10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number 001-08399

WORTHINGTON ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)


Ohio		31-1189815
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

200 West Old Wilson Bridge Road, Columbus, Ohio		43085
(Address of principal executive offices)		(Zip Code)

     (614) 438-3210

    

     (Registrant’s telephone number, including area code)

    

     Not Applicable

    

     (Former name, former address and former fiscal year, if changed since last report)

    

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, Without Par Value	WOR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

On April 4, 2025, the number of common shares, without par value, of the registrant issued and outstanding was 49,917,226.

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TABLE OF CONTENTS


Commonly Used or Defined Terms			ii
Cautionary Note Regarding Forward-Looking Statements			iii
Use of Non-GAAP Financial Measures and Definitions			1
Part I. Financial Information
	Item 1.	Financial Statements
		Consolidated Balance Sheets – February 28, 2025 and May 31, 2024	4
		Consolidated Statements of Earnings – Three and Nine Months Ended February 28, 2025 and February 29, 2024	5
		Consolidated Statements of Comprehensive Income – Three and Nine Months Ended February 28, 2025 and February 29, 2024	6
		Consolidated Statements of Cash Flows – Three and Nine Months Ended February 28, 2025 and February 29, 2024	7
		Condensed Notes to Consolidated Financial Statements (Unaudited)	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
	Item 4.	Controls and Procedures	36
Part II. Other Information

	Item 1.	Legal Proceedings	37
	Item 1A.	Risk Factors	37
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
	Item 3.	Defaults Upon Senior Securities	38
	Item 4.	Mine Safety Disclosures	38
	Item 5.	Other Information	38
	Item 6.	Exhibits	38
Signatures			39

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COMMONLY USED OR DEFINED TERMS

References in this Form 10-Q to “we,” “our,” “us” or the “Company” are collectively to Worthington Enterprises and its consolidated subsidiaries. In addition, the following terms, when used in this Form 10-Q, have the meanings set forth below:


Term		Definition
ABI		Architecture Billing Index
AOCI		Accumulated other comprehensive income (loss)
ASU		Accounting Standards Update
Board		Board of Directors of Worthington Enterprises, Inc.
CARES Act		Coronavirus Aid, Relief and Economic Security Act
CEO		Chief Executive Officer
ClarkDietrich		Clarkwestern Dietrich Building Systems LLC
CODM		Chief Operating Decision Maker
common shares		The common shares, no par value, of Worthington Enterprises
COVID-19		The novel coronavirus disease first known to originate in December 2019
CPI		U.S. Core Consumer Price Index
Credit Facility		Our $500,000,000 unsecured revolving credit facility with a group of lenders
Current year period		The nine months ended February 28, 2025
Current year quarter		The three months ended February 28, 2025
Distribution		The pro-rata distribution of all outstanding shares of Worthington Steel whereby each holder of record of Worthington Enterprises common shares received one common share of Worthington Steel for every one common share of Worthington Enterprises held as of the Record Date.
DMI		Dodge Momentum Index
EBIT		Earnings before interest and taxes
EPS		Earnings per common share
equity income		Equity in net income of unconsolidated affiliates
ETR		Effective income tax rate
Exchange Act		Securities Exchange Act of 1934, as amended
FASB		Financial Accounting Standards Board
Form 10-Q		This Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2025
fiscal 2025		Our fiscal year ended May 31, 2025
fiscal 2024		Our fiscal year ended May 31, 2024
third quarter of fiscal 2025		Our fiscal quarter ended February 28, 2025
third quarter of fiscal 2024		Our fiscal quarter ended February 29, 2024
GAAP		U.S. generally accepted accounting principles
GDP		U.S. gross domestic product
Halo		WH Products, LLC
Hexagon		Hexagon Composites ASA
HMI		National Association of Home Builders/Wells Fargo Housing Market Index
LIRA		Leading Indicator of Remodeling Activity
MD&A		Management’s Discussion and Analysis of Financial Condition and Results of Operations
NYSE		New York Stock Exchange
N.M.		Not meaningful
OCI		Other comprehensive income (loss)
Prior year period		The nine months ended February 29, 2024
Prior year quarter		The three months ended February 29, 2024
PSLRA		Private Securities Litigation Reform Act of 1995, as amended
Ragasco		Ragasco AS
SEC		Securities and Exchange Commission
Separation		The separation of our former steel processing business, effective December 1, 2023
SG&A		Selling, general and administrative expenses
SOFR		Secured Overnight Financing Rate
U.S.		United States of America
WAVE		Worthington Armstrong Venture
Workhorse		Taxi Workhorse Holdings, LLC
Worthington Enterprises		Worthington Enterprises, Inc. (formerly known as Worthington Industries, Inc.)
Worthington Steel		Worthington Steel, Inc.
2024 Form 10-K		Our Annual Report on Form 10-K for fiscal 2024 as filed with the SEC on July 30, 2024
2024 Notes		The senior unsecured notes that we issued on August 10, 2012, in the principal amount of $150,000,000, which bore interest at a rate of 4.60%, were scheduled to mature on August 10, 2024, and were paid in full on December 6, 2023.
2026 Notes		The senior unsecured notes that we issued on April 15, 2014, in the principal amount of $250,000,000, which bore interest at a rate of 4.55%, were scheduled to mature on April 15, 2026, and were paid in full on July 28, 2023.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Selected statements contained in this Form 10-Q, including, without limitation, in MD&A and in “Note E – Contingent Liabilities and Commitments,” constitute “forward-looking statements,” as that term is used in the PSLRA. We wish to take advantage of the safe harbor provisions included in the PSLRA. Forward-looking statements reflect our 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;

•

anticipated benefits of the Separation;

•

expected financial and operational performance, and future opportunities, following the Separation;

•

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;

•

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;

•

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, form joint ventures and consolidate operations, 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 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, laws and regulations;

•

effects of cybersecurity breaches and other disruptions to information technology infrastructure;

•

the lingering effects of COVID-19 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 ability to successfully realize the anticipated benefits of the Separation;

•

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 our products or suppliers, a U.S. 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 prices and/or supply of steel, natural gas, oil, copper, zinc, and other raw materials;

•

product demand and pricing;

•

changes in product mix, product substitution and market acceptance of our products;

iii

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•

volatility or fluctuations in the pricing, quality or availability of raw materials (particularly steel), supplies, transportation, utilities, labor and other items required by operations;

•

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 construction and other industries in which we participate;

•

failure to maintain appropriate levels of inventories;

•

financial difficulties (including bankruptcy filings) of end-users and customers, suppliers, joint venture partners and others with whom we do 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 we participate;

•

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, 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, foreign currency exchange rate exposure and the acceptance of our 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 our operations and financial results;

•

deviation of actual results from estimates and/or assumptions used by us in the application of our significant accounting policies;

•

the level of imports and import prices in our markets;

•

the effect of national, regional and global economic conditions generally and within major product markets;

•

the impact of environmental laws and regulations or the actions of the U.S. Environmental Protection Agency or similar regulators which increase costs or limit our 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 U.S. and abroad, including those adopted by the SEC and other governmental agencies as contemplated by the 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 U.S and potential changes for such laws which may increase our healthcare and other costs and negatively impact our operations and financial results;

•

the effects of tax laws in the U.S and potential changes for such laws, which may increase our costs and negatively impact our operations and financial results;

•

cyber security risks;

•

the effects of privacy and information security laws and standards;

•

the seasonality of our operations; and

•

other risks described from time to time in our filings with the SEC, including those described in “Part I – Item 1A. – Risk Factors” of the 2024 Form 10-K.

We note these risk factors for investors as contemplated by the PSLRA. Forward-looking statements should be construed in the light of such risks. 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. We do not undertake, and hereby disclaim, 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.

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USE OF NON-GAAP FINANCIAL MEASURES AND DEFINITIONS

(In thousands, except per common share amounts)

NON-GAAP FINANCIAL MEASURES. This Form 10-Q includes certain financial measures that are not calculated and presented in accordance with GAAP. 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 our ongoing operations. Management uses these non-GAAP financial measures to evaluate ongoing performance, engage in financial and operational planning, and determine incentive compensation. Management believes these non-GAAP financial measures provide useful supplemental information regarding the performance of our ongoing operations and should not be considered as an alternative to the comparable GAAP financial measure. Additionally, management believes these non-GAAP financial measures allow for meaningful comparisons and analysis of trends in our business and enables investors to evaluate our operations and future prospects in the same manner as management.

The following provides an explanation of each non-GAAP financial measure presented in this Form 10-Q:

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 diluted EPS from continuing operations is defined as adjusted net earnings from continuing operations divided by diluted weighted-average shares outstanding for the applicable period.

Adjusted EBITDA from continuing operations is the measure by which we evaluate segment performance and our overall profitability. EBITDA is defined as earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA from continuing operations excludes additional items including, but not limited to, those listed below, as well as other items that management believes are not reflective of, and thus should not be included when evaluating the performance of our ongoing operations. Adjusted EBITDA from continuing operations also excludes stock-based compensation due to its non-cash nature, which is consistent with how management assesses operating performance and determines incentive compensation. At the segment level, adjusted EBITDA from continuing operations 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 within the unallocated corporate and other category.

Adjusted EBITDA from continuing operations margin is calculated by dividing adjusted EBITDA from continuing operations by net sales.

EXCLUSIONS FROM NON-GAAP FINANCIAL MEASURES

Management believes it is useful to exclude the following items from its non-GAAP financial measures for its own and investors’ assessment of the business for the reasons identified below. Additionally, management may exclude other items from non-GAAP financial measures that do not occur in the ordinary course of our ongoing business operations and note them in the reconciliation from net earnings before from continuing operations to the non-GAAP financial measure adjusted EBITDA from continuing operations.

•

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 and other expense, net consists of established programs that are intended to fundamentally change our operations, and as such are excluded from our non-GAAP financial measures. Our restructuring programs may include closing or consolidating production facilities or moving manufacturing of a product to another location, realignment of the management structure of a business unit in response to changing market conditions or general rationalization of headcount. Our restructuring activities generally give rise to employee-related costs, such as severance pay, and facility-related costs, such as exit costs and gains or losses on asset disposals but may include other incremental costs associated with our restructuring activities. Restructuring and other expense, net, may also include other nonrecurring items included in operating income but incremental to our normal business activities. 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 periods 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 fiscal 2024 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 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.

•

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 our former steel processing business but did not meet the requirements to be presented as discontinued operations.

•

Pension settlement charges are excluded 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.

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•

One-time tax effects of Separation are charges to income tax expense primarily related to non-deductible transaction costs. They are excluded because they are one-time in nature and not expected to occur in periods following the Separation.

•

Gain on sale of assets in equity income is excluded because it does not occur in the normal course of business and is inherently unpredictable in timing and amount.

Consolidated Results – Selected Non-GAAP Adjusted Results


	Three Months Ended February 28, 2025
			Earnings				Net Earnings		Diluted
			Before		Income		from		EPS -		Effective
	Operating		Income		Tax		Continuing		Continuing		Tax
	Income		Taxes		Expense		Operations (1)		Operations (1)		Rate (1)
GAAP	$	20,868	$	52,579	$	13,240	$	39,663	$	0.79		25.0	%
Restructuring and other expense, net		5,374		5,374		295		5,669		0.12
Non-GAAP	$	26,242	$	57,953	$	12,945	$	45,332	$	0.91		22.2	%


	Three Months Ended February 29, 2024
			Earnings					Net Earnings		Diluted
			Before		Income			from		EPS -		Effective
	Operating		Income		Tax			Continuing		Continuing		Tax
	Income		Taxes		Expense			Operations		Operations		Rate
GAAP	$	4,281	$	40,471	$	18,471		$	22,000	$	0.44		45.6	%
Restructuring and other expense, net		698		698		(166	)		532		0.01
Separation costs		2,999		2,999		(712	)		2,287		0.05
Pension settlement charge		-		8,103		(1,929	)		6,174		0.12
One-time tax effects of Separation		-		-		9,197			9,197		0.18
Non-GAAP	$	7,978	$	52,271	$	12,081		$	40,190	$	0.80		23.1	%


	Nine Months Ended February 28, 2025
			Earnings					Net Earnings		Diluted
			Before		Income			from		EPS -		Effective
	Operating		Income		Tax			Continuing		Continuing		Tax
	Income		Taxes		Expense			Operations (1)		Operations (1)		Rate (1)
GAAP	$	19,690	$	120,478	$	29,122		$	92,176	$	1.84		24.0	%
Restructuring and other expense, net		9,152		9,152		(633	)		8,519		0.17
Non-GAAP	$	28,842	$	129,630	$	29,755		$	100,695	$	2.01		22.8	%


	Nine Months Ended February 29, 2024
				Earnings						Net Earnings			Diluted
	Operating			Before			Income			from			EPS -			Effective
	Income			Income			Tax			Continuing			Continuing			Tax
	(Loss)			Taxes			Expense			Operations			Operations			Rate
GAAP	$	(17,411	)	$	100,804		$	34,041		$	66,763			1.33			33.8	%
Corporate costs eliminated at Separation		19,343			19,343			(4,606	)		14,737			0.30
Restructuring and other expense, net		704			704			(168	)		536			0.01
Separation costs		12,465			12,465			(2,968	)		9,497			0.19
Pension settlement charge		-			8,103			(1,929	)		6,174			0.12
Loss on extinguishment of debt		-			1,534			(365	)		1,169			0.02
Gain on sale of assets in equity income		-			(2,780	)		662			(2,118	)		(0.04	)
One-time tax effects of Separation		-			-			9,197			9,197			0.18
Non-GAAP	$	15,101		$	140,173		$	34,218		$	105,955		$	2.11			24.4	%

(1)

Excludes the impact of noncontrolling interest.

