Worthington Industries(WOR) - 2026 Q1 - Quarterly Report

Commonly Used or Defined Terms This section defines key terms and acronyms used throughout the Form 10-Q for clarity and consistent understanding Definitions This section provides definitions for key terms and acronyms used throughout the Form 10-Q, ensuring clarity and consistent understanding of financial and operational terminology - The document defines various terms such as ABI, ATSR, AOCI, ASU, Board, CARES Act, CEO, ClarkDietrich, CODM, common shares, COVID-19, CPI, Credit Facility, current year quarter, DIY, DMI, EBIT, EBITDA, Elgen, EPS, equity income, ETR, Exchange Act, FASB, first quarter of fiscal 2026, fiscal 2024, fiscal 2025, fiscal 2026, Form 10-Q, GAAP, GDP, Halo, HMI, HVAC, LIRA, MD&A, N.M., OCI, prior year quarter, PSLRA, Ragasco, SEC, Separation, SG&A, simple SOFR, U.S., WAVE, Workhorse, Worthington Enterprises, Worthington Steel, 2025 Form 10-K, and 2026 Form 10-K[9] Cautionary Note Regarding Forward-Looking Statements This section warns that actual results may differ from forward-looking statements due to various risks and uncertainties Forward-Looking Statements Disclosure This section outlines the company's forward-looking statements, emphasizing that actual results may differ materially due to various risks and uncertainties - Forward-looking statements are identified by words like 'believe,' 'expect,' 'anticipate,' and similar phrases, reflecting current expectations, estimates, or projections concerning future results or events[10] - Key risk factors include future cash positions, liquidity, strategy, anticipated benefits of the Separation, financial and operational performance, pricing trends for raw materials, ability to improve margins, demand trends, and effects of judicial rulings and regulations[11] - Other significant risks include conditions in financial markets (inflation, interest rates, recession), tariffs, supply chain constraints, adverse claims experience, facility closures, customer demand changes, international business risks, reliance on AI technologies, and environmental regulations[12] Use of Non-GAAP Financial Measures and Definitions This section explains the company's use of non-GAAP financial measures and provides their definitions for performance evaluation Non-GAAP Financial Measures Overview The company uses non-GAAP financial measures like Adjusted operating income (loss), Adjusted net earnings, Adjusted EPS - diluted, and Adjusted EBITDA to evaluate ongoing performance, financial planning, and incentive compensation - Non-GAAP financial measures are used by management to evaluate ongoing performance, engage in financial and operational planning, and determine incentive compensation, providing supplemental information not reflective of ongoing operations[15] - Adjusted operating income (loss) and Adjusted net earnings exclude specific items, while Adjusted EPS - diluted is calculated by dividing adjusted net earnings by diluted weighted-average common shares outstanding[16][17] - Adjusted EBITDA, a key measure for segment performance, excludes interest, taxes, depreciation, amortization, stock-based compensation, impairment charges, and restructuring activities, as these are considered non-recurring or non-cash[18][20] Consolidated Results – Selected Non-GAAP Adjusted Results The company reported significant improvements in non-GAAP adjusted financial metrics for the three months ended August 31, 2025, compared to the prior year, reflecting better operational performance Consolidated Non-GAAP Adjusted Results (Three Months Ended August 31, In thousands) | Metric | August 31, 2025 | August 31, 2024 | | :----------------------------- | :-------------- | :-------------- | | Adjusted Operating Income | $11,719 | $(3,541) | | Adjusted Net Earnings | $37,247 | $25,121 | | Adjusted Diluted EPS | $0.74 | $0.50 | Consolidated Adjusted EBITDA (Three Months Ended August 31, In thousands) | Metric | August 31, 2025 | August 31, 2024 | | :----------------------------- | :-------------- | :-------------- | | Net earnings (GAAP) | $34,821 | $24,008 | | Net earnings attributable to controlling interest | $35,148 | $24,253 | | Interest expense, net | $63 | $489 | | Income tax expense | $10,860 | $6,782 | | EBIT | $46,071 | $31,524 | | Restructuring and other expense, net | $2,476 | $1,158 | | Adjusted EBIT | $48,547 | $32,682 | | Depreciation and amortization | $13,086 | $11,830 | | Stock-based compensation | $3,427 | $3,925 | | Adjusted EBITDA (non-GAAP) | $65,060 | $48,437 | - Adjusted EBITDA increased by $16.6 million (34.3%) from $48.4 