Worthington Enterprises, Inc. (NYSE:WOR) is one of the 10 most undervalued industrial stocks to buy according to analysts. On January 19, Seaport Global reiterated its Buy rating on the Worthington Enterprises, Inc. (NYSE:WOR) stock. It also set a target price of $74. Last month, Canaccord Genuity lowered its price target for the shares from $73 to $69 on December 19. Canaccord analyst Brian McNamara adjusted the firm’s price target while maintaining a Buy rating on the stock. RBC Calls Kodiak Gas (KGS) Q ...

COLUMBUS, Ohio, Jan. 16, 2026 (GLOBE NEWSWIRE) -- Worthington Enterprises Inc. (NYSE: WOR), a designer and manufacturer of market-leading brands that improve everyday life by elevating spaces and experiences, today announced the completion of its planned acquisition of LSI Group, LLC (LSI) of Logansport, Indiana. LSI, which includes BPD, Logan Stampings, LSI Metal Fabrication and Roof Hugger®, is one of the largest U.S. manufacturers of standing-seam metal roof clips and retrofit components in the commercia ...

Summary of Worthington Enterprises Conference Call Company Overview - **Company Name**: Worthington Enterprises - **Industry**: Consumer and Building Products - **Background**: Formerly known as Worthington Industries, the company separated its steel processing business on December 1, 2023, creating distinct value opportunities for both entities [3][4] Core Business Segments - **Business Segmentation**: - Building Products: Approximately 60% of revenue, 75% of EBITDA [8][9] - Consumer Products: Includes tools, outdoor living products, and celebrations [12][21] - **Manufacturing**: Over 80% of products are sourced and manufactured in the U.S. [5] Financial Performance - **Recent Financials**: - Adjusted EBITDA increased by 21%, nearly $50 million year-over-year [19] - EBITDA margins expanded by approximately 260 basis points [19] - Free cash flow conversion is nearly 96% [23] - **CapEx**: $30 million spent on facility modernization projects, with an additional $30 million planned [23][41] Strategic Initiatives - **M&A Strategy**: - Focus on acquiring high-margin, lower capital intensity businesses in niche markets [16] - Recent acquisitions include Elgin and LSI, both expected to enhance the company's portfolio [18][39] - **Innovation and Transformation**: Emphasis on continuous improvement and operational excellence [6][8] Market Dynamics - **Consumer Products**: - Facing headwinds from tariffs, high interest rates, and cautious consumer spending [13][21] - Store count for Balloon Time products increased by 63% over the last two years [12] - **Building Products**: - Strong performance in heating and cooking, with a shift from heating oil to propane noted [31][32] - Joint ventures like WAVE and ClarkDietrich are performing well despite market fluctuations [25][26] Challenges and Risks - **Tariff Exposure**: Approximately 6%-7% of revenue is affected by tariffs, primarily from Asian imports [33][34] - **Market Conditions**: Commercial construction is expected to peak in May 2024, with potential slowdowns thereafter [11][26] Competitive Positioning - **Market Leadership**: The company positions itself as a domestic manufacturer with a strong value proposition, particularly in the building products sector [34] - **Financial Flexibility**: Maintains a conservative leverage ratio of less than 0.5 times net debt to EBITDA, allowing for strategic capital deployment [43][44] Conclusion - Worthington Enterprises is well-positioned for growth through strategic acquisitions, operational excellence, and a focus on innovation, despite facing macroeconomic challenges and tariff-related risks. The company’s strong financial performance and market leadership in niche segments provide a solid foundation for future opportunities.

