As previously disclosed, the separation of the Company’s former Steel Processing business into an independent publicly traded company, Worthington Steel, Inc. (“Worthington Steel”), was completed on
( | 3Q 2024 | 3Q 2023 | ||||||||||||||
After-Tax | Per Share | After-Tax | Per Share | |||||||||||||
Net earnings from continuing operations | $ | 22.0 | $ | 0.44 | $ | 29.8 | $ | 0.60 | ||||||||
Corporate costs eliminated at Separation | - | - | 7.9 | 0.16 | ||||||||||||
True-up of Level5 earnout accrual | - | - | (0.8 | ) | (0.02 | ) | ||||||||||
Impairment and restructuring charges | 0.5 | 0.01 | 0.9 | 0.03 | ||||||||||||
Separation costs | 2.3 | 0.05 | 1.8 | 0.04 | ||||||||||||
Pension settlement charge | 6.2 | 0.12 | - | - | ||||||||||||
Loss on sale of investment in | - | - | 0.3 | - | ||||||||||||
One-time tax effects of Separation | 9.2 | 0.18 | - | - | ||||||||||||
Adjusted net earnings from continuing operations | $ | 40.2 | $ | 0.80 | $ | 39.9 | $ | 0.81 |
“We are off to a good start with our first full quarter as
Financial highlights for the current year periods and prior year comparative periods are as follows:
(
3Q 2024 | 3Q 2023 | 9M 2024 | 9M 2023 | |||||||||||||
Net sales | $ | 316.8 | $ | 346.3 | $ | 926.9 | $ | 1,049.7 | ||||||||
Operating income (loss) | 4.3 | 4.0 | (17.4 | ) | 14.5 | |||||||||||
Adjusted operating income | 8.0 | 16.9 | 15.1 | 49.3 | ||||||||||||
Net earnings from continuing operations | 22.0 | 29.8 | 66.8 | 75.6 | ||||||||||||
Adjusted EBITDA | 66.9 | 70.2 | 187.8 | 212.3 | ||||||||||||
EPS from continuing operations - diluted | 0.44 | 0.60 | 1.33 | 1.53 | ||||||||||||
Adjusted EPS from continuing operations - diluted | $ | 0.80 | $ | 0.81 | $ | 2.11 | $ | 2.39 |
Consolidated Quarterly Results
Net sales for the third quarter of fiscal 2024 were
Operating income of
Miscellaneous expense increased
Net interest expense was nominal in the current year quarter compared to
Equity income increased
Income tax expense was
Balance Sheet
Total debt was
Quarterly Segment Results
Effective
Consumer Products generated net sales of
Building Products generated net sales of
Sustainable Energy Solutions generated net sales of
Recent Developments
- In connection with the Separation, the Company received a cash distribution of
$150.0 million fromWorthington Steel , which was used to redeem, in full, the unsecured senior notes that were set to mature inAugust 2024 . - On
February 1, 2024 , the Company acquired an 80 percent ownership stake in an affiliate ofHALO Products Group, LLC . Halo is an asset-light business with technology-enabled solutions in the outdoor cooking space with products that include HALO™ branded pizza ovens, pellet grills, griddles and other accessories. The total purchase price was approximately$9.4 million . - On
March 20, 2024 , the Company’s Board of Directors declared a quarterly dividend of$0.16 per common share payable onJune 28, 2024 , to shareholders of record at the close of business onJune 14, 2024 .
Outlook
“Worthington Enterprises is operating well as we head into our fourth quarter,” Rose said. “We have well vetted strategies and strong teams with high expectations for delivering on our promise of increasing shareholder value. We are not without our challenges, but our strategic positioning is solid, and we have a strong balance sheet and significant capital available to take advantage of opportunities as they arise. Our Worthington Business System of transformation, innovation and acquisitions is well entrenched and will enable our success.”
