Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 2026
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number 001-08399
WORTHINGTON ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Ohio
31-1189815
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
200 West Old Wilson Bridge Road, Columbus, Ohio
43085
(Address of principal executive offices)
(Zip Code)
(614) 438-3210
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Shares, Without Par Value
WOR
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
APPLICABLE ONLY TO CORPORATE ISSUERS:
On April 6, 2026, the number of common shares, without par value, of the registrant issued and outstanding was 49,252,994.
TABLE OF CONTENTS
Commonly Used or Defined Terms
ii
Cautionary Note Regarding Forward-Looking Statements
iv
Use of Non-GAAP Financial Measures and Definitions
1
Part I. Financial Information
Item 1.
Financial Statements
Consolidated Balance Sheets – February 28, 2026 and May 31, 2025
5
Consolidated Statements of Earnings – Three Months and Nine Months Ended February 28, 2026 and 2025
6
Consolidated Statements of Comprehensive Income – Three Months and Nine Months Ended February 28, 2026 and 2025
7
Consolidated Statements of Cash Flows – Three Months and Nine Months Ended February 28, 2026 and 2025
8
Condensed Notes to Consolidated Financial Statements (Unaudited)
9
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
27
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
37
Item 4.
Controls and Procedures
Part II. Other Information
Legal Proceedings
38
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
39
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
Signatures
40
i
COMMONLY USED OR DEFINED TERMS
References in this Form 10-Q to “we,” “our,” “us” or the “Company” are collectively to Worthington Enterprises and its consolidated subsidiaries. In addition, the following terms, when used in this Form 10-Q, have the meanings set forth below:
Term
Definition
ABI
Architecture Billings Index
AI
Artificial intelligence
AOCI
Accumulated other comprehensive income (loss)
ASU
Accounting Standards Update
ATSR
Annualized absolute total shareholder return
Board
Board of Directors of Worthington Enterprises, Inc.
CARES Act
Coronavirus Aid, Relief and Economic Security Act
CEO
Chief Executive Officer
ClarkDietrich
Clarkwestern Dietrich Building Systems LLC
CODM
Chief Operating Decision Maker
common shares
The common shares, no par value, of Worthington Enterprises
Credit Facility
Our $500,000,000 unsecured revolving credit facility with a group of lenders
current year period
The nine months ended February 28, 2026
current year quarter
The three months ended February 28, 2026
DMI
Dodge Momentum Index
EBIT
Earnings before interest and taxes
EBITDA
Earnings before interest, taxes, depreciation, and amortization
Elgen
Elgen Manufacturing Company, Inc.
EPS
Earnings per common share
equity income
Equity in net income of unconsolidated affiliates
ETR
Effective income tax rate
Exchange Act
Securities Exchange Act of 1934, as amended
FASB
Financial Accounting Standards Board
fiscal 2024
Our fiscal year ended May 31, 2024
fiscal 2025
Our fiscal year ended May 31, 2025
fiscal 2026
Our fiscal year ending May 31, 2026
Form 10-Q
This Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2026
GAAP
U.S. generally accepted accounting principles
Halo
WH Products, LLC
Hexagon Composites
Hexagon Composites ASA, which is traded on the Euronext Oslo as HEX
Hexagon Purus
Hexagon Purus ASA, which is traded on the Euronext Oslo as HPUR
HMI
National Association of Home Builders/Wells Fargo Housing Market Index
HVAC
Heating, ventilation, and air conditioning
Hydrostat
Hydrostat, Inc.
IEEPA
International Emergency Economic Powers Act, as amended
LIRA
Leading Indicator of Remodeling Activity
LPG
Liquefied petroleum gas
LSI
LSI Group, LLC
MD&A
N.M.
Not meaningful
OCI
Other comprehensive income (loss)
prior year period
The nine months ended February 28, 2025
prior year quarter
The three months ended February 28, 2025
PSLRA
Private Securities Litigation Reform Act of 1995, as amended
Ragasco
Ragasco AS
SEC
Securities and Exchange Commission
SES
Sustainable Energy Solutions
Separation
The separation of our former steel processing business, effective December 1, 2023
SG&A
Selling, general and administrative expenses
simple SOFR
Simple Secured Overnight Financing Rate
special PSA
Special award of common shares subject to performance-based and time-based vesting restrictions
Steel Supply and Services Agreement
Steel Supply and Services Agreement, dated November 30, 2023, by and between Worthington Steel and Worthington Enterprises.
third quarter of fiscal 2026
Our fiscal quarter ended February 28, 2026
Trademark License Agreement
Trademark License Agreement, dated November 30, 2023, by and between Worthington Steel and Worthington Enterprises.
Transition Services Agreement
Transition Services Agreement, dated November 30, 2023, by and between Worthington Steel and Worthington Enterprises.
U.S.
United States of America
WAVE
Worthington Armstrong Venture
Workhorse
Taxi Workhorse Holdings, LLC
Worthington Enterprises
Worthington Enterprises, Inc. (formerly known as Worthington Industries, Inc.)
Worthington Steel
Worthington Steel, Inc.
2025 Form 10-K
Our Annual Report on Form 10-K for fiscal 2025 as filed with the SEC on July 30, 2025
2026 Form 10-K
Our Annual Report on Form 10-K for fiscal 2026
Also see the definitions included in the “Use of Non-GAAP Financial Measures and Definitions” section of this Form 10-Q.
iii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Selected statements contained in this Form 10-Q, including, without limitation, in MD&A and in “Note D – Contingent Liabilities and Commitments,” constitute “forward-looking statements,” as that term is used in the PSLRA. We wish to take advantage of the safe harbor provisions included in the PSLRA. Forward-looking statements reflect our 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:
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:
We note these risk factors for investors as contemplated by the PSLRA. Forward-looking statements should be construed in the light of such risks. 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. We do not undertake, and hereby disclaim, 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.
v
USE OF NON-GAAP FINANCIAL MEASURES AND DEFINITIONS
NON-GAAP FINANCIAL MEASURES. This Form 10-Q includes certain financial measures that are not calculated and presented in accordance with GAAP. Non-GAAP financial measures typically exclude items that management believes are not reflective of our ongoing operations, and thus should not be included when evaluating our performance. Management uses these non-GAAP financial measures to evaluate ongoing performance, engage in financial and operational planning, and determine incentive compensation. Management believes these non-GAAP financial measures provide useful supplemental information regarding the performance of our ongoing operations and should not be considered as an alternative to the comparable GAAP financial measure. Additionally, management believes these non-GAAP financial measures allow for meaningful comparisons and analysis of trends in our business and enable investors to evaluate our operations and future prospects in the same manner as management.
Beginning in the third quarter of fiscal 2026, we updated our definition of adjusted operating income, adjusted net earnings, adjusted EBITDA, and adjusted EPS – diluted to exclude the acquisition-related amortization of inventory step-up charges. Non-GAAP financial measures for prior periods presented in this Form 10-Q have been recast for comparability.
The following provides an explanation of each non-GAAP financial measure presented in this Form 10-Q:
Adjusted operating income (loss) is defined as operating income (loss) excluding the items listed below, to the extent naturally included in operating income (loss).
Adjusted net earnings is defined as net earnings attributable to controlling interest excluding the after-tax effect of the excluded items outlined below.
Adjusted EPS - diluted is defined as adjusted net earnings divided by diluted weighted-average common shares outstanding for the applicable period.
Adjusted EBITDA is the measure by which management evaluates segment performance and overall profitability. Adjusted EBITDA excludes additional items including, but not limited to, those listed below, as well as other items that management believes are not reflective of, and thus should not be included when evaluating the performance of ongoing operations. Adjusted EBITDA also excludes stock-based compensation due to its non-cash nature, which is consistent with how management assesses operating performance and determines incentive compensation. 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 within the unallocated corporate and other category.
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 its non-GAAP financial measures for its own and investors’ assessment of the business for the reasons identified below. Additionally, management may exclude other items from non-GAAP financial measures that do not occur in the ordinary course of our ongoing business operations and note them in the reconciliation from net earnings to the non-GAAP financial measure adjusted EBITDA.
