Worthington Enterprises Reports Fourth Quarter Fiscal 2024 Results
COLUMBUS, Ohio, June 25, 2024 – Worthington Enterprises, Inc. (NYSE: WOR) reported net sales of $318.8 million and a net loss from continuing operations of $31.5 million, or $(0.64) per diluted share, for its fiscal 2024 fourth quarter ended May 31, 2024. This compares to net sales of $368.8 million and net earnings from continuing operations of $50.1 million, or $1.01 per diluted share, in the fourth quarter of fiscal 2023. On a non-GAAP basis, adjusted net earnings from continuing operations totaled $37.5 million for the fourth quarter of fiscal 2024, or $0.74 per diluted share, compared to $59.0 million, or $1.19 per diluted share, in the prior year comparable quarter. Reported results reflect the controlling interest portion of continuing operations and were impacted by certain items, as summarized in the table below.
(U.S. dollars in millions, except per share amounts) |
4Q 2024 |
|
|
4Q 2023 |
|
|||||||||||
|
|
After-Tax |
|
|
Per Share |
|
|
After-Tax |
|
|
Per Share |
|
||||
Net earnings (loss) from continuing operations |
|
$ |
(31.5 |
) |
|
$ |
(0.64 |
) |
|
$ |
50.1 |
|
|
$ |
1.01 |
|
Corporate costs eliminated at Separation (1) |
|
|
- |
|
|
|
- |
|
|
|
8.0 |
|
|
|
0.16 |
|
Impairment and restructuring charges |
|
|
57.0 |
|
|
|
1.14 |
|
|
|
- |
|
|
|
- |
|
Separation costs |
|
|
0.1 |
|
|
|
- |
|
|
|
2.5 |
|
|
|
0.05 |
|
Impairment of investment in notes receivable |
|
|
11.1 |
|
|
|
0.22 |
|
|
|
- |
|
|
|
- |
|
Pension settlement charge in equity income |
|
|
0.8 |
|
|
|
0.02 |
|
|
|
- |
|
|
|
- |
|
Sale-leaseback gain in equity income |
|
|
- |
|
|
|
- |
|
|
|
(1.6 |
) |
|
|
(0.03 |
) |
Adjusted net earnings from continuing operations |
|
$ |
37.5 |
|
|
$ |
0.74 |
|
|
$ |
59.0 |
|
|
$ |
1.19 |
|
Financial highlights, on a continuing operations basis, for the fiscal 2024 periods and prior year comparative periods are as follows:
(U.S. dollars in millions, except per share amounts)
|
|
4Q 2024 |
|
|
4Q 2023 |
|
|
12M 2024 |
|
|
12M 2023 |
|
||||
Net sales |
|
$ |
318.8 |
|
|
$ |
368.8 |
|
|
$ |
1,245.7 |
|
|
$ |
1,418.5 |
|
Operating income (loss) |
|
|
(56.1 |
) |
|
|
15.3 |
|
|
|
(73.5 |
) |
|
|
29.8 |
|
Adjusted operating income |
|
|
5.8 |
|
|
|
28.6 |
|
|
|
20.9 |
|
|
|
77.9 |
|
Net earnings (loss) from continuing operations |
|
|
(31.5 |
) |
|
|
50.1 |
|
|
|
35.2 |
|
|
|
125.8 |
|
Adjusted EBITDA from continuing operations |
|
|
63.2 |
|
|
|
93.7 |
|
|
|
251.0 |
|
|
|
306.0 |
|
EPS from continuing operations - diluted |
|
|
(0.64 |
) |
|
|
1.01 |
|
|
|
0.70 |
|
|
|
2.55 |
|
Adjusted EPS from continuing operations - diluted |
|
$ |
0.74 |
|
|
$ |
1.19 |
|
|
$ |
2.84 |
|
|
$ |
3.60 |
|
“We finished our fiscal year with a respectable fourth quarter delivering adjusted earnings per share of $0.74,” said Worthington Enterprises President and CEO Andy Rose. “Building Products had a solid quarter benefiting from strong contributions from WAVE and our water business but was offset by lower contributions from ClarkDietrich which faced some margin compression. Consumer Products performed well despite headwinds due to volume being pulled ahead into the previous quarter and some softening in consumer spending. While both segments saw lower volumes, the overall health
Worthington Enterprises
June 25, 2024
Page 2
of the company is good. Our employees continue to deliver, and I could not be more proud of the focus and hard work they carry out every day.”
Consolidated Quarterly Results
Net sales for the fourth quarter of fiscal 2024 were $318.8 million, a decrease of $50.0 million, or 13.6%, from the prior year quarter, driven primarily by lower volume across all segments.
The operating loss of $56.1 million for the fourth quarter was unfavorable to the $15.3 million of operating income in the prior year quarter, due to significantly higher impairment and restructuring charges stemming from the deconsolidation of the former Sustainable Energy Solutions segment, effective May 29, 2024, as discussed below under Recent Business Developments. On an adjusted basis, operating income was $5.8 million, down $22.8 million from the prior year quarter, on lower volumes in Consumer Products combined with increased operating losses in Sustainable Energy Solutions.
Equity income decreased $10.9 million from the prior year quarter to $40.4 million, driven by lower contributions from ClarkDietrich which was down $13.8 million from the near record results in the prior year quarter, partially offset by strong contributions from WAVE which increased $3.3 million compared to the prior year quarter.
Miscellaneous expense was unfavorable by $11.1 million from the prior year quarter due to the write-down of an investment in a note receivable as a result of a change in business strategy in the Sustainable Energy Solutions business, while net interest expense was favorable $2.6 million over the prior year quarter due to lower average debt levels.
Income tax expense was $5.0 million in the fourth quarter of fiscal 2024 compared to $13.8 million in the prior year quarter. The decrease was driven by lower pre-tax earnings and discrete items related to the deconsolidation of the Sustainable Energy Solutions business. Tax expense in the fourth quarter of fiscal 2024 reflects an annual effective rate of 52.6% compared to 21.5% in the prior year. On an adjusted basis, the annual effective tax rate was 23.5% compared to 21.9% in the prior year.
Balance Sheet
Total debt was $298.1 million at the end of fiscal 2024, down approximately $391.8 million from May 31, 2023, due to the early redemption of the senior unsecured notes set to mature on August 10, 2024, and April 15, 2026, both of which were paid off earlier in the fiscal year. The Company ended the fourth quarter of fiscal 2024 with cash of $244.2 million, of which, $83.8 million was used after the quarter ended to fund the remaining purchase price of Hexagon Ragasco, as discussed below under Recent Business Developments.