Upcoming Investor Events
- Oppenheimer 19th Annual
Industrial Growth Conference ,May 8, 2024 KeyBanc Industrials & Basic Materials Conference ,May 30, 2024
Conference Call
The Company will review fiscal 2024 third quarter results during its quarterly conference call on
About
Headquartered in
Founded in 1955 as
Safe Harbor Statement
Selected statements contained in this release constitute “forward-looking statements,” as that term is used in the Private Securities Litigation Reform Act of 1995 (the “Act”). The Company wishes to take advantage of the safe harbor provisions included in the Act. Forward-looking statements reflect the Company’s current expectations, estimates or projections concerning future results or events. These statements are often identified by the use of forward-looking words or phrases such as “believe,” “expect,” “anticipate,” “may,” “could,” “should,” “would,” “intend,” “plan,” “will,” “likely,” “estimate,” “project,” “position,” “strategy,” “target,” “aim,” “seek,” “foresee” and similar words or phrases. These forward-looking statements include, without limitation, statements relating to: future or expected cash positions, liquidity and ability to access financial markets and capital; outlook, strategy or business plans; the anticipated benefits of the separation of the Company’s Steel Processing business (the “Separation); the expected financial and operational performance of, and future opportunities for, the Company following the Separation; the Company’s performance on a pro forma basis to illustrate the estimated effects of the Separation on historical periods; the tax treatment of the Separation transaction; future or expected growth, growth potential, forward momentum, performance, competitive position, sales, volumes, cash flows, earnings, margins, balance sheet strengths, debt, financial condition or other financial measures; pricing trends for raw materials and finished goods and the impact of pricing changes; the ability to improve or maintain margins; expected demand or demand trends for the Company or its markets; additions to product lines and opportunities to participate in new markets; expected benefits from transformation and innovation efforts; the ability to improve performance and competitive position at the Company’s operations; anticipated working capital needs, capital expenditures and asset sales; anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing and the supply chain and the results thereof; projected profitability potential; the ability to make acquisitions and the projected timing, results, benefits, costs, charges and expenditures related to acquisitions, joint ventures, headcount reductions and facility dispositions, shutdowns and consolidations; projected capacity and the alignment of operations with demand; the ability to operate profitably and generate cash in down markets; the ability to capture and maintain market share and to develop or take advantage of future opportunities, customer initiatives, new businesses, new products and new markets; expectations for Company and customer inventories, jobs and orders; expectations for the economy and markets or improvements therein; expectations for generating improving and sustainable earnings, earnings potential, margins or shareholder value; effects of judicial rulings; the ever-changing effects of the novel coronavirus (“COVID-19”) pandemic and the various responses of governmental and nongovernmental authorities thereto on economies and markets, and on our customers, counterparties, employees and third-party service providers; and other non-historical matters.
Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected. Any number of factors could affect actual results, including, without limitation, those that follow: the uncertainty of obtaining regulatory approvals in connection with the Separation, including rulings from the
Forward-looking statements should be construed in the light of such risks. The Company notes these factors for investors as contemplated by the Act. It is impossible to predict or identify all potential risk factors. Consequently, readers should not consider the foregoing list to be a complete set of all potential risks and uncertainties. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. The Company does not undertake, and hereby disclaims, any obligation to update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.
WORTHINGTON ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share amounts) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Net sales | $ | 316,755 | $ | 346,315 | $ | 926,902 | $ | 1,049,694 | ||||||||
Cost of goods sold | 243,643 | 267,344 | 720,882 | 820,266 | ||||||||||||