million in the prior year quarter to $65.1 million in the current year quarter[22] Part I. Financial Information This part presents the company's unaudited consolidated financial statements and management's discussion and analysis of financial performance Item 1. Financial Statements This section presents the unaudited consolidated financial statements for Worthington Enterprises, Inc., including balance sheets, statements of earnings, comprehensive income, and cash flows Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Consolidated Balance Sheet Highlights (In thousands) | Metric | August 31, 2025 | May 31, 2025 | | :-------------------------------- | :-------------- | :------------- | | Total Assets | $1,738,137 | $1,695,152 | | Total Current Assets | $626,040 | $685,370 | | Cash and cash equivalents | $167,122 | $250,075 | | Total Inventories | $201,560 | $169,393 | | Total Liabilities | $778,306 | $756,915 | | Total Current Liabilities | $189,788 | $196,842 | | Long-term debt | $306,010 | $302,868 | | Total Equity | $959,831 | $938,237 | - Total assets increased by $43.0 million (2.5%) from May 31, 2025, to August 31, 2025, primarily driven by increases in goodwill and other intangible assets[24] - Cash and cash equivalents decreased by $83.0 million (33.2%) from May 31, 2025, to August 31, 2025[24] Consolidated Statements of Earnings This section details the company's financial performance over a period, including net sales, gross profit, operating income, and net earnings Consolidated Statements of Earnings Highlights (Three Months Ended August 31, In thousands) | Metric | August 31, 2025 | August 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :--------- | :--------- | | Net sales | $303,707 | $257,308 | $46,399 | 18.0% | | Gross profit | $82,284 | $62,495 | $19,789 | 31.7% | | Operating income (loss) | $9,243 | $(4,699) | $13,942 | N.M. | | Earnings before income taxes | $45,681 | $30,790 | $14,891 | 48.4% | | Net earnings | $34,821 | $24,008 | $10,813 | 45.0% | | Diluted EPS | $0.70 | $0.48 | $0.22 | 45.8% | | Cash dividends declared per common share | $0.19 | $0.17 | $0.02 | 11.8% | - Net sales increased by $46.4 million (18.0%) year-over-year, driven by higher volumes in Building Products and contributions from the Elgen acquisition[26][121] - Operating income significantly improved from a loss of $4.7 million in the prior year to an income of $9.2 million in the current year quarter[26] Consolidated Statements of Comprehensive Income This section presents the total change in equity from non-owner sources, including net earnings and other comprehensive income items Consolidated Statements of Comprehensive Income Highlights (Three Months Ended August 31, In thousands) | Metric | August 31, 2025 | August 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :--------- | :--------- | | Net earnings | $34,821 | $24,008 | $10,813 | 45.0% | | Other comprehensive income, net of tax | $1,083 | $484 | $599 | 123.8% | | Comprehensive income | $35,904 | $24,492 | $11,412 | 46.6% | | Comprehensive income attributable to controlling interest | $36,231 | $24,737 | $11,494 | 46.5% | - Other comprehensive income, net of tax, more than doubled year-over-year, primarily due to foreign currency translation gains[29][55] Consolidated Statements of Cash Flows This section reports the cash generated and used by operating, investing, and financing activities, showing changes in liquidity Consolidated Statements of Cash Flows Highlights (Three Months Ended August 31, In thousands) | Metric | August 31, 2025 | August 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :--------- | :--------- | | Net cash provided by operating activities | $41,061 | $41,146 | $(85) | (0.2%) | | Net cash used by investing activities | $(105,430) | $(88,747) | $(16,683) | 18.8% | | Net cash used by financing activities | $(18,584) | $(18,077) | $(507) | 2.8% | | Decrease in cash and cash equivalents | $(82,953) | $(65,678) | $(17,275) | 26.3% | | Cash and cash equivalents at end of period | $167,122 | $178,547 | $(11,425) | (6.4%) | - Net cash provided by operating activities remained relatively flat year-over-year at $41.1 million[32][134] - Net cash used by investing activities increased by $16.7 million, primarily due to the acquisition of Elgen for $92.2 million and higher capital expenditures[32][135] Condensed Notes to Consolidated Financial Statements (Unaudited) This section provides detailed explanations and additional information supporting the unaudited consolidated financial statements Note A – Basis of Presentation This note describes the principles