Quarterly Segment Results
Consumer Products generated net sales of $125.3 million during the fourth quarter of fiscal 2024, down $23.5 million, or 16%, from the prior year quarter on lower volume. Adjusted EBITDA was down $12.5 million to $17.1 million, driven by the impact of lower volume, and to a lesser extent, a $2.4 million increase in SG&A expense due to higher benefit related costs and increased marketing spend.
Building Products generated net sales of $153.6 million during the fourth quarter of fiscal 2024, down $21.0 million, or 12%, from the prior year quarter due to lower volume and an unfavorable shift in product mix. Adjusted EBITDA decreased $13.1 million from the prior year quarter to $51.6 million on the combined impact of lower contributions of equity income from ClarkDietrich and unfavorable mix.
Worthington Enterprises
June 25, 2024
Page 3
Sustainable Energy Solutions’ net sales totaled $39.9 million, down 12.0%, or $5.5 million, from the prior year quarter due to lower average selling prices and lower volume. Adjusted EBITDA was $1.2 million, down $3.1 million from the prior year quarter as lower average selling prices compressed gross profit. During the quarter, the Company sold an interest in the Sustainable Energy Solutions business to Hexagon Composites ASA (“Hexagon”), creating a new unconsolidated joint venture, in which the Company retained a 49% noncontrolling interest, as discussed below under Recent Business Developments. Historical results for Sustainable Energy Solutions are reported as part of Unallocated Corporate and Other, while future results, starting with the first quarter of fiscal 2025, will flow through equity income within Unallocated Corporate and Other.
Recent Developments
Outlook
“We are optimistic heading into our new fiscal year having recently completed the acquisition of Hexagon Ragasco along with the formation of our Sustainable Energy Solutions joint venture,” Rose said. “We have market leading brands, a rock-solid balance sheet that will enable us to take advantage of growth opportunities as they arise, and a team focused on driving long-term profitable growth for Worthington Enterprises.”
Upcoming Investor Events
Conference Call
The Company will review fiscal 2024 fourth quarter results during its quarterly conference call on June 26, 2024, at 8:30 a.m., Eastern Time. Details regarding the conference call can be found on the Company website at www.WorthingtonEnterprises.com.
About Worthington Enterprises
Worthington Enterprises (NYSE: WOR) is a designer and manufacturer of market-leading brands that help enable people to live safer, healthier and more expressive lives. The Company operates with two segments: Building Products and
Worthington Enterprises
June 25, 2024
Page 4
Consumer Products. Worthington’s emphasis on innovation and transformation extends to building products including heating and cooling solutions, water systems, architectural and acoustical grid ceilings and metal framing and accessories, and consumer products in tools, outdoor living and celebrations categories sold under brand names Coleman®, Bernzomatic®, Balloon Time®, Level5 Tools®, Mag Torch®, Well-X-Trol®, General®, Garden-Weasel®, Pactool International®, HALO™ and Hawkeye™. The Company serves the growing global hydrogen ecosystem through on-board fueling systems and gas containment solutions.
Headquartered in Columbus, Ohio, Worthington Enterprises employs approximately 4,000 people throughout North America and Europe.
Founded in 1955 as Worthington Industries, Worthington Enterprises follows a people-first Philosophy with earning money for its shareholders as its first corporate goal. Worthington Enterprises achieves this outcome by empowering its employees to innovate, thrive and grow with leading brands in attractive markets that improve everyday life. The Company engages deeply with local communities where it has operations through volunteer efforts and The Worthington Companies Foundation, participates actively in workforce development programs and reports annually on its corporate citizenship and sustainability efforts. For more information, visit worthingtonenterprises.com.
Safe Harbor Statement
Selected statements contained in this release constitute “forward-looking statements,” as that term is used in the Private Securities Litigation Reform Act of 1995 (the “Act”). The Company wishes to take advantage of the safe harbor provisions included in the Act. Forward-looking statements reflect the Company’s current expectations, estimates or projections concerning future results or events. These statements are often identified by the use of forward-looking words or phrases such as “believe,” “expect,” “anticipate,” “may,” “could,” “should,” “would,” “intend,” “plan,” “will,” “likely,” “estimate,” “project,” “position,” “strategy,” “target,” “aim,” “seek,” “foresee” and similar words or phrases. These forward-looking statements include, without limitation, statements relating to: future or expected cash positions, liquidity and ability to access financial markets and capital; outlook, strategy or business plans; the anticipated benefits of the separation of the Company’s Steel Processing business (the “Separation); the expected financial and operational performance of, and future opportunities for, the Company following the Separation; the Company’s performance on a pro forma basis to illustrate the estimated effects of the Separation on historical periods; the tax treatment of the Separation transaction; future or expected growth, growth potential, forward momentum, performance, competitive position, sales, volumes, cash flows, earnings, margins, balance sheet strengths, debt, financial condition or other financial measures; pricing trends for raw materials and finished goods and the impact of pricing changes; the ability to improve or maintain margins; expected demand or demand trends for the Company or its markets; additions to product lines and opportunities to participate in new markets; expected benefits from transformation and innovation efforts; the ability to improve performance and competitive position at the Company’s operations; anticipated working capital needs, capital expenditures and asset sales; anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing and the supply chain and the results thereof; projected profitability potential; the ability to make acquisitions and the projected timing, results, benefits, costs, charges and expenditures related to acquisitions, joint ventures, headcount reductions and facility dispositions, shutdowns and consolidations; projected capacity and the alignment of operations with demand; the ability to operate profitably and generate cash in down markets; the ability to capture and maintain market share and to develop or take advantage of future opportunities, customer initiatives, new businesses, new products and new markets; expectations for Company and customer inventories, jobs and orders; expectations for the economy and markets or improvements therein; expectations for generating improving and sustainable earnings, earnings potential, margins or shareholder value; effects of judicial rulings; the ever-changing effects of the novel coronavirus (“COVID-19”) pandemic and the various responses of governmental and nongovernmental authorities thereto on economies and markets, and on our customers, counterparties, employees and third-party service providers; and other non-historical matters.
Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected. Any number of factors could affect actual results, including, without limitation, those that follow: the uncertainty of obtaining regulatory approvals in connection with the Separation, including rulings from the Internal Revenue Service; the Company’s ability to successfully realize the anticipated benefits of the Separation; the risks, uncertainties and impacts related to the COVID-19 pandemic – the duration, extent and severity of which are impossible to predict, including the possibility of future resurgence in the spread of COVID-19 or variants thereof – and the availability, effectiveness and acceptance of vaccines, and other actual or potential public health emergencies and actions taken by governmental authorities or others in connection therewith; the effect of national, regional and global economic conditions generally and within major product markets, including significant economic disruptions from COVID-19, the actions taken in connection therewith and the
Worthington Enterprises
June 25, 2024
Page 5
implementation of related fiscal stimulus packages; the effect of conditions in national and worldwide financial markets, including inflation, increases in interest rates and economic recession, and with respect to the ability of financial institutions to provide capital; the impact of tariffs, the adoption of trade restrictions affecting the Company’s products or suppliers, a United States withdrawal from or significant renegotiation of trade agreements, the occurrence of trade wars, the closing of border crossings, and other changes in trade regulations or relationships; changing oil prices and/or supply; product demand and pricing; changes in product mix, product substitution and market acceptance of the Company’s products; volatility or fluctuations in the pricing, quality or availability of raw materials (particularly steel), supplies, transportation, utilities, labor and other items required by operations (especially in light of the COVID-19 pandemic and Russia’s invasion of Ukraine); effects of sourcing and supply chain constraints; the outcome of adverse claims experience with respect to workers’ compensation, product recalls or product liability, casualty events or other matters; effects of facility closures and the consolidation of operations; the effect of financial difficulties, consolidation and other changes within the steel, automotive, construction and other industries in which the Company participates; failure to maintain appropriate levels of inventories; financial difficulties (including bankruptcy filings) of original equipment manufacturers, end-users and customers, suppliers, joint venture partners and others with whom the Company does business; the ability to realize targeted expense reductions from headcount reductions, facility closures and other cost reduction efforts; the ability to realize cost savings and operational, sales and sourcing improvements and efficiencies, and other expected benefits from transformation initiatives, on a timely basis; the overall success of, and the ability to integrate, newly-acquired businesses and joint ventures, maintain and develop their customers, and achieve synergies and other expected benefits and cost savings therefrom; capacity levels and efficiencies, within facilities, within major product markets and within the industries in which the Company participates as a whole; the effect of disruption in the business of suppliers, customers, facilities and shipping operations due to adverse weather, casualty events, equipment breakdowns, labor shortages, interruption in utility services, civil unrest, international conflicts (especially in light of Russia’s invasion of Ukraine), terrorist activities or other causes; changes in customer demand, inventories, spending patterns, product choices, and supplier choices; risks associated with doing business internationally, including economic, political and social instability (especially in light of Russia’s invasion of Ukraine), foreign currency exchange rate exposure and the acceptance of the Company’s products in global markets; the ability to improve and maintain processes and business practices to keep pace with the economic, competitive and technological environment; the effect of inflation, interest rate increases and economic recession, which may negatively impact the Company’s operations and financial results; deviation of actual results from estimates and/or assumptions used by the Company in the application of its significant accounting policies; the level of imports and import prices in the Company’s markets; the impact of environmental laws and regulations or the actions of the United States Environmental Protection Agency or similar regulators which increase costs or limit the Company’s ability to use or sell certain products; the impact of increasing environmental, greenhouse gas emission and sustainability regulations and considerations; the impact of judicial rulings and governmental regulations, both in the United States and abroad, including those adopted by the United States Securities and Exchange Commission and other governmental agencies as contemplated by the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Consolidated Appropriations Act, 2021, the American Rescue Plan Act of 2021, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the effect of healthcare laws in the United States and potential changes for such laws, especially in light of the COVID-19 pandemic, which may increase the Company’s healthcare and other costs and negatively impact the Company’s operations and financial results; the effects of tax laws in the United States and potential changes for such laws, which may increase the Company’s costs and negatively impact the Company’s operations and financial results; cyber security risks; the effects of privacy and information security laws and standards; and other risks described from time to time in the Company’s filings with the United States Securities and Exchange Commission, including those described in “Part I – Item 1A. – Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2023.