Gross profit | 73,112 | 78,971 | 206,020 | 229,428 | ||||||||||||
Selling, general and administrative expense | 65,134 | 71,359 | 210,262 | 211,208 | ||||||||||||
Impairment of long-lived assets | - | 484 | - | 484 | ||||||||||||
Restructuring and other expense (income), net | 698 | 823 | 704 | (354 | ) | |||||||||||
Separation costs | 2,999 | 2,305 | 12,465 | 3,572 | ||||||||||||
Operating income (loss) | 4,281 | 4,000 | (17,411 | ) | 14,518 | |||||||||||
Other income (expense): | ||||||||||||||||
Miscellaneous income (expense) | (6,995 | ) | 217 | (5,983 | ) | (4,499 | ) | |||||||||
Loss on extinguishment of debt | - | - | (1,534 | ) | - | |||||||||||
Interest expense, net | (50 | ) | (4,186 | ) | (1,596 | ) | (15,689 | ) | ||||||||
Equity in net income of unconsolidated affiliates | 43,235 | 37,111 | 127,328 | 102,004 | ||||||||||||
Earnings before income taxes | 40,471 | 37,142 | 100,804 | 96,334 | ||||||||||||
Income tax expense | 18,471 | 7,391 | 34,041 | 20,709 | ||||||||||||
Net earnings from continuing operations | 22,000 | 29,751 | 66,763 | 75,625 | ||||||||||||
Net earnings from discontinued operations | - | 20,507 | 83,106 | 59,382 | ||||||||||||
Net earnings | 22,000 | 50,258 | 149,869 | 135,007 | ||||||||||||
Net earnings attributable to noncontrolling interests | - | 3,933 | 7,460 | 8,382 | ||||||||||||
Net earnings attributable to controlling interest | $ | 22,000 | $ | 46,325 | $ | 142,409 | $ | 126,625 | ||||||||
Amounts attributable to controlling interest: | ||||||||||||||||
Net earnings from continuing operations | $ | 22,000 | $ | 29,751 | $ | 66,763 | $ | 75,625 | ||||||||
Net earnings from discontinued operations | - | 16,574 | 75,646 | 51,000 | ||||||||||||
Net earnings attributable to controlling interest | $ | 22,000 | $ | 46,325 | $ | 142,409 | $ | 126,625 | ||||||||
Earnings per share from continuing operations - basic | $ | 0.45 | $ | 0.61 | $ | 1.36 | $ | 1.56 | ||||||||
Earnings per share from discontinued operations - basic | - | 0.34 | 1.54 | 1.05 | ||||||||||||
Net earnings per share attributable to controlling interest - basic | $ | 0.45 | $ | 0.95 | $ | 2.90 | $ | 2.61 | ||||||||
Earnings per share from continuing operations - diluted | $ | 0.44 | $ | 0.60 | $ | 1.33 | $ | 1.53 | ||||||||
Earnings per share from discontinued operations - diluted | - | 0.34 | 1.50 | 1.04 | ||||||||||||
Net earnings per share attributable to controlling interest - diluted | $ | 0.44 | $ | 0.94 | $ | 2.83 | $ | 2.57 | ||||||||
Weighted average common shares outstanding - basic | 49,315 | 48,587 | 49,113 | 48,541 | ||||||||||||
Weighted average common shares outstanding - diluted | 50,417 | 49,493 | 50,271 | 49,356 | ||||||||||||
Cash dividends declared per share | $ | 0.16 | $ | 0.31 | $ | 0.80 | $ | 0.93 |
CONSOLIDATED BALANCE SHEETS WORTHINGTON ENTERPRISES, INC. (In thousands) | ||||||||
2024 | 2023 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 227,310 | $ | 422,268 | ||||
Receivables, less allowances of | ||||||||
and | 219,389 | 224,863 | ||||||
Inventories | ||||||||
Raw materials | 74,929 | 91,988 | ||||||
Work in process | 18,234 | 19,189 | ||||||
Finished products | 98,553 | 83,322 | ||||||
Total inventories | 191,716 | 194,499 | ||||||
Income taxes receivable | 2,398 | 1,681 | ||||||
Prepaid expenses and other current assets | 50,298 | 46,301 | ||||||
Current assets of discontinued operations | - | 978,725 | ||||||
Total current assets | 691,111 | 1,868,337 | ||||||
Investment in unconsolidated affiliates | 120,707 | 138,041 | ||||||
Operating lease assets | 21,285 | 24,686 | ||||||
345,445 | 336,178 | |||||||
Other intangibles, net of accumulated amortization of | ||||||||
226,859 | 230,851 | |||||||
Other assets | 30,900 | 14,339 | ||||||
Property, plant and equipment: | ||||||||
Land | 12,203 | 12,120 | ||||||
Buildings and improvements | 142,522 | 139,514 | ||||||
Machinery and equipment | 417,777 | 403,885 | ||||||
Construction in progress | 39,260 | 24,779 | ||||||
Total property, plant and equipment | 611,762 | 580,298 | ||||||
Less: accumulated depreciation | 343,380 | 323,883 | ||||||
Total property, plant and equipment, net | 268,382 | 256,415 | ||||||
Non-current assets of discontinued operations | - | 782,071 | ||||||
Total assets | $ | 1,704,689 | $ | 3,650,918 | ||||
Liabilities and equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 108,660 | $ | 126,743 | ||||
Accrued compensation, contributions to employee benefit plans and related taxes | 47,657 | 46,782 | ||||||
Dividends payable | 8,916 | 18,330 | ||||||
Other accrued items | 29,697 | 37,801 | ||||||
Current operating lease liabilities | 6,555 | 6,682 | ||||||
Income taxes payable | 536 | 8,918 | ||||||
Current maturities of long-term debt | 267 | 264 | ||||||
