WOR - Earnings call transcript Q1 2025 | Worthington Industries, Inc.

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Operator

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

Marcus Rogier

Rob. you, Thank and Enterprises everyone, for us joining Good Quarter thank Fiscal Worthington First XXXX for morning, you Earnings Call. today, Officer; Worthington's On and Officer. call we Rose, Andy our Worthington's Chief Executive Financial and Chief Hayek, Joe and Operations have President

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

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

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

B. Rose

you, want you Worthington earnings our of $X.XX million team to of versus XXXX quarter adjusted morning. good respectable to with high quarter Marcus, and tough EBITDA prior share year. call. $XX fiscal and welcome first environment $X.XX a macroeconomic per uncertainty, and Enterprises Despite adjusted of Thank rates I in interest the delivered earnings another

Solutions our both which the balance and the Energy of steady our of acquisition challenges, venture The cycle. its well. clear that these X destocking as Hexagon we of integration $X with building with and some ClarkDietrich gone business outlook million see our composites remained down drivers Despite and Sustainable have Ragasco and evidence decline have products, markets joint launch heating the at cooking post-COVID bottom a Hexagon are is improving The the year-over-year. and the long-term businesses positive of it of big of we

strong a the worth we safety market-leading advantage rate our Earlier during on more a us project at for campus secular notable sheet square Three modernization and events are new well trends our advantage future this fall. and month, XX,XXX and continued to cylinders. take equipment and products building balance allowing rates have hand expansion. quarter brands competitive Overall, favorable our building ensure automated interest we Chilton, efficiencies, fuel broke performance, in of as backdrop highlighting. Wisconsin positive long-term positioned torches while BernzOmatic where and and MagTorch manufacture increase helping quality and foot production on product will A ground

Workplaces industrial Worthington Workplaces to recognized for Greatest awards, the companies is Companies. recognizes World's recognition that compensation we and X,XXX distinction X Most Most company Worthington products World's America's career of Trustworthy benefits, and Companies. Enterprises the America's earn balance Trustworthy to of as and Newsweek X XX the companies And culture. earn were XX training countries progression, across and work-life one Second, Greatest

who again, and philosophy first to honors people golden our our to Congratulations day the every is differentiator. culture rule. their dedication our work people learn Once performance-based and hard true a with these

and and annual governance. X on sustainability management the responsible People and focused sustainable published yesterday, Finally, categories: we our citizenship planet, approach commitment, achievements corporate process and report company's products detailing first,

in meaningful sustainability customers, year have for first enabler strides in to suppliers taken and an collaboration and are achieving use Enterprises outcomes committed our as communities. our with significant to We success Worthington as

enable of effort right a transformation, The a achieve focus are business make will of our Worthington we accelerated this as can will us more our golden company. Our thing, in and culture pipeline technologies on guided M&A already better so who and growth the make to the by more further extension Today, system valuable philosophy us our and natural enhancing we innovation in rule and to value products focused partner. and on a innovation deliver we are significant customers capabilities, sustainable M&A and earnings. bring that incorporate our meaningful a to building particularly market doing faster

to growth hard through working are We Joe as numbers. reignite walk and Worthington Enterprises, now the you our will

Joseph Hayek

There were negatively bonds. year and share or a that per GAAP share. the impacted along reported $X.XX time costs related QX, extinguishment early transaction onetime the operations impacted costs share to largest good per the $X.XX quarter Thank related were versus we including of prior of at and you, the few Andy, of business, $X.XX eliminated $X.XX items being of restructuring charges our to quarterly in the results, that the unique public by items, corporate separation following. from million current $X our impacted quarter separation, morning, year. by continuing the was In due charge were a prior earnings a in steel of negatively several our XXXX everyone. The processing to with Results

adjusted current $X.XX operations in share QX per generated compared share of last year. quarter we earnings per from to items, continuing these $X.XX Excluding in the

purchase $XXX prior deconsolidation in with quarter net In addition, associated in of loan year Solutions in million sales contributed with Hexagon from year. the million $XXX prior $XX and the was QX of which XX.X% sales related of decreased acquisition volumes were driven segment, $X million Products. decrease an Consolidated mix former our combined results the in in accounting Energy The Ragasco. the unfavorable Sustainable quarter Building by by or adjustments million and $X.XX impacted a our our negatively to share costs

were deconsolidation, sales of the Excluding X%. the down SES impact

points was the current QX to from million respect prior $XX EBITDA million, down gross XX Our compared our $XX cash quarter for basis $XXX cash year XX.X% to flow flows $XX gross adjusted sheet, million approximately XXX quarter actually is adjusted to flow from EBITDA to in operations profit cash the was EBITDA in in Adjusted balance million. now while on trailing million our $XX million With the driven the of last and quarter, months QX quarter. was sales, and $XX in XX.X%. lower is in increased decreased $XX million, year. Trailing margin XX-month free margin