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Consolidated Results - Adjusted EBITDA from Continuing Operations


	Three Months Ended						Nine Months Ended
	February 28,			February 29,			February 28,			February 29,
	2025			2024			2025			2024
Net earnings from continuing operations (GAAP)	$	39,339		$	22,000		$	91,356		$	66,763
Plus: net loss attributable to noncontrolling interest		324			-			820			-
Net earnings from continuing operations attributable to controlling interest		39,663			22,000			92,176			66,763
Interest expense, net		628			50			2,150			1,596
Income tax expense		13,240			18,471			29,122			34,041
EBIT (1)		53,531			40,521			123,448			102,400
Corporate costs eliminated at Separation		-			-			-			19,343
Restructuring and other expense, net (2)		5,374			698			9,152			704
Separation costs		-			2,999			-			12,465
Pension settlement charge		-			8,103			-			8,103
Loss on extinguishment of debt		-			-			-			1,534
Gain on sale of assets in equity income		-			-			-			(2,780	)
Adjusted EBIT (1)		58,905			52,321			132,600			141,769
Depreciation and amortization		11,950			11,949			35,707			36,238
Stock-based compensation (3)		2,924			2,601			10,122			9,822
Adjusted EBITDA from continuing operations (non-GAAP)	$	73,779		$	66,871		$	178,429		$	187,829

Net earnings from continuing operations margin (GAAP)		12.9	%		6.9	%		10.9	%		7.2	%
Adjusted EBITDA from continuing operations margin (non-GAAP)		24.2	%		21.1	%		21.3	%		20.3	%

(1)

EBIT and adjusted EBIT are non-GAAP financial measures. However, these measures are not used by management to evaluate our performance, engage in financial and operational planning, or to determine incentive compensation. Instead, they are included as subtotals in the reconciliation of net earnings from continuing operations to adjusted EBITDA from continuing operations, which is a non-GAAP financial measure used by management.

(2)

The three and nine months ended February 28, 2025, includes $4,536 of expense related to an increase in the fair value of the contingent liability associated with the Ragasco earnout arrangement.

(3)

Excludes $2,665 of stock-based compensation reported in restructuring and other expense, net in our consolidated statement of earnings for the nine months ended February 28, 2025 due to the accelerated vesting of certain outstanding equity awards upon retirement of our former CEO effective November 1, 2024.

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Item 1. – Financial Statements

WORTHINGTON ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)


	(Unaudited)
	February 28,		May 31,
	2025		2024
Assets
Current assets:
Cash and cash equivalents		222,844	$	244,225
Receivables, less allowances of $3,651 and $343, respectively		202,848		199,798
Inventories:
Raw materials		78,186		66,040
Work in process		10,025		11,668
Finished products		77,124		86,907
Total inventories		165,335		164,615
Income taxes receivable		3,543		17,319
Prepaid expenses and other current assets		39,394		47,936
Total current assets		633,964		673,893
Investments in unconsolidated affiliates		131,800		144,863
Operating lease assets		21,757		18,667
Goodwill		368,047		331,595
Other intangible assets, net of accumulated amortization of $92,675 and $83,242, respectively		239,852		221,071
Other assets		23,779		21,342
Property, plant and equipment:
Land		8,613		8,657
Buildings and improvements		130,230		123,478
Machinery and equipment		363,762		321,836
Construction in progress		31,048		24,504
Total property, plant and equipment		533,653		478,475
Less: accumulated depreciation		270,848		251,269
Total property, plant and equipment, net		262,805		227,206
Total assets	$	1,682,004	$	1,638,637

Liabilities and equity
Current liabilities:
Accounts payable	$	83,905	$	91,605
Accrued compensation, contributions to employee benefit plans and related taxes		37,329		41,974
Dividends payable		9,102		9,038
Other accrued items		41,578		29,061
Current operating lease liabilities		5,644		6,228
Income taxes payable		2,830		470
Total current liabilities		180,388		178,376
Other liabilities		59,301		62,243
Distributions in excess of investment in unconsolidated affiliate		110,402		111,905
Long-term debt		293,921		298,133
Noncurrent operating lease liabilities		16,595		12,818
Deferred income taxes, net		82,876		84,150
Total liabilities		743,483		747,625
Shareholders’ equity - controlling interest		937,208		888,879
Noncontrolling interests		1,313		2,133
Total equity		938,521		891,012
Total liabilities and equity	$	1,682,004	$	1,638,637

See condensed notes to consolidated financial statements.

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WORTHINGTON ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per common share amounts)

(Unaudited)


	Three Months Ended						Nine Months Ended
	February 28,			February 29,			February 28,			February 29,
	2025			2024			2025			2024
Net sales	$	304,524		$	316,755		$	835,878		$	926,902
Cost of goods sold		215,277			243,643			610,077			720,882
Gross profit		89,247			73,112			225,801			206,020
Selling, general and administrative expense		63,005			65,134			196,959			210,262
Restructuring and other expense, net		5,374			698			9,152			704
Separation costs		-			2,999			-			12,465
Operating income (loss)		20,868			4,281			19,690			(17,411	)
Other income (expense):
Miscellaneous income (expense), net		258			(6,995	)		809			(5,983	)
Loss on extinguishment of debt		-			-			-			(1,534	)
Interest expense, net		(628	)		(50	)		(2,150	)		(1,596	)
Equity in net income of unconsolidated affiliates		32,081			43,235			102,129			127,328
Earnings before income taxes		52,579			40,471			120,478			100,804
Income tax expense		13,240			18,471			29,122			34,041
Net earnings from continuing operations		39,339			22,000			91,356			66,763
Net earnings from discontinued operations		-			-			-			83,106
Net earnings		39,339			22,000			91,356			149,869
Net earnings (loss) attributable to noncontrolling interests		(324	)		-			(820	)		7,460
Net earnings attributable to controlling interest	$	39,663		$	22,000		$	92,176		$	142,409

Amounts attributable to controlling interest:
Net earnings from continuing operations	$	39,663		$	22,000		$	92,176		$	66,763
Net earnings from discontinued operations		-			-			-			75,646
Net earnings attributable to controlling interest	$	39,663		$	22,000		$	92,176		$	142,409

Earnings per share - basic:
Continuing operations	$	0.80		$	0.45		$	1.86		$	1.36
Discontinued operations		-			-			-			1.54
Consolidated	$	0.80		$	0.45		$	1.86		$	2.90

Earnings per share - diluted:
Continuing operations	$	0.79		$	0.44		$	1.84		$	1.33
Discontinued operations		-			-			-			1.50
Consolidated	$	0.79		$	0.44		$	1.84		$	2.83

Weighted average common shares outstanding - basic		49,377			49,315			49,443			49,113
Weighted average common shares outstanding - diluted		49,981			50,417			50,171			50,271

Cash dividends declared per common share	$	0.17		$	0.16		$	0.51		$	0.80

See condensed notes to consolidated financial statements.

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WORTHINGTON ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three Months Ended						Nine Months Ended
	February 28,			February 29,			February 28,			February 29,
	2025			2024			2025			2024
Net earnings	$	39,339		$	22,000		$	91,356		$	149,869
Other comprehensive income (loss), net of tax
Foreign currency translation		(2,704	)		(700	)		(5,439	)		1,643
Pension liability adjustment		161			6,805			167			6,802
Cash flow hedges		548			218			441			6,916
Other comprehensive income (loss), net of tax		(1,995	)		6,323			(4,831	)		15,361
Comprehensive income		37,344			28,323			86,525			165,230
Comprehensive income (loss) attributable to noncontrolling interests		(324	)		-			(820	)		7,460
Comprehensive income attributable to controlling interest	$	37,668		$	28,323		$	87,345		$	157,770

See condensed notes to consolidated financial statements.

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WORTHINGTON ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three Months Ended						Nine Months Ended
	February 28,			February 29,			February 28,			February 29,
	2025			2024			2025			2024
Operating activities:
Net earnings	$	39,339		$	22,000		$	91,356		$	149,869
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		11,950			11,949			35,707			68,281
Impairment of long-lived assets		-			-			-			1,401
Provision for (benefit from) deferred income taxes		(8,016	)		4,329			(10,871	)		843
Loss on extinguishment of debt		-			-			-			1,534
Bad debt expense (income)		1,128			24			3,189			(430	)
Equity in net income of unconsolidated affiliates, net of distributions		3,089			(2,926	)		10,810			3,169
Net gain on sale of assets		(21	)		(14	)		(547	)		(348	)
Stock-based compensation		2,924			2,602			12,787			13,294
Changes in assets and liabilities, net of impact of acquisitions:
Receivables		(18,553	)		(18,124	)		(9,023	)		49,737
Inventories		14,128			16,176			15,558			54,999
Accounts payable		46			15,561			(12,600	)		(59,534	)
Accrued compensation and employee benefits		8,838			7,190			(4,628	)		(2,030	)
Other operating items, net		2,279			(8,646	)		15,592			(35,979	)
Net cash provided by operating activities		57,131			50,121			147,330			244,806

Investing activities:
Investment in property, plant and equipment		(12,704	)		(10,017	)		(37,494	)		(72,191	)
Acquisitions, net of cash acquired		-			(8,707	)		(88,156	)		(29,721	)
Proceeds from sale of assets, net of selling costs		59			35			13,444			837
Investment in non-marketable equity securities		(833	)		(75	)		(2,873	)		(1,614	)
Investment in note receivable		-			100			-			(14,900	)
Excess distributions from unconsolidated affiliate		-			-			-			1,085
Net cash used by investing activities		(13,478	)		(18,664	)		(115,079	)		(116,504	)

Financing activities:
Dividends paid		(8,422	)		(15,849	)		(25,507	)		(48,907	)
Repurchase of common shares		(6,170	)		-			(21,052	)		-
Proceeds from issuance of common shares, net of tax withholdings		(22	)		(1,023	)		(7,073	)		(15,360	)
Net proceeds from short-term borrowings (1)		-			-			-			172,187
Distribution to Worthington Steel at Separation		-			(218,048	)		-			(218,048	)
Principal payments on long-term obligations		-			(150,133	)		-			(393,890	)
Dividend from Worthington Steel at Separation		-			150,000			-			150,000
Payments to noncontrolling interests		-			-			-			(1,920	)
Net cash used by financing activities		(14,614	)		(235,053	)		(53,632	)		(355,938	)

Increase (decrease) in cash and cash equivalents		29,039			(203,596	)		(21,381	)		(227,636	)
Cash and cash equivalents at beginning of period		193,805			430,906			244,225			454,946
Cash and cash equivalents at end of period (2)	$	222,844		$	227,310		$	222,844		$	227,310

(1)

Net proceeds in fiscal 2024 consisted of borrowings under Worthington Steel’s short-term credit facilities assumed by Worthington Steel in conjunction with the Separation.

(2)

The cash flows related to discontinued operations have not been segregated in our consolidated statements of cash flows. See “Note B – Discontinued Operations” for a summarization of significant non-cash items related to discontinued operations.

See condensed notes to consolidated financial statements.

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WORTHINGTON ENTERPRISES, INC.

CONDENSED Notes to Consolidated Financial Statements (UNAUDITED)

(In thousands, except common share and per common share amounts)

Note A – Basis of Presentation

Basis of Presentation

These interim unaudited consolidated financial statements include the accounts of Worthington Enterprises and its consolidated subsidiaries. Significant intercompany accounts and transactions have been eliminated.

We own an 80% controlling interest in Halo, which we acquired on February 1, 2024. Halo is consolidated with the equity owned by the other joint venture members shown as “noncontrolling interests” in our consolidated balance sheets, and the other joint venture members’ portions of net earnings and OCI are shown as net earnings or comprehensive income attributable to noncontrolling interests in our consolidated statements of earnings and consolidated statements of comprehensive income, respectively. Net earnings and total equity in periods prior to the Separation include the minority interest of Worthington Steel.

Investments in unconsolidated affiliates that we do not control are accounted for using the equity method with our proportionate share of income or loss recognized within equity income in our consolidated statements of earnings. See further discussion of our unconsolidated affiliates in “Note C – Investments in Unconsolidated Affiliates.”

These interim unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, which are of a normal and recurring nature except those which have been disclosed elsewhere in this Form 10-Q, necessary for a fair presentation of the consolidated financial statements for these interim periods, have been included. Operating results for the third quarter of fiscal 2025 are not necessarily indicative of the results that may be expected for the full fiscal year. For further information, refer to the consolidated financial statements and notes thereto included in the 2024 Form 10-K.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Separation of the Steel Processing Business

On December 1, 2023, we completed the spin-off of our former steel processing business into an independent publicly traded company, Worthington Steel, on a tax-free basis. Accordingly, the operating results and financial position, of the former steel processing business, except for the minority partner’s portion of noncontrolling interest and accumulated other comprehensive income, are reported as discontinued operations for all periods presented, as discussed in further detail in “Note B – Discontinued Operations.” All discussion within this Form 10-Q, including amounts, percentages and disclosures for all periods presented, reflect only our continuing operations unless otherwise noted.

In connection with the Separation, we entered into several agreements with Worthington Steel that govern our ongoing relationships, including a Trademark License Agreement, both a short and long-term Transition Services Agreement, and a Steel Supply and Services Agreement. Transactions governed by these agreements are considered to be related party transactions.

