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Sep 22, 2026, 4:20 PM ETIndustrials

Worthington Enterprises — First Quarter Fiscal 2027 Earnings Summary

WORWORTHINGTON ENTERPRISES INC
Source

Financial Performance

  • Net sales increased 13% year-over-year to $343.9 million, driven by 6% organic growth and 7% from recent acquisitions.
  • Net earnings rose 22% to $42.6 million, while adjusted net earnings increased 3% to $40.1 million.
  • Adjusted EBITDA grew 10% to $74.0 million.
  • Earnings per share (diluted) improved to $0.87 from $0.70; adjusted EPS (diluted) increased to $0.82 from $0.78.
  • Operating cash flow increased $25.7 million to $66.7 million; free cash flow increased $26.1 million to $54.0 million.
  • Total debt stood at $305.6 million, consisting entirely of long-term debt, with no borrowings on the $500.0 million revolving credit facility.
  • Cash and cash equivalents increased $27.3 million to $55.1 million.
  • Net cash provided by operating activities was $66.7 million, with $12.8 million invested in capital expenditures.
  • Equity in net income of unconsolidated affiliates increased $3.9 million to $40.6 million.

Guidance and Future Outlook

  • Management expressed encouragement regarding the start of fiscal 2027, citing rapidly growing demand for engineered ASME tanks used in liquid cooling systems for data centers.
  • The company highlighted a healthy balance sheet and growing free cash flow generation as flexibility to invest in and pursue additional growth opportunities.
  • An Investor and Analyst Day is scheduled for November 10, 2026, to review strategy, financial performance, and long-term growth opportunities.

Business Segments and Product Lines

  • Two business segments were renamed: Building Products is now Building Performance Solutions, and Consumer Products is now Trade & Specialty Solutions.
  • Building Performance Solutions generated net sales of $215.1 million, a 16.4% increase, driven by acquisitions ($19.2 million contribution) and organic growth (6.0%); adjusted EBITDA was relatively flat at $59.8 million.
  • Trade & Specialty Solutions generated net sales of $128.8 million, an 8.3% increase driven by higher volume and average selling prices; adjusted EBITDA increased $7.9 million to $24.0 million.
  • Adjusted EBITDA margins for Building Performance Solutions were 27.8% (down from 32.4% prior year), while Trade & Specialty Solutions margins were 18.6% (up from 13.6% prior year).
  • Equity income contributions from WAVE and ClarkDietrich joint ventures increased by $2.7 million and $1.4 million, respectively.

Market and Competitive Landscape

  • The company serves OEMs and distributors in the building performance sector and professional tradespeople in the specialty solutions sector.
  • Recent acquisitions contributed significantly to sales growth in the Building Performance Solutions segment.
  • The company benefits from net tariff refunds related to the International Emergency Economic Powers Act (IEEPA).

Risks and Challenges

  • The press release includes a standard Safe Harbor statement noting forward-looking statements are subject to risks including economic conditions, inflation, interest rates, trade restrictions, tariffs, raw material price volatility (particularly steel), supply chain constraints, and geopolitical instability.
  • Specific risks mentioned include the ability to realize cost savings from transformation initiatives, integration of newly acquired businesses, and the impact of environmental and healthcare laws.

Management Commentary and Tone

  • CEO Joe Hayek stated the company started fiscal 2027 with solid performance, noting teams executed well and delivered for customers.
  • Management highlighted generating 7% organic growth, 10% adjusted EBITDA growth, and nearly doubling free cash flow as reflections of progress in optimizing and growing the company.
  • The tone was confident, emphasizing innovation, operational improvement, and the ability to create value for customers.

Other Key Points

  • The company repurchased 335,000 common shares for $18.2 million, leaving 4,230,000 shares available under the existing authorization.
  • A quarterly dividend of $0.20 per share was declared, payable on December 29, 2026, to shareholders of record on December 15, 2026.
  • The revolving credit facility was amended to extend the maturity date to August 31, 2031.
  • A pre-tax gain of $4.0 million was recognized related to an earnout agreement from the sale of the former oil and gas products business divested in January 2021.
  • The company employs approximately 4,000 people throughout North America and Europe.