Current liabilities associated of discontinued operations | - | 472,038 | ||||||
Total current liabilities | 202,288 | 717,558 | ||||||
Other liabilities | 76,300 | 71,766 | ||||||
Distributions in excess of investment in unconsolidated affiliate | 116,775 | 117,297 | ||||||
Long-term debt | 297,695 | 689,718 | ||||||
Noncurrent operating lease liabilities | 15,103 | 18,326 | ||||||
Deferred income taxes | 82,086 | 82,356 | ||||||
Non-current liabilities of discontinued operations | - | 132,269 | ||||||
Total liabilities | 790,247 | 1,829,290 | ||||||
Shareholders' equity - controlling interest | 912,096 | 1,696,011 | ||||||
Noncontrolling interests | 2,346 | 125,617 | ||||||
Total equity | 914,442 | 1,821,628 | ||||||
Total liabilities and equity | $ | 1,704,689 | $ | 3,650,918 |
WORTHINGTON ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Operating activities: | ||||||||||||||||
Net earnings | $ | 22,000 | $ | 50,258 | $ | 149,869 | $ | 135,007 | ||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 11,949 | 28,153 | 68,281 | 84,508 | ||||||||||||
Impairment of long-lived assets | - | 484 | 1,401 | 796 | ||||||||||||
Provision for (benefit from) deferred income taxes | 4,329 | (5,525 | ) | 843 | (20,198 | ) | ||||||||||
Loss on extinguishment of debt | - | - | 1,534 | - | ||||||||||||
Bad debt expense (income) | 24 | 2,346 | (430 | ) | 3,786 | |||||||||||
Equity in net income of unconsolidated affiliates, net of distributions | (2,926 | ) | 23,218 | 3,169 | 84,415 | |||||||||||
Net loss (gain) on sale of assets | (14 | ) | 46 | (348 | ) | (4,988 | ) | |||||||||
Stock-based compensation | 2,602 | 4,975 | 13,294 | 13,758 | ||||||||||||
Changes in assets and liabilities, net of impact of acquisitions: | ||||||||||||||||
Receivables | (18,124 | ) | 3,382 | 49,737 | 160,475 | |||||||||||
Inventories | 16,176 | 53,499 | 54,999 | 166,959 | ||||||||||||
Accounts payable | 15,561 | 6,627 | (59,534 | ) | (195,489 | ) | ||||||||||
Accrued compensation and employee benefits | 7,190 | (2,900 | ) | (2,030 | ) | (33,432 | ) | |||||||||
Income taxes payable | (725 | ) | - | (7,691 | ) | (300 | ) | |||||||||
Other operating items, net | (7,921 | ) | 17,588 | (28,288 | ) | 833 | ||||||||||
Net cash provided by operating activities | 50,121 | 182,151 | 244,806 | 396,130 | ||||||||||||
Investing activities: | ||||||||||||||||
Investment in property, plant and equipment | (10,017 | ) | (22,748 | ) | (72,191 | ) | (68,715 | ) | ||||||||
Acquisitions, net of cash acquired | (8,707 | ) | - | (29,721 | ) | (56,088 | ) | |||||||||
Proceeds from sale of assets, net of selling costs | - | 51 | 837 | 35,545 | ||||||||||||
Investment in note receivable | 100 | - | (14,900 | ) | - | |||||||||||
Investment in non-marketable equity securities | (75 | ) | (20 | ) | (1,614 | ) | (270 | ) | ||||||||
Net proceeds from sale of investment in | 35 | (300 | ) | - | 35,795 | |||||||||||
Distributions from unconsolidated affiliate | 1,085 | |||||||||||||||
Net cash used by investing activities | (18,664 | ) | (23,017 | ) | (116,504 | ) | (53,733 | ) | ||||||||
Financing activities: | ||||||||||||||||
Distribution from Separation of Worthington Steel, Inc. | 150,000 | - | 150,000 | - | ||||||||||||
Transfers to Worthington Steel, Inc. at Separation | (218,048 | ) | - | (218,048 | ) | - | ||||||||||
Net proceeds from short-term borrowings (1) | - | (1,330 | ) | 172,187 | (44,392 | ) | ||||||||||
Principal payments on long-term obligations | (150,133 | ) | (5,759 | ) | (393,890 | ) | (5,909 | ) | ||||||||
Proceeds from issuance of common shares, net of tax withholdings | (1,023 | ) | 704 | (15,360 | ) | (3,411 | ) | |||||||||
Payments to noncontrolling interests | - | - | (1,920 | ) | (11,760 | ) | ||||||||||
Dividends paid | (15,849 | ) | (15,101 | ) | (48,907 | ) | (44,166 | ) | ||||||||
Net cash provided (used) by financing activities | (235,053 | ) | (21,486 | ) | (355,938 | ) | (109,638 | ) | ||||||||
Increase (decrease) in cash and cash equivalents | (203,596 | ) | 137,648 | (227,636 | ) | 232,759 | ||||||||||
Cash and cash equivalents at beginning of period | 430,906 | 129,596 | 454,946 | 34,485 | ||||||||||||
Cash and cash equivalents at end of period (2) | $ | 227,310 | $ | 267,244 | $ | 227,310 | $ | 267,244 |
_______________________
- Net proceeds in fiscal 2024 consisted of borrowings under Worthington Steel’s short-term credit facilities assumed by
Worthington Steel in conjunction with the Separation.
- The cash flows related to discontinued operations have not been segregated in the periods presented herein. Accordingly, the consolidated statements of cash flows include the results from continuing and discontinued operations.
WORTHINGTON ENTERPRISES, INC.