Forward-looking statements should be construed in the light of such risks. The Company notes these factors for investors as contemplated by the Act. It is impossible to predict or identify all potential risk factors. Consequently, readers should not consider the foregoing list to be a complete set of all potential risks and uncertainties. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. The Company does not undertake, and hereby disclaims, any obligation to update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.
WORTHINGTON ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(In thousands, except per share amounts)
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
||||||||||
|
|
May 31, |
|
|
May 31, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net sales |
|
$ |
318,801 |
|
|
$ |
368,802 |
|
|
$ |
1,245,703 |
|
|
$ |
1,418,496 |
|
Cost of goods sold |
|
|
239,802 |
|
|
|
274,642 |
|
|
|
960,684 |
|
|
|
1,094,908 |
|
Gross profit |
|
|
78,999 |
|
|
|
94,160 |
|
|
|
285,019 |
|
|
|
323,588 |
|
Selling, general and administrative expense |
|
|
73,210 |
|
|
|
75,910 |
|
|
|
283,471 |
|
|
|
287,118 |
|
Impairment of goodwill and long-lived assets |
|
|
32,975 |
|
|
|
- |
|
|
|
32,975 |
|
|
|
484 |
|
Restructuring and other expense (income), net |
|
|
28,624 |
|
|
|
(13 |
) |
|
|
29,327 |
|
|
|
(367 |
) |
Separation costs |
|
|
240 |
|
|
|
2,961 |
|
|
|
12,705 |
|
|
|
6,534 |
|
Operating income (loss) |
|
|
(56,050 |
) |
|
|
15,302 |
|
|
|
(73,459 |
) |
|
|
29,819 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Miscellaneous expense, net |
|
|
(11,145 |
) |
|
|
- |
|
|
|
(17,129 |
) |
|
|
(4,497 |
) |
Loss on extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
|
(1,534 |
) |
|
|
- |
|
Interest income (expense), net |
|
|
9 |
|
|
|
(2,609 |
) |
|
|
(1,587 |
) |
|
|
(18,298 |
) |
Equity in net income of unconsolidated affiliates |
|
|
40,388 |
|
|
|
51,257 |
|
|
|
167,716 |
|
|
|
153,262 |
|
Earnings (loss) before income taxes |
|
|
(26,798 |
) |
|
|
63,950 |
|
|
|
74,007 |
|
|
|
160,286 |
|
Income tax expense |
|
|
4,986 |
|
|
|
13,825 |
|
|
|
39,027 |
|
|
|
34,535 |
|
Net earnings (loss) from continuing operations |
|
|
(31,784 |
) |
|
|
50,125 |
|
|
|
34,980 |
|
|
|
125,751 |
|
Net earnings (loss) from discontinued operations |
|
|
(265 |
) |
|
|
84,038 |
|
|
|
82,841 |
|
|
|
143,419 |
|
Net earnings (loss) |
|
|
(32,049 |
) |
|
|
134,163 |
|
|
|
117,821 |
|
|
|
269,170 |
|
Net earnings (loss) attributable to noncontrolling interests |
|
|
(263 |
) |
|
|
4,260 |
|
|
|
7,197 |
|
|
|
12,642 |
|
Net earnings (loss) attributable to controlling interest |
|
$ |
(31,786 |
) |
|
$ |
129,903 |
|
|
$ |
110,624 |
|
|
$ |
256,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amounts attributable to controlling interest: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings (loss) from continuing operations |
|
$ |
(31,521 |
) |
|
$ |
50,125 |
|
|
$ |
35,243 |
|
|
$ |
125,751 |
|
Net earnings (loss) from discontinued operations |
|
|
(265 |
) |
|
|
79,778 |
|
|
|
75,381 |
|
|
|
130,777 |
|
Net earnings (loss) attributable to controlling interest |
|
$ |
(31,786 |
) |
|
$ |
129,903 |
|
|
$ |
110,624 |
|
|
$ |
256,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings (loss) per share from continuing operations - basic |
|
$ |
(0.64 |
) |
|
$ |
1.03 |
|
|
$ |
0.72 |
|
|
$ |
2.59 |
|
Earnings (loss) per share from discontinued operations - basic |
|
|
(0.01 |
) |
|
|
1.64 |
|
|
|
1.53 |
|
|
|
2.69 |
|
Net earnings (loss) per share attributable to controlling interest - basic |
|
$ |
(0.65 |
) |
|
$ |
2.67 |
|
|
$ |
2.25 |
|
|
$ |
5.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings (loss) per share from continuing operations - diluted |
|
$ |
(0.64 |
) |
|
$ |
1.01 |
|
|
$ |
0.70 |
|
|
$ |
2.55 |
|
Earnings (loss) per share from discontinued operations - diluted |
|
|
(0.01 |
) |
|
|
1.60 |
|
|
|
1.50 |
|
|
|
2.64 |
|
Net earnings (loss) per share attributable to controlling interest - diluted |
|
$ |
(0.65 |
) |
|
$ |
2.61 |
|
|
$ |
2.20 |
|
|
$ |
5.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding - basic |
|
|
49,437 |
|
|
|
48,643 |
|
|
|
49,195 |
|
|
|
48,566 |
|
Weighted average common shares outstanding - diluted |
|
|
49,437 |
|
|
|
49,779 |
|
|
|
50,348 |
|
|
|
49,386 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash dividends declared per share |
|
$ |
0.16 |
|
|
$ |
0.31 |
|
|
$ |
0.96 |
|
|
$ |
1.24 |
|
CONSOLIDATED BALANCE SHEETS
WORTHINGTON ENTERPRISES, INC.
(In thousands)
|
|
May 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
244,225 |
|
|
$ |
422,268 |
|
Receivables, less allowances of $343 and $803 at May 31, 2024 |
|
|
|
|
|
|
||
and May 31, 2023, respectively |
|
|
199,798 |
|
|
|
224,863 |
|
Inventories |
|
|
|
|
|
|
||
Raw materials |
|
|
66,040 |
|
|
|
91,988 |
|
Work in process |
|
|
11,668 |
|
|
|
19,189 |
|
Finished products |
|
|
86,907 |
|
|
|
83,322 |
|
Total inventories |
|
|
164,615 |
|
|
|
194,499 |
|
Income taxes receivable |
|
|
17,319 |
|
|
|
1,681 |
|
Prepaid expenses and other current assets |
|
|
47,936 |
|
|
|
46,301 |
|
Current assets of discontinued operations |
|
|
- |
|
|
|
978,725 |
|
Total current assets |
|
|
673,893 |
|
|
|
1,868,337 |
|
Investment in unconsolidated affiliates |
|
|
144,863 |
|
|
|
138,041 |
|
Operating lease assets |
|
|
18,667 |
|
|
|
24,686 |
|
Goodwill |
|
|
331,595 |
|
|
|
336,178 |
|
Other intangibles, net of accumulated amortization of |
|
|
|
|
|
|
||
$83,242 and $73,308 at May 31, 2024 and May 31, 2023, respectively |
|
|
221,071 |
|
|
|
230,851 |
|
Other assets |
|
|
21,342 |
|
|
|
14,339 |
|