Pursuant to the Steel Supply and Services Agreement, Worthington Steel manufactures and supplies to us, at reasonable market rates, certain flat rolled steel products, and will provide us with certain related support services such as design, engineering/technical services, price risk management, scrap management, steel purchasing, supply chain optimization and product rework services, and other services at our request that are ancillary to the supply of the flat rolled steel products. Purchases from Worthington Steel under the Steel Supply and Services Agreement totaled $27,536 and $78,991 for the three and nine months ended February 28, 2025, respectively, and $20,274 for the three and nine months ended February 29, 2024. Accounts payable related to these purchases were $6,371 and $9,637 as of February 28, 2025 and May 31, 2024, respectively.

Activity under all other agreements between us and Worthington Steel related to the Separation was immaterial for the periods presented.

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Revenue Recognition

We recognize all revenue at the point in time the performance obligation is satisfied and control of the product is transferred to the customer upon shipment or delivery.

Receivables

We review our receivables on an ongoing basis to ensure that they are properly valued and collectible. The allowance for doubtful accounts is used to record the estimated risk of loss related to our customers’ inability to pay us. This allowance is maintained at a level that we consider appropriate based on factors that affect collectability, such as the financial health of our customers, historical trends of charge-offs and recoveries and current economic and market conditions. Our allowance for doubtful accounts increased from $343 at May 31, 2024, to $3,651 at February 28, 2025, primarily due to bankruptcy filings by two of our Consumer Products customers.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires the disaggregation of certain expense captions into specified categories in disclosures within the notes to the financial statements to provide enhanced transparency into the expense captions presented on the face of the income statement. We are currently evaluating the impact that the adoption of ASU 2024-03 will have on our related disclosures.

In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified that ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

Note B – Discontinued Operations

The following table summarizes the financial results from the discontinued operations of Worthington Steel for the nine months ended February 29, 2024. There were no discontinued operations for the three months ended February 29, 2024.


Net sales	$	1,670,027
Cost of goods sold		1,481,731
Gross profit		188,296
Selling, general and administrative expense		74,908
Impairment of long-lived assets		1,401
Separation costs		18,521
Operating income		93,466
Other income (expense):
Miscellaneous income, net		1,016
Interest expense, net		(3,706	)
Equity in net income of unconsolidated affiliate		12,735
Earnings before income taxes		103,511
Income tax expense		20,405
Net earnings		83,106
Net earnings attributable to noncontrolling interest		7,460
Net earnings attributable to controlling interest	$	75,646

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As permitted under GAAP, the cash flows of Worthington Steel have not been segregated in our consolidated statements of cash flows in the periods prior to the Separation. Accordingly, our consolidated statements of cash flows in periods prior to the Separation do not agree to the respective balance sheet changes, which reflect the reclassification of Worthington Steel as a discontinued operation.

The following table summarizes significant non-cash operating items and capital expenditures of discontinued operations included in the consolidated statement of cash flows for the nine months ended February 29, 2024. There were no discontinued operations for the three months ended February 29, 2024.


Significant non-cash operating items:
Depreciation and amortization	$	32,043
Impairment of long-lived assets		1,401
Equity in income of unconsolidated affiliate, net of distributions		(12,734	)
Stock-based compensation		3,472
Significant investing activities:
Investment in property, plant and equipment		(33,457	)
Acquisitions, net of cash acquired		(21,013	)
Significant financing activities:
Net proceeds from short-term borrowings		172,187

Note C – Investments in Unconsolidated Affiliates

Investments in joint ventures that we do not control, either through majority ownership or otherwise, are unconsolidated and accounted for using the equity method. At February 28, 2025, we held investments in the following unconsolidated joint ventures: ClarkDietrich (25%); Sustainable Energy Solutions (49%); WAVE (50%); and Workhorse (20%).

We received distributions from unconsolidated affiliates totaling $112,939 during the nine months ended February 28, 2025. We have received cumulative distributions from WAVE in excess of our investment balance, which resulted in a negative asset balance of $110,402 and $111,905 at February 28, 2025 and May 31, 2024, respectively. In accordance with the applicable accounting guidance, we have reclassified the negative balances to distributions in excess of investment in unconsolidated affiliate within our consolidated balance sheets. We will continue to record our equity in the net income of WAVE as a debit to the investment account, and if it becomes positive, it will again be shown as an asset on our consolidated balance sheets. If it becomes probable that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will immediately recognize any balance classified as a liability as income.

We use the cumulative earnings approach to determine the cash flow presentation of distributions from our unconsolidated joint ventures. Distributions received are included in our consolidated statements of cash flows as operating activities unless the cumulative distributions exceed our share of the cumulative equity in the net earnings of the joint venture. In such cases, the excess distributions are considered returns of investment and are classified as investing activities in our consolidated statements of cash flows. No distributions exceeded our share in any of our unconsolidated joint ventures during the third quarter of fiscal 2025.

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The following table presents condensed financial information for our unconsolidated affiliates for the three and nine months ended February 28, 2025 and February 29, 2024.


	Three Months Ended						Nine Months Ended
	February 28,			February 29,			February 28,			February 29,
	2025			2024			2025			2024
WAVE
Net sales	$	118,357		$	117,248		$	358,889		$	353,034
Operating income		54,681			55,998			168,111			164,140
Depreciation and amortization		1,436			853			3,797			3,456
Interest expense, net		4,032			4,228			12,676			12,953
Income tax expense		70			52			267			179
Net earnings		50,531			51,706			155,736			151,202

ClarkDietrich
Net sales	$	271,184		$	316,269		$	863,486		$	985,302
Operating income		36,942			70,167			108,521			190,949
Depreciation and amortization		3,997			3,978			11,804			11,266
Interest expense (income), net		6			151			(100	)		168
Income tax expense		312			489			898			977
Net earnings		37,944			71,164			111,840			193,069

Other (1)
Net sales	$	70,258		$	64,421		$	246,087		$	241,656
Operating income (loss)		(8,129	)		212			(7,945	)		21,693
Depreciation and amortization		1,972			2,105			7,535			7,015
Interest expense, net		243			564			992			2,099
Income tax expense (benefit)		(24	)		8			147			744
Net earnings (loss)		(8,432	)		(2,888	)		(7,665	)		16,477

——————————————————

(1)

Includes the summarized financial information of the Sustainable Energy Solutions joint venture and Workhorse.

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Note D – Restructuring and Other Expense, Net

We consider restructuring activities to be programs whereby we fundamentally change our operations, such as divestitures, closing or consolidating facilities, employee severance (including rationalizing headcount or making 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).

A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other expense, net financial statement caption in our consolidated statement of earnings for the nine months ended February 28, 2025, is summarized below:


	Balance at							Balance at
	May 31, 2024		Expense		Payments			February 28, 2025
Early retirement and severance	$	188	$	1,407	$	(1,193	)	$	402
Other restructuring charges		-		449		(449	)		-
	$	188		1,856	$	(1,642	)	$	402
Net loss on sale of assets				95
Stock-based compensation (1)				2,665
Change in fair value of Ragasco earnout (2)				4,536
Restructuring and other expense, net			$	9,152

(1)

Reflects non-cash stock-based compensation expense related to the accelerated vesting of certain outstanding equity awards held by our former CEO upon his retirement, effective November 1, 2024.

(2)

Reflects the change in fair value of the contingent liability associated with the Ragasco earnout arrangement covering the 12-month period ended December 31, 2024. See “Note N – Acquisitions” for additional information.

The total liability associated with our restructuring activities as of February 28, 2025 is expected to be paid in the next 12 months.

Note E – Contingent Liabilities and Commitments

Legal Proceedings

We are defendants in certain legal actions. In the opinion of management, the outcome of these actions, which is not clearly determinable at the present time, would not significantly affect our consolidated financial position or future results of operations. We also believe that environmental issues will not have a material effect on our capital expenditures, consolidated financial position or future results of operations.

Note F – Guarantees

We do not have guarantees that we believe are reasonably likely to have a material current or future effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

At February 28, 2025, we also had in place $9,500 of outstanding stand-by letters of credit issued to third-party service providers. The fair value of these guaranteed instruments, based on premiums paid, was not material and no amounts were drawn against them at February 28, 2025.

Note G – Debt

Our multi-year revolving Credit Facility is scheduled to mature on September 27, 2028. Borrowings under the Credit Facility have maturities of up to one year. We have the option to borrow at rates equal to an applicable margin over the overnight bank funding rate, the prime rate of PNC Bank, National Association or the adjusted daily simple SOFR. The applicable margin is determined by our total leverage ratio. There were no borrowings outstanding under the Credit Facility at February 28, 2025 or May 31, 2024, leaving $500,000 available for use.

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Note H – Other Comprehensive Income (Loss)

The following table summarizes the tax effects on each component of OCI for the periods presented:


	Three Months Ended
	February 28,									February 29,
	2025									2024
	Before-Tax			Tax			Net-of-Tax			Before-Tax			Tax			Net-of-Tax
Foreign currency translation	$	(1,519	)	$	(1,185	)	$	(2,704	)	$	(615	)	$	(85	)	$	(700	)
Pension liability adjustment		7			154			161			8,927			(2,122	)		6,805
Cash flow hedges		694			(146	)		548			564			(346	)		218
Other comprehensive income (loss)	$	(818	)	$	(1,177	)	$	(1,995	)	$	8,876		$	(2,553	)	$	6,323


	Nine Months Ended
	February 28,									February 29,
	2025									2024
	Before-Tax			Tax			Net-of-Tax			Before-Tax		Tax			Net-of-Tax
Foreign currency translation	$	(4,433	)	$	(1,006	)	$	(5,439	)	$	1,555	$	88		$	1,643
Pension liability adjustment		16			151			167			8,927		(2,125	)		6,802
Cash flow hedges		575			(134	)		441			9,140		(2,224	)		6,916
Other comprehensive income (loss)	$	(3,842	)	$	(989	)	$	(4,831	)	$	19,622	$	(4,261	)	$	15,361

Note I – Changes in Equity

The following tables summarize the changes in equity by component and in total for the periods presented:


	Controlling Interest
	Additional
	Paid-in			AOCI,			Retained						Noncontrolling
	Capital			Net of Tax			Earnings			Subtotal			Interests			Total
Balance at May 31, 2024	$	299,033		$	454		$	589,392		$	888,879		$	2,133		$	891,012
Net earnings (loss)		-			-			24,253			24,253			(245	)		24,008
Other comprehensive income		-			484			-			484			-			484
Common shares issued, net of withholding tax		(3,158	)		-			-			(3,158	)		-			(3,158	)
Common shares in non-qualified plans		32			-			-			32			-			32
Stock-based compensation		6,216			-			-			6,216			-			6,216
Repurchases and retirement of common shares		(884	)		-			(5,919	)		(6,803	)		-			(6,803	)
Cash dividends declared		-			-			(8,550	)		(8,550	)		-			(8,550	)
Balance at August 31, 2024	$	301,239		$	938		$	599,176		$	901,353		$	1,888		$	903,241
Net earnings (loss)		-			-			28,260			28,260			(251	)		28,009
Other comprehensive loss		-			(3,320	)		-			(3,320	)		-			(3,320	)
Common shares issued, net of withholding tax		(3,893	)		-			-			(3,893	)		-			(3,893	)
Common shares in non-qualified plans		56			-			-			56			-			56
Stock-based compensation		5,539			-			-			5,539			-			5,539
Repurchases and retirement of common shares		(1,212	)		-			(6,867	)		(8,079	)		-			(8,079	)
Cash dividends declared		-			-			(8,595	)		(8,595	)		-			(8,595	)
Balance at November 30, 2024	$	301,729		$	(2,382	)	$	611,974		$	911,321		$	1,637		$	912,958
Net earnings (loss)		-			-			39,663			39,663			(324	)		39,339
Other comprehensive loss		-			(1,995	)		-			(1,995	)		-			(1,995	)
Common shares issued, net of withholding tax		(22	)		-			-			(22	)		-			(22	)
Common shares in non-qualified plans		33			-			-			33			-			33
Stock-based compensation		2,890			-			-			2,890			-			2,890
Repurchases and retirement of common shares		(920	)		-			(5,250	)		(6,170	)		-			(6,170	)
Cash dividends declared		-			-			(8,512	)		(8,512	)		-			(8,512	)
Balance at February 28, 2025	$	303,710		$	(4,377	)	$	637,875		$	937,208		$	1,313		$	938,521