NON-GAAP FINANCIAL MEASURES / PRO FORMA FINANCIAL DATA
(In thousands, except units and per share amounts)
The following provides a reconciliation of certain non-GAAP financial measures, including adjusted operating income, adjusted net earnings from continuing operations attributable to controlling interest and adjusted earnings per diluted share from continuing operations attributable to controlling interest, from their most comparable GAAP measure for the three and nine months ended
Three Months Ended | ||||||||||||||||||||||||
Operating Income | Earnings Before Income Taxes | Income Tax Expense (Benefit) | Net Earnings - Continuing Operations | Diluted EPS - Continuing Operations | Effective Tax Rate | |||||||||||||||||||
GAAP | $ | 4,281 | $ | 40,471 | $ | 18,471 | $ | 22,000 | $ | 0.44 | 45.6 | % | ||||||||||||
Restructuring and other expense, net | 698 | 698 | (166 | ) | 532 | 0.01 | ||||||||||||||||||
Separation costs | 2,999 | 2,999 | (712 | ) | 2,287 | 0.05 | ||||||||||||||||||
Pension settlement charge | - | 8,103 | (1,929 | ) | 6,174 | 0.12 | ||||||||||||||||||
One-time tax effects of Separation | - | - | 9,197 | 9,197 | 0.18 | |||||||||||||||||||
Non-GAAP | $ | 7,978 | $ | 52,271 | $ | 12,081 | $ | 40,190 | $ | 0.80 | 23.1 | % |
Three Months Ended | ||||||||||||||||||||||||
Operating Income | Earnings Before Income Taxes | Income Tax Expense (Benefit) | Net Earnings - Continuing Operations | Diluted EPS - Continuing Operations | Effective Tax Rate | |||||||||||||||||||
GAAP | $ | 4,000 | $ | 37,142 | $ | 7,391 | $ | 29,751 | $ | 0.60 | 19.9 | % | ||||||||||||
Corporate costs eliminated at Separation | 10,369 | 10,369 | (2,469 | ) | 7,900 | 0.16 | ||||||||||||||||||
True-up of Level5 earnout accrual | (1,050 | ) | (1,050 | ) | 253 | (797 | ) | (0.02 | ) | |||||||||||||||
Impairment of long-lived assets | 484 | 484 | (115 | ) | 369 | 0.01 | ||||||||||||||||||
Restructuring and other income, net | 823 | 823 | (191 | ) | 632 | 0.02 | ||||||||||||||||||
Separation costs | 2,305 | 2,305 | (549 | ) | 1,756 | 0.04 | ||||||||||||||||||
Loss on sale of investment in | - | 300 | (43 | ) | 257 | - | ||||||||||||||||||
Non-GAAP | $ | 16,931 | $ | 50,373 | $ | 10,505 | $ | 39,868 | $ | 0.81 | 20.9 | % |
Nine Months Ended | ||||||||||||||||||||||||
Operating Income (Loss) | Earnings Before Income Taxes | Income Tax Expense (Benefit) | Net Earnings - Continuing Operations | Diluted EPS - Continuing Operations | Effective Tax Rate | |||||||||||||||||||
GAAP | $ | (17,411 | ) | $ | 100,804 | $ | 34,041 | $ | 66,763 | $ | 1.33 | 33.8 | % | |||||||||||
Corporate costs eliminated at Separation | 19,343 | 19,343 | (4,606 | ) | 14,737 | 0.30 | ||||||||||||||||||
Restructuring and other income, net | 704 | 704 | (168 | ) | 536 | 0.01 | ||||||||||||||||||
Separation costs | 12,465 | 12,465 | (2,968 | ) | 9,497 | 0.19 | ||||||||||||||||||
Pension settlement charge | - | 8,103 | (1,929 | ) | 6,174 | 0.12 | ||||||||||||||||||
Loss on extinguishment of debt | - | 1,534 | (365 | ) | 1,169 | 0.02 | ||||||||||||||||||
Gain on sale of assets in equity income | - | (2,780 | ) | 662 | (2,118 | ) | (0.04 | ) | ||||||||||||||||
One-time tax effects of Separation | - | - | 9,197 | 9,197 | 0.18 | |||||||||||||||||||
Non-GAAP | $ | 15,101 | $ | 140,173 | $ | 34,218 | $ | 105,955 | $ | 2.11 | 24.4 | % |
Nine Months Ended | ||||||||||||||||||||||||
Operating Income | Earnings Before Income Taxes | Income Tax Expense (Benefit) | Net Earnings - Continuing Operations | Diluted EPS - Continuing Operations | Effective Tax Rate | |||||||||||||||||||
GAAP | $ | 14,518 | $ | 96,334 | $ | 20,709 | $ | 75,625 | $ | 1.53 | 21.5 | % | ||||||||||||
Corporate costs eliminated at Separation | 31,108 | 31,108 | (7,391 | ) | 23,717 | 0.48 | ||||||||||||||||||
Impairment of long-lived assets | 484 | 484 | (115 | ) | 369 | 0.01 | ||||||||||||||||||
Restructuring and other income, net | (354 | ) | (354 | ) | 85 | (269 | ) | (0.01 | ) | |||||||||||||||
Separation costs | 3,572 | 3,572 | (854 | ) | 2,718 | 0.06 | ||||||||||||||||||