and methods used in preparing the interim unaudited consolidated financial statements - The interim unaudited consolidated financial statements include Worthington Enterprises and its consolidated subsidiaries, with significant intercompany accounts eliminated[34] - The company holds an 80% controlling interest in Halo, which is consolidated, with other joint venture members' equity shown as noncontrolling interests[35] - Purchases from Worthington Steel under the Steel Supply and Services Agreement totaled $37.0 million and $28.4 million for the three months ended August 31, 2025 and 2024, respectively[39] - New accounting standards (ASU 2023-09 and ASU 2024-03) will enhance income tax and expense disaggregation disclosures, effective for fiscal years beginning after December 15, 2024, and December 15, 2026, respectively, with no material impact on financial condition or cash flows[41][42] Note B – Investments in Unconsolidated Affiliates This note details the company's equity method investments in unconsolidated joint ventures and their summarized financial information - The company holds investments in unconsolidated joint ventures: ClarkDietrich (25%), Sustainable Energy Solutions (49%), WAVE (50%), and Workhorse (20%)[43] - Distributions from unconsolidated affiliates totaled $36.5 million during the three months ended August 31, 2025[44] Summarized Financial Information for Unconsolidated Affiliates (Three Months Ended August 31, In thousands) | Metric | WAVE 2025 | WAVE 2024 | ClarkDietrich 2025 | ClarkDietrich 2024 | Other 2025 | Other 2024 | | :-------------------- | :-------- | :-------- | :----------------- | :----------------- | :--------- | :--------- | | Net sales | $134,717 | $125,905 | $289,991 | $301,855 | $72,485 | $87,913 | | Operating income | $67,683 | $60,065 | $22,789 | $34,081 | $(3,257) | $200 | | Net earnings (loss) | $63,597 | $56,209 | $23,735 | $34,976 | $(3,623) | $(503) | Note C – Restructuring and Other Expense, Net This note details the costs associated with restructuring activities, including severance and facility-related expenses - Restructuring activities, including employee severance and facility-related costs, resulted in a net expense of $2.5 million for the three months ended August 31, 2025, up from $1.2 million in the prior year[48][49] Restructuring Liabilities Progression (Three Months Ended August 31, 2025, In thousands) | Category | Balance at May 31, 2025 | Expense | Payments | Balance at August 31, 2025 | | :------------------------ | :---------------------- | :------ | :------- | :----------------------- | | Early retirement and severance | $585 | $775 | $(365) | $995 | | Other restructuring charges | $100 | $1,701 | $(1,801) | $- | | Total | $685 | $2,476 | $(2,166) | $995 | Note D – Contingent Liabilities and Commitments This note addresses potential future obligations arising from legal actions and environmental matters, which management deems immaterial - Management believes the outcome of current legal actions and environmental issues will not significantly affect the company's consolidated financial position or future results of operations[50] Note E – Guarantees This note clarifies that the company has no guarantees expected to materially affect its financial condition or operations - The company does not have guarantees expected to have a material effect on its financial condition or results of operations[51] - Outstanding stand-by letters of credit totaled $9.2 million at August 31, 2025, with no material fair value or amounts drawn[52] Note F – Debt This note outlines the company's debt structure, including its revolving credit facility and outstanding borrowings - The company's $500.0 million multi-year revolving Credit Facility matures on September 27, 2028, with no outstanding borrowings at August 31, 2025, leaving the full amount available[53] Note G – Other Comprehensive Income (Loss) This note details the components of other comprehensive income (loss) and their tax effects, such as foreign currency translation adjustments Tax Effects on Other Comprehensive Income (Loss) (Three Months Ended August 31, In thousands) | Component | Before-Tax 2025 | Tax 2025 | Net-of-Tax 2025 | Before-Tax 2024 | Tax 2024 | Net-of-Tax 2024 | | :------------------------ | :-------------- | :------- | :-------------- | :-------------- | :------- | :-------------- | | Foreign currency translation | $1,280 | $127 | $1,407 | $(12) | $553 | $541 | | Pension liability adjustment | $(14) | $3 | $(11) | $(7) | $- | $(7) | | Cash flow hedges | $(439) | $126 | $(313) | $(65) | $15 | $(50) | | Total OCI (loss) | $827 | $256 | $1,083 | $(84) | $568 | $484 | Note H – Changes in Equity This note outlines the movements in total equity, including net earnings, comprehensive income, share repurchases, and dividends Changes in Equity (Three Months Ended August 31, In thousands) | Metric | May 31, 2025 | August 31, 2025 | May 31, 2024 | August 31, 2024 | | :-------------------------------- | :----------- | :-------------- | :----------- | :-------------- | | Total Equity | $938,237 | $959,831 | $891,012 | $903,241 | | Net earnings (loss) | - | $34,821 | - | $24,008 | | Other comprehensive income | - | $1,083 | - | $484 | | Repurchases and retirement of common shares | - | $(6,259) | - | $(6,803) | | Cash dividends declared | - | $(9,433) | - | $(8,550) | - Total equity increased by $21.6 million (2.3%) from May 31, 2025, to August 31, 2025, primarily due to net earnings and other comprehensive income, partially offset by cash dividends and share repurchases[56] - The company repurchased 100,000 common shares during the three months ended August 31, 2025, under an existing authorization, leaving 5,265,000 common shares available for repurchase[57] Note I – Stock-Based Compensation This note describes the various stock-based compensation awards granted, including service-based, market-based, and performance share awards - 63,330 service-based restricted common shares were granted, with a weighted average fair value of $63.05 per share, vesting over three years[59] - 92,500 market-based restricted common shares (at target) were granted, contingent on ATSR achievement over a three-year service period, with an estimated grant date fair value of $45.39 per share[60] - 53,130 performance share awards (at target) were granted, earned based on corporate and business unit targets over three-year performance periods, with an aggregate grant-date fair value of $3.4 million[65] Note J – Income Taxes This note provides details on the company's income tax expense and estimated annual effective tax rate - Income tax expense for the three months ended August 31, 2025, was $10.9 million, reflecting an estimated annual effective tax rate (ETR) of 23.8%, compared to 24.5% in the prior year quarter[26][66] Note K – Earnings per Share This note presents the computation of basic and diluted earnings per share, including weighted-average common shares outstanding Earnings per Share Computation (Three Months Ended August 31, In thousands, except per common share amounts) | Metric | August 31, 2025 | August 31, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Net earnings attributable to controlling interest | $35,148 | $24,253 | | Basic EPS – weighted average common shares | 49,264 | 49,487 | | Diluted EPS – weighted average common shares | 50,026 | 50,365 | | Basic EPS | $0.71 | $0.49 | | Diluted EPS | $0.70 | $0.48 | - Diluted EPS increased by $0.22 (45.8%) year-over-year, from $0.48 to $0.70[67] Note L – Segment Operations This note provides financial information for the Consumer Products and Building Products segments, with performance evaluated by adjusted EBITDA - The company operates in two segments: Consumer Products and Building Products, with performance evaluated based on adjusted EBITDA[68] Segment Net Sales (Three Months Ended August 31, In thousands) | Segment | August 31, 2025 | August 31, 2024 | Change ($) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | :--------- | | Consumer Products | $118,938 | $117,596 | $1,342 | 1.1% | | Building Products | $184,769 | $139,712 | $45,057 | 32.2% | | Consolidated | $303,707 | $257,308 | $46,399 | 18.0% | Segment Adjusted EBITDA (Three Months Ended August 31, In thousands) | Segment | August 31, 2025 | % of Net Sales 2025 | August 31, 2024 | % of Net Sales 2024 | Change ($) | Change (%) | | :---------------- | :-------------- | :------------------ | :-------------- | :------------------ | :--------- | :--------- | | Consumer Products | $16,148 | 13.5% | $17,775 | 15.1% | $(1,627) | (9.1%) | | Building Products | $57,793 | 31.3% | $39,729 | 28.4% | $18,064 | 45.5% | | Consolidated | $65,060 | 21.4% | $48,437 | 18.8% | $16,623 | 34.3% | - Building Products' Adjusted EBITDA increased significantly by $18.1 million (45.6%) due to volume growth, despite a negative impact from Elgen acquisition-related nonrecurring items[128] Segment Capital Expenditures (Three Months Ended August 31, In thousands) | Segment | August 31, 2025 | August 31, 2024 | | :---------------- | :-------------- | :-------------- | | Consumer Products | $9,041 | $4,943 | | Building Products | $3,509 | $3,709 | | Total | $13,195 | $9,629 | Note M – Acquisitions This note details recent acquisitions, including the purchase of Elgen and the resulting goodwill and intangible assets - On June 18, 2025, the company acquired Elgen, a provider of HVAC parts, for approximately $91.2 million (net of cash acquired), integrating it into the Building Products segment[74] - The acquisition resulted in $33.6 million in goodwill, representing the excess of purchase price over the fair value of net identifiable assets, and $34.4 million in acquired identifiable intangible assets[76][77][79] Elgen Acquisition: Acquired Intangible Assets (In thousands) | Category | Amount (In thousands) | Useful Life (Years) | | :------------------------ | :-------------------- | :------------------ | | Customer relationships | $17,800 | 15 | | Trade name | $7,900 | 10 | | Technological know-how | $7,000 | 10 | | Non-compete agreement | $1,700 | 5 | | Total | $34,400 | | Note N – Derivative Financial Instruments and Hedging Activities This note explains the company's use of derivative instruments to manage interest rate, foreign currency, and commodity price risks - The company uses derivative financial instruments to manage interest rate, foreign currency exchange, and commodity price risks, employing both designated hedging instruments and non-designated economic hedges[80][81][82][83] Fair Value of Derivative Financial Instruments (In thousands) | Category | August 31, 2025 Assets | May 31, 2025 Assets | August 31, 2025 Liabilities | May 31, 2025 Liabilities | | :-------------------------------- | :--------------------- | :------------------ | :-------------------------- | :----------------------- | | Derivatives designated as hedging instruments | $594 | $961 | $378 | $86 | | Derivatives not designated as hedging instruments | $36 | $81 | $7,642 | $7,375 | | Total | $630 | $1,042 | $8,020 | $7,461 | Gain (Loss) Reclassified from AOCI into Net Earnings for Cash Flow Hedges (Three Months Ended August 31, In thousands) | Category | 2025 Gain (Loss) | 2024 Gain (Loss) | | :------------------------ | :--------------- | :--------------- | | Commodity contracts | $393 | $(385) | | Interest rate contracts | $52 | $52 | | Foreign currency exchange contracts | $328 | $- | | Total | $773 | $(333) | - The company designated Euro-denominated debt of €91.7 million ($99.5 million) as a non-derivative net investment hedge of foreign operations in Portugal, recognizing a foreign currency loss of $3.1 million in OCI for the three months ended August 31, 2025[90] Note O – Fair Value Measurements This note categorizes fair value measurements into a three-tier hierarchy based on the observability of inputs used in valuation techniques - Fair value measurements are categorized into a three-tier hierarchy (Level 1, 2, 3) based on the observability of inputs[93][97] Recurring Fair Value Measurements (August 31, 2025, In thousands) | Category | Level 1 | Level 2 | Level 3 | Totals | | :-------------------------------- | :------ | :------ | :------ | :----- | | Assets: Derivative financial instruments | $- | $630 | $- | $630 | | Liabilities: Derivative financial instruments | $- | $8,020 | $- | $8,020 | - The fair value of long-term debt was $277.0 million at August 31, 2025, compared to a carrying amount of $306.0 million[96] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations for the three months ended August 31, 2025 - Worthington Enterprises is a market-leading designer and manufacturer of innovative metal products and services, operating in Consumer Products and Building Products segments, focused on shareholder value creation[100] - The Consumer Products segment offers tools, outdoor living, and celebrations products, while Building Products provides pressurized containment solutions and, through joint ventures, ceiling suspension systems and metal framing products[101][102] Acquisitions and Divestitures This section discusses recent acquisitions, including Elgen and Ragasco, and their integration into the Building Products segment - In fiscal 2026, the company acquired Elgen, an HVAC parts provider, for approximately $91.2 million, integrating it into the Building Products segment[105] - In fiscal 2025, the company acquired Ragasco, a global manufacturer of composite propane cylinders, for $108.6 million, also integrated into Building Products[106] Demand Trends This section analyzes macroeconomic conditions, including GDP growth, inflation, interest rates, and their impact on construction and consumer demand - Macroeconomic conditions in Q1 fiscal 2026 were mixed, with easing inflation offset by elevated borrowing