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	Controlling Interest
	Additional
	Paid-in			AOCI,			Retained						Noncontrolling
	Capital			Net of Tax			Earnings			Subtotal			Interests			Total
Balance at May 31, 2023	$	290,799		$	(23,179	)	$	1,428,391			1,696,011		$	125,617		$	1,821,628
Net earnings		-			-			96,106			96,106			3,597			99,703
Other comprehensive loss		-			(5,408	)		-			(5,408	)		-			(5,408	)
Common shares issued, net of withholding tax		(5,130	)		-			-			(5,130	)		-			(5,130	)
Common shares in non-qualified plans		130			-			-			130			-			130
Stock-based compensation		8,995			-			-			8,995			-			8,995
Cash dividends declared		-			-			(16,081	)		(16,081	)		-			(16,081	)
Dividends to noncontrolling interests		-			-			-			-			(1,921	)		(1,921	)
Balance at August 31, 2023	$	294,794		$	(28,587	)	$	1,508,416		$	1,774,623		$	127,293		$	1,901,916
Net earnings		-			-			24,302			24,302			3,865			28,167
Other comprehensive income		-			14,446			-			14,446			-			14,446
Common shares issued, net of withholding tax		(9,207	)		-			-			(9,207	)		-			(9,207	)
Common shares in non-qualified plans		195			-			-			195			-			195
Stock-based compensation		4,511			-			-			4,511			-			4,511
Cash dividends declared		-			-			(16,061	)		(16,061	)		-			(16,061	)
Balance at November 30, 2023	$	290,293		$	(14,141	)	$	1,516,657		$	1,792,809		$	131,158		$	1,923,967
Net earnings		-			-			22,000			22,000			-			22,000
Other comprehensive income		-			6,323			-			6,323			-			6,323
Common shares issued, net of withholding tax		(1,023	)		-			-			(1,023	)		-			(1,023	)
Common shares in non-qualified plans		53			-			-			53			-			53
Stock-based compensation		2,071			-			-			2,071			-			2,071
Acquisition of Halo		-			-			-			-			2,346			2,346
Separation of Worthington Steel		-			(717	)		(901,370	)		(902,087	)		(131,158	)		(1,033,245	)
Cash dividends declared		-			-			(8,050	)		(8,050	)		-			(8,050	)
Balance at February 29, 2024	$	291,394		$	(8,535	)	$	629,237		$	912,096		$	2,346		$	914,442

The following table summarizes the changes in AOCI for the periods presented:


	Foreign			Pension
	Currency			Liability			Cash Flow
	Translation			Adjustment			Hedges			AOCI
Balance at May 31, 2024	$	(669	)	$	(441	)	$	1,564		$	454
OCI before reclassifications		(4,433	)		16			207			(4,210	)
Reclassification adjustments to net earnings (1)		-			-			368			368
Income tax effect		(1,006	)		151			(134	)		(989	)
Balance at February 28, 2025	$	(6,108	)	$	(274	)	$	2,005		$	(4,377	)


	Foreign			Pension
	Currency			Liability			Cash Flow
	Translation			Adjustment			Hedges			AOCI
Balance at May 31, 2023	$	(22,123	)	$	(1,730	)	$	674		$	(23,179	)
OCI before reclassifications		1,555			60			14,893			16,508
Reclassification adjustments to net earnings (1)(2)		-			8,867			(5,753	)		3,114
Income tax effect		88			(2,125	)		(2,224	)		(4,261	)
Separation of Worthington Steel		10,874			(5,984	)		(5,607	)		(717	)
Balance at February 29, 2024	$	(9,606	)	$	(912	)	$	1,983		$	(8,535	)

——————————————————

(1)

The statement of earnings classification of amounts reclassified to net income for cash flow hedges is disclosed in “Note O – Derivative Financial Instruments and Hedging Activities.”

(2)

Reflects the acceleration of deferred pension costs in AOCI related to separate pension lift-out transactions completed in February 2024 and August 2022, respectively, to transfer the pension benefit obligation under The Gerstenslager Company Bargaining Unit Employees’ Pension Plan to third-party insurance companies.

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On March 20, 2019, the Board authorized the repurchase of up to 6,600,000 common shares. On March 24, 2021, the Board authorized the repurchase of up to an additional 5,618,464 common shares, increasing the total number of common shares then authorized for repurchase to 10,000,000 (net of previously repurchased common shares). During the nine months ended February 28, 2025, we repurchased a total of 500,000 common shares under these authorizations leaving 5,565,000 common shares available for repurchase at February 28, 2025.

Common shares may be repurchased from time to time, with consideration given to the market price of the common shares, the nature of other investment opportunities, cash flows from operations, general economic conditions and other relevant considerations. Repurchases may be made on the open market or through privately-negotiated transactions.

Note J – Stock-Based Compensation

Non-Qualified Stock Options

During the nine months ended February 28, 2025, we granted non-qualified stock options covering a total of 54,200 common shares under our stock-based compensation plans. The weighted average exercise price of these non-qualified stock options was $44.38 per common share and was determined based on the closing market price of the underlying common shares at the respective grant date. The weighted average grant date fair value of these non-qualified stock options, based on the Black-Scholes option-pricing model, was $16.38 per common share, or $888 in total, and will be recognized on a straight-line basis over the three-year vesting period, net of any forfeitures. The weighted average fair value of stock options granted during the nine months ended February 28, 2025 was based on the following assumptions:


Dividend yield	1.34	%
Expected volatility	36.90	%
Risk-free interest rate	3.97	%
Expected term (years)	6.0

Due to the impact of the Separation on the comparability to the historical prices of the common shares, we are unable to use the historical volatility of the common shares to determine the expected volatility. Accordingly, we use a comparable peer group to determine the expected volatility of the common shares. The risk-free interest rate is based on the U.S. Treasury strip rate for the expected term of the non-qualified stock options. The expected term was developed using historical exercise experience.

Service-Based Restricted Common Shares

During the nine months ended February 28, 2025 we granted an aggregate of 291,295 service-based restricted common shares under our stock-based compensation plans, which generally cliff vest three years from the grant date. The weighted average grant date fair value of these restricted common shares, based on the weighted average closing price of the underlying common shares on the grant date, was $44.88 per share, or $13,073 in total, and will be recognized on a straight-line basis over the three-year vesting period, net of any forfeitures.

Performance Share Awards

Performance shares awarded under our stock-based compensation plans are earned based on the level of achievement with respect to a set of measurement criteria for corporate and business unit targets for the three-year periods ending May 31, 2025, 2026, and 2027.

These performance share awards will be paid, to the extent earned, in common shares in the fiscal quarter following the end of the applicable three-year performance period. The fair values of our performance shares are determined by the closing market prices of the underlying common shares at the respective grant dates of the performance shares and the pre-tax stock-based compensation expense is based on our periodic assessment of the probability of the targets being achieved and our estimate of the number of common shares that will ultimately be issued. The ultimate pre-tax stock-based compensation expense to be recognized over the three-year performance period on all tranches will vary based on our periodic assessment of the probability of the targets being achieved. During the nine months ended February 28, 2025, we granted performance share awards covering an aggregate of 42,100 common shares (at target levels). The calculated pre-tax stock-based compensation expense for these performance shares is $1,868 (at target levels). The ultimate pre-tax stock-based compensation expense to be recognized over the three-year performance period on all tranches will vary based on our periodic assessment of the probability of the targets being achieved.

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Note K – Income Taxes

Income tax expense for the nine months ended February 28, 2025 and February 29, 2024 reflected estimated annual ETRs of 24.4% and 30.8%, respectively. Income tax expense in the prior year period was impacted by certain discrete tax items triggered by the Separation, which were primarily non-deductible transaction costs. Management is required to estimate the annual ETR based upon its forecast of annual pre-tax income for domestic and foreign operations. Our actual ETR for fiscal 2025 could be materially different from the forecasted rate as of February 28, 2025.

Note L – Earnings per Share

The following table sets forth the computation of basic and diluted EPS attributable to controlling interest for the periods presented:


	Three Months Ended				Nine Months Ended
	February 28,		February 29,		February 28,		February 29,
	2025		2024		2025		2024
Numerator (basic & diluted):
Net earnings from continuing operations attributable to controlling interest	$	39,663	$	22,000	$	92,176	$	66,763
Denominator (shares in thousands):
Basic EPS from continuing operations - weighted average common shares		49,377		49,315		49,443		49,113
Effect of dilutive securities		604		1,102		728		1,158
Diluted EPS from continuing operations - weighted average common shares		49,981		50,417		50,171		50,271

Basic EPS from continuing operations	$	0.80	$	0.45	$	1.86	$	1.36
Diluted EPS from continuing operations	$	0.79	$	0.44	$	1.84	$	1.33

Stock options covering an aggregate of 94,521 and 54,686 common shares for the three months ended February 28, 2025 and February 29, 2024, respectively, and 104,608 and 61,141 for the nine months ended February 28, 2025 and February 29, 2024, respectively, have been excluded from the computation of diluted EPS because the effect would have been antidilutive for those periods.

Note M – Segment Operations

Our operating segments reflect the way in which internally-reported financial information is regularly reviewed by the CODM to analyze performance, make decisions and allocate resources. We have identified our CEO as our CODM. Our CODM evaluates segment performance on the basis of adjusted EBITDA from continuing operations, as described in the “Use of Non-GAAP Financial Measures and Definitions” section. Factors used to identify operating segments include the nature of the products provided by each business, the management reporting structure, similarity of economic characteristics and certain quantitative measures, as prescribed by GAAP. Our operations are organized under two operating segments: Consumer Products and Building Products. Our former Sustainable Energy Solutions operating segment is presented within Unallocated Corporate and Other in periods prior to its deconsolidation on May 29, 2024. In periods subsequent to the deconsolidation transaction, our retained 49% interest is accounted for under the equity method of accounting, as discussed in “Note C – Investments in Unconsolidated Affiliates.” Unallocated Corporate and Other also includes certain assets and liabilities (e.g., public debt) held at the corporate level as well as general corporate expenses that are not directly attributable to our business operations and are administrative in nature, such as public company and other governance-related costs that benefit the organization as a whole.

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The following tables present summarized financial information for our reportable segments and Unallocated Corporate and Other for the periods indicated.


	Three Months Ended February 28, 2025
					Total		Unallocated
	Consumer		Building		Reportable		Corporate and
	Products		Products		Segments		Other			Total
Net sales	$	139,714	$	164,810	$	304,524	$	-		$	304,524
Capital expenditures		8,775		3,413		12,188		516			12,704
Depreciation and amortization		4,277		6,526		10,803		1,147			11,950
Restructuring and other expense, net		-		579		579		4,795			5,374
Equity income (loss)		-		34,499		34,499		(2,418	)		32,081
Adjusted EBITDA from continuing operations		28,625		53,187		81,812		(8,033	)		73,779


	Three Months Ended February 29, 2024
					Total		Unallocated
	Consumer		Building		Reportable		Corporate and
	Products		Products		Segments		Other			Total
Net sales	$	133,181	$	148,190	$	281,371	$	35,384		$	316,755
Capital expenditures		4,806		3,952		8,758		1,259			10,017
Depreciation and amortization		3,960		5,984		9,944		2,005			11,949
Restructuring and other expense, net		-		84		84		614			698
Separation costs		-		-		-		2,999			2,999
Equity income (loss)		-		43,813		43,813		(578	)		43,235
Adjusted EBITDA from continuing operations		25,649		53,059		78,708		(11,837	)		66,871


	Nine Months Ended February 28, 2025
					Total		Unallocated
	Consumer		Building		Reportable		Corporate and
	Products		Products		Segments		Other			Total
Net sales	$	374,057	$	461,821	$	835,878	$	-		$	835,878
Capital expenditures		19,508		11,470		30,978		6,516			37,494
Depreciation and amortization		12,872		19,392		32,264		3,443			35,707
Restructuring and other expense, net		-		1,382		1,382		7,770			9,152
Equity income (loss)		-		105,438		105,438		(3,309	)		102,129
Adjusted EBITDA from continuing operations		61,884		140,101		201,985		(23,556	)		178,429


	Nine Months Ended February 29, 2024
					Total		Unallocated
	Consumer		Building		Reportable		Corporate and
	Products		Products		Segments		Other			Total
Net sales	$	369,923	$	465,421	$	835,344	$	91,558		$	926,902
Capital expenditures		10,533		16,209		26,742		13,098			39,840
Depreciation and amortization		12,065		17,910		29,975		6,263			36,238
Restructuring and other expense, net		-		704		704		-			704
Separation costs		-		-		-		12,465			12,465
Equity income		-		124,032		124,032		3,296			127,328
Adjusted EBITDA from continuing operations		52,537		158,501		211,038		(23,209	)		187,829

The following table reconciles segment adjusted EBITDA from continuing operations to earnings before income taxes from continuing operations for the periods indicated.

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	Three Months Ended						Nine Months Ended
	February 28,			February 28,			February 28,			February 29,
	2025			2024			2025			2024
Segment adjusted EBITDA from continuing operations	$	81,812		$	78,708		$	201,985		$	211,038
Reconciling items:
Unallocated Corporate and Other		(8,033	)		(11,837	)		(23,556	)		(23,209	)
Depreciation and amortization		(11,950	)		(11,949	)		(35,707	)		(36,238	)
Interest expense, net		(628	)		(50	)		(2,150	)		(1,596	)
Stock-based compensation (1)		(2,924	)		(2,601	)		(10,122	)		(9,822	)
Corporate costs eliminated at Separation		-			-			-			(19,343	)
Restructuring and other expense, net (2)		(5,374	)		(698	)		(9,152	)		(704	)
Separation costs		-			(2,999	)		-			(12,465	)
Pension settlement charge		-			(8,103	)		-			(8,103	)
Loss on extinguishment of debt		-			-			-			(1,534	)
Gain on sale of assets in equity income		-			-						2,780
Net loss attributable to noncontrolling interests		(324	)		-			(820	)		-
Earnings before income taxes from continuing operations	$	52,579		$	40,471		$	120,478		$	100,804

(1)

(2)

Total assets for each of our reportable segments at the dates indicated were as follows:


	February 28,		May 31,
	2025		2024
Consumer Products	$	588,872	$	557,826
Building Products		754,126		672,723
Total reportable segments		1,342,998		1,230,549
Unallocated Corporate and Other		339,006		408,088
Total assets	$	1,682,004	$	1,638,637

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Note N – Acquisitions

On June 3, 2024, we acquired Ragasco, a leading global manufacturer of composite propane cylinders based in Norway. The total purchase price, after adjustment for final working capital, consisted of cash consideration of $101,424, of which $11,343 was on deposit at May 31, 2024, and contingent consideration in the form of an earnout agreement with an estimated acquisition date fair value of $7,139. During the three months ended February 28, 2025, the fair value of the earnout increased by $4,536, resulting in a charge to restructuring and other expense, net in our consolidated statement of earnings. At February 28, 2025, the total earnout liability was $11,230 and is expected to be settled in the fourth quarter of fiscal 2025. Ragasco operates as part of the Building Products operating segment and its results have been included in our consolidated statements of earnings since the date of acquisition. Pro forma results, including the acquired business since the beginning of fiscal 2023, would not be materially different from reported results.