Property, plant and equipment: |
|
|
|
|
|
|
||
Land |
|
|
8,657 |
|
|
|
12,120 |
|
Buildings and improvements |
|
|
123,478 |
|
|
|
139,514 |
|
Machinery and equipment |
|
|
321,836 |
|
|
|
403,885 |
|
Construction in progress |
|
|
24,504 |
|
|
|
24,779 |
|
Total property, plant and equipment |
|
|
478,475 |
|
|
|
580,298 |
|
Less: accumulated depreciation |
|
|
251,269 |
|
|
|
323,883 |
|
Total property, plant and equipment, net |
|
|
227,206 |
|
|
|
256,415 |
|
Non-current assets of discontinued operations |
|
|
- |
|
|
|
782,071 |
|
Total assets |
|
$ |
1,638,637 |
|
|
$ |
3,650,918 |
|
|
|
|
|
|
|
|
||
Liabilities and equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
91,605 |
|
|
$ |
126,743 |
|
Accrued compensation, contributions to employee benefit plans and related taxes |
|
|
41,974 |
|
|
|
46,782 |
|
Dividends payable |
|
|
9,038 |
|
|
|
18,330 |
|
Other accrued items |
|
|
29,061 |
|
|
|
37,801 |
|
Current operating lease liabilities |
|
|
6,228 |
|
|
|
6,682 |
|
Income taxes payable |
|
|
470 |
|
|
|
8,918 |
|
Current maturities of long-term debt |
|
|
- |
|
|
|
264 |
|
Current liabilities associated of discontinued operations |
|
|
- |
|
|
|
472,038 |
|
Total current liabilities |
|
|
178,376 |
|
|
|
717,558 |
|
Other liabilities |
|
|
62,243 |
|
|
|
71,766 |
|
Distributions in excess of investment in unconsolidated affiliate |
|
|
111,905 |
|
|
|
117,297 |
|
Long-term debt |
|
|
298,133 |
|
|
|
689,718 |
|
Noncurrent operating lease liabilities |
|
|
12,818 |
|
|
|
18,326 |
|
Deferred income taxes |
|
|
84,150 |
|
|
|
82,346 |
|
Non-current liabilities of discontinued operations |
|
|
- |
|
|
|
132,279 |
|
Total liabilities |
|
|
747,625 |
|
|
|
1,829,290 |
|
Shareholders' equity - controlling interest |
|
|
888,879 |
|
|
|
1,696,011 |
|
Noncontrolling interests |
|
|
2,133 |
|
|
|
125,617 |
|
Total equity |
|
|
891,012 |
|
|
|
1,821,628 |
|
Total liabilities and equity |
|
$ |
1,638,637 |
|
|
$ |
3,650,918 |
|
WORTHINGTON ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
||||||||||
|
|
May 31, |
|
|
May 31, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings (loss) |
|
$ |
(32,049 |
) |
|
$ |
134,163 |
|
|
$ |
117,821 |
|
|
$ |
269,170 |
|
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
12,423 |
|
|
|
28,292 |
|
|
|
80,704 |
|
|
|
112,800 |
|
Impairment of goodwill and long-lived assets |
|
|
32,975 |
|
|
|
1,800 |
|
|
|
34,377 |
|
|
|
2,596 |
|
Provision for (benefit from) deferred income taxes |
|
|
1,919 |
|
|
|
4,670 |
|
|
|
2,762 |
|
|
|
(15,528 |
) |
Impairment of investment in note receivable |
|
|
11,170 |
|
|
|
- |
|
|
|
11,170 |
|
|
|
- |
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
|
1,534 |
|
|
|
- |
|
Bad debt expense (income) |
|
|
(21 |
) |
|
|
(1,678 |
) |
|
|
(450 |
) |
|
|
2,108 |
|
Equity in net income of unconsolidated affiliates, net of distributions |
|
|
2,552 |
|
|
|
(4,545 |
) |
|
|
5,722 |
|
|
|
79,870 |
|
Net loss (gain) on sale of assets |
|
|
29,329 |
|
|
|
530 |
|
|
|
28,980 |
|
|
|
(4,458 |
) |
Stock-based compensation |
|
|
3,394 |
|
|
|
5,420 |
|
|
|
16,688 |
|
|
|
19,178 |
|
Changes in assets and liabilities, net of impact of acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Receivables |
|
|
342 |
|
|
|
(17,386 |
) |
|
|
50,078 |
|
|
|
143,089 |
|
Inventories |
|
|
8,597 |
|
|
|
(6,843 |
) |
|
|
63,596 |
|
|
|
160,116 |
|
Accounts payable |
|
|
(5,866 |
) |
|
|
45,089 |
|
|
|
(65,401 |
) |
|
|
(150,400 |
) |
Accrued compensation and employee benefits |
|
|
2,498 |
|
|
|
10,206 |
|
|
|
468 |
|
|
|
(23,226 |
) |
Other operating items, net |
|
|
(22,094 |
) |
|
|
29,516 |
|
|
|
(58,073 |
) |
|
|
30,049 |
|
Net cash provided by operating activities |
|
|
45,169 |
|
|
|
229,234 |
|
|
|
289,976 |
|
|
|
625,364 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment in property, plant and equipment |
|
|
(11,336 |
) |
|
|
(17,651 |
) |
|
|
(83,527 |
) |
|
|
(86,366 |
) |
Acquisitions, net of cash acquired |
|
|
(12,315 |
) |
|
|
- |
|
|
|
(42,035 |
) |
|
|
(56,088 |
) |
Proceeds from sale of assets, net of selling costs |
|
|
28 |
|
|
|
108 |
|
|
|
865 |
|
|
|
35,653 |
|
Investment in note receivable |
|
|
- |
|
|
|
- |
|
|
|
(14,900 |
) |
|
|
- |
|
Investment in non-marketable equity securities |
|
|
(681 |
) |
|
|
(500 |
) |
|
|
(2,296 |
) |
|
|
(770 |
) |
Net proceeds from sale of investment in ArtiFlex |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
35,795 |
|
Excess distributions from unconsolidated affiliate |
|
|
- |
|
|
|
- |
|
|
|
1,085 |
|
|
|
- |
|
Net cash used by investing activities |
|
|
(24,304 |
) |
|
|
(18,043 |
) |
|
|
(140,808 |
) |
|
|
(71,776 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dividend from Worthington Steel at Separation |
|
|
- |
|
|
|
- |
|
|
|
150,000 |
|
|
|
- |
|
Distribution to Worthington Steel at Separation |
|
|
- |
|
|
|
- |
|
|
|
(218,048 |
) |
|
|
- |
|
Net proceeds (repayments) from short-term borrowings (1) |
|
|
- |
|
|
|
(791 |
) |
|
|
172,187 |
|
|
|
(45,183 |
) |
Principal payments on long-term obligations |
|
|
- |
|
|
|
(776 |
) |
|
|
(393,890 |
) |
|
|
(6,685 |
) |
Proceeds from issuance of common shares, net of tax withholdings |
|
|
3,961 |
|
|
|
1,631 |
|
|
|
(11,399 |
) |
|
|
(1,780 |
) |
Payments to noncontrolling interests |
|
|
- |
|
|
|
(8,475 |
) |
|
|
(1,920 |
) |
|
|
(20,235 |
) |
Dividends paid |
|
|
(7,911 |
) |
|
|
(15,078 |
) |
|
|
(56,819 |
) |
|
|
(59,244 |
) |
Net cash used by financing activities |
|
|
(3,950 |
) |
|
|
(23,489 |
) |
|
|
(359,889 |
) |
|
|
(133,127 |
) |
Increase (decrease) in cash and cash equivalents |
|
|
16,915 |
|
|
|
187,702 |
|
|
|
(210,721 |
) |
|
|
420,461 |
|
Cash and cash equivalents at beginning of period |
|
|
227,310 |
|
|
|
267,244 |
|
|
|
454,946 |
|
|
|
34,485 |
|
Cash and cash equivalents at end of period (2) |
|
$ |
244,225 |
|
|
$ |
454,946 |
|
|
$ |
244,225 |
|
|
$ |
454,946 |
|
|
WORTHINGTON ENTERPRISES, INC.
