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]

Financial Data and Key Metrics Changes - The company reported a revenue increase of over 19% year-over-year in Q2, with adjusted EBITDA growing by 8% year-over-year, reaching $60 million [4][5][16] - Adjusted earnings per share rose to $0.65, up from $0.60 in the prior year quarter [14] - The adjusted EBITDA margin improved to 18.5% compared to 20% a year ago [5][16] Business Line Data and Key Metrics Changes - In the consumer products segment, net sales increased by 3% to $120 million, with adjusted EBITDA remaining flat at $15 million [20] - The building products segment saw a 32% year-over-year growth in net sales to $208 million, driven by higher volumes and contributions from the Elgen acquisition [21] - Excluding Elgen, building products net sales grew by 16% year-over-year, reflecting strength across multiple categories [21] Market Data and Key Metrics Changes - The company noted cautious consumer sentiment and muted construction activity impacting market conditions, but still managed to gain market share [12] - The performance of joint ventures was highlighted, with WAVE contributing $26 million in equity earnings, while ClarkDietrich's earnings were lower due to a challenging market environment [22] Company Strategy and Development Direction - The company aims to optimize its business through organic growth and strategic acquisitions, with a focus on increasing margins [5][6] - The planned acquisition of LSI, a leader in metal roofing components, is expected to enhance the company's position in engineered building systems and create long-term shareholder value [6][11] - The company continues to leverage the Worthington Business System, focusing on innovation, transformation, and M&A to maximize success [6][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current environment and positioning for long-term growth despite challenges in the housing market and construction activity [12][13] - The company is optimistic about growth prospects in the back half of the fiscal year, particularly in consumer products and building products [20][21] Other Important Information - The company declared a quarterly dividend of $0.19 per share, payable in March 2026 [19] - The acquisition of LSI is expected to close in January 2026 and will be funded primarily with cash on hand [19][11] Q&A Session Summary Question: Can you expand on the strategy for growth from the acquisition of LSI? - Management highlighted the complementary nature of acquisitions and the focus on leveraging manufacturing expertise and innovation to create value [26][27] Question: What are the opportunities involved in data centers? - Management noted that several segments, including WAVE and ClarkDietrich, provide products for data centers, indicating a meaningful growth opportunity [31][33] Question: What drives the healthy margin profile of LSI? - Management indicated that LSI's business is driven by resilient retrofit demand and strong customer relationships, contributing to its high margins [39][40] Question: How much of the building products growth is due to pricing versus volume? - Management stated that the growth was primarily driven by volume, with a focus on gaining market share through innovation [42][44] Question: What is the outlook for ClarkDietrich? - Management expects no worse than flat sequential performance moving forward, with a focus on cost-saving initiatives [46][47] Question: How does the company plan to balance capital allocation? - Management expressed a balanced approach to capital structure, considering strategic M&A and returns to shareholders while maintaining growth [50]