costs and policy uncertainty; U.S. GDP rebounded to 3.3% annualized growth in June 2025, but inflation remained near 3%[108] - High mortgage costs (average 30-year fixed rate at 6.56% in August 2025) constrained new construction, while inflation-driven cost consciousness impacted discretionary consumer purchases[108][109] - Inventory levels at key retailer and distributor customers remained aligned with end-user demand, with no material build-up, indicating cautious inventory management[111] - U.S. residential and non-residential construction spending trended lower, with the HMI weakening to 32 in August 2025, while the DMI rose 7.5% to a record 301.4, signaling stronger project planning despite current spending softness[113] Factors Affecting Operating Costs This section examines the impact of raw material prices, tariffs, and seasonal demand on the company's cost of goods sold and financial performance - Raw material expenditures, primarily steel, propane, propylene, and aluminum, significantly impact cost of goods sold and financial performance[114] - Steel prices moderated from April 2025 peaks, improving spreads, while aluminum costs increased due to higher global benchmarks and a 50% U.S. Section 232 tariff increase in June 2025[115][116] - Propane and propylene costs were stable, partly due to fixed-price agreements, and helium/industrial gas costs declined, benefiting Consumer Products[117] - Net sales are seasonally stronger in fiscal Q3 and Q4 for Consumer Products, and Q1 and Q4 for Building Products, influenced by weather, customer cycles, and construction projects[119] Results of Operations This section provides a detailed analysis of the company's consolidated GAAP and non-GAAP financial performance, including sales, gross profit, and EBITDA Consolidated GAAP Financial Measures (Three Months Ended August 31, In millions) | Metric | August 31, 2025 | August 31, 2024 | Change ($) | Change (%) | | :-------------------- | :-------------- | :-------------- | :--------- | :--------- | | Net sales | $303.7 | $257.3 | $46.4 | 18.0% | | Operating income (loss) | $9.2 | $(4.7) | $13.9 | N.M. | | Earnings before income taxes | $45.7 | $30.8 | $14.9 | 48.4% | | Net earnings | $34.8 | $24.0 | $10.8 | 45.0% | | Equity income | $36.7 | $35.5 | $1.2 | 3.4% | | EPS - diluted | $0.70 | $0.48 | $0.22 | 45.8% | Consolidated Non-GAAP Financial Measures (Three Months Ended August 31, In millions) | Metric | August 31, 2025 | August 31, 2024 | Change ($) | Change (%) | | :-------------------- | :-------------- | :-------------- | :--------- | :--------- | | Adjusted operating income (loss) | $11.7 | $(3.5) | $15.2 | N.M. | | Adjusted EBITDA | $65.1 | $48.4 | $16.7 | 34.5% | | Adjusted EPS – diluted | $0.74 | $0.50 | $0.24 | 48.0% | - Net sales increased by $46.4 million (18.0%) year-over-year, driven by a 32.2% increase in Building Products sales, including $20.9 million from Elgen, while Consumer Products sales rose 1.1%[121] - Gross profit increased by $19.8 million (31.7%) to $82.3 million, primarily due to higher volumes in Building Products; Gross margin improved from 24.3% to 27.1%[122] - SG&A expenses increased by $4.6 million (7.0%) due to the Elgen acquisition, but decreased as a percentage of net sales from 25.7% to 23.2% due to lower corporate overhead[123] - Equity income increased by $1.2 million (3.4%) to $36.7 million, driven by a $4.5 million increase from WAVE, partially offset by a $2.8 million decline at ClarkDietrich due to pricing pressure[125][126] - Adjusted EBITDA increased by $16.6 million (34.3%) to $65.0 million, with Building Products contributing an $18.1 million increase, while Consumer Products saw a $1.7 million decrease[128] Liquidity and Capital Resources This section discusses the company's cash flows from operating, investing, and financing activities, and its ability to meet future operational needs - Net cash provided by operating activities was $41.1 million, flat year-over-year, as higher net earnings were offset by increased working capital requirements and lower distributions from unconsolidated affiliates[129][134] - Net cash used by investing activities increased to $105.4 million, primarily due to the $92.0 million acquisition of Elgen and $13.2 million in capital expenditures[129][135] - Net cash used by financing activities was $18.6 million, including $6.3 million for share repurchases and $8.6 million for dividends[129][137] - The company believes it has adequate resources, including $167.2 million in cash and cash equivalents and $500.0 million available under its Credit Facility, to meet