The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under accounting rules (e.g., assembled workforce) or of immaterial value. The purchase price also includes strategic and synergistic benefits (i.e., investment value) specific to us, which resulted in a purchase price in excess of the fair value of the identifiable net assets. This additional investment value resulted in goodwill, which is not expected to be deductible for income tax purposes.

The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. In connection with the acquisition of Ragasco, we identified and valued the following intangible assets:


			Useful Life
Category	Amount		(Years)
Trade name	$	4,379	10
Technological know-how		14,659	10
Customer relationships		12,660	15
Total acquired identifiable intangible assets	$	31,698

The following table summarizes the consideration paid and the final fair value assigned to the assets and liabilities assumed at the acquisition date.


				Measurement
	Preliminary			Period			Final
	Valuation			Adjustments			Valuation
Cash and cash equivalents	$	1,925		$	-		$	1,925
Accounts receivable		8,554			-			8,554
Inventory		16,403			-			16,403
Other current assets		990			-			990
Property, plant and equipment		27,325			-			27,325
Operating lease assets		8,834			-			8,834
Deferred income taxes		365			-			365
Intangible assets		32,840			(1,142	)		31,698
Total identifiable assets		97,236			(1,142	)		96,094
Accounts payable		(4,885	)		-			(4,885	)
Current operating lease liability		(980	)		-			(980	)
Accrued expenses		(6,344	)		-			(6,344	)
Noncurrent operating lease liability		(7,886	)		-			(7,886	)
Deferred income taxes		(9,226	)		251			(8,975	)
Other liabilities		(100	)		-			(100	)
Net identifiable assets		67,815			(891	)		66,924
Goodwill		40,748			891			41,639
Total purchase price		108,563			-			108,563
Less: Fair value of earnout		7,139			-			7,139
Cash purchase price	$	101,424		$	-		$	101,424

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Note O – Derivative Financial Instruments and Hedging Activities

We primarily utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative financial instruments include interest rate risk, foreign currency exchange risk and commodity price risk. While certain of our derivative financial instruments are designated as hedging instruments, we also enter into derivative financial instruments that are designed to hedge a risk, but are not designated as hedging instruments and therefore do not qualify for hedge accounting. These derivative financial instruments are adjusted to current fair value through earnings at the end of each period.

Interest Rate Risk Management – We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities along with both fixed-rate and variable-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs.

Foreign Currency Exchange Rate Risk Management – We conduct business in several major international currencies and are, therefore, subject to risks associated with changing foreign currency exchange rates. We enter into various contracts that change in value as foreign currency exchange rates change to manage this exposure. Such contracts limit exposure to both favorable and unfavorable foreign currency exchange rate fluctuations. The translation of foreign currencies into U.S. dollars also subjects us to exposure related to fluctuating foreign currency exchange rates; however, derivative financial instruments are not used to manage this risk.

Commodity Price Risk Management – We are exposed to changes in the price of certain commodities, including steel, natural gas, copper, zinc, aluminum and other raw materials, and our utility requirements. Our objective is to reduce earnings and cash flow volatility associated with forecasted purchases and sales of these commodities to allow management to focus its attention on business operations. Accordingly, we enter into derivative financial instruments to manage the associated price risk.

We are exposed to counterparty credit risk on all of our derivative financial instruments. Accordingly, we have established and maintain strict counterparty credit guidelines. We have credit support agreements in place with certain counterparties to limit our credit exposure. These agreements require either party to post cash collateral if its cumulative market position exceeds a predefined liability threshold. Amounts posted to the margin accounts accrue interest at market rates and are required to be refunded in the period in which the cumulative market position falls below the required threshold. We do not have significant exposure to any one counterparty and management believes the risk of loss is remote and, in any event, would not be material.

Refer to “Note P – Fair Value Measurements” for additional information regarding the accounting treatment for our derivative financial instruments, as well as how fair value is determined. The following table summarizes the fair value of our derivative financial instruments and the respective lines in which they were recorded in the consolidated balance sheet at February 28, 2025 and May 31, 2024:


	Fair Value of Assets					Fair Value of Liabilities
	Balance					Balance
	Sheet	February 28,		May 31,		Sheet	February 28,		May 31,
	Location	2025		2024		Location	2025		2024
Derivatives designated as hedging instruments:
Commodity contracts	Receivables	$	1,030	$	601	Accounts payable	$	-	$	83
Commodity contracts	Other assets		-		-	Other liabilities		-		21
Foreign currency exchange contracts	Receivables		-		-	Accounts payable		74		-
Subtotal			1,030		601			74		104

Derivatives not designated as hedging instruments:
Commodity contracts	Receivables	$	304	$	319	Accounts payable	$	54	$	69
Foreign currency exchange contracts	Receivables		-		-	Accounts payable		1,220		1,248
Subtotal			304		319			1,274		1,317

Total derivative financial instruments		$	1,334	$	920		$	1,348	$	1,421

The amounts in the table above reflect the fair value of our derivative financial instruments on a net basis where allowed under master netting arrangements. Had these amounts been recognized on a gross basis, the impact would have been an increase in receivables with a corresponding increase in accounts payable of $583 and $391 at February 28, 2025 and May 31, 2024, respectively.

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Cash Flow Hedges

We enter into derivative financial instruments to hedge our exposure to changes in cash flows attributable to interest rate and commodity price fluctuations associated with certain forecasted transactions. These derivative financial instruments are designated and qualify as cash flow hedges. Accordingly, the effective portion of the gain or loss on each of these derivative financial instruments is reported as a component of OCI and reclassified into earnings in the same line associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings.

The following table summarizes the net notional positions of our cash flow hedges at February 28, 2025:


	Notional
	Amount		Maturity Date(s)
Commodity contracts	$	8,163	March 2025 - December 2025
Foreign currency exchange contracts	$	2,485	March 2025 - December 2025

The following table summarizes the gain (loss) recognized in OCI and the gain (loss) reclassified from AOCI into net earnings for derivative financial instruments designated as cash flow hedges for the periods presented:


				Location of	Gain (Loss)
	Gain (Loss)			Gain (Loss)	Reclassified
	Recognized			Reclassified from AOCI	from AOCI
	in OCI			into Net Earnings	into Net Earnings
For the three months ended February 28, 2025:
Commodity contracts	$	1,039		Cost of goods sold	$	219
Interest rate contracts		-		Interest expense, net		52
Foreign currency exchange contracts		(74	)	Miscellaneous income (expense), net		-
Total	$	965			$	271

For the three months ended February 29, 2024:
Commodity contracts	$	1,944		Cost of goods sold	$	1,328
Interest rate contracts		-		Interest expense, net		52
Total	$	1,944			$	1,380

For the nine months ended February 28, 2025:
Commodity contracts	$	281		Cost of goods sold	$	(523	)
Interest rate contracts		-		Interest expense, net		155
Foreign currency exchange contracts		(74	)	Miscellaneous income (expense), net		-
Total	$	207			$	(368	)

For the nine months ended February 29, 2024:
Commodity contracts	$	3,553		Cost of goods sold	$	(921	)
Interest rate contracts		-		Loss on extinguishment of debt		(642	)
Interest rate contracts		-		Interest expense, net		136
Foreign currency exchange contracts		(11	)	Miscellaneous income (expense), net		(44	)
Total	$	3,542			$	(1,471	)

The estimated amount of net gains recognized in AOCI at February 28, 2025, expected to be reclassified into net earnings within the succeeding 12 months is $1,002 (net of tax of $321). This amount was computed using the fair value of the cash flow hedges at February 28, 2025, and will change before actual reclassification from OCI to net earnings during the fiscal years ending May 31, 2025 and May 31, 2026.

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Net Investment Hedges

We have designated our Euro-denominated debt held in the U.S. with an initial notional amount of €91,700 ($99,479) as a non-derivative net investment hedge of our foreign operations in Portugal. Accordingly, the foreign currency effects resulting from the remeasurement of this debt have been deferred in AOCI as an offset to the translation of our net investment in Portugal. A remeasurement gain of $1,842 and $4,335 was deferred in AOCI during the three and nine months ended February 28, 2025. There was no foreign currency gain (loss) recognized in AOCI for the non-derivative instruments designated as net investment hedges in the prior year period.

Economic (Non-designated) Hedges

We enter into foreign currency exchange contracts to manage our foreign currency exchange rate exposure related to inter-company and financing transactions that do not meet the requirements for hedge accounting treatment. We also enter into certain commodity contracts that do not qualify for hedge accounting treatment. Accordingly, these derivative financial instruments are adjusted to current market value at the end of each period through gain (loss) recognized in earnings.

The following table summarizes the net notional positions of our economic (non-designated) derivative financial instruments outstanding at February 28, 2025:


	Notional
	Amount		Maturity Date(s)
Commodity contracts	$	715	March 2025 - November 2025
Foreign currency exchange contracts	$	53,598	March 2025 - December 2025

The following table summarizes the gain (loss) recognized in earnings for economic (non-designated) derivative financial instruments for the periods presented:


		Gain (Loss)
		Recognized in Earnings for the
		Three Months Ended
	Location of Gain (Loss)	February 28,			February 29,
	Recognized in Earnings	2025			2024
Commodity contracts	Cost of goods sold	$	108		$	311
Foreign currency exchange contracts	Miscellaneous income (expense), net		(531	)		(82	)
Total		$	(423	)	$	229


		Gain (Loss)
		Recognized in Earnings
		Nine Months Ended
	Location of Gain (Loss)	February 28,		February 29,
	Recognized in Earnings	2025		2024
Commodity contracts	Cost of goods sold	$	479	$	(832	)
Foreign currency exchange contracts	Miscellaneous income (expense), net		27		(3	)
Total		$	506	$	(835	)

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Note P – Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability. Current accounting guidance establishes a three-tier fair value hierarchy as a basis for considering such assumptions and for classifying the inputs used in the valuation methodologies. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair values are as follows:

•

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

•

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

•

Level 3 - Unobservable inputs for the asset or liability and that are significant to the fair value of the assets and liabilities (i.e., allowing for situations in which there is little or no market activity for the asset or liability at the measurement date).

Recurring Fair Value Measurements

At February 28, 2025, our assets and liabilities measured at fair value on a recurring basis were as follows:


	(Level 1)		(Level 2)		(Level 3)		Totals
Assets (1)
Derivative financial instruments	$	-	$	1,334	$	-	$	1,334
Total assets	$	-	$	1,334	$	-	$	1,334

Liabilities (1)
Derivative financial instruments	$	-	$	1,348	$	-	$	1,348
Ragasco earnout liability (2)		-		-		11,230		11,230
Total liabilities	$	-	$	1,348	$	11,230	$	12,578

At May 31, 2024, our assets and liabilities measured at fair value on a recurring basis were as follows:


	(Level 1)		(Level 2)		(Level 3)		Totals
Assets (1)
Derivative financial instruments	$	-	$	920	$	-	$	920
Total assets	$	-	$	920	$	-	$	920

Liabilities (1)
Derivative financial instruments	$	-	$	1,421	$	-	$	1,421
Total liabilities	$	-	$	1,421	$	-	$	1,421

——————————————————

(1)

The fair value of our derivative financial instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note O – Derivative Financial Instruments and Hedging Activities” for additional information regarding our use of derivative financial instruments.

(2)

During the three months ended February 28, 2025, the fair value of the Ragasco earnout liability increased to $11,230. The fair value measurements were primarily based on inputs that are not observable in the market and are therefore classified in Level 3 of the fair value hierarchy. The change in fair value was recorded in restructuring and other expense, net in our consolidated statement of earnings. See “Note D – Restructuring and Other Expense, Net” and “Note N – Acquisitions” for additional information.

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Non-Recurring Fair Value Measurements

At February 28, 2025, there were no assets measured at fair value on a non-recurring basis on our consolidated balance sheet.

At May 31, 2024, our assets measured at fair value on a non-recurring basis were as follows:


	(Level 1)		(Level 2)		(Level 3)		Totals
Assets
Investment in note receivable (1)	$	-	$	5,000	$	-	$	5,000
Investment in unconsolidated affiliate (2)		-		-		31,367		31,367
Total assets	$	-	$	5,000	$	31,367	$	36,367

——————————————————

(1)

Reflects the write-down of an investment in notes receivable that was determined to be other than temporarily impaired.

(2)

On May 29, 2024, in connection with the contribution of the net assets of our former Sustainable Energy Solutions operating segment to the newly-formed Sustainable Energy Solutions joint venture, we obtained a 49% minority ownership interest in the joint venture. In accordance with the applicable accounting guidance, our minority ownership interest in the Sustainable Energy Solutions joint venture was recorded at its acquisition date fair value of $31,367.