2
(In thousands, except per common share amounts)
Consolidated Results – Selected Non-GAAP Adjusted Results
Three Months Ended February 28, 2026
Earnings
Before
Income
Operating
Tax
Net
Diluted
Taxes
Expense
Earnings (1)
EPS (1)
$
31,543
60,114
14,994
45,463
0.92
Amortization of inventory step-up (2)
1,500
(367
)
1,133
0.02
Restructuring and other expense, net
2,186
(512
1,674
0.03
Unrealized loss on investment in marketable securities (4)
-
340
(84
256
0.01
Non-GAAP
35,229
64,140
15,957
48,526
0.98
Three Months Ended February 28, 2025
20,868
52,579
13,240
39,663
0.79
5,374
295
5,669
0.12
26,242
57,953
12,945
45,332
0.91
Nine Months Ended February 28, 2026
53,050
141,575
34,605
107,939
2.17
3,651
(888
2,763
0.06
6,306
(1,292
5,014
0.11
Loss on partial sale of investment in SES (3)
2,950
1,584
(385
1,199
63,007
156,066
37,170
119,865
2.41
Nine Months Ended February 28, 2025
19,690
120,478
29,122
92,176
1.84
Amortization of inventory step-up
1,477
(369
1,108
9,152
(632
8,520
0.17
30,319
131,107
30,123
101,804
2.03
3
Consolidated Results - Adjusted EBITDA
Three Months Ended
Nine Months Ended
February 28,
2026
2025
Net earnings (GAAP)
45,120
39,339
106,970
91,356
Plus: Net loss attributable to noncontrolling interest
343
324
969
820
Net earnings attributable to controlling interest
Interest expense, net
1,828
628
3,363
2,150
Income tax expense
EBIT (5)
62,285
53,531
145,907
123,448
Adjusted EBIT (5)
66,311
58,905
160,398
134,077
Depreciation and amortization
14,552
11,950
41,402
35,707
Stock-based compensation (6)
3,752
2,924
10,504
10,122
Adjusted EBITDA (non-GAAP)
84,615
73,779
212,304
179,906
Net earnings margin (GAAP)
11.9
%
12.9
10.6
10.9
Adjusted EBITDA margin (non-GAAP)
22.3
24.2
21.0
21.5
4
Item 1. – Financial Statements
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
May 31,
Assets
Current assets:
Cash and cash equivalents
5,979
250,075
Receivables, less allowances of $1,062 and $907, respectively
231,878
215,824
Inventories:
Raw materials
104,684
80,522
Work in process
8,087
9,408
Finished products
84,817
79,463
Total inventories
197,588
169,393
Income taxes receivable
25,374
12,720
Prepaid expenses and other current assets
43,044
37,358
Total current assets
503,863
685,370
Investments in unconsolidated affiliates
118,678
129,262
Operating lease assets
44,703
22,699
Goodwill
499,492
376,480
Other intangible assets, net of accumulated amortization of $101,791 and $88,887, respectively
327,353
190,398
Other assets
24,900
20,717
Property, plant and equipment:
Land
8,746
8,703
Buildings and improvements
136,279
132,742
Machinery and equipment
409,609
372,798
Construction in progress
57,206
33,326
Total property, plant and equipment
611,840
547,569
Less: accumulated depreciation
307,291
277,343
Total property, plant and equipment, net
304,549
270,226
Total assets
1,823,538
1,695,152
Liabilities and equity
Current liabilities:
Accounts payable
107,386
103,205
Short-term borrowings
4,792
Accrued compensation, contributions to employee benefit plans and related taxes
43,062
43,864
Dividends payable
9,833
9,172
Other accrued items
39,659
34,478
Current operating lease liabilities
7,950
6,014
Income taxes payable
554
109
Total current liabilities
213,236
196,842
Other liabilities
58,462
53,364
Distributions in excess of investment in unconsolidated affiliate
109,592
103,767
Long-term debt
307,256
302,868
Noncurrent operating lease liabilities
37,681
17,173
Deferred income taxes, net
94,751
82,901
Total liabilities
820,978
756,915
Shareholders’ equity - controlling interest
1,002,479
937,187
Noncontrolling interest
81
1,050
Total equity
1,002,560
938,237
Total liabilities and equity
See condensed notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF EARNINGS
Net sales
378,677
304,524
1,009,836
835,878
Cost of goods sold
269,203
215,277
733,449
610,077
Gross profit
109,474
89,247
276,387
225,801
Selling, general and administrative expense
75,745
63,005
217,031
196,959
Operating income
Other income (expense):
Miscellaneous income (expense), net
(316
258
(4,602
809
(1,828
(628
(3,363
(2,150
30,715
32,081
96,490
102,129
Earnings before income taxes
Net earnings
Net loss attributable to noncontrolling interest
(343
(324
(969
(820
Basic
Weighted average common shares outstanding
49,073
49,377
49,167
49,443
Earnings per share attributable to controlling interest
0.93
0.80
2.20
1.86
49,665
49,981
49,822
50,171
Cash dividends declared per common share
0.19
0.57
0.51
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Other comprehensive income (loss), net of tax
Foreign currency translation
5,304
(2,704
5,756
(5,439
Pension liability adjustment
(7
161
(15
167
Cash flow hedges
860
548
(99
441
6,157
(1,995
5,642
(4,831
Comprehensive income
51,277
37,344
112,612
86,525
Comprehensive loss attributable to noncontrolling interest
Comprehensive income attributable to controlling interest
51,620
37,668
113,581
87,345
CONSOLIDATED STATEMENTS OF CASH FLOWS
Operating activities:
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for (benefit from) deferred income taxes
4,294
(8,016
7,812
(10,871
Bad debt (income) expense
(97
1,128
112
3,189
Equity in net income of unconsolidated affiliates, net of distributions
4,064
3,089
8,991
10,810
Net loss (gain) on sale of assets
(17
(21
2,995
(547
Stock-based compensation
12,787
Unrealized loss on investment in marketable securities
Changes in assets and liabilities, net of impact of acquisitions:
Receivables
(16,973
(18,553
3,870
(9,023
Inventories
10,998
14,128
(1,699
15,558
6,612
46
(3,365
(12,600
Accrued compensation and employee benefits
13,658
8,838
(4,628
Other operating items, net
(24,365
2,279
(23,838
15,592
Net cash provided by operating activities
61,938
57,131
154,518
147,330
Investing activities:
Investment in property, plant and equipment
(13,794
(12,704
(39,421
(37,494
Acquisitions, net of cash acquired
(212,191
(304,426
(88,156
Proceeds from sale of assets, net of selling costs
18
59
13,444
Investment in non-marketable equity securities, net of distributions
(58
(833
(113
(2,873
Net cash used by investing activities
(226,025
(13,478
(343,942
(115,079
Financing activities:
Dividends paid
(9,341
(8,422
(27,540
(25,507
Repurchase of common shares
(5,374
(6,170
(25,328
(21,052
Net proceeds from short term borrowings
Principal payments on long-term obligations
(284
(760
Proceeds from issuance of common shares, net of tax withholdings
(22
(5,836
(7,073
Net cash used by financing activities
(10,222
(14,614
(54,672
(53,632
(Decrease) increase in cash and cash equivalents
(174,309
29,039
(244,096
(21,381
Cash and cash equivalents at beginning of period
180,288
193,805
244,225
Cash and cash equivalents at end of period
222,844
CONDENSED Notes to Consolidated Financial Statements (UNAUDITED)
(In thousands, except common share and per common share amounts)
Note A – Basis of Presentation
Basis of Presentation
These interim unaudited consolidated financial statements include the accounts of Worthington Enterprises and its consolidated subsidiaries. Significant intercompany accounts and transactions have been eliminated.
We own an 80% controlling interest in Halo. Halo is consolidated with the equity owned by the other joint venture members shown as “noncontrolling interests” in our consolidated balance sheets, and the other joint venture members’ portions of net earnings and OCI are shown as net earnings or comprehensive income attributable to noncontrolling interests in our consolidated statements of earnings and consolidated statements of comprehensive income, respectively.
Investments in unconsolidated affiliates that we do not control are accounted for using the equity method with our proportionate share of income or loss recognized within equity income in our consolidated statements of earnings. See further discussion of our unconsolidated affiliates in “Note B – Investments in Unconsolidated Affiliates.”
These interim unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, which are of a normal and recurring nature except those which have been disclosed elsewhere in this Form 10-Q, necessary for a fair presentation of the consolidated financial statements for these interim periods, have been included. Operating results for the third quarter of fiscal 2026 are not necessarily indicative of the results that may be expected for the full fiscal year. For further information, refer to the consolidated financial statements and notes thereto included in the 2025 Form 10-K.
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.
Relationship with Worthington Steel
We are party to several agreements with Worthington Steel that govern our ongoing relationship following the Separation, including a Trademark License Agreement, both a short and long-term Transition Services Agreement, and a Steel Supply and Services Agreement. Transactions governed by these agreements are considered related party transactions.
Pursuant to the Steel Supply and Services Agreement, Worthington Steel manufactures and supplies to us, at reasonable market rates, certain flat rolled steel products, and will provide us with certain related support services such as design, engineering/technical services, price risk management, scrap management, steel purchasing, supply chain optimization and product rework services, and other services at our request that are ancillary to the supply of the flat rolled steel products. Purchases from Worthington Steel under the Steel Supply and Services Agreement totaled $34,607 and $27,536 for the current year quarter and prior year quarter, respectively, and $103,508 and $78,991 for the current year period and prior year period, respectively. Accounts payable related to these purchases were $10,614 and $9,099 as of February 28, 2026 and May 31, 2025, respectively.
Activity under all other agreements between Worthington Steel and us related to the Separation was immaterial for the periods presented.
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This standard requires enhanced income tax disclosures, including more detailed information in the effective tax rate reconciliation and disaggregated disclosures of income taxes paid by jurisdiction. The standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. While adoption of this ASU is not expected to have a material effect on our consolidated financial condition, results of operations, or cash flows, it will result in expanded income tax disclosures beginning in the 2026 Form 10-K.
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures,” which expands the disclosure of significant costs and expenses. This ASU requires expanded disclosures of significant costs and expenditures within cost of goods sold and SG&A, including amounts of inventory purchased, employee compensation, depreciation, amortization and selling expenses. This ASU also requires expanded qualitative disclosures, including a description of selling expenses and a description of non-disaggregated expenses. This standard is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We expect this ASU to only impact our disclosures with no impact on our results of operations, cash flows and financial condition.