Pension settlement charge | - | 4,774 | (1,142 | ) | 3,632 | 0.07 | ||||||||||||||||||
Loss on sale of investment in | - | 16,059 | (3,842 | ) | 12,217 | 0.25 | ||||||||||||||||||
Non-GAAP | $ | 49,328 | $ | 151,977 | $ | 33,968 | $ | 118,009 | $ | 2.39 | 22.4 | % |
To further assist in the analysis of segment results for the three and nine months ended
For periods prior to the Separation, we have also included adjusted EBITDA and adjusted EBITDA margin, on a pro forma basis, to illustrate estimated effects of the post-Separation relationship between us and
Three Months Ended | |||||||||||||||||||
Sustainable | Unallocated | ||||||||||||||||||
Consumer | Building | Energy | Corporate | ||||||||||||||||
Products | Products | Solutions | and Other | Consolidated | |||||||||||||||
Volume (units) | 19,010 | 3,422 | 143 | n/a | 22,575 | ||||||||||||||
Net sales | $ | 133,181 | $ | 148,190 | $ | 35,384 | n/a | $ | 316,755 | ||||||||||
Operating income (loss) | $ | 21,352 | $ | 2,703 | $ | (4,848 | ) | $ | (14,926 | ) | $ | 4,281 | |||||||
Restructuring and other expense, net | - | 84 | - | 614 | 698 | ||||||||||||||
Separation costs | - | - | - | 2,999 | 2,999 | ||||||||||||||
Adjusted operating income (loss) | 21,352 | 2,787 | (4,848 | ) | (11,313 | ) | 7,978 | ||||||||||||
Miscellaneous income (expense), net (1) | 12 | 154 | 328 | 613 | 1,107 | ||||||||||||||
Equity in net income of unconsolidated affiliates | - | 43,813 | - | (578 | ) | 43,235 | |||||||||||||
Adjusted EBIT | $ | 21,364 | $ | 46,754 | $ | (4,520 | ) | $ | (11,278 | ) | $ | 52,320 | |||||||
Depreciation and amortization | 3,960 | 5,985 | 1,853 | 151 | 11,949 | ||||||||||||||
Stock-based compensation | 325 | 320 | - | 1,957 | 2,602 | ||||||||||||||
Adjusted EBITDA | $ | 25,649 | $ | 53,059 | $ | (2,667 | ) | $ | (9,170 | ) | $ | 66,871 | |||||||
Adjusted EBITDA margin | 19.3 | % | 35.8 | % | (7.5 | %) | NM | 21.1 | % |
Three Months Ended | |||||||||||||||||||
Sustainable | Unallocated | ||||||||||||||||||
Consumer | Building | Energy | Corporate | ||||||||||||||||
Products | Products | Solutions | and Other | Consolidated | |||||||||||||||
Volume (units) | 18,154 | 3,499 | 122 | n/a | 21,775 | ||||||||||||||
$ | 130,684 | $ | 183,839 | $ | 31,792 | n/a | $ | 346,315 | |||||||||||
Operating income (loss) | $ | 14,594 | $ | 9,900 | $ | (1,403 | ) | $ | (19,091 | ) | $ | 4,000 | |||||||
Corporate costs eliminated at Separation (4) | 2,611 | 2,616 | - | 5,142 | 10,369 | ||||||||||||||
True-up of Level5 earnout accrual | (1,050 | ) | - | - | - | (1,050 | ) | ||||||||||||
Impairment of long-lived assets | - | 484 | - | - | 484 | ||||||||||||||
Restructuring and other income, net | 206 | 617 | - | - | 823 | ||||||||||||||
Separation costs | - | - | - | 2,305 | 2,305 | ||||||||||||||
Adjusted operating income (loss) | 16,361 | 13,617 | (1,403 | ) | (11,644 | ) | 16,931 | ||||||||||||
Miscellaneous income (expense), net | (12 | ) | 122 | (37 | ) | 144 | 217 | ||||||||||||
Equity in net income of unconsolidated affiliates (2) | - | 37,836 | - | (425 | ) | 37,411 | |||||||||||||
Adjusted EBIT | $ | 16,349 | $ | 51,575 | $ | (1,440 | ) | $ | (11,925 | ) | $ | 54,559 | |||||||
Depreciation and amortization | 4,264 | 5,666 | 1,652 | 311 | 11,893 | ||||||||||||||
Stock-based compensation | 487 | 856 | - | 2,421 | 3,764 | ||||||||||||||
Adjusted EBITDA | $ | 21,100 | $ | 58,097 | $ | 212 | $ | (9,193 | ) | $ | 70,216 | ||||||||
Adjusted EBITDA margin | 16.1 | % | 31.6 | % | 0.7 | % | NM | 20.3 | % | ||||||||||
Pro forma adjusted EBITDA | $ | 20,625 | $ | 57,622 | $ | 212 | $ | (9,110 | ) | $ | 69,349 | ||||||||
Pro forma Adjusted EBITDA margin | 15.8 | % | 31.3 | % | 0.7 | % | NM | 20.0 | % |
Nine Months Ended | |||||||||||||||||||
Sustainable | Unallocated | ||||||||||||||||||
Consumer | Building | Energy | Corporate | ||||||||||||||||
Products | Products | Solutions | and Other | Consolidated | |||||||||||||||
Volume (units) | 50,973 | 10,578 | 363 | n/a | 61,914 | ||||||||||||||
$ | 369,923 | $ | 465,421 | $ | 91,558 | n/a | $ | 926,902 | |||||||||||