The fair value of non-derivative financial instruments included in the carrying amounts of cash and cash equivalents, receivables, income taxes receivable, other assets, accounts payable, accrued compensation, contributions to employee benefit plans and related taxes, other accrued items, income taxes payable and other liabilities approximate carrying value due to their short-term nature. The fair value of long-term debt, including current maturities, based upon models utilizing market observable (Level 2) inputs and credit risk, was $265,352 and $257,866 at February 28, 2025 and May 31, 2024, respectively. The carrying amount of long-term debt, including current maturities, was $293,921 and $298,133 at February 28, 2025 and May 31, 2024, respectively.

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Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless otherwise indicated, all Note references contained in this MD&A refer to the Condensed Notes to Consolidated Financial Statements included in “Part I – Item 1. – Financial Statements” of this Form 10-Q. All amounts are presented in millions except common share and per common share amounts.

Introduction

The following discussion and analysis of market and industry trends, business developments, and the results of our operations and financial position should be read in conjunction with our consolidated financial statements and notes thereto included in “Part I – Item 1. – Financial Statements” of this Form 10-Q. The 2024 Form 10-K includes additional information about our business, operations and consolidated financial position and should be read in conjunction with this Form 10-Q. This MD&A is designed to provide a reader with material information relevant to an assessment of our financial condition and results of operations and to allow investors to view the Company from the perspective of management. The results of operations contained in this MD&A include all of our operations, including our former steel processing business. Our historical results have been restated to reflect the operations of Worthington Steel as a discontinued operation in periods prior to the Separation as discussed in “Note A – Basis of Presentation.”

Business Overview

Worthington Enterprises is a market-leading designer and manufacturer of innovative products and services, including manufactured metal products, organized around attractive end markets under two separate and distinct reportable operating segments: Consumer Products and Building Products. Our primary goal is to create value for our shareholders. Built on the successful foundation of the Worthington Business System, we apply a disciplined approach to capital deployment and seek to grow earnings by optimizing our operations and supply chain, developing and commercializing new products and applications, and pursuing strategic investments and acquisitions.

Our Consumer Products business has a diverse product offering in the tools, outdoor living and celebrations categories, including propane-filled cylinders for torches and related accessories, handheld torches, specialized hand tools and instruments, drywall tools (collectively, tools), propane-filled camping cylinders helium-filled balloon kits, and accessories and gas grills and pizza ovens sold primarily to mass merchandisers, retailers and distributors. Sales to one customer in Consumer Products accounted for 13.0% of our consolidated net sales in the third quarter of fiscal 2025.

Our Building Products business is a market-leading provider of pressurized containment solutions, providing critical components in the residential, non-residential, and repair and remodel end markets through essential categories, such as heating, cooking, cooling and water, and, through our unconsolidated joint ventures, WAVE and ClarkDietrich, ceiling suspension systems and light gauge metal framing products, respectively. Our pressurized containment solutions include refrigerant and LPG cylinders, well water and expansion tanks, and other specialty products which are generally sold to gas producers and distributors.

Separation of the Steel Processing Business

On December 1, 2023, we completed the Separation of our former steel processing business into a separate public company in a transaction intended to qualify as tax free to our shareholders, which was accomplished via the Distribution. Worthington Steel is an independent public company trading under the symbol “WS” on the NYSE. Following the Separation, Worthington Industries, Inc. changed its name to Worthington Enterprises, Inc. and its common shares continue trading on the NYSE under the ticker symbol “WOR.” In connection with the Separation, we received a one-time cash dividend of $150.0 million from Worthington Steel, the proceeds of which were used to pay off in full the 2024 Notes. The dividend was funded by cash drawn on the Worthington Steel Credit Facility of $175.0 million immediately prior to the Distribution.

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Acquisitions and Divestitures

On June 3, 2024, we acquired Ragasco, a leading global manufacturer of composite propane cylinders based in Norway. The purchase price included cash consideration of approximately $101.4 million and contingent consideration in the form of an earnout agreement with an estimated fair value of $11.2 million at February 28, 2025. See “Note N – Acquisitions” for additional information.

On May 29, 2024, we became a noncontrolling equity partner in a new unconsolidated joint venture with Hexagon, a leading global manufacturer of Type 4 composite cylinders used for storing gas under high-pressure, by selling 51% of the nominal share capital of our former Sustainable Energy Solutions operating segment in Europe. Pursuant to the transaction, Hexagon acquired a 49% stake in the joint venture for approximately $11.5 million, after adjusting for closing cash and preliminary net working capital, with an additional 2% sold to members of the existing management team for an additional $0.5 million. Post-closing, we hold a 49%, noncontrolling interest in the joint venture, which is accounted for under the equity method due to our significant influence. The newly formed joint venture, which combines two of Europe’s market leaders in composite high-pressure storage technology, focuses on capitalizing on the global clean energy transition specific to the storage, transport and distribution of hydrogen and compressed natural gas.

On February 1, 2024, we acquired an 80% ownership stake in Halo, an affiliate of HPG, an asset-light business with technology-enabled solutions in the outdoor cooking space. The total purchase price was approximately $9.6 million.

General Economic Conditions

The macroeconomic and geopolitical outlook remains complex and continues to evolve amid persistent inflationary pressures, high interest rates, and escalating trade tensions. While the U.S. economy continues to expand at a modest pace, growth slowed in the fourth quarter of calendar 2024 with GDP increasing at an annual rate of 2.4%, down sequentially from 3.1% in the third quarter of calendar 2024. Inflationary pressures have proven more resilient than anticipated, with the CPI rising 3.1% year-over-year in February 2025, down sequentially from 3.3% in January 2025 and 3.8% in February 2024 aided by cuts in the federal funds rate of 0.50% in September 2024 and 0.25% in November 2024. However, interest rates remain high, with the 30-year mortgage rate relatively unchanged from the prior year at 6.8% as of February 28, 2025, and future rate cuts remain uncertain with the Federal Reserve opting to maintain the federal funds rate in March 2025, citing uncertainty surrounding the inflationary effects of recently imposed tariffs on Canadian, Mexican, and European imports. The recent uptick in inflation, coupled with geopolitical risks, including heightened trade tensions and financial market volatility, has further weighed on consumer sentiment, with consumer sentiment falling for a third straight month in March 2025 to its lowest level since November 2022. As a result, we expect ongoing economic uncertainty and tighter financial conditions to continue negatively influencing consumer purchasing behavior and overall market demand in the near term.

End Market Trends

We offer a wide range of products and services to a diverse, primarily domestic, customer base across several end markets, including U.S. residential and non-residential construction, repair/remodel, which collectively drive overall demand for the Building Products segment. These end markets also drive demand for many of our consumer products sold in the tools and outdoor living categories. Demand for our remaining consumer products, including helium-filled balloon kits sold into the celebrations category, is generally driven by the general health of the consumer, including the macroeconomic and geopolitical conditions discussed above.

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We actively monitor the following publicly available economic data and selected key indicators for our major end markets:


Key Indicator		Description
U.S. Residential Construction Spend		Represents total expenditures on residential construction projects, including new builds, renovations, and improvements.
U.S. Non-residential Construction Spend		Measures total spending on commercial, institutional, and industrial construction projects across the country.
Existing Home Sales		Reports the number of previously owned homes sold in a given period, reflecting demand in the housing market.
Authorized Housing Permits		Indicates the number of building permits issued for new housing construction, serving as a leading indicator for future housing starts.
U.S. Private Housing Starts		Measures the number of new residential construction projects that have begun, signaling housing market activity.
HMI		Measures homebuilder sentiment on current and future single-family home sales and buyer traffic.
ABI		A leading economic indicator for non-residential construction, based on monthly billings reported by architecture firms.
DMI		Tracks the value of non-residential building projects in planning stages, serving as a leading indicator for future construction activity.
LIRA		Projects short-term trends in U.S. home improvement and repair spending, serving as a forward-looking gauge of residential remodeling activity.


	February 28,			February 29,
(Dollars and units in millions)	2025			2024			% Change
U.S. Residential Construction spend (1)(2)	$	940,578		$	925,498			1.6	%
U.S. Non-residential Construction Spend (1)(2)	$	1,255,176		$	1,208,252			3.9	%
Existing Home Sales (units) (1)(2)		4.3			4.4			(2.7	%)
Authorized Housing Permits (units) (1)(2)		1,456			1,563			(6.8	%)
U.S. Private Housing Starts (units) (1)(2)		1,501			1,546			(2.9	%)
HMI		42.0			48.0			(12.5	%)
ABI		45.5			49.5			(8.1	%)
DMI		225.6			180.5			25.0	%
LIRA (3)		1.2	%		(1.4	%)		(185.7	%)

——————————————————

(1)

Federal Reserve Bank of St. Louis; figures based on seasonally adjusted annual rates

(2)

2024 figures based on revised actuals

(3)

Joint Center for Housing Studies of Harvard University; four quarter moving rate of change

Residential Construction: The near-term outlook for the residential construction end market remains uncertain as economic headwinds continue to weigh on both builders and buyers. In February 2025, residential construction spending grew a modest 1.6% year-over-year. However, this increase largely follows inflationary trends, rather than organic expansion in the housing market. Key leading indicators suggest that underlying demand remains tepid. Housing starts and authorized permits declined from the prior year period, signaling that both builders and prospective buyers are approaching the market with caution. From a demand perspective, affordability challenges persist. Elevated mortgage rates have kept many potential buyers on the sidelines, while existing homeowners, many of which are locked into historically low interest rates, are reluctant to sell, further constraining inventory turnover. In February 2025, existing home sales declined by 2.7% year-over-year to 4.3 million units, highlighting the persistent supply challenges. Additionally, homebuilder sentiment, as measured by HMI, weakened to 42.0, falling below the neutral threshold of 50, suggesting that more builders view conditions as poor than favorable. This decline in builder confidence reflects uncertainty around elevated construction costs and mortgage rates. We believe that builders and buyers will likely remain in a holding pattern in the near-term, navigating high material costs, elevated mortgage rates, a slow-moving resale market, and geopolitical developments.

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Non-Residential Construction: The near-term outlook for non-residential construction is mixed with key indicators signaling both caution and long-term potential. The ABI fell to 45.5 in February 2025, marking a contraction in demand for architectural services. Further reinforcing this sentiment, inquiries into new projects declined in February 2025 for the first time since the peak of the COVID-19 pandemic. This signals that clients are exercising caution amid economic uncertainty, holding back on new project commitments as they navigate concerns about broader macroeconomic conditions. The soft ABI and declining inquiries suggest the near-term construction pipeline will likely be subdued. In contrast, the DMI climbed to 225.6, up from 180.5 in February 2024, suggesting a robust long-term pipeline. This rise was broad-based due to a surge of warehouse, data center, and industrial facility plans. The DMI’s strength, contrasted with the weak ABI, implies a timing gap – while many projects are still in the concept and design phase, they have yet to translate into active architectural billings or construction starts. While industrial and data center projects remain bright spots, we believe the participants in this end market will take a wait-and-see approach as developers and investors assess economic risks before committing to large-scale builds.

Repair and Remodel: Spending on home improvement continues to show signs of softness as the market remains under pressure from multi-decade lows in existing home sales, driven by elevated mortgage rates, high prices, and limited supply. With many homeowners locked into historically low interest rates, mobility in the housing market remains stalled, dampening turnover-driven renovation activity. Despite this pullback, the January 2025 LIRA report from Harvard’s Joint Center for Housing Studies projects a 1.2% annual increase in home renovation and maintenance expenditures, reaching $509 billion by the end of calendar year 2025. This upward revision from prior forecasts reflects stronger-than expected late calendar year 2024 spending. Near-term activity is expected to remain concentrated on essential maintenance projects, rather than large-scale, discretionary remodels. Uncertainty around recent and potential future tariffs, particularly on construction materials like steel, aluminum, and lumber, could create headwinds and pressure margins for both contractors and DIY consumers. We believe this end market is transitioning from the pandemic fueled highs into a more normalized, sustainable growth phase, supported by long-term fundamentals such as rising home equity, energy efficiency upgrades, and the need to modernize older homes.

Seasonality

Historically, sales tend to be stronger in the third and fourth quarters of our fiscal year for our Consumer Products businesses when our facilities perform at seasonal peaks, matching consumer demand. Sales in our Building Products businesses are generally stronger in the first and fourth quarters of our fiscal year due to weather conditions, customer business cycles, and the timing of renovation and new construction projects.

Results of Operations

The following discussion provides a review of results for the three and nine months ended February 28, 2025 and February 29, 2024:


	Three Months Ended							Nine Months Ended
	February 28,		February 29,					February 28,		February 29,
	2025		2024		$ Change			2025		2024			$ Change
GAAP Financial Measures
Net sales	$	304.5	$	316.8	$	(12.3	)	$	835.9	$	926.9		$	(91.0	)
Operating income (loss)		20.9		4.3		16.6			19.7		(17.4	)		37.1
Earnings before income taxes		52.6		40.5		12.1			120.5		100.8			19.7
Net earnings from continuing operations		39.3		22.0		17.3			91.4		66.8			24.6
Equity income		32.1		43.2		(11.1	)		102.1		127.3			(25.2	)
EPS from continuing operations - diluted		0.79		0.44		0.35			1.84		1.33			0.51

Non-GAAP Financial Measures (1)
Adjusted operating income	$	26.2	$	8.0	$	18.2		$	28.8	$	15.1		$	13.7
Adjusted EBITDA from continuing operations		73.8		66.9		6.9			178.4		187.8			(9.4	)
Adjusted EPS from continuing operations - diluted		0.91		0.80		0.11			2.01		2.11			(0.10	)

——————————————————

(1)

Reconciliations for each of these non-GAAP financial measures to their most comparable GAAP financial measure is provided in the “Use of Non-GAAP Financial Measures and Definitions” section.

