10-Q 1 wor-20240229.htm 10-Q 10-Q
Q30000108516--05-31falseMarch 31, 2024 June 30, 2025March 31, 2024December 31, 2024March 31, 20240000108516us-gaap:ParentMember2022-08-310000108516wor:Level5ToolsLlcMemberus-gaap:CustomerRelationshipsMember2022-06-022022-06-020000108516us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccountsPayableMemberus-gaap:CommodityContractMember2024-02-290000108516us-gaap:NondesignatedMembersrt:MinimumMemberus-gaap:CommodityContractMember2023-06-012024-02-290000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-02-280000108516wor:JeffersonMemberwor:CapitalProjectMemberwor:BuildingProductsFacilityMember2023-02-280000108516us-gaap:AllOtherSegmentsMember2022-06-012023-02-280000108516us-gaap:EmployeeSeveranceMember2024-02-290000108516us-gaap:SegmentContinuingOperationsMember2024-02-290000108516us-gaap:AdditionalPaidInCapitalMember2023-05-310000108516wor:Level5ToolsLlcMembersrt:RestatementAdjustmentMember2022-06-022022-06-020000108516us-gaap:RetainedEarningsMember2023-05-310000108516wor:ConsumerProductsMember2023-05-310000108516wor:TwoThousandTwentyFourNotesMember2023-05-310000108516wor:BuildingProductsMember2022-12-012023-02-280000108516wor:ClarkDietrichMember2024-02-290000108516wor:AccountsReceivableSecuritizationFacilityMember2023-06-290000108516wor:HaloMember2024-02-010000108516wor:SeniorUnsecuredNotesFourPointThreeZeroPercentDueAugustOneTwentyThirtyTwoMember2023-05-310000108516us-gaap:ForeignExchangeContractMemberwor:MiscellaneousIncomeExpenseMemberus-gaap:SegmentContinuingOperationsMember2022-12-012023-02-280000108516us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-05-310000108516wor:ArtiFlexMember2023-02-280000108516wor:BalloonTimeMiniHeliumTanksMember2023-11-300000108516wor:HaloProductsGroupLlcMember2024-02-010000108516us-gaap:DomesticLineOfCreditMember2023-09-262023-09-260000108516us-gaap:InterestRateContractMemberus-gaap:SegmentContinuingOperationsMember2022-12-012023-02-280000108516wor:ConsolidatedMember2022-06-012023-02-280000108516us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeMember2024-02-290000108516us-gaap:NoncontrollingInterestMember2022-12-012023-02-280000108516us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-05-310000108516us-gaap:PropertyLeaseGuaranteeMember2024-02-290000108516us-gaap:RetainedEarningsMember2023-08-310000108516us-gaap:AdditionalPaidInCapitalMember2022-12-012023-02-280000108516wor:SeniorUnsecuredNotesFourPointThreeZeroPercentDueAugustOneTwentyThirtyTwoMember2023-06-012024-02-290000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-012023-02-280000108516us-gaap:ForeignExchangeContractMemberwor:MiscellaneousIncomeExpenseMemberus-gaap:SegmentContinuingOperationsMember2023-06-012024-02-290000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-012023-02-280000108516us-gaap:ParentMember2022-05-310000108516wor:BuildingProductsMember2022-06-012023-02-280000108516us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOtherMember2023-05-310000108516wor:ServiaceroPlanosSDeCVMember2023-06-012024-02-290000108516wor:Level5ToolsLlcMember2022-06-020000108516us-gaap:AccumulatedTranslationAdjustmentMember2023-06-012024-02-290000108516us-gaap:ParentMember2023-06-012023-08-310000108516us-gaap:FairValueMeasurementsRecurringMember2023-05-310000108516wor:ConsolidatedMember2022-12-012023-02-280000108516us-gaap:NoncontrollingInterestMember2023-12-012024-02-290000108516us-gaap:AccumulatedTranslationAdjustmentMember2024-02-290000108516us-gaap:AllOtherSegmentsMember2023-05-310000108516wor:JeffersonMemberwor:CapitalProjectMemberwor:BuildingProductsFacilityMember2023-05-310000108516us-gaap:NoncontrollingInterestMember2022-05-310000108516us-gaap:RetainedEarningsMember2022-09-012022-11-3000001085162022-09-012022-11-300000108516us-gaap:NondesignatedMemberus-gaap:AccountsPayableMemberus-gaap:CommodityContractMember2023-05-310000108516us-gaap:FairValueInputsLevel2Memberus-gaap:SegmentContinuingOperationsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeMember2023-05-310000108516us-gaap:NoncontrollingInterestMember2023-06-012023-08-310000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-05-310000108516us-gaap:DesignatedAsHedgingInstrumentMember2024-02-290000108516wor:SustainableEnergySolutionsMember2022-12-012023-02-280000108516wor:ArtiFlexMember2022-08-032022-08-030000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-05-310000108516wor:ServiceBasedRestrictedCommonSharesMember2023-05-310000108516us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-02-2900001085162022-06-012023-05-310000108516us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-02-280000108516us-gaap:AdditionalPaidInCapitalMember2023-09-012023-11-300000108516us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccountsPayableMemberus-gaap:CommodityContractMember2023-05-310000108516us-gaap:InterestRateContractMemberus-gaap:SegmentContinuingOperationsMember2022-06-012023-02-280000108516us-gaap:LongTermDebtMember2023-05-3100001085162023-09-012023-11-300000108516us-gaap:ParentMember2022-09-012022-11-300000108516us-gaap:ForeignExchangeContractMemberus-gaap:SegmentContinuingOperationsMember2023-06-012024-02-290000108516us-gaap:LongTermDebtMember2024-02-290000108516us-gaap:AllOtherSegmentsMember2024-02-290000108516wor:OtherDebtMember2024-02-2900001085162022-06-012023-02-280000108516wor:HaloMemberus-gaap:TradeNamesMember2024-02-012024-02-010000108516wor:WorthingtonArmstrongVentureMember2024-02-290000108516wor:BuildingProductsMember2024-02-290000108516us-gaap:SegmentContinuingOperationsMemberus-gaap:CommodityContractMember2022-12-012023-02-2800001085162024-04-0300001085162023-12-012024-02-2900001085162023-06-012023-08-310000108516us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOtherMember2022-12-012023-02-280000108516us-gaap:AdditionalPaidInCapitalMember2023-08-310000108516wor:WorthingtonSamuelCoilProcessingLlcMemberus-gaap:CorporateJointVentureMember2024-02-290000108516wor:WorthingtonArmstrongVentureMember2023-06-012024-02-290000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-012023-11-300000108516us-gaap:ParentMember2023-11-300000108516us-gaap:RetainedEarningsMember2023-02-280000108516srt:MaximumMemberus-gaap:CashFlowHedgingMemberus-gaap:CommodityContractMember2023-06-012024-02-290000108516wor:ServiceBasedRestrictedCommonSharesMember2023-06-012024-02-290000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-012023-08-310000108516us-gaap:ParentMember2023-05-310000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-012024-02-290000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-012024-02-2900001085162023-11-300000108516us-gaap:FairValueMeasurementsRecurringMember2024-02-290000108516us-gaap:NondesignatedMemberwor:ReceivablesMemberus-gaap:CommodityContractMember2024-02-290000108516us-gaap:InterestRateContractMember2023-12-012024-02-290000108516us-gaap:ParentMember2023-09-012023-11-300000108516wor:ConsumerProductsMember2024-02-290000108516wor:WorkhorseMember2024-02-290000108516us-gaap:InterestRateContractMemberus-gaap:SegmentContinuingOperationsMember2023-06-012