Financial Performance - Net sales for the three months ended November 30, 2025, were $327,452 thousand, a 19.5% increase from $274,046 thousand in the same period of 2024[27] - Gross profit for the six months ended November 30, 2025, was $166,913 thousand, up 22.3% from $136,554 thousand in the prior year[27] - Operating income for the three months ended November 30, 2025, was $12,264 thousand, compared to $3,521 thousand in the same period of 2024, representing a significant improvement[27] - Net earnings attributable to controlling interest for the six months ended November 30, 2025, were $62,476 thousand, a 18.9% increase from $52,513 thousand in the same period of 2024[27] - Adjusted EBITDA for the six months ended November 30, 2025, was $125,538 million, compared to $104,649 million for the same period in 2024, reflecting an increase of about 19.9%[76] - Total net sales for the three months ended November 30, 2025, were $327,452 million, an increase from $274,046 million in the same period of 2024, representing a growth of approximately 19.5%[75] - Adjusted EBITDA for the three months ended November 30, 2025, was $60.5 million, a 7.6% increase from $56.2 million in the prior year[129] Cash and Liquidity - Cash and cash equivalents at the end of the period were $180,288 thousand, a decrease from $250,075 thousand at the beginning of the period[33] - The company reported a net cash provided by operating activities of $51,518 thousand for the three months ended November 30, 2025, compared to $49,053 thousand in the same period of 2024[33] - Net cash provided by operating activities was $92.6 million for the six months ended November 30, 2025, an increase of $2.4 million compared to the prior year[158] - Net cash used by investing activities was $117.9 million during the six months ended November 30, 2025, primarily due to the acquisition of Elgen and capital expenditures[159] - Net cash used by financing activities was $44.5 million for the six months ended November 30, 2025, including $20.0 million for share repurchases and $18.2 million in dividends[161] - The company has $500,000 million available under its multi-year revolving Credit Facility, with no borrowings outstanding as of November 30, 2025[56] - The company had no outstanding borrowings against its $500.0 million Credit Facility as of November 30, 2025, indicating full borrowing capacity available for future use[164] Assets and Liabilities - Total assets increased to $1,753,333 thousand as of November 30, 2025, compared to $1,695,152 thousand as of May 31, 2025[25] - Total liabilities rose to $790,310 thousand as of November 30, 2025, from $756,915 thousand as of May 31, 2025[25] - As of November 30, 2025, the total equity balance was $963.023 million, with controlling interest at $962.599 million and noncontrolling interest at $424 thousand[58] Dividends and Share Repurchase - The company declared cash dividends of $0.19 per common share for the three months ended November 30, 2025, compared to $0.17 in the same period of 2024[27] - The company declared cash dividends totaling $9.432 million for the six months ended November 30, 2025, consistent with the previous period[58] - The company repurchased 350,000 common shares during the six months ended November 30, 2025, leaving 5,015,000 shares available for repurchase[59] - The total number of common shares purchased from September 1 to November 30, 2025, was 286,578 shares, with an average price of $55.65 per share[177] - The maximum number of common shares that may yet be purchased under the publicly announced repurchase plans is 5,015,000 as of November 30, 2025[177] Acquisitions and Investments - The company acquired Elgen for $91,184 million, which is expected to enhance the Building Products segment's performance[79] - Goodwill from the Elgen acquisition amounted to $34,783 million, reflecting strategic benefits beyond the fair value of identifiable net assets[81] - The total identifiable assets acquired from Elgen were valued at $99,591 million, with intangible assets accounting for $34,800 million[82] - The company signed an agreement to acquire LSI for approximately $205 million, expected to close in January 2026, enhancing its Building Products segment[102] - On December 3, 2025, the company acquired Hydrostat's propane distribution and refurbishment assets for approximately $9.578 million, which will also be reported under Building Products starting Q3 fiscal 2026[103] Market Conditions and Demand - The company reported that demand for its products is closely tied to macroeconomic conditions, with moderate inflation and high mortgage rates impacting consumer sentiment and construction activity[116] - Inventory levels at key retail and distributor customers remained aligned with end-consumer demand, with no material build-up in distribution or retail channels[119] - The company expects demand to remain uneven as market participants await clearer signals on inflation and economic momentum[117] - U.S. residential construction spending was approximately 5% below prior year levels, while non-residential construction remained stable[121] - Existing home sales improved in November 2025, but authorized housing permits and private housing starts declined, indicating a weaker forward pipeline[121] - Builder sentiment, measured by the HMI, was at 38 in November 2025, marking the 19th consecutive month below the 50 threshold, with 41% of builders reporting price cuts[121] Financial Reporting and Compliance - The effective tax rate disclosures will be enhanced starting with the 2026 Form 10-K due to the adoption of ASU 2023-09[42] - The company expects no material impact on its financial condition from the adoption of ASU 2024-03 regarding expense disaggregation disclosures[43] - The estimated annual effective tax rate (ETR) for both the six months ended November 30, 2025, and November 30, 2024, was 24.1%[68] - Income tax expense for the three months ended November 30, 2025, was $8.8 million, a decrease of 3.3% from $9.1 million in the prior year quarter[145] - The company remains in compliance with financial covenants of its debt agreements, which do not include credit rating triggers or material adverse change provisions[164] - There were no changes in internal control over financial reporting that materially affected the company's financial reporting during the period covered[171] - The company is involved in various judicial and administrative proceedings but does not expect any material adverse effects on its business or financial position[173] - Risk factors have not changed significantly from those disclosed in the 2025 Form 10-K, which could materially affect the company's business and financial condition[174] - The company maintains effective disclosure controls and procedures, ensuring timely and accurate reporting of required information[169]