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Net Sales and Volume

The following table provides a breakdown of our consolidated net sales by operating segment for the periods indicated:


	Three Months Ended										Nine Months Ended
	February 28,		February 29,		Change						February 28,		February 29,		Change
	2025		2024		$			%			2025		2024		$			%
Consumer Products	$	139.7	$	133.2	$	6.5			4.9	%	$	374.1	$	369.9	$	4.2			1.1	%
Building Products		164.8		148.2		16.6			11.2	%		461.8		465.4		(3.6	)		(0.8	%)
Total reportable segments		304.5		281.4		23.1			8.2	%		835.9		835.3		0.6			0.1	%
Other		-		35.4		(35.4	)	N.M.				-		91.6		(91.6	)	N.M.
Consolidated	$	304.5	$	316.8	$	(12.3	)		(3.9	%)	$	835.9	$	926.9	$	(91.0	)		(9.8	%)

The following table provides volume (in units) by operating segment for the periods presented:


	Three Months Ended										Nine Months Ended
	February 28,		February 29,		Change						February 28,		February 29,		Change
	2025		2024		Units			%			2025		2024		Units			%
Consumer Products		20,760,641		19,009,883		1,750,758			9.2	%		53,351,154		50,972,515		2,378,639			4.7	%
Building Products		3,559,814		3,422,475		137,339			4.0	%		9,982,444		10,578,278		(595,834	)		(5.6	%)
Total reportable segments		24,320,455		22,432,358		1,888,097			8.4	%		63,333,598		61,550,793		1,782,805			2.9	%
Other		-		142,878		(142,878	)	N.M.				-		363,247		(363,247	)	N.M.
Consolidated		24,320,455		22,575,236		1,745,219			7.7	%		63,333,598		61,914,040		1,419,558			2.3	%

Quarterly Comparison

•

Consumer Products – Net sales totaled $139.7 million in the current year quarter, up $6.5 million, or 4.9% over the prior year quarter, primarily driven by higher volumes.

•

Building Products – Net sales totaled $164.8 million in the current year quarter, up $16.6 million, or 11.2%, over the prior year quarter, driven by contributions from Ragasco and favorable product mix, particularly in the large-format heating business which returned to more seasonally normal levels following a prolonged destocking cycle.

•

Other – Net sales in the prior year quarter are related to our former Sustainable Energy Solutions operating segment, which was deconsolidated on May 29, 2024, when we sold a 51% interest in the business. In periods subsequent to the sale transaction, our retained 49% interest is accounted for under the equity method as discussed in “Note C – Investments in Unconsolidated Affiliates.”

Year-to-Date Comparison

•

Consumer Products – Net sales totaled $374.1 million in the current year period, an increase of $4.2 million over the prior year period primarily due to higher overall volume.

•

Building Products – Net sales totaled $461.8 million in the current year period, down $3.6 million, or 0.8%, from the prior year period, as contributions from Ragasco and a favorable product mix were more than offset by lower overall volume.

•

Other – Net sales in the prior year period are related to our former Sustainable Energy Solutions operating segment, which was deconsolidated on May 29, 2024, when we sold a 51% interest in the business. In periods subsequent to the sales transaction, our 49% retained interest is accounted for under the equity method as discussed in “Note C – Investments in Unconsolidated Affiliates.”

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Gross Profit


	Three Months Ended											Nine Months Ended
	February 28,			February 29,			Change					February 28,			February 29,			Change
	2025			2024			$		%			2025			2024			$		%
Gross profit	$	89.2		$	73.1		$	16.1		22.0	%	$	225.8		$	206.0		$	19.8		9.6	%
Gross margin %		29.3	%		23.1	%							27.0	%		22.2	%

Quarterly Comparison

•

Gross profit for the current year quarter was $89.2 million, an increase of $16.1 million, or 22.0%, over the prior year quarter, driven by higher contributions from both Consumer Products and Building Products. In Consumer Products, the increase resulted from higher volume, particularly in our more profitable product categories. In Building Products, gross profit benefited from contributions by Ragasco, a favorable product mix, and a lower of cost or net realizable value charge in the prior year quarter that did not repeat, partially offsetting lower volume excluding Ragasco. Additionally, gross profit improved $0.9 million due to the deconsolidation of the former Sustainable Energy Solutions segment.

Year-to-Date Comparison

•

Gross profit was $225.8 million for the current year period, an increase of $19.8 million, or 9.6% over the prior year period, primarily due to improvements in Consumer Products, up $15.7 million, on the combined impact of higher volume and a $3.1 million reserve related to the voluntary recall of our Balloon Time® Mini helium tank in the prior year period. In Building Products, gross profit was positively impacted by contributions from Ragasco, favorable product mix, and a lower of cost or net realizable value charge in the prior year quarter that did not repeat, partially offsetting the impact of lower volume.

SG&A


	Three Months Ended												Nine Months Ended
	February 28,			February 29,			Change						February 28,			February 29,			Change
	2025			2024			$			%			2025			2024			$			%
SG&A	$	63.0		$	65.1		$	(2.1	)		(3.2	%)	$	197.0		$	210.3		$	(13.3	)		(6.3	%)
Net Sales %		20.7	%		20.5	%								23.6	%		22.7	%

Quarterly Comparison

•

SG&A decreased $2.1 million, or 3.2%, from the prior year quarter, primarily driven by lower profit sharing and bonus expense and costs recovered from Worthington Steel through the Transition Services Agreement, partially offset by an increase of incremental bad debt expense of $1.1 million related to a customer bankruptcy in Consumer Products.

Year-to-Date Comparison

•

SG&A decreased $13.3 million, or 6.3%, from the prior year period, largely driven by the elimination of certain corporate overhead costs that no longer exist post-Separation, but have been presented within net earnings from continuing operations in our consolidated statements of earnings, partially offset by an $8.1 million increase due to the acquisition of Ragasco on June 3, 2024 and an increase in bad debt expense of $3.2 million.

Other Consolidated Results


	Three Months Ended							Nine Months Ended
	February 28,		February 29,					February 28,		February 29,
	2025		2024		$ Change			2025		2024		$ Change
Restructuring and other expense, net	$	5.4	$	0.7	$	4.7		$	9.2	$	0.7	$	8.5
Separation costs		-		3.0		(3.0	)		-		12.5		(12.5	)
Loss on extinguishment of debt		-		-		-			-		1.5		(1.5	)

Quarterly Comparison

•

Restructuring and other expense, net in the current year quarter was primarily driven by a $4.5 million increase in the fair value of the contingent liability associated with the Ragasco earnout.

•

Separation costs in the prior year quarter reflect direct and incremental costs incurred in connection with the Separation.

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Year-to-Date Comparison

•

Restructuring and other expense, net in the current year period was driven primarily by the accelerated vesting of certain outstanding equity awards upon retirement of our former CEO and a change in fair value of an earnout associated with the acquisition of Ragasco.

•

Separation costs in the prior year period reflect direct and incremental costs incurred in connection with the Separation.

•

Loss on extinguishment of debt of $1.5 million in the prior year period resulted from the July 28, 2023 early redemption of the 2026 Notes and consisted primarily of unamortized debt issuance costs and the remaining loss deferred in AOCI associated with an interest rate swap executed prior to the issuance of the 2026 Notes.

Income Tax Expense


	Three Months Ended									Nine Months Ended
	February 28,			February 29,						February 28,			February 29,
	2025			2024			$ Change			2025			2024			$ Change
Income tax expense	$	13.2		$	18.5		$	(5.3	)	$	29.1		$	34.0		$	(4.9	)
Annual Estimated ETR		24.4	%		30.8	%					24.4	%		30.8	%

Quarterly Comparison

•

Income tax expense was $13.2 million in the current year quarter compared to $18.5 million in the prior year quarter. The decrease was primarily driven by one-time discrete tax charges from the Separation, which were recognized in the prior year quarter, partially offset by higher pre-tax earnings in the current year quarter. Income expense in the current year quarter reflects an estimated annual ETR of 24.4% compared to 30.8% in the prior year quarter.

Year-to-Date Comparison

•

Income tax expense was $29.1 million in the current year period compared to $34.0 million in the prior year period. The decrease was primarily driven by one-time discrete tax charges from the Separation, which were recognized in the prior year period, partially offset by higher pre-tax earnings in the current year period. Income expense in the current year period reflects an estimated annual ETR of 24.4% compared to 30.8% in the prior year period.

Equity Income


	Three Months Ended												Nine Months Ended
	February 28,			February 29,			Change						February 28,			February 29,		Change
	2025			2024			$			%			2025			2024		$			%
WAVE (1)	$	25.0		$	26.0		$	(1.0	)		(4	%)	$	77.4		$	75.8	$	1.6			2	%
ClarkDietrich (1)		9.5			17.8			(8.3	)		(47	%)		28.0			48.3		(20.3	)		(42	%)
Other (2)		(2.4	)		(0.6	)		(1.8	)		(300	%)		(3.3	)		3.3		(6.6	)		(200	%)
Equity income	$	32.1		$	43.2			(11.1	)		(26	%)	$	102.1		$	127.4		(25.3	)		(20	%)

——————————————————

(1)

Equity income contributed by WAVE and ClarkDietrich is reported within our Building Products segment.

(2)

Includes our share of equity earnings of the Workhorse and the Sustainable Energy Solutions joint ventures.

Quarterly Comparison

•

Equity income decreased $11.1 million from the prior year quarter to $32.1 million, primarily driven by lower contributions from ClarkDietrich, which decreased $8.3 million compared to the prior year quarter, as declining year-over-year steel prices compressed margin.

Year-to-Date Comparison

•

Equity income was down $25.3 million from the prior year period, driven by lower contributions from ClarkDietrich and lower contributions from Workhorse, which benefited from a $2.8 million gain in the prior year period.

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Adjusted EBITDA from Continuing Operations

The following table provides a summary of adjusted EBITDA from continuing operations, a non-GAAP financial measure, by reportable segment and on a consolidated basis, along with the respective percentage of net sales for each reportable segment and on a consolidated basis. See the “Use of Non-GAAP Financial Measures and Definitions” section preceding Part I, Item 1 of this Form 10-Q for additional information regarding our use of non-GAAP financial measures. A reconciliation from earnings before income taxes to adjusted EBITDA from continuing operations is provided in “Note M – Segment Operations.”


	Three Months Ended
	February 28,			% of			February 29,			% of			Change
	2025			Net Sales			2024			Net Sales			$		%
Consumer Products	$	28.6			20.5	%	$	25.6			19.2	%	$	3.0		11.7	%
Building Products		53.2			32.3	%		53.1			35.8	%		0.1		0.2	%
Total reportable segments	$	81.8			26.9	%	$	78.7			28.0	%		3.1		3.9	%
Unallocated Corporate and Other		(8.0	)	N.M.				(11.8	)	N.M.				3.8		32.2	%
Consolidated	$	73.8			24.2	%	$	66.9			21.1	%		6.9		10.3	%


	Nine Months Ended
	February 28,			% of			February 29,			% of			Change
	2025			Net Sales			2024			Net Sales			$			%
Consumer Products	$	61.9			16.5	%	$	52.5			14.2	%	$	9.4			17.9	%
Building Products		140.1			30.3	%		158.5			34.1	%		(18.4	)		(11.6	%)
Total reportable segments	$	202.0			24.2	%	$	211.0			25.3	%		(9.0	)		(4.3	%)
Unallocated Corporate and Other		(23.6	)	N.M.				(23.2	)	N.M.				(0.4	)		(1.7	%)
Consolidated	$	178.4			21.3	%	$	187.8			20.3	%		(9.4	)		(5.0	%)

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Quarterly Comparison

•

Consumer Products – Adjusted EBITDA from continuing operations was $28.6 million in the current year quarter, an increase of $3.0 million over the prior year quarter, primarily driven by higher volumes and gross margin improvement, partially offset by higher SG&A. Adjusted EBITDA from continuing operations in the current year quarter includes incremental bad debt expense of $1.1 million related to a customer bankruptcy.

•

Building Products – Adjusted EBITDA from continuing operations increased slightly over the prior year quarter to $53.2 million as contributions from Ragasco and a favorable product mix were largely offset by lower equity income contributions from ClarkDietrich and WAVE, which decreased by $9.3 million compared to the prior year quarter. Adjusted EBITDA from continuing operations in the prior year quarter was negatively impacted by a $1.9 million lower of cost or net realizable value charge.

•

Unallocated Corporate and Other – Adjusted EBITDA from continuing operations increased $3.8 million over the prior year quarter, primarily driven by lower SG&A and lower losses related to the deconsolidation of our former Sustainable Energy Solutions in May 2024, partially offset by lower contributions of equity income from Workhorse.

Year-to-Date Comparison

•

Consumer Products – Adjusted EBITDA from continuing operations was $61.9 million, an increase of $9.4 million over the prior year quarter, primarily due to the favorable impact of higher volume in gross profit. Adjusted EBITDA from continuing operations in the current year period included $2.5 million of incremental bad debt related to customer bankruptcies. The prior year period was negatively impacted by a $3.1 million reserve related to the recall of our Balloon Time® Mini helium tank.

