Financial Performance - Net sales for the three months ended August 31, 2024, were $257,308, a decrease of 17.4% compared to $311,918 for the same period in 2023[29]. - Gross profit for the same period was $62,495, down from $69,630, reflecting a gross margin of 24.3%[29]. - Net earnings from continuing operations were $24,008, compared to $26,831 in the prior year, representing a decline of 10.5%[29]. - The company reported an operating loss of $4,699 for the three months ended August 31, 2024, an improvement from a loss of $7,324 in the same period last year[29]. - Net earnings from continuing operations attributable to controlling interest for the three months ended August 31, 2024, were $24,253,000, compared to $26,831,000 for the same period in 2023, reflecting a decrease of approximately 9.6%[66]. - Basic EPS from continuing operations for the three months ended August 31, 2024, was $0.49, down from $0.55 in the prior year, indicating a decline of about 10.9%[66]. - Adjusted EBITDA from continuing operations for the three months ended August 31, 2024, was $48,437,000, after accounting for a net restructuring and other expense of $1,158,000[68]. - Adjusted EBITDA from continuing operations decreased to $48.4 million, down $17.5 million or 26.6% from $65.9 million in the first quarter of fiscal 2024[128]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $178,547 from $244,225, a decline of 27%[34]. - Cash generated from operating activities was $41.1 million for the three months ended August 31, 2024, down from $59.7 million in the same period last year, primarily due to lower net earnings and a $25.7 million decrease in dividends from unconsolidated joint ventures[136]. - Net cash used by investing activities increased to $88.7 million in the first quarter of fiscal 2025, compared to $44.3 million in the first quarter of fiscal 2024, driven mainly by the acquisition of Ragasco[138]. - Net cash used by financing activities was $18.1 million in the first quarter of fiscal 2025, significantly lower than $269.3 million in the same period last year, which included a $243.8 million repayment of long-term debt[140]. - As of August 31, 2024, the company had $500.0 million of borrowing capacity available under its Credit Facility, with no outstanding borrowings drawn against it[144]. - The company believes it has adequate resources to meet operational needs for at least the next 12 months, including cash and unused credit lines[132]. Dividends and Share Repurchase - The company declared cash dividends of $0.17 per common share, down from $0.32 in the previous year[29]. - The Board declared a quarterly dividend of $0.17 per common share, payable on December 27, 2024, to shareholders of record on December 13, 2024[101]. - The company repurchased 150,000 common shares for $6.8 million at an average price of $45.35 during the first quarter of fiscal 2025[101]. - The total number of common shares available for repurchase as of August 31, 2024, was 5,915,000, as part of the company's ongoing share repurchase program[60]. Assets and Liabilities - Total assets increased slightly to $1,645,271 from $1,638,637, reflecting a growth of 0.4%[27]. - The company’s total liabilities decreased to $742,030 from $747,625, a reduction of 0.7%[27]. - The total liability associated with restructuring activities as of August 31, 2024, is expected to be paid in the next 12 months[53]. - The company reported a negative asset balance of $110,522 related to WAVE, indicating cumulative distributions exceeded the investment balance[49]. Acquisitions and Investments - The company acquired Halo on February 1, 2024, consolidating its financial results with a controlling interest of 80%[37]. - The company acquired Ragasco for a total purchase price of $109,295 million, including cash consideration of $102,156 million and an estimated earnout of $7,139 million[72][77]. - The acquisition of Ragasco added $32,840 million in identifiable intangible assets, including $14,660 million for technological know-how and $12,660 million for customer relationships[75]. - The company held investments in several unconsolidated joint ventures, including ClarkDietrich (25%) and Sustainable Energy Solutions (49%)[48]. Market Conditions - U.S. residential construction spending increased by approximately 7.4% year-over-year, reaching $911,429 million in August 2024[107]. - U.S. non-residential construction spending rose to $1,220,507 million, reflecting a year-over-year increase of $60,657 million[107]. - The average price of hot-rolled steel decreased to $690 per ton, down $189 from the previous year[107]. - The Architectural Billings Index (ABI) fell to 45.7 in August 2024, indicating a decline in demand for architectural services, while the Dodge Momentum Index increased to 220.4, suggesting a potential future pipeline of projects[109]. Tax and Income - The estimated annual effective income tax rate for the three months ended August 31, 2024, was 24.5%, compared to 25.1% for the same period in 2023[65]. - Income tax expense was $6.8 million with an effective tax rate of 24.5%, down from $9.0 million and 25.1% in the prior year[127]. Other Comprehensive Income - Other comprehensive income (loss) for the three months ended August 31, 2024, was a loss of $84, with significant impacts from foreign currency translation and cash flow hedges[58]. - The company recognized a deferred remeasurement loss of $1,835 million in AOCI related to Euro-denominated debt as a net investment hedge for foreign operations in Portugal[87]. - The estimated amount of net gains recognized in AOCI expected to be reclassified into net earnings within the next 12 months is $437 million[86]. Certifications and Compliance - The report is formatted in Inline XBRL, complying with Regulation S-T[161]. - Certifications from the Principal Executive Officer and Principal Financial Officer are included[162]. - The report is signed by Joseph B. Hayek, Executive Vice President and Chief Financial and Operations Officer[167]. - The filing is pursuant to the requirements of the Securities Exchange Act of 1934[165].
Worthington Industries(WOR_V) - 2025 Q1 - Quarterly Report