In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software,” which modernizes and clarifies the threshold entities apply to begin capitalizing development costs for internal-use software. This guidance is effective for interim and annual periods beginning after December 15, 2027. Early adoption is permitted. We are evaluating the impact the adoption of this ASU will have on our results of operations, cash flows and financial condition.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the application, form and content, and required disclosures for interim financial statements prepared in accordance with GAAP. The ASU improves the organization and clarity of Topic 270 by specifying interim reporting requirements, consolidating required interim disclosures and introducing a disclosure principle for events and changes occurring after the end of the most recent annual reporting period that have a material impact on the entity. This guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 for public business entities. Early adoption is permitted. The amendments in this ASU are not expected to have a material effect on our financial position or results of operations.
Note B – Investments in Unconsolidated Affiliates
Investments in joint ventures that we do not control, either through majority ownership or otherwise, are unconsolidated and accounted for using the equity method. At February 28, 2026, we held investments in the following unconsolidated joint ventures: ClarkDietrich (25%); SES (49%); WAVE (50%); and Workhorse (20%).
On October 16, 2025, we divested our 49% interest in the composite business of the SES joint venture, resulting in a loss of $2,950, recorded in miscellaneous income (expense), net in the consolidated statement of earnings for the current year period. In exchange for our interest in the divested assets, we received common shares of both Hexagon Composites and Hexagon Purus. Refer to “Note O – Fair Value Measurements” for information regarding the fair value measurement of these common shares.
We received distributions from unconsolidated affiliates totaling $105,481 during the current year period. We have received cumulative distributions from WAVE in excess of our investment balance, which resulted in a negative asset balance of $109,592 and $103,767 at February 28, 2026 and May 31, 2025, respectively. In accordance with the applicable accounting guidance, we have reclassified the negative balances to distributions in excess of investment in unconsolidated affiliate within our consolidated balance sheets. We will continue to record our equity in the net income of WAVE as a debit to the investment account, and if it becomes positive, it will again be shown as an asset on our consolidated balance sheets. If it becomes probable that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will immediately recognize any balance classified as a liability as income.
We use the cumulative earnings approach to determine the cash flow presentation of distributions from our unconsolidated joint ventures. Distributions received are included in our consolidated statements of cash flows as operating activities unless the cumulative distributions exceed our share of the cumulative equity in the net earnings of the joint venture. In such cases, the excess distributions are considered returns of investment and are classified as investing activities in our consolidated statements of cash flows.
10
WAVE and ClarkDietrich are included within the Building Products segment, while the SES and Workhorse joint ventures are reported within Other. The following tables summarize financial information for our unconsolidated affiliates for the periods presented:
122,245
118,357
377,695
358,889
56,635
54,681
181,785
168,111
1,512
1,436
3,941
3,797
3,813
4,032
11,644
12,676
88
70
204
267
52,847
50,531
170,598
155,736
274,314
271,184
846,920
863,486
23,758
36,942
62,427
108,521
5,194
3,997
14,275
11,804
Interest expense (income), net
(248
(138
(100
Income tax expense (benefit)
(70
312
(110
898
22,902
37,944
63,169
111,840
Other
56,037
70,258
201,868
246,087
Operating loss
(5,043
(8,129
(9,295
(7,945
2,209
1,972
7,535
188
243
633
992
(24
323
147
Net loss
(5,206
(8,432
(10,955
(7,665
Note C – Restructuring and Other Expense, Net
Restructuring activities consist of established programs that are intended to fundamentally change our operations. Our restructuring programs may include closing or consolidating production facilities or moving manufacturing of a product to another location, realignment of the management structure of a business unit in response to changing market conditions or general rationalization of headcount. Our restructuring activities generally give rise to employee-related costs, such as severance pay, and facility-related costs, such as exit costs and gains or losses on asset disposals but may include other incremental operating items associated with our ongoing businesses that are nonrecurring in nature but incremental to our normal business activities.
A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other expense, net financial statement caption in our consolidated statement of earnings for the current year period is summarized below:
Balance at
May 31, 2025
Payments
February 28, 2026
Early retirement and severance
585
923
(1,192
316
Other restructuring charges (1)
100
5,383
(5,483
685
(6,675
The total liability associated with our restructuring activities as of February 28, 2026 is expected to be paid in the next 12 months.
11
Note D – Contingent Liabilities and Commitments
We are defendants in certain legal actions. In the opinion of management, the outcome of these actions, which is not clearly determinable at the present time, would not significantly affect our consolidated financial position or future results of operations. We also believe that environmental issues will not have a material effect on our capital expenditures, consolidated financial position or future results of operations.
Note E – Guarantees
We do not have guarantees that we believe are reasonably likely to have a material current or future effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
At February 28, 2026, we also had in place $9,204 of outstanding stand-by letters of credit issued to third-party service providers. The fair value of these guaranteed instruments, based on premiums paid, was not material and no amounts were drawn against them at February 28, 2026.
Note F – Debt
Our multi-year revolving Credit Facility is scheduled to mature on September 27, 2028. Borrowings under the Credit Facility have maturities of up to one year. We have the option to borrow at rates equal to an applicable margin over the overnight bank funding rate, the prime rate of PNC Bank, National Association or the adjusted daily simple SOFR. The applicable margin is determined by our total leverage ratio. At February 28, 2026, there were $4,792 of borrowings outstanding under the Credit Facility bearing interest at a weighted average of 4.9%, leaving $495,208 available for use. At May 31, 2025, there were no borrowings outstanding under the Credit Facility.
Note G – Other Comprehensive Income (Loss)
The following table summarizes the tax effects on each component of OCI for the periods presented:
Before-Tax
Net-of-Tax
4,324
980
(1,519
(1,185
(9
154
1,157
(297
694
(146
5,472
(818
(1,177
4,752
1,004
(4,433
(1,006
(19
16
151
(144
45
575
(134
4,589
1,053
(3,842
(989
12
Note H – Changes in Equity
The following tables summarize the changes in equity by component and in total for the periods presented:
Controlling Interest
Additional
Paid In
Retained
Noncontrolling
Capital
Net of Tax
Subtotal
Interest
Total
Balance at May 31, 2025
308,608
4,050
624,529
Net earnings (loss)
35,148
(327
34,821
Other comprehensive income
1,083
Common shares issued, net of withholding tax
(3,552
Common shares in non-qualified plans
78
4,856
Purchase and retirement of common shares
(623
(5,636
(6,259
Cash dividends declared
(9,433
Balance at August 31, 2025
309,367
5,133
644,608
959,108
723
959,831
27,328
(299
27,029
(1,598
(2,269
53
3,104
(1,566
(12,129
(13,695
(9,432
Balance at November 30, 2025
308,689
3,535
650,375
962,599
424
963,023
33
3,046
(630
(4,744
(9,430
Balance at February 28, 2026
311,123
9,692
681,664
13
Balance at May 31, 2024
299,033
454
589,392
888,879
2,133
891,012
24,253
(245
24,008
484
(3,158
32
6,216
(884
(5,919
(6,803
(8,550
Balance at August 31, 2024
301,239
938
599,176
901,353
1,888
903,241
28,260
(251
28,009
(3,320
(3,893
56
5,539
(1,212
(6,867
(8,079
(8,595
Balance at November 30, 2024
301,729
(2,382
611,974
911,321
1,637
912,958
2,890
(920
(5,250
(8,512
Balance at February 28, 2025
303,710
(4,377
637,875
937,208
1,313
938,521
The following table summarizes the changes in AOCI for the periods presented:
Foreign Currency Translation
Pension Liability Adjustment
Cash Flow Hedges
2,581
(365
1,834
OCI before reclassifications
997
5,730
Reclassification adjustments to net earnings (1)
(1,141
Income tax effect
8,337
(380
1,735
(669
(441
1,564
207
(4,210
368
(6,108
(274
2,005
——————————————————
On March 24, 2021, the Board authorized the repurchase of up to 5,618,464 common shares. During the current year period, we repurchased a total of 450,000 common shares under this authorization leaving 4,915,000 common shares available for repurchase at February 28, 2026.
14
Common shares may be repurchased from time to time, with consideration given to the market price of the common shares, the nature of other investment opportunities, cash flows from operations, general economic conditions and other relevant considerations. Repurchases may be made on the open market or through privately-negotiated transactions.
Note I – Stock-Based Compensation
Service-Based Restricted Common Shares
During the current year period, we granted an aggregate of 120,725 service-based restricted common shares under our stock-based compensation plans, which cliff vest three years from the grant date. The weighted average grant date fair value of these restricted common shares, based on the weighted average closing price of the underlying common shares on the grant date, was $58.25 per share, or $7,032 in total, and will be recognized on a straight-line basis over the three-year vesting period, net of any forfeitures.
Special PSAs
On June 30, 2025, we granted special PSAs covering an aggregate of 92,500 common shares (at target levels) to certain members of executive management. Vesting of the awards is subject to time-based restrictions and the achievement of specified levels of ATSR over a three-year service period ending June 30, 2028, in which ATSR must exceed a threshold level in order to be satisfied. The fair value of these market-based restricted common shares was estimated using a Monte-Carlo simulation model that incorporates key assumptions such as the risk-free interest rate, expected volatility and expected dividends. Compensation expense is recognized on a straight-line basis over the three-year vesting period, net of forfeitures, regardless of whether the market condition is satisfied. The estimated grant date fair value of these market-based restricted common shares was $45.39 per common share or $4,199 in total (at target levels).
The following assumptions were used to determine the grant date fair value for our market-based restricted common shares during the current year period:
Dividend yield
1.19
Expected volatility
38.00
Risk-free interest rate
3.68
Performance Shares
Performance shares awarded under our stock-based compensation plans are earned based on the level of achievement with respect to a set of measurement criteria for corporate and business unit targets. The awards generally cover three-year performance periods ending May 31, 2026, 2027, and 2028.