•

Building Products – Adjusted EBITDA from continuing operations decreased $18.4 million from the prior year period as equity income was down $25.3 million partially offset by contributions from Ragasco and a favorable product mix. Equity income declined primarily from lower contributions from ClarkDietrich. Adjusted EBITDA from continuing operations in the prior year quarter was negatively impacted by a $1.9 million lower of cost or net realizable value charge which did not repeat in the current year quarter.

•

Unallocated Corporate and Other – Adjusted EBITDA from continuing operations was down $0.4 million from the prior year period, primarily driven by lower equity earnings from Workhorse, which benefited from a $2.8 million gain related to the divestiture of its Brazilian operations in the prior year period, and higher SG&A, partially offset by lower losses due to the deconsolidation of our former Sustainable Energy Solutions operating segment in May 2024.

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Liquidity and Capital Resources

During the nine months ended February 28, 2025, we generated $147.3 million of cash from operating activities, invested $37.5 million in property, plant and equipment, spent $88.2 million to acquire Ragasco, and received $11.4 million for the sale of 51% of our former Sustainable Energy Solutions operating segment. Additionally, we paid $21.1 million to repurchase 500,000 common shares and paid dividends of $25.5 million on the common shares during the nine months ended February 28, 2025.

The following table summarizes our consolidated cash flows for the periods presented:


	Nine Months Ended
	February 28,			February 29,
	2025			2024
Net cash provided by operating activities	$	147.3		$	244.8
Net cash used by investing activities		(115.1	)		(116.5	)
Net cash used by financing activities		(53.6	)		(355.9	)
Decrease in cash and cash equivalents		(21.4	)		(227.6	)
Cash and cash equivalents at beginning of period		244.2			454.9
Cash and cash equivalents at end of period	$	222.8		$	227.3

——————————————————

Activity related to our discontinued operations has not been segregated in our consolidated statements of cash flows. See “Note B – Discontinued Operations” for a summarization of significant non-cash items related to discontinued operations.

We believe we have access to adequate resources to meet the needs of our existing businesses for normal operating costs, mandatory capital expenditures, debt redemptions, dividend payments, and working capital, to the extent not funded by cash provided by operating activities, for at least 12 months and for the foreseeable future thereafter. These resources include cash and cash equivalents and unused committed lines of credit under our Credit Facility, which had a total of $500.0 million of borrowing capacity available to be drawn as of February 28, 2025.

Although we do not currently anticipate a need, we believe that we could access the financial markets to sell long-term debt or equity securities. However, the continuation of uncertain economic conditions, including those caused by a high interest rate environment, could create volatility in the financial markets, which may impact our ability to access capital and the terms under which we can do so.

We routinely monitor current operational requirements, financial market conditions, and credit relationships and we may choose to seek additional capital by issuing new debt and/or equity securities to strengthen our liquidity or capital structure. Should we seek additional capital, there can be no assurance that we would be able to obtain such additional capital on terms acceptable to us, if at all, and such additional equity or debt financing could dilute the interests of our existing shareholders and/or increase our interest costs. We may also from time to time seek to retire or repurchase our outstanding debt through cash purchases, in open-market purchases, privately-negotiated transactions or otherwise. Such repurchases, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

Operating Activities

Our business is cyclical and cash flows from operating activities may fluctuate during the year and from year to year due to economic and industry conditions. We rely on cash and short-term borrowings to meet cyclical increases in working capital needs. These needs generally arise during periods of increased economic activity or increasing raw material prices, requiring higher levels of inventory and accounts receivable. During economic slowdowns or periods of decreasing raw material costs, working capital needs generally decrease as a result of the reduction of inventories and accounts receivable.

Net cash provided by operating activities was $147.3 million during the nine months ended February 28, 2025, down from $244.8 million from the prior year period. The decrease was primarily due to lower net earnings in the current year period driven by the Separation and a $31.4 million decrease in dividends received from unconsolidated joint ventures.

Investing Activities

Net cash used by investing activities was $115.1 million during the nine months ended February 28, 2025 compared to $116.5 million from the prior year period. Net cash used by investing activities during the nine months ended February 28, 2025 was driven primarily by the acquisition of Ragasco and capital expenditures partially offset by proceeds from the sale of 51% of the nominal share capital of our former Sustainable Energy Solutions operating segment on May 29, 2024.

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Investment activities are largely discretionary and future investment activities could be reduced significantly, or eliminated, as economic conditions warrant. We assess acquisition opportunities as they arise, and any such opportunities may require additional financing. However, there can be no assurance that any such opportunities will arise, that any such acquisition opportunities will be consummated, or that any additional financing will be available on satisfactory terms if required.

Financing Activities

Net cash used by financing activities was $53.6 million during the nine months ended February 28, 2025, compared to $355.9 million in the prior year period. During the nine months ended February 28, 2025, we paid $21.1 million to repurchase 500,000 common shares and paid dividends of $25.5 million on the common shares. During the nine months ended February 29, 2024, we received $172.2 million in net proceeds of short-term borrowings and repaid $243.8 million of long-term debt associated with the redemption of the 2026 Notes and $150.0 million for the redemption of our 2024 Notes.

Common shares – On March 25, 2025, the Board declared a quarterly dividend of $0.17 per common share payable on June 27, 2025, to shareholders of record at the close of business on June 13, 2025.

On March 20, 2019, the Board authorized the repurchase of up to 6,600,000 common shares.

On March 24, 2021, the Board authorized the repurchase of up to an additional 5,618,464 common shares, increasing the total number of common shares then authorized for repurchase to 10,000,000. As of February 28, 2025, 5,565,000 common shares remained available for repurchase under these two authorizations.

The common shares may be repurchased under these authorizations from time to time, with consideration given to the market price of the common shares, the nature of other investment opportunities, cash flows from operations, general economic conditions and other relevant considerations. Repurchases may be made on the open market or through privately negotiated transactions.

Long-term debt and short-term borrowings – As of February 28, 2025, we were in compliance with the financial covenants of our short-term and long-term debt agreements. Our debt agreements do not include credit rating triggers or material adverse change provisions. There were no outstanding borrowings drawn against the Credit Facility at February 28, 2025, leaving the full borrowing capacity of $500.0 million available for future use.

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Dividend Policy

We currently have no material contractual or regulatory restrictions on the payment of dividends. Dividends are declared at the discretion of the Board. The Board reviews the dividend quarterly and establishes the dividend rate based upon our consolidated financial condition, results of operations, capital requirements, current and projected cash flows, business prospects, and other relevant factors. While we have paid a dividend every quarter since becoming a public company in 1968, there is no guarantee that payments of dividends will continue in the future.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements and related disclosure, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to use judgment and make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. We continually evaluate our estimates, including those related to our valuation of receivables, inventories, intangible assets, accrued liabilities, income and other tax accruals, contingencies and litigation, and business combinations. We base our estimates on historical experience, current trends and other factors that we believe to be relevant and reasonable under the circumstances at the time the estimate was made. These results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Critical accounting policies are defined as those that reflect our significant judgments and uncertainties that could potentially result in materially different results under different assumptions and conditions. Although actual results historically have not deviated significantly from those determined using our estimates, our consolidated financial position or results of operations could be materially different if we were to report under different conditions or to use different assumptions in the application of such policies. We believe that our estimates, assumptions, and judgments are reasonable in that they were based on information available when the estimates, assumptions and judgments were made. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from those implied by our assumptions and estimates. Our critical accounting policies have not significantly changed from those discussed in “Part II – Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” of the 2024 Form 10-K.

Item 3. – Quantitative and Qualitative Disclosures About Market Risk

Market risks have not materially changed from those disclosed in “Part II – Item 7A. – Quantitative and Qualitative Disclosures About Market Risk” of the 2024 Form 10-K.

Item 4. – Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in the reports that Worthington Enterprises files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including Worthington Enterprises’ principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management, under the supervision of and with the participation of Worthington Enterprises’ principal executive officer and principal financial officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Form 10-Q. Based on that evaluation, Worthington Enterprises’ principal executive officer and principal financial officer have concluded that such disclosure controls and procedures were designed at the reasonable assurance level and were effective at a reasonable assurance level as of the end of the quarterly period covered by this Form 10-Q.

Changes in Internal Control Over Financial Reporting

There were no changes that occurred during the period covered by this Form 10-Q in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. – Legal Proceedings

We are involved in various judicial and administrative proceedings, as both plaintiff and defendant, arising in the ordinary course of business. We do not believe that any such proceedings, individually and in the aggregate, will have a material adverse effect on our business, financial position, results of operation or cash flows.

Item 1A. – Risk Factors

There are certain risks and uncertainties in our business that could cause our actual results to differ materially from those anticipated. In “PART I – Item 1A. – Risk Factors” of the 2024 Form 10-K, we included a detailed discussion of our risk factors. Our risk factors have not changed significantly from those disclosed in the 2024 Form 10-K. Those risk factors should be read carefully in connection with evaluating our business and investments in the common shares and in connection with the forward-looking statements and other information contained in this Form 10-Q. Any of the risks described in the 2024 Form 10-K could materially affect our business, consolidated financial condition or future results and the actual outcome of matters as to which forward-looking statements are made. The risk factors described in the 2024 Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may materially adversely affect our business, consolidated financial condition and/or future results.

Item 2. – Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

There were no equity securities of Worthington Enterprises sold by Worthington Enterprises during the nine months ended February 28, 2025 that were not registered under the Securities Act of 1933, as amended.

Issuer Purchases of Equity Securities

Common shares withheld to cover tax withholding obligations in connection with the vesting of restricted common shares are treated as common share purchases for purposes of the following table. However, those withheld common shares are not considered common share repurchases under an authorized common share repurchase plan or program. The total number of common shares purchased, as indicated in the table below, include (1) common shares withheld from our employees to satisfy minimum statutory tax withholding obligations arising from the vesting of restricted common shares and (2) common shares repurchased as part of publicly announced plans or programs.




							Maximum Number of
					Total Number of Common		Common Shares that
	Total Number of		Average Price		Shares Purchased as Part		May Yet Be
	Common Shares		Paid per		of Publicly Announced		Purchased Under the
Period	Purchased		Common Share		Plans or Programs		Plans or Programs (1)
December 1-31, 2024		703	$	41.04		-		5,715,000
January 1-31, 2025		152,400		41.15		150,000		5,565,000
February 1-28, 2025		-		-		-		5,565,000
Total		153,103	$	41.10		150,000

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(1)

The number shown represents, as of the end of each period, the maximum number of common shares that could be purchased under the publicly announced repurchase authorizations then in effect. On March 20, 2019, the Board authorized the repurchase of up to 6,600,000 common shares. On March 24, 2021, the Board authorized the repurchase of up to an additional 5,618,464 common shares, increasing the total number of common shares then authorized for repurchase to 10,000,000 (net of previously repurchased common shares). A total of 4,435,000 common shares have been repurchased since the latest authorization, leaving 5,565,000 common shares available for repurchase under these authorizations at February 28, 2025, and such authorizations are not subject to a fixed expiration date. The common shares available for repurchase under the authorizations currently in effect may be purchased from time to time, with consideration given to the market price of the common shares, the nature of other investment opportunities, cash flows from operations, general economic conditions and other relevant considerations. Repurchases may be made on the open market or through privately-negotiated transactions.

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Item 3. – Defaults Upon Senior Securities

Not applicable.

Item 4. – Mine Safety Disclosures

Not applicable.

Item 5. – Other Information

During the quarter ended February 28, 2025, no director or officer (as defined under Rule 16a-1 of the Exchange Act) adopted or terminated any Rule 10b5-1 trading arrangements or any non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

Item 6. – Exhibits


		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	Exhibit	Filing Date
2.1	Separation and Distribution Agreement, dated November 30, 2023, between Worthington Enterprises, Inc. and Worthington Steel, Inc.	8-K	2.1	12/05/2023

3.1	Amended Articles of Incorporation of Worthington Enterprises, Inc. [This document represents the articles of incorporation of Worthington Enterprises, Inc. in compiled form incorporating all amendments.]	10-Q	3.1	01/09/2024

3.2	Code of Regulations of Worthington Enterprises, Inc. [This document represents the code of regulations of Worthington Enterprises, Inc. in compiled form incorporating all amendments.]	10-Q	3(b)	10/16/2000

31.1	Rule 13a - 14(a)/15d - 14(a) Certifications (Principal Executive Officer)*

31.2	Rule 13a - 14(a)/15d - 14(a) Certifications (Principal Financial Officer)*

32.1	Section 1350 Certification of Principal Executive Officer**

32.2	Section 1350 Certification of Principal Financial Officer**

101	Interactive Data Files Pursuant to Rule 405 of Regulation S-T, formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at February 28, 2025 and May 31, 2024; (ii) Consolidated Statements of Earnings for the nine months ended February 28, 2025 and February 29, 2024; (iii) Consolidated Statements of Comprehensive Income for the nine months ended February 28, 2025 and February 29, 2024; (iv) Consolidated Statements of Cash Flows for the nine months ended February 28, 2025 and February 29, 2024 and (v) Condensed Notes to Consolidated Financial Statements.*

104	The cover page from this Quarterly Report on Form 10-Q for the quarter ended February 28, 2025, formatted in Inline XBRL and included in Exhibit 101.*

——————————————————

* Filed herewith.

** Furnished herewith.

† Indicates a management contract or compensatory plan or arrangement.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		WORTHINGTON ENTERPRISES, INC.

Date: April 9, 2025	By:	/s/ Colin J. Souza
		Colin J. Souza,
		Vice President and Chief Financial Officer
		(On behalf of the registrant as Duly Authorized Officer and as Principal Financial Officer)