Core Insights - Worthington Enterprises will participate in the CJS Securities New Ideas for the New Year conference on January 14, 2026, at 8:45 a.m. ET [1] - The company's leadership will discuss strategies for growth and shareholder value through innovation, transformation, and M&A [2] Company Overview - Worthington Enterprises is a designer and manufacturer of brands that enhance everyday life, operating in two main segments: Building Products and Consumer Products [3] - The Building Products segment includes solutions for heating, cooling, cooking, construction, and water systems, while the Consumer Products segment focuses on tools, outdoor living, and celebrations [3] - The company employs approximately 4,000 people across North America and Europe [4] Corporate Philosophy and Community Engagement - Founded in 1955, Worthington Enterprises prioritizes a people-first philosophy, aiming to generate profits for shareholders while empowering employees [5] - The company is actively involved in local communities through volunteer efforts and the Worthington Companies Foundation, and it participates in workforce development programs [5]

Core Viewpoint - The investment strategy focuses on long-term investments while also utilizing short-term shorts to identify alpha opportunities through bottom-up analysis of individual companies' fundamentals [1] Group 1: Investment Strategy - The approach emphasizes medium to long-term investment duration [1] - The goal is to identify companies with strong fundamentals, sustainable competitive advantages, and growth potential [1]

Financial Performance - Net sales for Q2 2026 were $327.5 million, an increase of 19% compared to Q2 2025[4] - Adjusted net earnings increased by 7% to $32.5 million, while net earnings decreased by 3% to $27.0 million[4] - Adjusted EBITDA grew 8% to $60.5 million, with operating income rising to $12.3 million from $3.5 million in the prior year[4][7] - Free cash flow improved by 15% to $39.1 million, up from $33.9 million in Q2 2025[4][11] - Operating cash flow for the quarter was $51.5 million, a 5% increase from $49.1 million in Q2 2025[4][11] - For the three months ended November 30, 2025, the GAAP net earnings were $27,328 thousand, with a diluted EPS of $0.55, while non-GAAP net earnings were $32,460 thousand, resulting in a diluted EPS of $0.65[35] - The adjusted EBITDA for the six months ended November 30, 2025, was $125,538 thousand, compared to $104,649 thousand for the same period in 2024, reflecting a year-over-year increase of approximately 20%[39] - Free cash flow for the three months ended November 30, 2025, was $39,086 thousand, up from $33,892 thousand in the same period of 2024, indicating a growth of about 15%[42] - The operating cash flow conversion for the six months ended November 30, 2025, was 148%, compared to 172% for the same period in 2024[42] Segment Performance - Building Products segment net sales increased by 31.9% to $207.5 million, driven by higher volumes and contributions from Elgen Manufacturing[14] - Consumer Products segment generated net sales of $119.9 million, a 2.7% increase over the prior year quarter[13] - The Building Products segment reported net sales of $207,528 thousand for the three months ended November 30, 2025, a 32.0% increase from $157,298 thousand in the same period of 2024[31] Assets and Liabilities - Total debt at quarter end was $305.3 million, with no borrowings under the revolving credit facility[12] - Total assets as of November 30, 2025, were $1,753,333 thousand, an increase from $1,695,152 thousand as of May 31, 2025[27] - Cash and cash equivalents decreased to $180,288 thousand from $250,075 thousand at the beginning of the period[29] Dividends and Shareholder Returns - The company declared a quarterly dividend of $0.19 per common share, payable on March 27, 2026[4] - Dividends declared per common share increased to $0.19 for the three months ended November 30, 2025, compared to $0.17 in the same period of 2024[25] Acquisitions and Investments - The company announced an agreement to acquire LSI Group for approximately $205 million, expected to close in January 2026[4][15] - The company’s investment in property, plant, and equipment for the three months ended November 30, 2025, was $12,432 thousand, compared to $15,161 thousand in the same period of 2024[42] Other Financial Metrics - Adjusted EBITDA margin for the consolidated results was 18.5% for the three months ended November 30, 2025, down from 20.5% in the same period of 2024[31] - The adjusted EBITDA margin for the three months ended November 30, 2025, was 18.5%, down from 20.5% in the same period of 2024[39] - The company reported a restructuring and other expense of $1,644 thousand for the three months ended November 30, 2025, which impacted the GAAP earnings[35] - The loss on the partial sale of investment in SES was $2,950 thousand for the three months ended November 30, 2025, affecting the overall earnings[35] - The net earnings attributable to controlling interest for the six months ended November 30, 2025, was $62,476 thousand, compared to $52,513 thousand in 2024, representing a year-over-year increase of approximately 19%[42]

The Hecht Commodity Report is one of the most comprehensive commodities reports available today from a top-ranked author in commodities, forex, and precious metals. My weekly report covers the market movements of over 29 different commodities and provides bullish, bearish, and neutral calls, directional trading recommendations, and actionable ideas for traders and investors.I last wrote about Worthington Enterprises ( WOR ) on Seeking Alpha on September 24, 2025 , after the company’s last earnings report. W ...

