investors to
evaluate operations and future prospects in the same manner as
management.
The following provides an explanation of each
non-GAAP measure presented in these materials:
Adjusted operating income (loss) is defined as
operating income (loss) excluding the items listed below, to the
extent naturally included in operating income (loss).
Adjusted net earnings from continuing operations
attributable to controlling interest is defined as net earnings
from continuing operations attributable to controlling interest
excluding the after-tax effect of the excluded items listed
below.
Adjusted earnings per diluted share from
continuing operations is defined as adjusted net earnings from
continuing operations divided by diluted weighted-average shares
outstanding).
Adjusted EBITDA is defined as adjusted earnings
before interest, taxes, depreciation, and amortization (“EBITDA”).
EBITDA is calculated by adding or subtracting, as appropriate,
interest expense, net, income tax expense, depreciation, and
amortization to/from net earnings from continuing operations
attributable to controlling interest, which is further adjusted to
exclude impairment and restructuring charges (gains) as well as
other items that management believes are not reflective of, and
thus should not be included when evaluating the performance of its
ongoing operations, as outlined below. Adjusted EBITDA also
excludes stock-based compensation due to its non-cash nature, which
is consistent with how management assesses operating performance.
At the segment level, adjusted EBITDA includes expense allocations
for centralized corporate back-office functions that exist to
support the day-to-day business operations. Public company and
other governance costs are held at the corporate-level.
Adjusted EBITDA margin is calculated by dividing
adjusted EBITDA by net sales.
Exclusions from Non-GAAP Financial
Measures
Management believes it is useful to exclude the
following items from the non-GAAP measures presented in this report
for its own and investors’ assessment of the business for the
reasons identified below:
- Impairment charges are excluded because they do not occur in
the ordinary course of our ongoing business operations, are
inherently unpredictable in timing and amount, and are non-cash,
which we believe facilitates the comparison of historical, current
and forecasted financial results.
- Restructuring activities, which can result in both discrete
gains and/or losses, consist of established programs that are not
part of our ongoing operations, such as divestitures, closing or
consolidating facilities, employee severance (including
rationalizing headcount or other significant changes in personnel),
and realignment of existing operations (including changes to
management structure in response to underlying performance and/or
changing market conditions). These items are excluded because
they are not part of the ongoing operations of our underlying
business.
- Separation costs, which consist of direct and incremental costs
incurred in connection with the completed Separation are excluded
as they are one-time in nature and are not expected to occur in
period following the Separation. These costs include fees paid
to third-party advisors, such as investment banking, audit and
other advisory services as well as direct and incremental costs
associated with the Separation of shared corporate functions.
Results in the current fiscal year also include incremental
compensation expense associated with the modification of unvested
short and long-term incentive compensation awards, as required
under the employee matters agreement executed in conjunction with
the Separation.
- Loss on early extinguishment of debt is excluded because it
does not occur in the normal course of business and may obscure
analysis of trends and financial performance. Additionally, the
amount and frequency of this type of charge is not consistent and
is significantly impacted by the timing and size of debt
extinguishment transactions.
- Pension settlement charges are excluded because due to their
non-cash nature and the fact that they do not occur in the normal
course of business and may obscure analysis of trends and financial
performance. These transactions typically result from the transfer
of all or a portion of the total projected benefit obligation to
third-party insurance companies.
- Corporate costs eliminated at Separation reflect certain
corporate overhead costs that no longer exist post-Separation.
These costs were included in continuing operations as they
represent general corporate overhead that was historically
allocated to the Company’s former steel processing business but did
not meet the requirements to be presented as discontinued
operations.
Sonya L. HigginbothamSenior
Vice PresidentChief of Corporate Affairs, Communications and
Sustainability614.438.7391sonya.higginbotham@wthg.com
Marcus A. RogierTreasurer and
Investor Relations Officer614.840.4663marcus.rogier@wthg.com
200 West
Old Wilson Bridge Rd.Columbus, Ohio 43085WorthingtonEnterprises.com
Grafico Azioni Worthington Enterprises (NYSE:WOR)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni Worthington Enterprises (NYSE:WOR)
Storico
Da Dic 2023 a Dic 2024