These performance share awards will be paid, to the extent earned, in common shares in the fiscal quarter following the end of the applicable performance period. The fair values of our performance shares are determined by the closing market prices of the underlying common shares at the respective grant dates of the performance shares and the pre-tax stock-based compensation expense is based on our periodic assessment of the probability of the targets being achieved and our estimate of the number of common shares that will ultimately be issued. The ultimate pre-tax stock-based compensation expense to be recognized over the performance period on all tranches will vary based on our periodic assessment of the probability of the targets being achieved. During the current year period, we granted performance share awards covering an aggregate of 53,130 common shares (at target levels). The aggregate grant-date fair value at target for these performance shares is $3,395, which will be recognized over the performance period and adjusted based on our periodic assessment of the probability of achieving the performance targets.
Note J – Income Taxes
Income tax expense for both the current year period and the prior year period reflected estimated annual ETRs of 24.3% and 24.4%, respectively. Management is required to estimate the annual ETR based upon its forecast of annual pre-tax income for domestic and foreign operations. Our actual ETR for fiscal 2026 could be materially different from the forecasted rate as of February 28, 2026.
15
Note K – Earnings per Share
The following table sets forth the computation of basic and diluted EPS attributable to controlling interest for the periods presented:
Numerator (basic and diluted)
Denominator (shares in thousands)
Basic EPS - weighted average common shares
Effect of dilutive securities
592
604
655
728
Diluted EPS - weighted average common shares
Basic EPS
Diluted EPS
Stock options and restricted common shares covering an aggregate of 43,228 and 94,521 common shares for the current year quarter and the prior year quarter, respectively, and 11,729 and 104,608 for current year period and the prior year period, respectively, have been excluded from the computation of diluted EPS because the effect would have been antidilutive for those periods.
Note L – Segment Operations
Our operating segments reflect the way in which internally-reported financial information is regularly reviewed by the CODM to analyze performance, make decisions and allocate resources. We have identified our CEO as our CODM. Our CODM evaluates segment performance on the basis of adjusted EBITDA, as described in the “Use of Non-GAAP Financial Measures and Definitions” section. Factors used to identify operating segments include the nature of the products provided by each business, the management reporting structure, similarity of economic characteristics and certain quantitative measures, as prescribed by GAAP. Our operations are organized under two operating segments: Consumer Products and Building Products. Activity outside of our two operating segments is presented within “Other” and “Unallocated Corporate” as described further below.
Other includes our share of the equity earnings of two of our unconsolidated joint ventures, SES and Workhorse, and the related investments in these businesses.
Unallocated Corporate includes certain assets and liabilities (e.g. public debt) held at the corporate level as well as general corporate expenses that are not directly attributable to our business operations and are administrative in nature, such as public company and other governance-related costs that benefit the organization as a whole.
The following tables present summarized financial information for our reportable operating segments, Other, and Unallocated Corporate for the periods indicated. A reconciliation from the GAAP financial measure of earnings (loss) before income taxes to the non-GAAP financial measure of adjusted EBITDA is provided directly following the summarized information below.
Reportable
Building
Consumer
Unallocated
Products
Segments
Corporate
Consolidated
223,850
154,827
172,971
96,172
269,143
60
37,437
28,180
65,617
10,128
Restructuring and other expense (income), net
(1
99
2,087
Other segment items (1)
(56
(25
(81
1,885
2,144
32,822
(2,107
Earnings (loss) before income taxes
46,220
30,501
76,721
(2,447
(14,160
Reconciling items to adjusted EBITDA (2)
10,382
3,969
14,351
201
Interest expense (income)
(33
1,861
656
640
1,296
2,456
Non-cash charges in miscellaneous income
Adjusted EBITDA
58,825
35,452
94,277
(7,555
164,810
139,714
127,157
88,069
215,226
51
27,566
28,406
55,972
7,033
579
4,795
(409
(397
767
370
Equity in net income (loss) of unconsolidated affiliates
34,498
(2,417
44,415
23,227
67,642
(12,646
7,449
4,314
11,763
187
Interest expense
624
740
760
1,424
53,187
28,625
81,812
(5,616
17
616,147
393,689
475,625
257,713
733,338
111
105,134
83,891
189,025
28,006
552
564
5,742
289
282
4,534
3,149
7,965
101,570
(5,080
136,117
52,080
188,197
(9,614
(37,008
29,028
11,776
40,804
598
228
(4
224
3,139
2,190
2,054
4,244
6,260
171,766
66,887
238,653
(21,269
461,821
374,057
367,931
242,040
609,971
106
83,972
85,975
169,947
27,012
1,382
7,770
(587
20
(567
1,908
1,341
105,438
(3,309
114,561
46,022
160,583
(36,796
22,156
12,982
35,138
569
2,117
1,969
2,060
4,029
6,093
141,578
61,884
203,462
(20,247
Total assets for each of our reportable operating segments at the dates indicated were as follows:
Consumer Products
537,382
531,187
Building Products
1,155,910
795,837
Total reportable operating segments
1,693,292
1,327,024
Unallocated Corporate and Other
130,246
368,128
The following table reports the capital expenditures for each of our reportable operating segments for the periods presented:
6,020
8,775
21,956
19,508
7,038
3,413
15,436
11,470
13,058
12,188
37,392
30,978
Unallocated Corporate
736
516
2,029
6,516
13,794
12,704
39,421
37,494
Note M – Acquisitions
On January 16, 2026, we acquired LSI, one of the largest U.S. manufacturers of standing-seam metal roof clips and retrofit components in the commercial roof market. The purchase price was $206,064, net of cash acquired, and includes an estimated tax equalization payment of approximately $3,000 that was not settled at closing. The purchase price is subject to customary post-closing adjustments. LSI operates as part of the Building Products operating segment and its results have been included in our consolidated statements of earnings since the date of acquisition.
The information included herein is based on the preliminary allocation of the purchase price using estimates of the fair value and useful lives of the assets acquired. The purchase price allocation is subject to further adjustment until all pertinent information regarding the assets acquired is fully evaluated by us, including but not limited to, the fair value accounting.
The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under GAAP (e.g., assembled workforce) or of immaterial value. The purchase price also includes strategic and synergistic benefits (i.e., investment value) specific to us, which resulted in a purchase price in excess of the fair value of the identifiable net assets. This additional investment value resulted in goodwill, which is expected to be deductible for income tax purposes. During the current year period, we incurred approximately $2,568 of acquisition-related costs associated with the LSI transaction, which are recorded in restructuring and other expense, net in our consolidated statement of earnings.
In connection with the acquisition of LSI, we identified and valued the following intangible assets:
Useful Life
Category
Amount
(Years)
Customer relationships
70,600
12 - 20
Trade name
21,100
Indefinite
Technological know-how
16,100
Non-compete agreement
800
Total acquired identifiable intangible assets
108,600
19
The following table summarizes the consideration paid, as of February 28, 2026, and the preliminary fair value assigned to the assets and liabilities assumed at the LSI acquisition date:
Preliminary
Valuation
398
Accounts receivable
4,434
Inventory
9,871
Other current assets
95
Property, plant and equipment
8,941
6,715
Intangible assets
Total identifiable assets
139,054
(1,668
Current operating lease liability
(177
Accrued expenses
(1,127
Noncurrent operating lease liability
(6,568
Net identifiable assets
129,514
76,948
Total purchase price
206,462
Less: estimated tax equalization payment
3,000
Total cash paid at closing
On December 3, 2025, we acquired Hydrostat’s propane distribution and refurbishment assets. The purchase price was approximately $9,578, subject to customary post-closing adjustments. In connection with the acquisition of these assets, we recognized total intangible assets of $8,085, consisting of customer relationships of $2,000 and goodwill of $6,085. The remaining purchase price was allocated primarily to working capital and fixed assets. This business operates as part of the Building Products operating segment and its results have been included in our consolidated statements of earnings since the date of acquisition.
On June 18, 2025, we acquired Elgen, a leading provider of HVAC parts and components, ductwork, and structural framing used primarily in commercial building applications across North America. The purchase price was $90,734, net of cash acquired. Elgen operates as part of the Building Products operating segment and its results have been included in our consolidated statements of earnings since the date of acquisition.
The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under GAAP (e.g., assembled workforce) or of immaterial value. The purchase price also includes strategic and synergistic benefits (i.e., investment value) specific to us, which resulted in a purchase price in excess of the fair value of the identifiable net assets. This additional investment value resulted in goodwill, which is not expected to be deductible for income tax purposes. During the current year period, we incurred approximately $1,756 of acquisition-related costs associated with the Elgen transaction, which are recorded in restructuring and other expense, net in our consolidated statement of earnings.
In connection with the acquisition of Elgen, we identified and valued the following intangible assets:
18,200
7,900
7,000
1,700
34,800
The following table summarizes the consideration paid and the final fair value assigned to the assets and liabilities assumed at the Elgen acquisition date.
Measurement
Period
Final
Adjustments
1,093
12,751
868
13,619
16,351
1,605
(124
1,481
11,941
(308
11,633
21,196
162
21,358
34,400
400
99,337
998
100,335
(11,364
(2,225
(2,242
(4,465
(850
(5,315
(19,041
(19,187
Deferred income taxes
(3,582
(1,510
(5,092
58,660
(1,525
57,135
33,617
1,075
34,692
92,277
(450
91,827
Unaudited Pro Forma Information
The following unaudited pro forma financial information presents combined results of operations for each of the periods presented as if the acquisitions, described above in “Note M – Acquisitions”, had taken place at the beginning of fiscal 2025. The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisitions occurred at the beginning of fiscal 2025 or of the results of our future operations of the combined business.