XXX,XXX we $X related the of common During invested included million we dividends projects. to of previously $XX $XX quarter, stock. million close facility Hexagon and repurchase Ragasco our on modernization mentioned X, which June in million the to spent our projects, million to capital paid $X spent million shares We $X acquisition

received proceeds dividends JVs from rate segment of and XXX% formation conversion quarter, cash during received of which million our also SES associated We represents with part $XX our $XX of the in XX% that unconsolidated equity as income. the with the Hexagon, we former million and on selling a JV

sheet $XXX cash, position, Continue of around with we balance our X.X% million long-term operate with we're Looking with yielding carrying the an debt facility. of liquidity ample ended quarter X%. positioned ending bank liquidity, to extremely at including ratio a $XXX low of with undrawn a leverage, rate the funded approximately million and average to X.X $XXX debt net and million turn, quarter leverage trailing well of EBITDA credit interest

minutes Adjusted for and volumes of slightly Consumer of $XX was EBITDA compared from year. up each December year million $XXX declared the for payable a quarter, of to few EBITDA of Products, the compared on is the to were net prior ago, Enterprises XX.X% of In spend Yesterday, a share a businesses. Board Worthington last the with XXXX. $X.XX the in flat margin XX.X% business in adjusted $XX QX in per million essentially QX was Consumer now We'll dividend and QX which year. million sales in

has in tools and as the we existing year-over-year are sales, by uncertainty repair/remodel from improvement continues businesses. Our well sequential our and XXX Despite QX. X.X% product new the home points, in up EBITDA to general which EBITDA team concerns and about to as consumer improvements spending headwinds depress encouraged the in face multiple continued was that respectively, by caused margins across impacting economy, decrease with along basis activity, volume categories, impacts economic consumer adjusted

last quarter XX% in from million $XX heating driven the $XXX decrease was as for The and compared cooking EBITDA and less challenging margin point-of-sale a we there to customers QX, deliver XX.X% activities celebrations was favorable XX% year $XX to no Products projects. living million a particularly and with volumes, million It and ago. as are activities, QX improvement of Products the million are home generated We of adjusted well Building improve and a growth believe of by material market-leading continue in for our is down destocking. $XXX retail essential current Building of positioned and market outdoor conditions business that Consumer was in products to and generated sales as year. product volumes EBITDA reflective adjusted mix. is space partner business a lower net

The ClarkDietrich that we prior strong in run the mix multiple sustained team margin navigating heating environment business and strength slightly in by in in demand end the by results other combined that going ClarkDietrich. compared the million largely was lower cooking large a million into has prices markets. and at ClarkDietrich choppy believe adjusted the prior being largely earnings some heating with quarter steel year. WAVE indications improving. in quarter, a in their $XX should the the are the the offset winter heating and strong equity earnings year. in million The to $X business destocking contractors' year-over-year continued backlogs contributed tank We stronger to current with very its earnings WAVE lower record course, $XX by contributed which decrease are EBITDA equity deliver in has but down help job volumes see great in to relative business seasonally from lower starting caused driven of done commercial compression the quarters. in mix a in volumes decline equity

start the as the very cost repeat solutions and Ragasco, that Hexagon which EBITDA adjusted Despite contributed team purchase we multiple Ragasco in Worthington continuing of completed acquisition to at innovation accounting million team some $X happy and future on to included quarters. $X.X build excellent continues of value across the with delivering We're the headwinds, and have Hexagon which team. customers, Products do sales of QX million of strips. value-added of reputation million, quarter, part Building of its to deal we not adjustments $XX Additionally, the expect

point, this to people we're At might any take have. happy questions

Operator

Thompson Group. first the Instructions] line Research comes [Operator Thompson Your of from question Kathryn from

Kathryn Thompson

How have markets getting the been if more there any more -- timing quarter. to just in projects? of there more additional color relative is due weakness or end are cancellation is others? on that ClarkDietrich versus And regions any on Focus the color sluggish much versus

B. Rose

Andy. is this Kathryn, Yes.

space But their well. a mentioned. been in thing up is overall, on generally think little the has market actually other holding speaking, business bit issue have for goes off for up. it steel And lower prices pretty prices that I as of choppy, that has holding catch mean steel you I sort wait Joe is sort to to of when decline, an with the contractors prices.