024-02-290000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-08-310000108516wor:EarnoutAgreementMemberwor:Level5ToolsLlcMember2022-06-022022-06-020000108516us-gaap:SegmentContinuingOperationsMemberus-gaap:CommodityContractMemberus-gaap:CostOfSalesMember2022-12-012023-02-280000108516us-gaap:AdditionalPaidInCapitalMember2022-08-310000108516us-gaap:FairValueMeasurementsNonrecurringMemberwor:LongLivedAssetsHeldAndUsedMember2023-05-3100001085162023-06-012024-02-290000108516us-gaap:SegmentDiscontinuedOperationsMemberus-gaap:LandMember2023-05-310000108516us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherAssetsMemberus-gaap:CommodityContractMember2024-02-2900001085162022-08-310000108516us-gaap:SegmentContinuingOperationsMemberus-gaap:CommodityContractMemberus-gaap:CostOfSalesMember2023-06-012024-02-290000108516us-gaap:SegmentContinuingOperationsMemberus-gaap:CommodityContractMember2023-06-012024-02-290000108516us-gaap:ParentMember2023-02-280000108516wor:TheSeparationOfWorthingtonSteelMember2022-06-012023-02-280000108516wor:Level5ToolsLlcMemberwor:NonCompeteMember2022-06-022022-06-020000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-02-290000108516wor:CurrentAssetsOfDiscontinuedOperationsMember2023-05-310000108516wor:ConsumerProductsMember2022-12-012023-02-280000108516us-gaap:DomesticLineOfCreditMember2024-02-2900001085162022-05-310000108516us-gaap:NondesignatedMemberus-gaap:AccountsPayableMemberus-gaap:CommodityContractMember2024-02-290000108516us-gaap:NoncontrollingInterestMember2023-11-300000108516us-gaap:NondesignatedMember2024-02-290000108516wor:JeffersonMemberwor:CapitalProjectMemberwor:BuildingProductsFacilityMember2022-12-012023-02-280000108516us-gaap:NondesignatedMemberus-gaap:CommodityContractMember2023-06-012024-02-290000108516wor:SeriesASeniorUnsecuredNotesTwoPointZeroSixPercentDueAugustTwentyThirdTwentyThirtyOneMember2024-02-290000108516wor:Level5ToolsLlcMembersrt:RestatementAdjustmentMember2022-06-020000108516wor:ConsolidatedMember2023-12-012024-02-290000108516wor:SustainableEnergySolutionsMember2024-02-290000108516wor:ArtiFlexMember2024-02-290000108516wor:ConsumerProductsMember2023-12-012024-02-290000108516wor:SeniorUnsecuredNotesFourPointThreeZeroPercentDueAugustOneTwentyThirtyTwoMember2024-02-290000108516us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-06-012023-02-280000108516wor:SustainableEnergySolutionsMember2023-06-012024-02-290000108516us-gaap:StandbyLettersOfCreditMember2023-06-012024-02-2900001085162023-02-280000108516wor:ArtiFlexMember2022-06-012023-02-280000108516us-gaap:NoncontrollingInterestMember2022-06-012022-08-310000108516wor:Level5ToolsLlcMember2023-06-012024-02-290000108516us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-06-012024-02-290000108516us-gaap:NoncontrollingInterestMember2023-08-310000108516wor:HaloMemberwor:ProductDesignKnowHowMember2024-02-012024-02-010000108516wor:TwoThousandTwentySixNotesMember2023-05-310000108516us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-02-290000108516us-gaap:AllOtherSegmentsMember2023-12-012024-02-290000108516us-gaap:ParentMember2023-08-310000108516us-gaap:AdditionalPaidInCapitalMember2022-05-310000108516us-gaap:NoncontrollingInterestMember2022-09-012022-11-300000108516us-gaap:CashFlowHedgingMembersrt:MinimumMemberus-gaap:CommodityContractMember2023-06-012024-02-290000108516us-gaap:RetainedEarningsMember2022-11-300000108516us-gaap:AdditionalPaidInCapitalMember2024-02-290000108516us-gaap:AdditionalPaidInCapitalMember2023-12-012024-02-2900001085162022