Pro forma net sales
383,021
341,789
1,054,891
954,519
Pro forma net earnings
48,144
40,948
120,807
92,194
21
Note N – Derivative Financial Instruments and Hedging Activities
We primarily utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative financial instruments include interest rate risk, foreign currency exchange risk and commodity price risk. While certain of our derivative financial instruments are designated as hedging instruments, we also enter into derivative financial instruments that are designed to hedge a risk, but are not designated as hedging instruments and therefore do not qualify for hedge accounting. These derivative financial instruments are adjusted to current fair value through earnings at the end of each period.
Interest Rate Risk Management – We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities along with both fixed-rate and variable-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs.
Foreign Currency Exchange Rate Risk Management – We conduct business in several major international currencies and are, therefore, subject to risks associated with changing foreign currency exchange rates. We enter into various contracts that change in value as foreign currency exchange rates change to manage this exposure. Such contracts limit exposure to both favorable and unfavorable foreign currency exchange rate fluctuations. The translation of foreign currencies into U.S. dollars also subjects us to exposure related to fluctuating foreign currency exchange rates; however, derivative financial instruments are not used to manage this risk.
Commodity Price Risk Management – We are exposed to changes in the price of certain commodities, including steel, natural gas, copper, zinc, aluminum and other raw materials, and our utility requirements. Our objective is to reduce earnings and cash flow volatility associated with forecasted purchases and sales of these commodities to allow management to focus its attention on business operations. Accordingly, we enter into derivative financial instruments to manage the associated price risk.
We are exposed to counterparty credit risk on all of our derivative financial instruments. Accordingly, we have established and maintain strict counterparty credit guidelines. We have credit support agreements in place with certain counterparties to limit our credit exposure. These agreements require either party to post cash collateral if its cumulative market position exceeds a predefined liability threshold. Amounts posted to the margin accounts accrue interest at market rates and are required to be refunded in the period in which the cumulative market position falls below the required threshold. We do not have significant exposure to any one counterparty and management believes the risk of loss is remote and, in any event, would not be material.
Refer to “Note O – Fair Value Measurements” for additional information regarding the accounting treatment for our derivative financial instruments, as well as how fair value is determined. The following table summarizes the fair value of our derivative financial instruments and the respective lines in which they were recorded in the consolidated balance sheet at February 28, 2026 and May 31, 2025:
Fair Value of Assets
Fair Value of Liabilities
Balance
Sheet
Location
Derivatives designated as hedging instruments:
Commodity contracts
757
478
285
35
Foreign currency exchange contracts
184
483
941
961
291
86
Derivatives not designated as hedging instruments:
62
153
339
7,360
492
7,375
Total derivative financial instruments
1,003
1,042
783
7,461
The amounts in the table above reflect the fair value of our derivative financial instruments on a net basis where allowed under master netting arrangements. Had these amounts been recognized on a gross basis, the impact would have been an increase in receivables with a corresponding increase in accounts payable of $365 and $356 at February 28, 2026 and May 31, 2025, respectively.
22
We enter into derivative financial instruments to hedge our exposure to changes in cash flows attributable to interest rate and commodity price fluctuations associated with certain forecasted transactions. These derivative financial instruments are designated and qualify as cash flow hedges. Accordingly, the effective portion of the gain or loss on each of these derivative financial instruments is reported as a component of OCI and reclassified into earnings in the same line associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings.
The following table summarizes the net notional positions of our cash flow hedges at February 28, 2026:
Notional
Maturity Date(s)
15,277
March 2026 - December 2027
8,490
March 2026 - July 2026
The following table summarizes the gain (loss) recognized in OCI and the gain (loss) reclassified from AOCI into net earnings for derivative financial instruments designated as cash flow hedges for the periods presented:
Location of
Gain (Loss)
Reclassified
Recognized
Reclassified from AOCI
from AOCI
in OCI
into Net Earnings
For the three months ended February 28, 2026
1,343
150
140
Interest expense, net / Miscellaneous income (expense), net
Interest rate contracts
65
1,483
326
For the three months ended February 28, 2025
1,039
219
52
(74
965
271
For the nine months ended February 28, 2026
555
490
101
332
341
169
1,141
For the nine months ended February 28, 2025
281
(523
155
(368
The estimated amount of net losses recognized in AOCI at February 28, 2026, expected to be reclassified into net earnings within the succeeding 12 months is $714 (net of tax of $202). This amount was computed using the fair value of the cash flow hedges at February 28, 2026, and will change before actual reclassification from OCI to net earnings during the fiscal years ending May 31, 2026 and May 31, 2027.
Net Investment Hedges
At February 28, 2026, we designated our Euro-denominated debt held in the U.S. with an initial notional amount of €91,700 ($99,479) as a non-derivative net investment hedge of our foreign operations in Portugal. The full principal amount is considered fully effective. We did not reclassify any gains or losses related to the net investment hedge from AOCI into earnings during any of the fiscal years
23
presented. The following table summarizes the foreign currency gain (loss) recognized in OCI for the non-derivative instruments designated as net investment hedges for the periods presented.
Net gain (loss) recognized in OCI
(1,960
1,842
(4,265
4,335
Economic (Non-designated) Hedges
The following table summarizes the net notional positions of our economic (non-designated) derivative financial instruments outstanding at February 28, 2026:
3,323
March 2026 - November 2026
37,226
March 2026 - May 2026
The following table summarizes the gain (loss) recognized in earnings for economic (non-designated) derivative financial instruments for the periods presented:
Location of Gain (Loss)
Recognized in Earnings
268
108
Miscellaneous income, net
6,944
(531
7,212
(423
276
479
7,618
7,894
506
24
Note O – Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability. Current accounting guidance establishes a three-tier fair value hierarchy as a basis for considering such assumptions and for classifying the inputs used in the valuation methodologies. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair values are as follows:
Recurring Fair Value Measurements
At February 28, 2026, our assets and liabilities measured at fair value on a recurring basis were as follows:
(Level 1)
(Level 2)
(Level 3)
Totals
Derivative financial instruments (1)
Investment in marketable securities (2)
3,498
4,501
Liabilities
At May 31, 2025, our assets and liabilities measured at fair value on a recurring basis were as follows:
Non-Recurring Fair Value Measurements
At February 28, 2026, there were no assets measured at fair value on a non-recurring basis on our consolidated balance sheet. See “Note R – Fair Value Measurements” in the 2025 Form 10-K for information regarding non-recurring fair value measurements as of May 31, 2025.
25
The fair value of non-derivative financial instruments included in the carrying amounts of cash and cash equivalents, receivables, income taxes receivable, other assets, accounts payable, accrued compensation, contributions to employee benefit plans and related taxes, other accrued items, income taxes payable and other liabilities approximate carrying value due to their short-term nature. The fair value of long-term debt, including current maturities, based upon models utilizing market observable (Level 2) inputs and credit risk, was $287,121 and $263,547 at February 28, 2026 and May 31, 2025, respectively. The carrying amount of long-term debt was $307,256 and $302,868 at February 28, 2026 and May 31, 2025, respectively.
26
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations
Unless otherwise indicated, all Note references contained in this MD&A refer to the Condensed Notes to Consolidated Financial Statements included in “Part I – Item 1. – Financial Statements” of this Form 10-Q. All amounts are presented in millions except common share and per common share amounts.
Introduction
The following discussion and analysis of market and industry trends, business developments, and the results of our operations and financial position should be read in conjunction with our consolidated financial statements and notes thereto included in “Part I – Item 1. – Financial Statements” of this Form 10-Q. The 2025 Form 10-K includes additional information about our business, operations and consolidated financial position and should be read in conjunction with this Form 10-Q. This MD&A is designed to provide a reader with material information relevant to an assessment of our financial condition and results of operations and to allow investors to view the Company from the perspective of management.
Business Overview
We are a market-leading designer and manufacturer of innovative products and services, including manufactured metal products, organized around attractive end markets under two separate and distinct reportable operating segments: Building Products and Consumer Products. Our primary goal is to create value for our shareholders. Built on the successful foundation of the Worthington Business System, we apply a disciplined approach to capital deployment and seek to grow earnings by optimizing our operations and supply chain, developing and commercializing innovative products and applications, and pursuing strategic investments and acquisitions.
Our Building Products business is a market-leading provider of pressurized containment solutions, providing critical components in essential end markets, such as heating, cooking, cooling and water, HVAC systems and components, metal roofing clips and components and, through our unconsolidated joint ventures, WAVE and ClarkDietrich, ceiling suspension systems and light gauge metal framing products. Our pressurized containment solutions include refrigerant and LPG cylinders, well water and expansion tanks, and other specialty products which are generally sold to gas producers and distributors. Refrigerant gas cylinders are used to hold refrigerant gases for commercial, residential, and automotive air conditioning and refrigeration systems. LPG cylinders hold fuel for residential and light commercial heating systems, barbeque grills and recreational vehicle equipment, industrial forklifts and commercial/residential cooking (the latter, generally outside North America). Well water tanks and expansion tanks are used primarily in the residential market with certain products also sold to commercial markets. Specialty products include a variety of fire suppression tanks, chemical tanks, and foam and adhesive tanks.