now. of right So on margin there's going a bit that little compression

Joseph Hayek

is ClarkDietrich last -- X a Yes, company pretty competitors buys. market a declining ultimately oftentimes big ClarkDietrich buying ahead, better in so I a with smaller that steadily steel in the that's buy so, after of are And can like national regional months spot mean being it year prices. or right? prices function buys been we've

see But Andy is do you so And right there. on. yes, compression margin

that stabilize isn't reverses the or prices relatively I either market great, it's abates dynamic steady. but or demand and actually itself. steel you And actually rise think see

B. Rose

that the and firm areas, data about positive. X- a it a the your they centers projects put of outlook some is there's Kathryn, was I positive medium well the space, the commercial from will large that note to outlook. think even where is maybe player, ClarkDietrich metal short they're term, stimulus player benefit out to number largest in mega And that talked saying very national And stand other and government quite trend. a because And longer-term framing actually rather to X-year

Kathryn Thompson

kind a of to on that And was follow-up. the tag Yes.

what's to pricing steel part two the least that, the kind in Given with with field. inventory going of is at

ClarkDietrich in right inventories they these of So win do what to with be is you because bit little have of does need But projects. a catch-up. terms how mega then it insight now also,

B. Rose

talk way their ClarkDietrich maybe breadth job But their the of and competitors things their Well, inventories. is as take national the ability do of full can to can wins one they number just deliver a hours. that and they're truckloads site question a player steel XX I'll line, of we And to can't. product in example, then the first, a that with second about

they large very potentially not what these but customers little what on of also of the inventory, ton the premium because levels head. even then especially they can in inventory are of a do. have to do. have, win a of they a garner the projects, Joe, off top know, positioned I I don't And insight and terms don't are my that win capabilities if bit So of project, that very their well you only

Joseph Hayek

is they're their customers It's holding of actually typically so that distributor because much specific lot mentioned, relatively doing job a often as Andy plays, of it low a some of And inventory. what go things overly level get too ClarkDietrich to gotten some which to concerned of right, they that is but it's to inventory, strengths, we're heavy. the being able has, need where aren't not

Operator

question the Goldman Our Susan comes from from of line next Maklari Sachs.

Susan Maklari

the broadly more talking first health of is My the consumer. just question about

in Can Consumer came characterize relative across especially business in in Consumer hearing your talk of the what's fall the segment, as a lighter just winter? state partners? the would the And retail how volumes the some mentioned You and we into you perhaps little demand from your head the expectations. you to and that the

B. Rose

Yes.

the you have between talk improvement the a when in kind to Products of this And about you segmented I saw business Consumer bit think we Consumer, little products. some our quarter.

are We of X say, it's one the the and at recession. have think the selling I repair businesses celebrations outdoor and But our publicized and probably that, tools. categories: would well rest the remodel POS Tools essentially sort I where right weakest, of of living, levels. because outside now well-known is of

business more levels whatever of to the And at it's COVID sort obviously is a happening down normalized saw POS. So our what's significant increase level we from it's matches where levels. back but

most the for of different? anything you I think we're Joe, ton if not don't I But seeing impact So know, part, a have there.

Joseph Hayek

interest think that, that's the a That's, in think definitely you about we that's direction. right Consumer a I point in confidence rates. No, hear you XX I basis think, Yes. real, When -- right. and decline step

as house our starts decline, move sell it case, most so or mobility, People more their that's for to they're do rates to interest and remodel likely their And ready frequently first worst when repair into getting projects that neutral when case, business, Consumer influence house. people's right? ultimately they

And will so a be good lower interest rates guy.

of as were levels X really that the controls, we've opportunity flat years operating kind a QX X of ago. think reasons, lot ultimately, is also I kind essentially for why Andy around volumes. we But I in the is than benefit said, we see But taking which of rest, and to or cost expansion margin some lower work really we'll on had are certainly, you we're think, the at that on there. some of

Susan Maklari

over down, as where next cost quarters? the And can both helpful come the bit then color. go have the across on segment any thoughts Consumer the of could dynamics you trending That's talk price Products also and Building segment Okay. and a that that's steel about how prices the couple

B. Rose

very steel to as mean that the our for it and time, a a well run come way to extended And as you are we X don't of that fix predict. Year-over-year, that we is try I that prices, so good of an know, down. so difficult period obviously, uncertainty. portion out have prices we months prices XX have business call result, Yes.

of flowing to now, change but through acquisition prices, flat, lot the got Nippon Steel, quickly. our the benefit think, in up, buy there's some steel. steel very are an U.S. space around relatively I coming that and cycle And so trying can large press we see you of with numbers. election Obviously, Right steel a things

a you, believe business, change have we But former processing our we with the at partnership and steel can will I the tell world they're in quickly. best securing things So steel.