NON-GAAP FINANCIAL MEASURES / PRO FORMA FINANCIAL DATA
(In thousands, except units and per share amounts
The following provides a reconciliation of non-GAAP financial measures, including adjusted operating income (loss), adjusted earnings before income taxes, adjusted income tax expense (benefit), adjusted net earnings (loss) from continuing operations attributable to controlling interest, adjusted earnings per diluted share from continuing operations attributable to controlling interest and adjusted effective tax rate, from their most comparable GAAP measure for the three and 12 months ended May 31, 2024, and May 31, 2023. Refer to the Use of Non-GAAP Measures and Definitions section herein and non-GAAP footnotes below for further information on these measures .
|
Three Months Ended May 31, 2024 |
|
|||||||||||||||||||||
|
Operating |
|
|
Earnings |
|
|
Income Tax Expense |
|
|
Net loss from Continuing Operations (1) |
|
|
Diluted EPS - Continuing Operations |
|
|
Effective |
|
||||||
GAAP |
$ |
(56,050 |
) |
|
$ |
(26,798 |
) |
|
$ |
4,986 |
|
|
$ |
(31,521 |
) |
|
|
(0.64 |
) |
|
|
(18.8 |
%) |
Impairment of goodwill and long-lived assets |
|
32,975 |
|
|
|
32,975 |
|
|
|
- |
|
|
|
32,975 |
|
|
|
0.66 |
|
|
|
|
|
Restructuring and other expense, net |
|
28,624 |
|
|
|
28,624 |
|
|
|
(4,609 |
) |
|
|
24,015 |
|
|
|
0.48 |
|
|
|
|
|
Separation costs |
|
240 |
|
|
|
240 |
|
|
|
(81 |
) |
|
|
159 |
|
|
|
- |
|
|
|
|
|
Non-cash charges in miscellaneous expense |
|
|
|
|
11,077 |
|
|
|
7 |
|
|
|
11,084 |
|
|
|
0.22 |
|
|
|
|
||
Pension settlement charge in equity income |
|
- |
|
|
|
1,040 |
|
|
|
(244 |
) |
|
|
796 |
|
|
|
0.02 |
|
|
|
|
|
Non-GAAP |
$ |
5,789 |
|
|
$ |
47,158 |
|
|
$ |
9,913 |
|
|
$ |
37,508 |
|
|
$ |
0.74 |
|
|
|
20.9 |
% |
|
Three Months Ended May 31, 2023 |
|
|||||||||||||||||||||
|
Operating |
|
|
Earnings |
|
|
Income Tax Expense |
|
|
Net Earnings from Continuing Operations (1) |
|
|
Diluted EPS - Continuing Operations |
|
|
Effective |
|
||||||
GAAP |
$ |
15,302 |
|
|
$ |
63,950 |
|
|
$ |
13,825 |
|
|
$ |
50,125 |
|
|
$ |
1.01 |
|
|
|
21.6 |
% |
Corporate costs eliminated at Separation |
|
10,370 |
|
|
|
10,370 |
|
|
|
(2,375 |
) |
|
|
7,995 |
|
|
|
0.16 |
|
|
|
|
|
Restructuring and other income, net |
|
(13 |
) |
|
|
(13 |
) |
|
|
(1 |
) |
|
|
(14 |
) |
|
|
- |
|
|
|
|
|
Separation costs |
|
2,961 |
|
|
|
2,961 |
|
|
|
(424 |
) |
|
|
2,537 |
|
|
|
0.05 |
|
|
|
|
|
Sale-leaseback gain in equity income |
|
- |
|
|
|
(2,063 |
) |
|
|
472 |
|
|
|
(1,591 |
) |
|
|
(0.03 |
) |
|
|
|
|
Non-GAAP |
$ |
28,620 |
|
|
$ |
75,205 |
|
|
$ |
16,153 |
|
|
$ |
59,052 |
|
|
$ |
1.19 |
|
|
|
21.5 |
% |
|
Twelve Months Ended May 31, 2024 |
|
|||||||||||||||||||||
|
Operating |
|
|
Earnings |
|
|
Income Tax Expense |
|
|
Net Earnings from Continuing Operations (1) |
|
|
Diluted EPS - Continuing Operations |
|
|
Effective |
|
||||||
GAAP |
$ |
(73,459 |
) |
|
$ |
74,007 |
|
|
$ |
39,027 |
|
|
$ |
35,243 |
|
|
$ |
0.70 |
|
|
|
52.6 |
% |
Corporate costs eliminated at Separation |
|
19,343 |
|
|
|
19,343 |
|
|
|
(4,643 |
) |
|
|
14,700 |
|
|
|
0.29 |
|
|
|
|
|
Impairment of goodwill and long-lived assets |
|
32,975 |
|
|
|
32,975 |
|
|
|
- |
|
|
|
32,975 |
|
|
|
0.65 |
|
|
|
|
|
Restructuring and other expense, net |
|
29,327 |
|
|
|
29,327 |
|
|
|
(4,737 |
) |
|
|
24,590 |
|
|
|
0.49 |
|
|
|
|
|
Separation costs |
|
12,705 |
|
|
|
12,705 |
|
|
|
(3,049 |
) |
|
|
9,656 |
|
|
|
0.19 |
|
|
|
|
|
Non-cash charges in miscellaneous expense |
|
- |
|
|
|
19,180 |
|
|
|
(1,922 |
) |
|
|
17,258 |
|
|
|
0.34 |
|
|
|
|
|
Loss on extinguishment of debt |
|
- |
|
|
|
1,534 |
|
|
|
(368 |
) |
|
|
1,166 |
|
|
|
0.02 |
|
|
|
|
|
Gain on sale of assets in equity income |
|
- |
|
|
|
(2,780 |
) |
|
|
662 |
|
|
|
(2,118 |
) |
|
|
(0.04 |
) |
|
|
|
|
Pension settlement charge in equity income |
|
- |
|
|
|
1,040 |
|
|
|
(244 |
) |
|
|
796 |
|
|
|
0.02 |
|
|
|
|
|
One-time tax effects of Separation |
|
- |
|
|
|
- |
|
|
|
9,197 |
|
|
|
9,197 |
|
|
|
0.18 |
|
|
|
|
|
Non-GAAP |
$ |
20,891 |
|
|
$ |
187,331 |
|
|
$ |
44,131 |
|
|
$ |
143,463 |
|
|
$ |
2.84 |
|
|
|
23.5 |
% |
|
Twelve Months Ended May 31, 2023 |
|
|||||||||||||||||||||
|
Operating |
|
|
Earnings |
|
|
Income Tax Expense |
|
|
Net Earnings from Continuing Operations (1) |
|
|
Diluted EPS - Continuing Operations |
|
|
Effective |
|
||||||
GAAP |
$ |
29,819 |
|
|
$ |
160,286 |
|
|
$ |
34,535 |
|
|
$ |
125,751 |
|
|
$ |
2.55 |
|
|
|
21.5 |
% |