Our Consumer Products business has a diverse product offering in the tools, outdoor living and celebrations categories, including propane-filled cylinders for torches and related accessories, handheld torches, specialized hand tools and instruments, drywall tools, propane-filled camping cylinders, helium-filled balloon kits, and accessories and gas griddles and pizza ovens sold primarily to mass merchandisers, retailers and distributors. Sales to one customer in Consumer Products accounted for 12.1% of our consolidated net sales in the third quarter of fiscal 2026.
Activity outside of our two reportable operating segments is presented within Other and Unallocated Corporate, as described further below.
Other includes our share of the equity earnings of two of our unconsolidated joint ventures, SES and Workhorse and the related investments in these businesses.
Unallocated Corporate includes certain assets and liabilities (e.g., cash and cash equivalents and public debt) held at the corporate level as well as general corporate expenses that are not directly attributable to our business operations and are administrative in nature, such as public company and other governance-related costs that benefit the organization as a whole, have not been allocated to our operating segments and are held at the corporate level.
Acquisitions and Divestitures
Fiscal 2026
On January 16, 2026, we acquired LSI, one of the largest U.S. manufacturers of standing-seam metal roof clips and retrofit components in the commercial roof market. The purchase price was $206.1, net of cash acquired, including an estimated tax equalization payment of approximately $3.0 million, subject to customary post-closing adjustments. Refer to “Note M – Acquisitions” for additional information.
On December 3, 2025, we acquired Hydrostat’s propane distribution and refurbishment assets. The purchase price was approximately $9.6 million, subject to customary post-closing adjustments. Refer to “Note M – Acquisitions” for additional information.
On October 16, 2025, we divested our 49% interest in the composite business of our SES joint venture. In exchange for our divested interest in the composite business, we received common shares of both Hexagon Composites and Hexagon Purus. The transaction aligns the core remaining capabilities of the SES joint venture – primarily Type 1 low-pressure, steel cylinder and storage infrastructure applications – with our long-term strategic priorities. Refer to “Note B – Investments in Unconsolidated Affiliates” and “Note O – Fair Value Measurements” for additional information.
On June 18, 2025, we acquired Elgen, a leading provider of HVAC parts and components. The purchase price was approximately $90.7 million, net of cash acquired. Elgen began operating as part of Building Products in the first quarter of fiscal 2026. Refer to “Note M – Acquisitions” for additional information.
Fiscal 2025
On June 3, 2024, we completed the acquisition of Ragasco, a leading global manufacturer of composite propane cylinders based in Norway. The purchase price consisted of cash consideration of $108.6 million, including an earnout that was settled in March 2025. Ragasco began operating as part of Building Products in the first quarter of fiscal 2025. Changes in the fair value of this earnout were reflected in Restructuring and other expense, net.
Demand Trends
General Economic Conditions
Demand for our products is closely tied to broader macroeconomic conditions and overall consumer and business sentiment. Shifts in inflation, interest rates, disposable income, and construction activity directly influence purchase behavior, capital investment, and distributor inventory management.
During the third quarter of fiscal 2026, we operated in a macroeconomic environment marked by moderating inflation and mixed housing and construction activity. The Federal Reserve reduced the federal funds target range to 3.50% – 3.75% in December 2025 and maintained that range through January and February 2026, signaling a transition from tightening to a more neutral stance. Although mortgage rates eased modestly during the quarter, the 30-year fixed rate remained approximately 6% at quarter end, continuing to pressure affordability and contributing to subdued existing-home sales and limited housing turnover. In Building Products, housing starts showed sequential stabilization but remained below prior-year levels, while builder sentiment remained depressed. Nonresidential construction activity leveled off, while forward-planning data reflects cautious project pipelines, particularly outside large-scale infrastructure and data center categories.
In Consumer Products, this macroeconomic environment is expected to continue pressuring discretionary spending, as elevated interest rates and cautious sentiment weigh on large-ticket purchases and project timing. As a result, we expect point-of-sale activity to remain uneven as consumers seek clearer direction on inflation trends, interest rate stability, and overall economic momentum.
Inventory Demand Cycles
Demand for our products is influenced by the inventory management strategies of our retail and distribution partners. Periods of customer destocking, when our customers reduce their own inventories, can lead to lower order volumes, even when consumer sell-through remains steady. Conversely, customers’ restocking can temporarily elevate shipments above underlying end-user demand. As a result, shifts in customers’ inventory levels can meaningfully impact our reported revenue and margin performance, particularly in Consumer Products, where a large volume of products flow through big box retailers.
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Throughout the first nine months of fiscal 2026, inventory levels at most key retailer and distributor customers remained aligned with end-consumer demand, and replenishment activity generally mirrored point-of-sale trends, with no material build-up in our distribution or retail channels.
End Market Trends
We offer a wide range of products and services to a diverse, primarily domestic, customer base across several end markets, including U.S. residential and non-residential construction, repair/remodel, which collectively drive overall demand for Building Products. These end markets also drive demand for many of our consumer products sold in the tools and outdoor living categories. Demand for our remaining consumer products, including helium-filled balloon kits sold into the celebrations category, is generally driven by the general health of the consumer, including the macroeconomic and geopolitical conditions discussed above. We actively monitor the following publicly available economic data and selected key indicators for our major end markets.
Key Indicator
Description
U.S. Residential Construction Spend
Represents total expenditures on residential construction projects, including new builds, renovations, and improvements.
U.S. Non-residential Construction Spend
Measures total spending on commercial, institutional, and industrial construction projects across the country.
Existing Home Sales
Reports the number of previously owned homes sold in a given period, reflecting demand in the housing market.
Authorized Housing Permits
Indicates the number of building permits issued for new housing construction, serving as a leading indicator for future housing starts.
U.S. Private Housing Starts
Measures the number of new residential construction projects that have begun, signaling housing market activity.
Measures homebuilder sentiment on current and future single-family home sales and buyer traffic.
A leading economic indicator for non-residential construction, based on monthly billings reported by architecture firms.
Tracks the value of non-residential building projects in planning stages, serving as a leading indicator for future construction activity.
Projects short-term trends in U.S. home improvement and repair spending, serving as a forward-looking gauge of residential remodeling activity.
During the third quarter of fiscal 2026, conditions across our key end markets remained mixed. U.S. Residential Construction Spend was modestly below prior-year levels, while Authorized Housing Permits and U.S. Private Housing Starts both declined from a year ago, indicating that current activity remained soft and that the near-term pipeline from new residential construction was still under pressure. Existing Home Sales, by contrast, improved to a 4.09 million seasonally adjusted annual rate in February 2026, up 1.7% from January 2026, suggesting some stabilization in housing turnover that could modestly support downstream demand in some of our key end markets. Builder sentiment remained weak, with the HMI at 36 in February 2026, well below the neutral 50 level and consistent with continued affordability-related caution among home buyers and builders. The ABI remained below the 50 threshold, signaling continued contraction in design activity, while the DMI fell 7.3% in February 2026 to 250.0 from January 2026, indicating further moderation in the future non-residential pipeline. The LIRA continued to project modest homeowner improvement spending in calendar year 2026, with growth expected to slow from 2.9% early in the year to 1.6% by calendar year-end. Taken together, these indicators suggest uneven demand across our end markets, with some stabilization in resale housing activity, but continued softness in new residential construction, builder sentiment, and non-residential planning activity. Against this backdrop, we are prioritizing disciplined execution, portfolio diversification, and operational efficiency initiatives to mitigate near-term macroeconomic pressures while positioning the business for long-term success and value creation.
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Factors Affecting Operating Costs
Raw Materials
Our largest raw material expenditures include cold-rolled and hot-rolled steel, aluminum, propane, propylene, and other industrial gases. Fluctuations in the prices of these inputs have a direct impact on our cost of goods sold and overall financial performance. Our primary raw material and energy inputs are subject to significant price volatility driven by global supply-demand imbalances, tariffs, and other external factors. We manage this risk through a combination of supply contracts, forward purchasing, and selective hedging strategies designed to reduce near-term cost swings and support margin stability.
Steel: Steel is our most significant direct material cost across both Building Products and Consumer Products. During February 2026, hot-rolled steel prices increased meaningfully from late-fiscal 2026 second quarter levels, averaging approximately $984 per ton compared to $855 per ton in November 2025, reflecting a clear firming in market conditions versus the second quarter of fiscal 2026. Cold-rolled steel also moved higher, averaging approximately $1,126 per ton in February 2026 compared to $1,040 per ton in November 2025. Overall, the sequential move and the strength late in the quarter indicate that steel has shifted from a period of softness into a firmer pricing environment. Our balanced sourcing strategy, combining firm-price contracts for select inputs with index-based agreements for others, enabled us to effectively manage these pricing trends and support margin stability.
Aluminum: During the third quarter of fiscal 2026, aluminum costs increased meaningfully on a sequential basis, reflecting a firming in global base metal pricing. In addition to higher global benchmark pricing, U.S. delivered aluminum costs continue to be influenced by regional premiums and trade policy dynamics, including the Section 232 tariffs, which can affect overall transaction prices for aluminum-intensive components. Where possible, we mitigated these increases through forward purchasing and supplier negotiations, but tariff-related cost pressure on aluminum is expected to persist through the remainder of fiscal 2026.
Propane, propylene, and other gases: Propane and propylene costs were generally stable to modestly favorable through the first nine months of fiscal 2026, with market prices trending below the prior year period. This trend was driven by strong overall supply levels and softer end-market demand. A portion of our propane and propylene requirements are secured under fixed-price supply agreements, which limited our exposure to spot fluctuations. Costs for helium and other industrial gases declined from the prior year quarter, providing a margin benefit in select consumer-facing product lines, particularly within Consumer Products.