-11-300000108516us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-02-280000108516us-gaap:AccumulatedTranslationAdjustmentMember2023-02-280000108516srt:ScenarioPreviouslyReportedMemberwor:HaloMember2024-02-010000108516us-gaap:CashFlowHedgingMemberus-gaap:CommodityContractMember2024-02-290000108516us-gaap:AdditionalPaidInCapitalMember2023-11-300000108516us-gaap:ParentMember2022-12-012023-02-280000108516wor:AccountsReceivableSecuritizationFacilityMember2022-05-190000108516wor:TwbCompanyLLCMemberus-gaap:CorporateJointVentureMember2024-02-290000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-11-300000108516us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOtherMember2022-06-012023-02-280000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-08-310000108516us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOtherMember2024-02-290000108516us-gaap:ParentMember2023-12-012024-02-290000108516wor:SustainableEnergySolutionsMember2023-12-012024-02-290000108516wor:Level5ToolsLlcMembersrt:ScenarioPreviouslyReportedMember2022-06-022022-06-020000108516us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMemberus-gaap:AccountsPayableMember2024-02-290000108516srt:EuropeMemberwor:PropaneTanksMember2024-02-290000108516us-gaap:SegmentContinuingOperationsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeMember2023-05-310000108516us-gaap:AdditionalPaidInCapitalMember2023-02-280000108516wor:SeriesBSeniorUnsecuredNotesTwoPointFourZeroPercentDueAugustTwentyThirdTwentyThirtyFourMember2022-06-012023-05-310000108516us-gaap:StandbyLettersOfCreditMember2024-02-290000108516us-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeMember2024-02-290000108516country:BRwor:WorkhorseMember2023-09-012023-11-300000108516us-gaap:RetainedEarningsMember2023-09-012023-11-300000108516us-gaap:CorporateJointVentureMember2024-02-290000108516wor:SeriesASeniorUnsecuredNotesTwoPointZeroSixPercentDueAugustTwentyThirdTwentyThirtyOneMember2023-05-310000108516wor:TwoThousandTwentySixNotesMember2024-02-290000108516us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-05-310000108516us-gaap:AllOtherSegmentsMember2022-12-012023-02-280000108516us-gaap:SegmentDiscontinuedOperationsMemberus-gaap:MachineryAndEquipmentMember2023-05-310000108516wor:ArtiFlexMember2022-12-012023-02-2800001085162023-07-282023-07-280000108516us-gaap:AllOtherSegmentsMember2023-06-012024-02-290000108516us-gaap:SegmentDiscontinuedOperationsMember2023-06-012024-02-290000108516us-gaap:RetainedEarningsMember2024-02-290000108516us-gaap:ForeignExchangeContractMemberwor:MiscellaneousIncomeExpenseMemberus-gaap:SegmentContinuingOperationsMember2023-12-012024-02-290000108516us-gaap:DomesticLineOfCreditMember2023-09-272023-09-270000108516wor:Level5ToolsLlcMemberus-gaap:TradeNamesMember2022-06-022022-06-020000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-012022-08-3100001085162023-08-310000108516us-gaap:AccumulatedTranslationAdjustmentMember2022-06-012023-02-280000108516us-gaap:PerformanceSharesMember2023-05-310000108516us-gaap:RetainedEarningsMember2022-05-310000108516us-gaap:AdditionalPaidInCapitalMember2023-06-012023-08-310000108516us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-05-310000108516wor:WorthingtonArmstrongVentureMember2023-05-310000108516us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel2Member2023-05-310000108516wor:OtherDebtMember2023-05-310000108516us-gaap:NoncontrollingInterestMember2024-02-290000108516us-gaap:NondesignatedMemberwor:ReceivablesMemberus-gaap:CommodityContractMember2023-