Core Insights - Worthington Enterprises Inc. reported a fiscal 2026 second-quarter EPS of $0.65, missing the estimated $0.704 by 9.72%, although it showed a slight increase from $0.60 a year ago [1][6] - The company generated revenue of approximately $327.5 million, exceeding the estimated $310.6 million, representing a 19% year-over-year increase from $274.05 million [2][6] - Adjusted net earnings rose by 7% to $32.5 million, and adjusted EBITDA increased by 8% to $60.5 million, indicating improved financial performance [3][6] Financial Performance - Operating cash flow increased by 5% to $51.5 million, while free cash flow improved by 15% to $39.1 million, reflecting the company's efforts to enhance financial metrics [3] - The company repurchased 250,000 common shares for $13.7 million, indicating a commitment to increasing shareholder value, with 5,015,000 common shares remaining outstanding [4] - Worthington's financial ratios include a P/E ratio of 26.13 and a debt-to-equity ratio of 0.36, suggesting a strong financial position with low debt levels [4] Liquidity and Investment Metrics - The current ratio of 3.26 indicates a strong ability to cover short-term liabilities with short-term assets [5] - An earnings yield of 3.83% suggests a favorable return on investment based on earnings, demonstrating solid financial health and potential for future growth [5]

Financial Data and Key Metrics Changes - Revenue in Q2 increased by over 19% year-over-year, reaching $327 million compared to $274 million in the prior year quarter [5][18] - Adjusted EBITDA grew by 8% year-over-year, totaling $60 million, with an adjusted EBITDA margin of 18.5% [5][19] - Adjusted earnings per share rose to $0.65 from $0.60 in the prior year quarter [17][18] - Gross profit increased to $85 million, with a gross margin of 25.8%, down from 27% in the prior year quarter [19] Business Line Data and Key Metrics Changes - Consumer products net sales were $120 million, up 3% year-over-year, with adjusted EBITDA flat at $15 million [24] - Building products net sales grew 32% year-over-year to $208 million, driven by higher volumes and contributions from the Elgen acquisition [26][28] - Excluding Elgen, building products net sales increased by 16% year-over-year [26] Market Data and Key Metrics Changes - The company noted mixed market conditions, with cautious consumers and muted construction activity impacting performance [14] - The acquisition of LSI is expected to enhance the company's position in engineered building systems and add resilient revenue streams [12][14] Company Strategy and Development Direction - The company aims to optimize its business through organic growth and strategic acquisitions while increasing margins [6][8] - The planned acquisition of LSI, a leader in metal roofing components, aligns with the strategy of adding market leaders in niche markets [12][13] - The company continues to focus on innovation and transformation as key growth drivers [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current environment and gaining market share despite challenging conditions [5][14] - The company is well-positioned for growth as it enters its seasonally strongest quarters [29] - Management highlighted the importance of their workforce and recognized the company for its workplace culture and responsibility [15] Other Important Information - The company reported a net debt to trailing adjusted EBITDA ratio of approximately 0.4 times, indicating strong financial flexibility [22] - Capital expenditures totaled $12 million in the quarter, with plans for continued investment in operations [20][21] Q&A Session Summary Question: Can you expand on the strategy for growth from the acquisition of LSI? - Management emphasized the complementary nature of acquisitions and the focus on leveraging manufacturing expertise and innovation [32][33] Question: What are the opportunities related to data centers? - Management noted that several business segments provide products for data centers, contributing to growth, though it represents less than 10% of total sales [39][40] Question: How sustainable is LSI's margin profile? - Management highlighted LSI's strong reputation and resilient demand, indicating a sustainable margin profile driven by retrofit opportunities [46][48] Question: What is the outlook for ClarkDietrich? - Management acknowledged challenges in the new construction environment but expressed confidence in maintaining flat performance moving forward [56][58] Question: How does the company plan to balance capital allocation? - Management indicated a balanced approach to capital structure, including strategic M&A and returning capital to shareholders [58]