We continue to actively monitor commodity markets and maintain a diversified sourcing strategy to ensure continuity of supply and cost discipline. Our approach to material procurement supports margin stability and helps mitigate the impact of input price volatility on our results.
Global Trade Policy
On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the IEEPA exceeded presidential authority and were therefore invalid. The President immediately replaced the IEEPA tariffs with tariffs under alternative statutory authority, though the scope and duration of future tariffs remain uncertain. We are evaluating the impacts of these developments on our supply chain costs and pricing. We may be entitled to refunds of IEEPA tariffs, though the process and timing for obtaining such refunds remain uncertain. As of February 28, 2026, we have not recorded any impact for potential recovery of tariff-related costs as refunds are uncertain.
Seasonality
Historically, net sales in both Building Products and Consumer Products tend to be stronger in our fiscal third and fourth quarters. In Building Products, this seasonality is generally driven by weather conditions, customer business cycles, and the timing of renovation and new construction projects, while in Consumer Products, it is driven by our facilities performing at seasonal peaks, matching consumer demand.
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Results of Operations
The following discussion provides an overview of results for the three and nine months ended February 28, 2026 and 2025:
Change
GAAP Financial Measures
378.7
304.5
74.2
1,009.8
835.9
173.9
31.5
20.9
53.1
19.7
33.4
60.1
52.6
7.5
141.6
120.5
21.1
45.1
39.3
5.8
107.0
91.4
15.6
Equity income
30.7
32.1
(1.4
96.5
102.1
(5.6
EPS - diluted
0.13
0.33
Non-GAAP Financial Measures (1)
Adjusted operating income
35.2
26.2
9.0
63.0
30.3
32.7
84.6
73.8
10.8
212.3
179.9
32.4
Net Sales
The following table provides a breakdown of our consolidated net sales by operating segment for the periods indicated:
223.9
164.8
59.1
35.9
616.1
461.8
154.3
154.8
139.7
15.1
393.7
374.1
19.6
5.2
24.4
20.8
Quarterly Comparison
Year-to-Date Comparison
Gross Profit
109.5
89.2
20.3
22.8
276.4
225.8
50.6
22.4
Gross margin
28.9
29.3
27.4
27.0
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Gross profit for the current year quarter increased $20.3 million, or 22.8%, over the prior year quarter to $109.5 million, driven by the impact of higher overall volume, including contributions from our fiscal 2026 acquisitions, and higher average selling prices. While gross profit was up over the prior year quarter, gross margin decreased slightly, primarily due to the amortization of a portion of the inventory step-up associated with the LSI acquisition.
Gross profit was $276.4 million for the current year period, an increase of $50.6 million, or 22.4% over the prior year period on higher overall volume, including contributions from our fiscal 2026 acquisitions, and higher average selling prices.
75.7
12.7
20.2
217.0
197.0
20.0
10.2
Net Sales %
20.7
23.6
SG&A increased $12.7 million, or 20.2%, from the prior year quarter, primarily due to the addition of LSI and Elgen. As a percentage of net sales, SG&A was down from 20.7% in the prior year quarter to 20.0%.
SG&A increased $20.0 million, or 10.2%, from the prior year period, primarily due to the addition of LSI and Elgen. As a percentage of net sales, SG&A was down from 23.6% in the prior year period to 21.5%.
Restructuring and Other Expense, Net
2.2
5.4
(3.2
6.3
9.2
(2.9
Restructuring and other expense, net in the current year quarter and current year period consisted primarily of transaction costs related to acquisitions and divestitures, as well as employee severance. Restructuring activity in the prior year quarter and prior year period was driven by the accelerated vesting of certain outstanding equity awards upon the retirement of our former CEO and a change in fair value of an earnout associated with the Ragasco acquisition.
Miscellaneous Income (Expense), Net
(0.3
0.3
(0.6
(4.6
0.8
(5.4
(1.8
(1.2
(3.4
(2.2
Miscellaneous expense in both the current year quarter and current year period was driven by the divestiture of our 49% interest in the composite business of our SES joint venture on October 16, 2025, and the related mark-to-market loss on the marketable securities received in exchange for our interest in the divested assets.
Interest expense, net increased $1.2 million in both the current year quarter and current year period due to lower interest income generated from cash on hand and higher average debt levels associated with amounts drawn under the Credit Facility to fund the LSI acquisition.
Equity Income
WAVE (1)
27.1
25.0
2.1
8.4
85.8
77.4
ClarkDietrich (1)
5.7
9.5
(3.8
(40.0
%)
15.8
28.0
(12.2
(43.6
Other (2)
(2.1
(2.4
(12.5
(5.1
(3.3
54.5
(4.4
(5.5
Equity income decreased $1.4 million from the prior year quarter to $30.7 million, on lower contributions from ClarkDietrich, which were down $3.8 million, driven by the impact of weak non-residential construction activity and pricing pressure, partially offset by higher contributions from WAVE, up $2.1 million.
Equity income was down $5.6 million from the prior year period, driven by lower contributions from ClarkDietrich, which were down $12.2 million as continued pricing pressure and an unfavorable shift in project mix led to lower gross profit, partially offset by higher contributions from WAVE, up $8.4 million.
Income Tax Expense
15.0
13.2
1.8
13.6
34.6
29.1
5.5
18.9
Estimated Annual ETR
24.3
Income tax expense was $15.0 million in the current year quarter compared to $13.2 million in the prior year quarter. The increase was primarily driven by higher pre-tax earnings.
Income tax expense was $34.6 million in the current year period compared to $29.1 million in the prior year period. The increase was primarily driven by higher pre-tax earnings.
The following table provides a summary of adjusted EBITDA, a non-GAAP financial measure, by reportable operating segment and on a consolidated basis, along with the respective percentage of net sales for each reportable operating segment and on a consolidated basis. See the “Use of Non-GAAP Financial Measures and Definitions” section preceding Part I, Item 1 of this Form 10-Q for additional information regarding our use of non-GAAP financial measures. A reconciliation from earnings before income taxes to adjusted EBITDA is provided in “Note L – Segment Operations.”
% of
58.8
26.3
53.2
32.3
5.6
10.5
35.5
22.9
28.6
20.5
6.9
24.1
94.3
24.9
81.8
26.9
12.5
15.3
(7.6
(2.0
35.7
14.6
171.8
27.9
30.2
21.3
66.9
17.0
61.9
16.5
5.0
8.1
238.7
203.5
17.3
(21.3
(20.3
(1.0
4.9
18.0
Building Products – Adjusted EBITDA was $58.8 million, an increase of $5.6 million, or 10.5% compared to the prior year quarter, driven by the impact of higher net sales, partially offset by lower overall contributions of equity income.
Consumer Products – Adjusted EBITDA was $35.5 million, an increase of $6.9 million, or 24.1% over the prior year quarter, primarily driven by the impact of higher net sales and gross margin improvement, partially offset by higher SG&A. Adjusted EBITDA in the prior year quarter was negatively impacted by $1.1 million of bad debt expense related to a customer bankruptcy.
Other – Adjusted EBITDA increased $0.3 million compared to the prior year quarter, as higher equity earnings from Workhorse offset lower equity earnings from SES.
Unallocated Corporate – Unallocated SG&A increased $2.0 million, or 35.7%, from the prior year quarter, primarily driven by higher profit sharing and bonus accruals.
Building Products – Adjusted EBITDA was $171.8 million in the current year period, an increase of $30.2 million, or 21.3%, over the prior year period. The increase was driven by higher overall volumes and the impact of acquisitions, which contributed $9.0 million of adjusted EBITDA in the current year period, partially offset by lower overall contributions of equity income.
Consumer Products – Adjusted EBITDA increased $5.0 million, or 8.1%, from the prior year period, as the impact of higher average selling prices was partially offset by lower overall volume, higher conversion costs, and higher SG&A.
Other – Adjusted EBITDA decreased $1.8 million compared to the prior year period, driven by lower contributions of equity earnings from the SES joint venture.
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Unallocated Corporate – Unallocated SG&A increased $1.0 million, or 4.9%, from the prior year period, primarily driven by higher profit sharing and bonus accruals.
Liquidity and Capital Resources
During the current year period, we generated $154.5 million of cash from operating activities, invested $39.4 million in property, plant and equipment, and spent approximately $303.4 million to acquire 100% of the outstanding equity interests in Elgen and LSI, and the propane and distribution assets of Hydrostat. Additionally, we paid $25.3 million to repurchase 450,000 common shares and paid dividends of $27.5 million on the common shares during the current year period.
The following table summarizes our consolidated cash flows for the periods presented:
154.5
147.3
(343.9
(115.1
(54.7
(53.6
Decrease in cash and cash equivalents
(244.1
(21.4
250.1
244.2
6.0
222.8
We believe we have access to adequate resources to meet the needs of our existing businesses for normal operating costs, mandatory capital expenditures, debt redemptions, dividend payments, and working capital, to the extent not funded by cash provided by operating activities, for at least 12 months and for the foreseeable future thereafter. These resources include cash and cash equivalents and unused committed lines of credit under our Credit Facility, which had a total of $495.2 million of borrowing capacity available to be drawn as of February 28, 2026.
Although we do not currently anticipate a need, we believe that we could access the financial markets to sell long-term debt or equity securities. However, the continuation of uncertain economic conditions, including those caused by a high interest rate environment, could create volatility in the financial markets, which may impact our ability to access capital and the terms under which we can do so.
