WORTHINGTON ENTERPRISES, INC. Q3 FY2025 earnings call

• Joe Hayek noted Q3 set records in production and shipments, with year-over-year and sequential growth in adjusted EBITDA and earnings per share. • Product launches included SureSense in Building Products and Balloon Time Mini helium tank in Consumer Products. • Investments in automation, facility modernization, and AI, including an 80/20 project in the water business. • M&A activities such as the Ragasco acquisition, HALO griddle at Walmart, and Level5 drywall tools with Sherwin-Williams. • Strong balance sheet and liquidity for pursuing additional growth through acquisitions.

In Consumer Products, Q3 net sales grew 5% year-over-year to $140 million, driven by higher volumes. Adjusted EBITDA was $29 million with a 20.5% margin. In Building Products, Q3 net sales grew 11% year-over-year to $165 million. Adjusted EBITDA for the quarter was $53 million with a 32% margin. Joint ventures like ClarkDietrich faced headwinds from steel price declines and weather, while WAVE continued to execute well in a flat market.

• Confident in accelerating profitable growth and creating long-term value for shareholders. • Board declared a quarterly dividend of $0.17 per share payable in June 2025. • Capital allocation will be balanced with bias towards growth, monitoring share buybacks and M&A opportunities.

• Trade tariffs and trade-related uncertainty, with fluidity in the environment. • Macroeconomic uncertainty impacting consumer sentiment and demand. • Volatility in steel prices affecting joint ventures like ClarkDietrich. • Supply chain disruptions from weather and other factors.

Q: Kathryn Thompson asked about tariffs, pricing, and supply issues.

A: Joe Hayek stated they're well-positioned, have diversified sourcing, and are working on offsetting cost increases and price adjustments.

Q: Daniel Moore inquired about free cash flow conversion and share buybacks.

A: Colin Souza said capital allocation will be balanced with bias towards growth, and buybacks will continue to be monitored.

Q: Charles Perron asked about M&A pipeline and margin performance.

A: Colin Souza mentioned M&A pipeline is healthy, and margins are driven by mix shift and operational initiatives.

Q: Brian McNamara questioned organic sales growth and gross margin.

A: Colin Souza and Joe Hayek discussed organic growth excluding SES and Ragasco, and gross margin drivers including mix shift and seasonality.

Q: Walt Liptak asked about 80/20 work and Consumer business.

A: Colin Souza and Joe Hayek talked about the 80/20 project in the water business and positive consumer business trends despite uncertainty.