And -- do well think we'll so any in we're I environment.

Susan Maklari

you're what the one how Okay. as the year-end? And the we quarter. or And thinking WAVE your seeing about about more then a JV talk -- sneak dynamics go I really bright the in nice performance which Can there? in, just into is was you spot can you're the calendar

Joseph Hayek

terrific flat WAVE, acquisition soft more the there. looks DCR opportunities and of space slightly looks data ultimately WAVE small of portfolio across DCR growing true will but toehold on was get Yes. volumes is strength projects WAVE board, be to right, into there, in center space, is DCR small, of to same kind but WAVE commercial the and I them you're space several down. the another other markets end gets a in able mean, to revenue will containment the the still will WAVE get relative next center the that had quarter, and data that more part because obviously is be A but a of the at they --

saving and versus they there significantly some care of infrastructure and boded right? for The labor gotten the repair health ultimately rise and weighted be have proposition proposition well WAVE education, less As fact has for really them. products value new that value more around having bode to and WAVE well a is real availability but those on contractors' have to winning also continued intensive continue these projects having products proving contractors money that really mix to can drive continue of on and to labor pretty labor scarce. home labor, them, for costs But be great their remodel use and has

Operator

from the from comes of Canaccord Brian question Genuity. next McNamara line Your

Brian McNamara

the your mean, guess, XX our surprise curious, came What So ago? in delta like I'm I biggest or days obviously, the below, quarter to in expectations numbers expectations. I was well relative

B. Rose

it's but expecting a to sure margin ClarkDietrich we've been surprise, down. Brian, not I'm huge Yes. come necessarily

second surprised the a terms biggest bit that while, period a in in the I we longer like driver Building been of think it's little they've think in And for feel lasted maybe our we're heard I probably and obviously a both of just me Joe just little us And saw year-over-year. expected, was the And that business through Products. one now. we bit destocking so although mentioned, heating -- and of than we was that decline a you kind

And seeing so market we're evidence definitely that is that, up. picking

hopefully, it And the we're greener on so pastures. through

Joseph Hayek

there's had going company there including and heating was, are things of came in I the ultimately, And think, quarter, few that then market of grill And tanks. think, free cylinders hundred there the very gas Yes. that kind tanks aggressively. market, the large that into and handful are in I a a Brian, on like the price a thousand

were so us there Products And owned businesses ultimately performance. Building that for the revenues down, is which colored wholly

And so ago that's but didn't impacted something see months quarter. ultimately that we the X

B. Rose

XX-pound gas the grill tank. That's Yes. cylinder

Brian McNamara

Got your of at is you're of this cooking you thing kind of heating bottom sell-through we're with it. post-pandemic guess the And that market of customers? kind of evidence sell-in gives and the the that I seeing that confidence kind matching kind

B. Rose

seasonally been Yes. And like, surely, have colder moving we're also weather there. slowly, it impacts right? which we're well, moving but but but very they're their strong the into into temperatures seems warm, getting as their The period, business

our conjunction at in customers just that's that, so with distributor And destocking largely complete.

Brian McNamara

kind Great. or days thing? kind expectation kind change maybe I willingness of finally, XX more to a any Any invest Products? your rate you was think announcement since And Fed week? of mood bps change ago, XX mood customers have in then last the the with of mean, out seen I of cut of kind Building

Joseph Hayek

us the and feels -- anticipate like are a for what I looking or But from points we our a come, to from it is. whether rate buying answer makes but, that of XX year where they Building it this better we've today. sometimes that I year XX now, to that rates us to interest certainly and at lower entered and basis CapEx. it's than But think of think you're think customers whatever interest feel going is, the and us and cuts our part are be is cycle. it's might mean seems in lot more I this Products fact, I customers, they're more a new the yes, And

to going there so a interest rates is lower bit. quite help And

switch than was think will fact that and less have everybody's the appreciated don't now I definitely going forward rearview. be back catch But expensive up. flip it going in to basis XX point capital very people that the likely

Operator

from CJS [Operator Your the Dan of line from Securities. question Instructions] next Moore comes

Will Seddon

This on answered. have on been lot is Will Dan. Will questions is Dan. This for for A of

