Worthington Enterprises, Inc. - Q3 Fiscal 2026 Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended February 28, 2026 (Third Quarter of Fiscal 2026) and the nine months ended on that date. Worthington Enterprises operates two primary segments: Building Products (pressurized containment, metal roofing, HVAC components) and Consumer Products (tools, outdoor living, celebrations). The company is a large accelerated filer incorporated in Ohio.
Key Financial Metrics
| Metric | Q3 2026 (3 Months) | Q3 2025 (3 Months) | YTD 2026 (9 Months) | YTD 2025 (9 Months) |
|---|---|---|---|---|
| Net Sales | $378.7 million | $304.5 million | $1,009.8 million | $835.9 million |
| Operating Income | $31.5 million | $20.9 million | $53.1 million | $19.7 million |
| Net Earnings (GAAP) | $45.1 million | $39.3 million | $107.0 million | $91.4 million |
| Diluted EPS | $0.92 | $0.79 | $2.17 | $1.84 |
| Adjusted EBITDA | $84.6 million | $73.8 million | $212.3 million | $179.9 million |
| Adjusted EBITDA Margin | 22.3% | 24.2% | 21.0% | 21.5% |
| Cash from Operations (YTD) | $154.5 million | |||
| Cash & Equivalents (End of Period) | $6.0 million | |||
| Long-Term Debt | $307.3 million | |||
| Available Credit Facility | $495.2 million |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 24.4% quarter-over-quarter and 20.8% year-to-date, driven primarily by the Building Products segment (+35.9% QoQ) due to acquisitions (LSI, Elgen) and higher volume.
- Profitability: Operating income rose 50.7% in the quarter and 169.6% year-to-date. Adjusted EBITDA increased 14.6% in the quarter and 18.0% year-to-date.
- Acquisitions: Significant cash outflows for acquisitions ($304.4 million YTD) including LSI ($206.1 million) and Elgen ($90.7 million) contributed to revenue but reduced cash balances from $250.1 million to $6.0 million.
- Equity Income: Equity income from unconsolidated affiliates decreased 4.4% in the quarter, primarily due to lower contributions from ClarkDietrich, partially offset by higher earnings from WAVE.
- Restructuring: Restructuring and other expenses decreased to $2.2 million in the quarter from $5.4 million in the prior year quarter, as prior year costs included CEO retirement equity vesting and earnout adjustments.
Guidance, Outlook, and Risks
- Market Conditions: Management notes a macroeconomic environment with moderating inflation but mixed housing and construction activity. Mortgage rates remain elevated (~6%), pressuring affordability and new residential construction.
- Raw Materials: Steel and aluminum costs increased sequentially in Q3. Steel prices averaged $984/ton (hot-rolled) in February 2026 vs. $855/ton in November 2025. Tariff uncertainties remain a risk following recent Supreme Court rulings on IEEPA tariffs.
- Liquidity: Despite a significant drop in cash balances due to M&A, the company maintains $495.2 million in available credit capacity and believes it has adequate resources for the next 12 months.
- Dividends & Buybacks: A quarterly dividend of $0.19 per share was declared. The company repurchased 450,000 shares YTD, with 4.9 million shares remaining under the current authorization.
- Non-GAAP Updates: Beginning in Q3 2026, the company updated its non-GAAP measures to exclude acquisition-related inventory step-up amortization.
Investor Verification Checklist
- Cash Position: Verify the sustainability of operations with only $6.0 million in cash on hand, relying heavily on the $500 million credit facility.
- Acquisition Integration: Monitor the integration and performance of LSI and Elgen, which drove significant revenue growth but also increased SG&A and inventory step-up amortization.
- Raw Material Hedging: Assess the effectiveness of hedging strategies given the sequential rise in steel and aluminum costs.
- Joint Venture Performance: Review the declining equity income from ClarkDietrich and the impact of the SES divestiture on future earnings.
- Tariff Exposure: Evaluate potential impacts of changing trade policies and the uncertainty surrounding IEEPA tariff refunds.