Operating income (loss) | $ | 34,207 | $ | 8,971 | $ | (13,025 | ) | $ | (47,564 | ) | $ | (17,411 | ) | ||||||
Corporate costs eliminated at Separation (4) | 4,707 | 4,650 | - | 9,986 | 19,343 | ||||||||||||||
Restructuring and other expense, net | - | 84 | - | 620 | 704 | ||||||||||||||
Separation costs | - | - | - | 12,465 | 12,465 | ||||||||||||||
Adjusted operating income (loss) | 38,914 | 13,705 | (13,025 | ) | (24,493 | ) | 15,101 | ||||||||||||
Miscellaneous income (expense), net (1) | 49 | 452 | 1,165 | 454 | 2,120 | ||||||||||||||
Equity in net income of unconsolidated affiliates (2) | - | 124,032 | - | 516 | 124,548 | ||||||||||||||
Adjusted EBIT (3) | $ | 38,963 | $ | 138,189 | $ | (11,860 | ) | $ | (23,523 | ) | $ | 141,769 | |||||||
Depreciation and amortization | 12,064 | 17,911 | 5,426 | 837 | 36,238 | ||||||||||||||
Stock-based compensation | 1,510 | 2,401 | - | 5,911 | 9,822 | ||||||||||||||
Adjusted EBITDA (3) | $ | 52,537 | $ | 158,501 | $ | (6,434 | ) | $ | (16,775 | ) | $ | 187,829 | |||||||
Adjusted EBITDA margin | 14.2 | % | 34.1 | % | (7.0 | %) | NM | 20.3 | % | ||||||||||
Pro forma adjusted EBITDA | $ | 51,637 | $ | 157,601 | $ | (6,434 | ) | $ | (16,609 | ) | $ | 186,195 | |||||||
Pro forma Adjusted EBITDA margin | 14.0 | % | 33.9 | % | (7.0 | %) | NM | 20.1 | % |
Nine Months Ended | |||||||||||||||||||
Sustainable | Unallocated | ||||||||||||||||||
Consumer | Building | Energy | Corporate | ||||||||||||||||
Products | Products | Solutions | and Other | Consolidated | |||||||||||||||
Volume (units) | 55,068 | 10,842 | 411 | n/a | 66,321 | ||||||||||||||
$ | 406,479 | $ | 542,536 | $ | 100,679 | n/a | $ | 1,049,694 | |||||||||||
Operating income (loss) | $ | 46,422 | $ | 12,250 | $ | (1,709 | ) | $ | (42,445 | ) | $ | 14,518 | |||||||
Corporate costs eliminated at Separation (4) | 7,833 | 7,849 | - | 15,426 | 31,108 | ||||||||||||||
Impairment of long-lived assets | - | 484 | - | - | 484 | ||||||||||||||
Restructuring and other income, net | 206 | 617 | - | (1,177 | ) | (354 | ) | ||||||||||||
Separation costs | - | - | - | 3,572 | 3,572 | ||||||||||||||
Adjusted operating income (loss) | $ | 54,461 | $ | 21,200 | $ | (1,709 | ) | $ | (24,624 | ) | $ | 49,328 | |||||||
Miscellaneous income (expense), net (1) | (78 | ) | 405 | 19 | (69 | ) | 277 | ||||||||||||
Equity in net income of unconsolidated affiliates (2) | - | 116,809 | - | 1,254 | 118,063 | ||||||||||||||
Adjusted EBIT | $ | 54,383 | $ | 138,414 | $ | (1,690 | ) | $ | (23,439 | ) | $ | 167,668 | |||||||
Depreciation and amortization | 12,002 | 16,479 | 4,622 | 1,099 | 34,202 | ||||||||||||||
Stock-based compensation | 1,461 | 2,565 | - | 6,392 | 10,418 | ||||||||||||||
Adjusted EBITDA | $ | 67,846 | $ | 157,458 | $ | 2,932 | $ | (15,948 | ) | $ | 212,288 | ||||||||
Adjusted EBITDA margin | 16.7 | % | 29.0 | % | 2.9 | % | NM | 20.2 | % | ||||||||||
Pro forma adjusted EBITDA | $ | 66,371 | $ | 155,983 | $ | 2,932 | $ | (15,699 | ) | $ | 209,587 | ||||||||
Pro forma Adjusted EBITDA margin | 16.3 | % | 28.8 | % | 2.9 | % | NM | 20.0 | % |
Non-GAAP Footnotes:
- Excludes pre-tax charges of
$8,103 and$4,774 from separate pension lift-out transaction completed inFebruary 2024 andAugust 2022 , respectively, to transfer the pension benefit obligation under The Gerstenslager Company Bargaining Unit Employees’ Pension Plan to third-party insurance companies. - Excludes the following items reflected in equity income in our consolidated statements of earnings:
- For the three and nine months ended
February 29, 2024 , our share of the gain realized by our engineered cabs joint venture, Taxi Workhorse, in connection with the sale of the joint venture’s operations inBrazil , which totaled$2,780 on a pre-tax basis. - For the nine months ended
February 28, 2023 , the loss realized in connection with theAugust 3, 2022 , sale of our then 50% noncontrolling equity investment inArtiFlex Manufacturing, LLC , or$16,059 on a pre-tax basis, including$300 of deal costs during the three months endedFebruary 28, 2023 .