operational needs for the foreseeable future[130] - The Board declared a quarterly dividend of $0.19 per common share payable on December 29, 2025, an increase from $0.17 in the prior year[26][138] Critical Accounting Estimates This section confirms that the company's critical accounting estimates, involving significant judgments and assumptions, remain consistent with prior disclosures - The company's critical accounting estimates, involving significant judgments and assumptions (e.g., valuation of receivables, inventories, intangible assets, accrued liabilities, income taxes, contingencies, and business combinations), have not significantly changed from those discussed in the 2025 Form 10-K[142] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states that there have been no material changes to the company's market risks compared to those disclosed in the 2025 Form 10-K - Market risks have not materially changed from those disclosed in the 2025 Form 10-K[143] Item 4. Controls and Procedures This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting - Management, under the supervision of the principal executive and financial officers, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of August 31, 2025[145] - There were no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the period[146] Part II. Other Information This part covers legal proceedings, risk factors, equity security sales, and other required disclosures Item 1. Legal Proceedings The company is involved in various legal and administrative proceedings, but management does not believe any will have a material adverse effect on its financial position or operations - The company is involved in various legal and administrative proceedings, but management believes the outcome will not materially affect its business, financial position, results of operation, or cash flows[149] Item 1A. Risk Factors This section reiterates that the company's risk factors have not significantly changed from those detailed in the 2025 Form 10-K - The company's risk factors have not changed significantly from those disclosed in the 2025 Form 10-K, and readers are advised to review them carefully[150] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports no unregistered sales of equity securities and details common share repurchases, including those withheld for tax obligations - No unregistered sales of equity securities occurred during the three months ended August 31, 2025[151] Issuer Purchases of Equity Securities (Three Months Ended August 31, 2025) | Period | Total Number of Common Shares Purchased | Average Price Paid per Common Share | Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Common Shares that May Yet Be Purchased Under the Plans or Programs | | :---------------- | :-------------------------------------- | :---------------------------------- | :------------------------------------------------------------------------------------ | :------------------------------------------------------------------------------------ | | June 1-30, 2025 | 40,862 | $60.46 | - | 5,365,000 | | July 1-31, 2025 | 124,730 | $62.93 | 100,000 | 5,265,000 | | August 1-31, 2025 | 317 | $67.05 | - | 5,265,000 | | Total | 165,909 | $62.33 | 100,000 | | - As of August 31, 2025, 5,265,000 common shares remained available for repurchase under the authorization approved on March 24, 2021[153] Item 3. Defaults Upon Senior Securities This item is not applicable to the company for the reporting period - This item is not applicable[155] Item 4. Mine Safety Disclosures This item is not applicable to the company for the reporting period - This item is not applicable[156] Item 5. Other Information This section states that no director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended August 31, 2025[157] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including organizational documents, equity plans, certifications, and interactive data files - Exhibits include Amended Articles of Incorporation, Code of Regulations, 2025 Equity Plan for Non-Employee Directors, Rule 13a-14(a)/15d-14(a) Certifications, Section 1350 Certifications, and Interactive Data Files (XBRL)[158] Signatures This section contains the official signatures certifying the accuracy and authorization of the Form 10-Q filing Report Signatures This section contains the required signatures, certifying the due authorization and filing of the report on behalf of Worthington Enterprises, Inc. - The report was signed on October 8, 2025, by Colin J. Souza, Vice President and Chief Financial Officer, on behalf of Worthington Enterprises, Inc.[164]