Worthington Industries(US:WOR)2026-01-09 15:40Financial 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]