- For the three and nine months ended
- Excludes a pre-tax loss of
$1,534 realized in connection with theJuly 28, 2023 , early redemption of the 2026 Notes. The loss resulted primarily from unamortized issuance costs and discount included in the carrying amount of the 2026 Notes and the acceleration of the remaining unamortized loss in equity related to a treasury lock derivative instrument executed in connection with the issuance of the 2026 Notes. - Reflects reductions in certain corporate overhead costs that no longer exist post-Separation. These costs were included in continuing operations as they represent general corporate overhead that was historically allocated to
Worthington Steel but did not meet the requirements to be presented as discontinued operations.
The following table outlines our equity income (loss) by unconsolidated affiliate for the periods presented:
Three Months Ended | Nine Months Ended | ||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||
WAVE | $ | 26,022 | $ | 18,906 | $ | 75,765 | $ | 61,681 | |||||||||
ClarkDietrich | 17,791 | 18,930 | 48,267 | 55,128 | |||||||||||||
- | (300 | ) | - | (13,700 | ) | ||||||||||||
Workhorse | (578 | ) | (425 | ) | 3,296 | (1,105 | ) | ||||||||||
Total equity income | $ | 43,235 | $ | 37,111 | $ | 127,328 | $ | 102,004 |
WORTHINGTON ENTERPRISES, INC.
USE OF NON-GAAP MEASURES AND DEFINITIONS
NON-GAAP MEASURES. These materials include certain financial measures that are not calculated and precented in accordance with accounting principles generally accepted in
The following provides an explanation of each non-GAAP measure presented in these materials:
Adjusted operating income is defined as operating income (loss) excluding the items listed below, to the extent naturally included in operating income (loss).
Adjusted net earnings from continuing operations is defined as net earnings from continuing operations attributable to controlling interest (“net earnings from continuing operations”) excluding the after-tax effect of the excluded items outlined below.
Adjusted earnings per diluted share from continuing operations (“Adjusted EPS from continuing operations”) – is defined as adjusted net earnings from continuing operations divided by diluted weighted-average shares outstanding.
Adjusted EBITDA – Adjusted EBITDA is defined as Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization. EBITDA is calculated by adding or subtracting, as appropriate, interest expense, net, income tax expense, depreciation, and amortization to/from net earnings from continuing operations attributable to controlling interest, which is further adjusted to exclude impairment and restructuring charges (gains) as well as other items that management believes are not reflective of, and thus should not be included when evaluating the performance of its ongoing operations, as outlined below. Adjusted EBITDA also excludes stock-based compensation due to its non-cash nature, which is consistent with how management assesses operating performance. At the segment level, adjusted EBITDA includes expense allocations for centralized corporate back-office functions that exist to support the day-to-day business operations. Public company and other governance costs are held at the corporate level.
Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by net sales.
Exclusions from Non-GAAP Financial Measures
Management believes it is useful to exclude the following items from the non-GAAP measures presented in this report for its own and investors’ assessment of the business for the reasons identified below:
- Impairment charges are excluded because they do not occur in the ordinary course of our ongoing business operations, are inherently unpredictable in timing and amount, and are non-cash, which we believe facilitates the comparison of historical, current and forecasted financial results.
- Restructuring activities, which can result in both discrete gains and/or losses, consist of established programs that are not part of our ongoing operations, such as divestitures, closing or consolidating facilities, employee severance (including rationalizing headcount or other significant changes in personnel), and realignment of existing operations (including changes to management structure in response to underlying performance and/or changing market conditions). These items are excluded because they are not part of the ongoing operations of our underlying business.
- Separation costs, which consist of direct and incremental costs incurred in connection with the completed Separation are excluded as they are one-time in nature and are not expected to occur in period following the Separation. These costs include fees paid to third-party advisors, such as investment banking, audit and other advisory services as well as direct and incremental costs associated with the Separation of shared corporate functions. Results in the current fiscal year also include incremental compensation expense associated with the modification of unvested short and long-term incentive compensation awards, as required under the employee matters agreement executed in conjunction with the Separation.
- Loss on early extinguishment of debt is excluded because it does not occur in the normal course of business and may obscure analysis of trends and financial performance. Additionally, the amount and frequency of this type of charge is not consistent and is significantly impacted by the timing and size of debt extinguishment transactions.
- Pension settlement charges are excluded because of their non-cash nature and the fact that they do not occur in the normal course of business and may obscure analysis of trends and financial performance. These transactions typically result from the transfer of all or a portion of the total projected benefit obligation to third-party insurance companies.
PRO FORMA FINANCIAL INFORMATION. These materials include certain financial data and operating metrics that are presented on a pro forma basis to illustrate the estimated effects of the Separation of
Senior Vice President
Chief of Corporate Affairs, Communications and Sustainability
614.438.7391
sonya.higginbotham@wthg.com
Treasurer and Investor Relations Officer
614.840.4663
marcus.rogier@wthg.com
WorthingtonEnterprises.com
Source:
2024 GlobeNewswire, Inc., source