Corporate costs eliminated at Separation |
|
41,479 |
|
|
|
41,479 |
|
|
|
(9,499 |
) |
|
|
31,980 |
|
|
|
0.65 |
|
|
|
|
|
Impairment of long-lived assets |
|
484 |
|
|
|
484 |
|
|
|
(111 |
) |
|
|
373 |
|
|
|
0.01 |
|
|
|
|
|
Restructuring and other income, net |
|
(367 |
) |
|
|
(367 |
) |
|
|
84 |
|
|
|
(283 |
) |
|
|
(0.01 |
) |
|
|
|
|
Separation costs |
|
6,534 |
|
|
|
6,534 |
|
|
|
(1,496 |
) |
|
|
5,038 |
|
|
|
0.11 |
|
|
|
|
|
Pension settlement charge |
|
- |
|
|
|
4,774 |
|
|
|
(1,093 |
) |
|
|
3,681 |
|
|
|
0.07 |
|
|
|
|
|
Loss on sale of investment in Artiflex |
|
- |
|
|
|
16,059 |
|
|
|
(3,678 |
) |
|
|
12,381 |
|
|
|
0.25 |
|
|
|
|
|
Sale lease-back gain in equity income |
|
- |
|
|
|
(2,063 |
) |
|
|
472 |
|
|
|
(1,591 |
) |
|
|
(0.03 |
) |
|
|
|
|
Non-GAAP |
$ |
77,949 |
|
|
$ |
227,186 |
|
|
$ |
49,856 |
|
|
$ |
177,330 |
|
|
$ |
3.60 |
|
|
|
21.9 |
% |
|
To further assist in the analysis of segment results for the three and twelve months ended May 31, 2024, and May 31, 2023, the following supplemental information has been provided. Reconciliations of adjusted EBITDA from continuing operations and adjusted EBITDA margin from continuing operations to the most comparable GAAP measures, earnings (loss) before income taxes and earnings (loss) before income taxes margin.
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
||||||||||
|
|
May 31, |
|
|
May 31, |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Volume |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer Products |
|
|
15,660 |
|
|
|
19,070 |
|
|
|
66,632 |
|
|
|
74,137 |
|
Building Products |
|
|
3,579 |
|
|
|
3,787 |
|
|
|
14,157 |
|
|
|
14,630 |
|
Total reportable segments |
|
|
19,239 |
|
|
|
22,857 |
|
|
|
80,789 |
|
|
|
88,767 |
|
Other |
|
|
160 |
|
|
|
163 |
|
|
|
523 |
|
|
|
574 |
|
Consolidated |
|
|
19,399 |
|
|
|
23,020 |
|
|
|
81,312 |
|
|
|
89,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer Products |
|
$ |
125,336 |
|
|
$ |
148,831 |
|
|
$ |
495,259 |
|
|
$ |
555,309 |
|
Building Products |
|
|
153,551 |
|
|
|
174,533 |
|
|
|
618,973 |
|
|
|
717,069 |
|
Total reportable segments |
|
|
278,887 |
|
|
|
323,364 |
|
|
|
1,114,232 |
|
|
|
1,272,378 |
|
Other |
|
|
39,914 |
|
|
|
45,438 |
|
|
|
131,471 |
|
|
|
146,118 |
|
Consolidated |
|
$ |
318,801 |
|
|
$ |
368,802 |
|
|
$ |
1,245,703 |
|
|
$ |
1,418,496 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer Products |
|
$ |
17,061 |
|
|
$ |
29,523 |
|
|
$ |
69,598 |
|
|
$ |
97,370 |
|
Building Products |
|
|
51,628 |
|
|
|
64,737 |
|
|
|
210,128 |
|
|
|
222,197 |
|
Total reportable segments |
|
|
68,689 |
|
|
|
94,260 |
|
|
|
279,726 |
|
|
|
319,567 |
|
Other |
|
|
(5,521 |
) |
|
|
(525 |
) |
|
|
(28,727 |
) |
|
|
(13,542 |
) |
Consolidated |
|
$ |
63,168 |
|
|
$ |
93,735 |
|
|
$ |
250,999 |
|
|
$ |
306,025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA margin from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer Products |
|
|
13.6 |
% |
|
|
19.8 |
% |
|
|
14.1 |
% |
|
|
17.5 |
% |
Building Products |
|
|
33.6 |
% |
|
|
37.1 |
% |
|
|
33.9 |
% |
|
|
31.0 |
% |
Consolidated |
|
|
19.8 |
% |
|
|
25.4 |
% |
|
|
20.1 |
% |
|
|
21.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity income by unconsolidated affiliate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
WAVE (1) |
|
$ |
27,534 |
|
|
$ |
24,252 |
|
|
$ |
103,298 |
|
|
$ |
85,933 |
|
ClarkDietrich (1) |
|
|
11,560 |
|
|
|
25,365 |
|
|
|
59,827 |
|
|
|
80,494 |
|
Other (2) |
|
|
1,294 |
|
|
|
1,640 |
|
|
|
4,591 |
|
|
|
(13,165 |
) |
Consolidated |
|
$ |
40,388 |
|
|
$ |
51,257 |
|
|
$ |
167,716 |
|
|
$ |
153,262 |
|
|
A reconciliation from net earnings (loss) before income taxes from continuing operations to the non-GAAP financial measure of adjusted EBITDA from continuing operations for the each of the periods presented is provided below.
For periods prior to the Separation, the Company has also included adjusted EBITDA from continuing operations and adjusted EBITDA margin from continuing operations, on a pro forma basis, to illustrate estimated effects of the post-Separation relationship between the Company and Worthington Steel under the parties’ transition services agreement and long-term steel supply agreement. This pro forma financial information assumes the Separation occurred on June 1, 2022, the first day of our fiscal 2023. For further information on this pro forma presentation, refer to the Use of Non-GAAP Measures and Definitions section included herein.