We routinely monitor current operational requirements, financial market conditions, and credit relationships and we may choose to seek additional capital by issuing new debt and/or equity securities to strengthen our liquidity or capital structure. Should we seek additional capital, there can be no assurance that we would be able to obtain such additional capital on terms acceptable to us, if at all, and such additional equity or debt financing could dilute the interests of our existing shareholders and/or increase our interest costs. We may also from time to time seek to retire or repurchase our outstanding debt through cash purchases, in open-market purchases, privately-negotiated transactions or otherwise. Such repurchases, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved in any such transaction may or may not be material.
Operating Activities
Our business is cyclical and cash flows from operating activities may fluctuate during the year and from year to year due to economic and industry conditions. We rely on cash and short-term borrowings to meet cyclical increases in working capital needs. These needs generally arise during periods of increased economic activity or increasing raw material prices, requiring higher levels of inventory and accounts receivable. During economic slowdowns or periods of decreasing raw material costs, working capital needs generally decrease as a result of the reduction of inventories and accounts receivable.
Net cash provided by operating activities was $154.5 million during the current year period, up $7.2 million over the prior year period as higher net earnings in the current year period was partially offset by a $7.5 million decrease in distributions received from unconsolidated affiliates.
Investing Activities
Net cash used by investing activities was $343.9 million during the current year period compared to $115.1 million from the prior year period. Net cash used by investing activities during the current year period was driven primarily by cash paid to acquire the outstanding equity interests in Elgen and LSI, and capital expenditures, including $18.5 million related to ongoing facility modernization projects.
Investment activities are largely discretionary and future investment activities could be reduced significantly, or eliminated, as economic conditions warrant. We assess acquisition opportunities as they arise, and any such opportunities may require additional financing. However, there can be no assurance that any such opportunities will arise, that any such acquisition opportunities will be consummated, or that any additional financing will be available on satisfactory terms if required.
Financing Activities
Net cash used by financing activities was $54.7 million during the current year period, compared to $53.6 million in the prior year period. During the current year period, we paid $25.3 million to repurchase 450,000 common shares and paid dividends of $27.5 million on the common shares.
Common shares – On March 24, 2026, the Board declared a quarterly dividend of $0.19 per common share payable on June 29, 2026, to shareholders of record at the close of business on June 15, 2026.
On March 24, 2021, the Board authorized the repurchase of up to 5,618,464 common shares. As of February 28, 2026, 4,915,000 common shares remained available for repurchase under this authorization. The common shares may be repurchased under these authorizations from time to time, with consideration given to the market price of the common shares, the nature of other investment opportunities, cash flows from operations, general economic conditions and other relevant considerations. Repurchases may be made on the open market or through privately negotiated transactions.
Long-term debt and short-term borrowings – As of February 28, 2026, we were in compliance with the financial covenants of our short-term and long-term debt agreements. Our debt agreements do not include credit rating triggers or material adverse change provisions. We had $4.8 million outstanding under the Credit Facility as of February 28, 2026, leaving $495.2 million available for future use.
Dividend Policy
We currently have no material contractual or regulatory restrictions on the payment of dividends. Dividends are declared at the discretion of the Board. The Board reviews the dividend quarterly and establishes the dividend rate based upon our consolidated financial condition, results of operations, capital requirements, current and projected cash flows, business prospects, and other relevant factors. While we have paid a dividend every quarter since becoming a public company in 1968, there is no guarantee that payments of dividends will continue in the future.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements and related disclosure, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to use judgment and make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. We continually evaluate our estimates, including those related to our valuation of receivables, inventories, intangible assets, accrued liabilities, income and other tax accruals, contingencies and litigation, and business combinations. We base our estimates on historical experience, current trends and other factors that we believe to be relevant and reasonable under the circumstances at the time the estimate was made. These results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Critical accounting estimates are defined as those that reflect our significant judgments and uncertainties that could potentially result in materially different results under different assumptions and conditions. Although actual results historically have not deviated significantly from those determined using our estimates, our consolidated financial position or results of operations could be materially different if we were to report under different conditions or to use different assumptions in the application of accounting policies. We believe that our estimates, assumptions, and judgments are reasonable in that they were based on information available when the estimates, assumptions and judgments were made. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from those implied by our assumptions and estimates. Our critical accounting estimates have not significantly changed from those discussed in “Part II – Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” of the 2025 Form 10-K.
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Item 3. – Quantitative and Qualitative Disclosures About Market Risk
Market risks have not materially changed from those disclosed in “Part II – Item 7A. – Quantitative and Qualitative Disclosures About Market Risk” of the 2025 Form 10-K.
Item 4. – Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in the reports that Worthington Enterprises files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including Worthington Enterprises’ principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Management, under the supervision of and with the participation of Worthington Enterprises’ principal executive officer and principal financial officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Form 10-Q. Based on that evaluation, Worthington Enterprises’ principal executive officer and principal financial officer have concluded that such disclosure controls and procedures were designed at the reasonable assurance level and were effective at a reasonable assurance level as of the end of the quarterly period covered by this Form 10-Q.
Changes in Internal Control Over Financial Reporting
There were no changes that occurred during the period covered by this Form 10-Q in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. – Legal Proceedings
We are involved in various judicial and administrative proceedings, as both plaintiff and defendant, arising in the ordinary course of business. We do not believe that any such proceedings, individually and in the aggregate, will have a material adverse effect on our business, financial position, results of operations or cash flows.
Item 1A. – Risk Factors
There are certain risks and uncertainties in our business that could cause our actual results to differ materially from those anticipated. In “PART I – Item 1A. – Risk Factors” of the 2025 Form 10-K, we included a detailed discussion of our risk factors. Our risk factors have not changed significantly from those disclosed in the 2025 Form 10-K. Those risk factors should be read carefully in connection with evaluating our business and investments in the common shares and in connection with the forward-looking statements and other information contained in this Form 10-Q. Any of the risks described in the 2025 Form 10-K could materially affect our business, consolidated financial condition or future results and the actual outcome of matters as to which forward-looking statements are made. The risk factors described in the 2025 Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may materially adversely affect our business, consolidated financial condition and/or future results.
Item 2. – Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
There were no equity securities of Worthington Enterprises sold by Worthington Enterprises during the current year period that were not registered under the Securities Act of 1933, as amended.
Issuer Purchases of Equity Securities
Common shares withheld to cover tax withholding obligations in connection with the vesting of restricted common shares are treated as common share purchases for purposes of the following table. However, those withheld common shares are not considered common share repurchases under an authorized common share repurchase plan or program. The total number of common shares purchased, as indicated in the table below, includes (1) common shares withheld from our employees to satisfy minimum statutory tax withholding obligations arising from the vesting of restricted common shares and (2) common shares repurchased as part of publicly announced plans or programs.
Maximum Number of
Total Number of Common
Common Shares that
Total Number of
Average Price
Shares Purchased as Part
May Yet Be
Common Shares
Paid per
of Publicly Announced
Purchased Under the
Purchased
Common Share
Plans or Programs
Plans or Programs (1)
December 1-31, 2025
2,143
52.79
5,015,000
January 1-31, 2026
100,338
53.74
100,000
4,915,000
February 1-28, 2026
102,481
53.72
Item 3. – Defaults Upon Senior Securities
Not applicable.
Item 4. – Mine Safety Disclosures
Item 5. – Other Information
During the current year quarter, no director or officer (as defined under Rule 16a-1 of the Exchange Act) adopted or terminated any Rule 10b5-1 trading arrangements or any non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).
Item 6. – Exhibits
Incorporated by Reference
Exhibit No.
Exhibit Description
Form
Exhibit
Filing Date
3.1
Amended Articles of Incorporation of Worthington Enterprises, Inc. [This document represents the articles of incorporation of Worthington Enterprises, Inc. in compiled form incorporating all amendments.]
10-Q
1/09/2024
3.2
Code of Regulations of Worthington Enterprises, Inc. [This document represents the code of regulations of Worthington Enterprises, Inc. in compiled form incorporating all amendments.]
3(b)
10/16/2000
10.1
Worthington Enterprises, Inc. 2025 Equity Plan for Non-Employee Directors†
8-K
9/26/2025
31.1
Rule 13a - 14(a)/15d - 14(a) Certifications (Principal Executive Officer)*
31.2
Rule 13a - 14(a)/15d - 14(a) Certifications (Principal Financial Officer)*
Section 1350 Certification of Principal Executive Officer**
32.2
Section 1350 Certification of Principal Financial Officer**
Interactive Data Files Pursuant to Rule 405 of Regulation S-T, formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at February 28, 2026 and May 31, 2025; (ii) Consolidated Statements of Earnings for the three and nine months ended February 28, 2026 and February 28, 2025; (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended February 28, 2026 and February 28, 2025; (iv) Consolidated Statements of Cash Flows for the three and nine months ended February 28, 2026 and February 28, 2025 and (v) Condensed Notes to Consolidated Financial Statements.*
104
The cover page from this Quarterly Report on Form 10-Q for the quarter ended February 28, 2026, formatted in Inline XBRL and included in Exhibit 101.*
* Filed herewith.
** Furnished herewith.
† Indicates a management contract or compensatory plan or arrangement.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: April 9, 2026
By:
/s/ Colin J. Souza
Colin J. Souza,
Vice President and Chief Financial Officer
(On behalf of the registrant as Duly Authorized Officer and as Principal Financial Officer)