And I to Or continue even to undercapitalized cash is remains relative I would generation what your prefer build still after shareholders? returning ask potential focus liquidity you consider the to your Hexagon larger the would you sheet thought So your balance line? are for your priorities just down would acquisition, development? arguably for primary to deals M&A cash capital

B. Rose

Yes.

for kind you've us think bit. the of question I a answered little

doing do building The companies very top right job aggressive opportunistic terms some now on capital I very Would execute is buyback? and bought is trying continue But we've The are of that an opportunity, right right now, that. in pipeline, to there right priority consider the finding that is the pivoting answer mostly obviously, we priority. stock for think situation. now be Our quarter, strategy. a strategy, and is terms we've at We a the we'll dilution, share to that. would it. if to I and share the growth of and buyback, to just in price M&A But yes. our allocation during M&A got good would an were question done probably of back a fit a we mean the good offset top consider that we're massive

Operator

the of Very John And from question comes next Independent line your Research. Tumazos from Tumazos John

John Tumazos

is it your what say fraction tied you would to In commercial of to as housing terms of Building opposed construction? Products,

Joseph Hayek

residential. businesses are almost are towards the relatively a no new, remodel versus to owned though bit repair, mix, The So probably maintenance, a bias little XX-XX, John. a with of close wholly JVs

John Tumazos

them like your kilo, month spent XX% year, costs And back summer. my a go globally, a XX, maybe in sell In staples the strong in XX And with cetera, where since they I would things for Europe that food, a to strapped raise argument X the X Greece, catch global strategy, stays every consumer so EUR or et coverage, men appear agriculture on is pandemic It that. terms fisherman a of tougher it expensive. EUR insurance cut premiums, EUR a they I more and try kilo, consumer and XX is seem like the night. tougher work hard nuts. XX boat lifting the warming a it the there's and it's around in make EUR would world food they

multiples So to consumer or $XX businesses, little you there's or and acquire why stock. and goodwill pay not Hexagon so paid intangibles. a And large underperformers million X $XX performers why or $XX -- for million back new in and X flat buy million

Joseph Hayek

but right, So group, part a -- as to nor well it's appliance your not is Products our an taken. nondurable. consumer But a is it It's Hexagon a of is a trip point that overseas not or Ragasco, Building hotel. nice

we one, very speaking, so feel And like aren't expensive. relatively our products,

from some Walmart. in taking when are, they tracked, they'll or at some like actually home, an our hotel them Depot things more somewhere camping out a at people that. spend and using products, and and to down or that to trip also oftentimes, Two, you they or might Lowe's shy cooking find our from but of else airplane go buying fact, time on of away doing oftentimes, Home might If or products trade

talked right rest we've of So you're moderate a most that of that portfolio. lot I our stuff. perspective. with for then advantage, makes some to for And good types us since like experiences, done they've right? products differently. our high margin, headwinds the find a positioned assured, the But absolutely low then, from about think lot sense we've are our allocation got with mean a if about are way people to now, happy in we bought we think asset we're to that I COVID, we'll like a And capital we deals that businesses some. John, thinking we're capital And the competitive economy. But allocation feel that see of can't starting what constantly about softness intensity of then think I the relative in look despite

John Tumazos

more. X that? program why the Industries just there ask a for water stock something I put the with like XXX,XXX smaller toe million or of start share shares. Did would one you can back I buy was demerger. the quarter chunks. X.X your old Worthington last million the The reason or know in in But week the we're

B. Rose

Yes. and historically, undervalued, to that's that very proved John, of believe I we the used I think we the business. We we went trade And were mean, through much it. why steel out. separation

John Tumazos

done. Congratulations well as

B. Rose

So and on the appropriate an we think trading have is XXx XXx we now EBITDA, and which for we're between return multiple margin capital today. the profile that

Products into right the all share doing opportunistic As we're That offsetting scale focus earlier, our world-class repurchase is be a now, gaining front. now business right And dilution. But on is mentioned I Building building of and may the Consumer company. kind we some through M&A. being said,

Operator

question-and-answer turn Rose that final over now for And some remarks. closing I back the session, will Andy call our concludes to

B. Rose

and coming by showcasing I Thanks. our the forward to saying proud put growth to Yes. people world-class that want day, we to they achieve years. the in forth every we're Thanks, finish just everyone. of look our ability and effort

Joseph Hayek

Thanks, everybody.

Operator

your This concludes Thank today's participation. you call. conference for

now may You disconnect.

Worthington Industries (WOR) 25 Sep 242025 Q1 Earnings call transcript