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
||||||||||
|
|
May 31, |
|
|
May 31, |
|
|
May 31, |
|
|
May 31, |
|
||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Earnings (loss) before income taxes (GAAP) |
|
$ |
(26,798 |
) |
|
$ |
63,950 |
|
|
$ |
74,007 |
|
|
$ |
160,286 |
|
Less: net loss attributable to noncontrolling interest |
|
|
(263 |
) |
|
|
- |
|
|
|
(263 |
) |
|
|
- |
|
Net earnings (loss) before income taxes attributable to controlling interest |
|
|
(26,535 |
) |
|
|
63,950 |
|
|
|
74,270 |
|
|
|
160,286 |
|
Interest expense (income), net |
|
|
(9 |
) |
|
|
2,609 |
|
|
|
1,587 |
|
|
|
18,298 |
|
EBIT (subtotal) |
|
|
(26,544 |
) |
|
|
66,559 |
|
|
|
75,857 |
|
|
|
178,584 |
|
Corporate costs eliminated at Separation (1) |
|
|
- |
|
|
|
10,370 |
|
|
|
19,343 |
|
|
|
41,479 |
|
Impairment of goodwill and long-lived assets |
|
|
32,975 |
|
|
|
- |
|
|
|
32,975 |
|
|
|
484 |
|
Restructuring and other expense (income), net |
|
|
28,624 |
|
|
|
(13 |
) |
|
|
29,327 |
|
|
|
(367 |
) |
Separation costs |
|
|
240 |
|
|
|
2,961 |
|
|
|
12,705 |
|
|
|
6,534 |
|
Non-cash charges in miscellaneous expense (2) |
|
|
11,077 |
|
|
|
- |
|
|
|
19,180 |
|
|
|
4,774 |
|
Loss on investment in ArtiFlex (3) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
16,059 |
|
Loss on extinguishment of debt (4) |
|
|
- |
|
|
|
- |
|
|
|
1,534 |
|
|
|
- |
|
Gain on sale of assets in equity income (5) |
|
|
- |
|
|
|
(2,063 |
) |
|
|
(2,780 |
) |
|
|
(2,063 |
) |
Pension settlement charge in equity income (6) |
|
|
1,040 |
|
|
|
- |
|
|
|
1,040 |
|
|
|
- |
|
Adjusted EBIT (subtotal) |
|
|
47,412 |
|
|
|
77,814 |
|
|
|
189,181 |
|
|
|
245,484 |
|
Depreciation and amortization |
|
|
12,424 |
|
|
|
11,773 |
|
|
|
48,663 |
|
|
|
45,975 |
|
Stock-based compensation |
|
|
3,332 |
|
|
|
4,148 |
|
|
|
13,155 |
|
|
|
14,566 |
|
Adjusted EBITDA from continuing operations (non-GAAP) |
|
$ |
63,168 |
|
|
$ |
93,735 |
|
|
$ |
250,999 |
|
|
$ |
306,025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings (loss) before income taxes margin |
|
|
(8.4 |
%) |
|
|
17.3 |
% |
|
|
5.9 |
% |
|
|
11.3 |
% |
Non-GAAP adjusted EBITDA margin from continuing operations |
|
|
19.8 |
% |
|
|
25.4 |
% |
|
|
20.1 |
% |
|
|
21.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Pro forma adjusted EBITDA from continuing operations |
|
n/a |
|
|
$ |
92,868 |
|
|
$ |
249,399 |
|
|
$ |
302,357 |
|
|
Pro forma adjusted EBITDA margin from continuing operations |
|
n/a |
|
|
|
25.2 |
% |
|
|
20.0 |
% |
|
|
21.3 |
% |
|
Non-GAAP Footnotes:
WORTHINGTON ENTERPRISES, INC.
USE OF NON-GAAP MEASURES AND DEFINITIONS
NON-GAAP MEASURES. These materials include certain financial measures that are not calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”). The non-GAAP financial measures typically exclude items that management believes are not reflective of, and thus should not be included when evaluating the performance of the Company’s ongoing operations. Management uses the non-GAAP financial measures to evaluate the Company’s performance, engage in financial and operational planning, and determine incentive compensation. Management believes these non-GAAP measures provide useful supplemental information and additional perspective on the performance of the Company’s ongoing operations and should not be considered as an alternative to the comparable GAAP measure. Additionally, management believes these non-GAAP measures allow for meaningful comparisons and analysis of trends in the Company’s businesses and enables investors to evaluate operations and future prospects in the same manner as management.
The following provides an explanation of each non-GAAP measure presented in these materials:
Adjusted operating income is defined as operating income (loss) excluding the items listed below, to the extent naturally included in operating income (loss).
Adjusted net earnings from continuing operations is defined as net earnings from continuing operations attributable to controlling interest (“net earnings from continuing operations”) excluding the after-tax effect of the excluded items outlined below.
Adjusted earnings per diluted share from continuing operations (“Adjusted EPS from continuing operations”) – is defined as adjusted net earnings from continuing operations divided by diluted weighted-average shares outstanding.
Adjusted EBITDA – Adjusted EBITDA is defined as Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization. EBITDA is calculated by adding or subtracting, as appropriate, interest expense, net, income tax expense, depreciation, and amortization to/from net earnings from continuing operations attributable to controlling interest, which is further adjusted to exclude impairment and restructuring charges (gains) as well as other items that management believes are not reflective of, and thus should not be included when evaluating the performance of its ongoing operations, as outlined below. Adjusted EBITDA also excludes stock-based compensation due to its non-cash nature, which is consistent with how management assesses operating performance. At the segment level, adjusted EBITDA includes expense allocations for centralized corporate back-office functions that exist to support the day-to-day business operations. Public company and other governance costs are held at the corporate-level.
Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by net sales.
Exclusions from Non-GAAP Financial Measures
Management believes it is useful to exclude the following items from the non-GAAP measures presented in this report for its own and investors’ assessment of the business for the reasons identified below:
PRO FORMA FINANCIAL INFORMATION. These materials include certain financial data and operating metrics that are presented on a pro forma basis to illustrate the estimated effects of the Separation of Worthington Steel from the historical combined company, which was consummated on December 1, 2023, and to give effect to divested operations historically presented within Other. Management believes these pro forma measures provide investors with useful supplemental financial information regarding the performance of the Company’s continuing operations after reflecting the Separation. This pro forma financial information has been prepared based upon the best available information and management estimates and is subject to assumptions and adjustments described in the accompanying footnotes. They are not intended to be a complete presentation of the Company’s financial position or results of operations had the Separation occurred as of and for the periods indicated. In addition, the pro forma financial information is being provided for informational purposes only and is not necessarily indicative of the Company’s future results of operations or financial condition had the Separation and related transactions been completed on the dates assumed. Management believes these assumptions and estimates are reasonable, given the information available on the date of this release.