05-310000108516us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOtherMember2023-06-012024-02-290000108516us-gaap:SegmentDiscontinuedOperationsMember2023-05-310000108516wor:BuildingProductsMember2023-12-012024-02-290000108516wor:Level5ToolsLlcMembersrt:ScenarioPreviouslyReportedMember2022-06-020000108516us-gaap:FairValueMeasurementsNonrecurringMember2023-05-310000108516wor:HaloMember2024-02-012024-02-010000108516wor:HaloProductsGroupLlcMember2024-02-012024-02-010000108516us-gaap:SegmentContinuingOperationsMemberus-gaap:CommodityContractMemberus-gaap:CostOfSalesMember2023-12-012024-02-290000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-012022-11-300000108516us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-11-300000108516wor:TheSeparationOfWorthingtonSteelMember2023-06-012024-02-290000108516us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-05-310000108516us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-06-012023-02-2800001085162022-12-012023-02-280000108516wor:ReceivablesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CommodityContractMember2024-02-290000108516us-gaap:NoncontrollingInterestMember2022-08-310000108516wor:ServiaceroPlanosSDeCVMember2024-02-290000108516us-gaap:NoncontrollingInterestMember2023-09-012023-11-300000108516us-gaap:SegmentContinuingOperationsMemberus-gaap:CommodityContractMember2022-06-012023-02-280000108516us-gaap:SegmentContinuingOperationsMemberus-gaap:CommodityContractMemberus-gaap:CostOfSalesMember2022-06-012023-02-280000108516us-gaap:ParentMember2022-06-012022-08-310000108516us-gaap:EmployeeSeveranceMember2023-06-012024-02-290000108516us-gaap:SegmentContinuingOperationsMemberwor:InterestRateContractOneMember2023-06-012024-02-290000108516wor:HaloMemberus-gaap:CustomerRelationshipsMember2024-02-012024-02-010000108516us-gaap:AdditionalPaidInCapitalMember2022-06-012022-08-310000108516wor:ServiceBasedRestrictedCommonSharesMember2024-02-290000108516us-gaap:RetainedEarningsMember2022-06-012022-08-310000108516us-gaap:ParentMember2022-11-300000108516wor:BuildingProductsMember2023-06-012024-02-290000108516us-gaap:PerformanceSharesMember2024-02-290000108516us-gaap:EmployeeSeveranceMember2023-05-310000108516us-gaap:NoncontrollingInterestMember2022-11-300000108516wor:ConsumerProductsMember2023-06-012024-02-2900001085162023-05-310000108516wor:WorthingtonSteelMemberwor:LongTermSteelSupplyAgreementMember2024-02-290000108516us-gaap:SegmentDiscontinuedOperationsMember2022-06-012023-02-280000108516wor:TwoThousandTwentySixNotesMember2023-07-280000108516us-gaap:RetainedEarningsMember2023-12-012024-02-290000108516wor:SpartanSteelCoatingLlcMemberus-gaap:CorporateJointVentureMember2024-02-290000108516us-gaap:ConstructionInProgressMemberus-gaap:SegmentDiscontinuedOperationsMember2023-05-310000108516us-gaap:ForeignExchangeContractMemberus-gaap:SegmentContinuingOperationsMember2022-12-012023-02-280000108516wor:TwoThousandTwentySixNotesMember2023-07-282023-07-280000108516us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-06-012024-02-290000108516us-gaap:ParentMember2024-02-290000108516us-gaap:DesignatedAsHedgingInstrumentMember2023-05-310000108516us-gaap:AdditionalPaidInCapitalMember2022-11-300000108516wor:SeniorUnsecuredNotesFourPointThreeZeroPercentDueAugustOneTwentyThirtyTwoMember2022-06-012023-05-310000108516wor:SustainableEnergySolutionsMember2022-06-012023-02-280000108516wor:SeriesBSeniorUnsecuredNotesTwoPointFourZeroPercentDueAugustTwentyThirdTwentyThirtyFourMember2024-02-290000108516us-gaap:AccumulatedTranslationAdjustmentMember2022-05-310000108516wor:SeriesBSeniorUnsecuredNotesTwoPointFourZeroPercentDueAugustTwentyThirdTwentyThirtyFourMember2023-05-310000108516us-gaap:ForeignExchangeContractMemberwor:MiscellaneousIncomeExpenseMemberus-gaap:SegmentContinuingOperationsMember2022-06-012023-02-280000108516us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2023-06-012024-02-290000108516srt:MaximumMemberus-gaap:DomesticLineOfCreditMember2023-06-012024-02-290000108516us-gaap:NondesignatedMember2023-05-310000108516us-gaap:AdditionalPaidInCapitalMember2022-09-012022-11-300000108516wor:WhProductsMember2023-06-012024-02-290000108516wor:ReceivablesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CommodityContractMember2023-05-310000108516wor:Level5ToolsLlcMember2022-06-022022-06-020000108516us-gaap:RetainedEarningsMember2022-12-012023-02-280000108516us-gaap:SegmentContinuingOperationsMember2023-05-310000108516us-gaap:SegmentDiscontinuedOperationsMemberus-gaap:BuildingAndBuildingImprovementsMember2023-05-310000108516wor:SeriesASeniorUnsecuredNotesTwoPointZeroSixPercentDueAugustTwentyThirdTwentyThirtyOneMember2023-06-012024-02-290000108516us-gaap:SegmentDiscontinuedOperationsMember2022-12-012023-02-280000108516wor:ConsolidatedMember2023-06-012024-02-290000108516us-gaap:PerformanceSharesMember2023-06-012024-02-290000108516us-gaap:ForeignExchangeContractMemberus-gaap:SegmentContinuingOperationsMember2022-06-012023-02-280000108516us-gaap:DomesticLineOfCreditMember2023-09-270000108516us-gaap:NoncontrollingInterestMember2023-05-310000108516us-gaap:RetainedEarningsMember2023-11-300000108516us-gaap:CashFlowHedgingMember2023-06-012024-02-290000108516wor:TheSeparationOfWorthingtonSteelMember2023-12-012023-12-010000108516us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMembersrt:MinimumMember2023-06-012024-02-290000108516wor:SeriesBSeniorUnsecuredNotesTwoPointFourZeroPercentDueAugustTwentyThirdTwentyThirtyFourMember2023-06-012024-02-290000108516wor:BuildingProductsMember2023-05-3100001085162024-02-290000108516wor:ConsumerProductsMember2022-06-012023-02-280000108516wor:WorthingtonSpecialtyProcessingMemberus-gaap:CorporateJointVentureMember2024-02-290000108516us-gaap:EmployeeStockOptionMember2023-06-012024-02-290000108516srt:ScenarioPreviouslyReportedMemberwor:HaloMember2024-02-012024-02-010000108516wor:SustainableEnergySolutionsMember2023-05-310000108516us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CommodityContractMemberus-gaap:OtherLiabilitiesMember2023-05-310000108516us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccountsPayableMember2023-05-310000108516us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-02-290000108516us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOtherMember2023-12-012024-02-290000108516us-gaap:NondesignatedMembersrt:MaximumMemberus-gaap:CommodityContractMember2023-06-012024-02-290000108516us-gaap:NoncontrollingInterestMember2023-02-280000108516us-gaap:CommodityContractMember2023-12-012024-02-290000108516wor:SeriesASeniorUnsecuredNotesTwoPointZeroSixPercentDueAugustTwentyThirdTwentyThirtyOneMember2022-06-012023-05-310000108516wor:Level5ToolsLlcMemberwor:TechnologicalKnowHowMember2022-06-022022-06-020000108516us-gaap:AccumulatedTranslationAdjustmentMember2023-05-310000108516us-gaap:RetainedEarningsMember2023-06-012023-08-310000108516us-gaap:FairValueMeasurementsNonrecurringMemberwor:LongLivedAssetsHeldAndUsedMemberus-gaap:FairValueInputsLevel2Member2023-05-310000108516us-gaap:RetainedEarningsMember2022-08-310000108516wor:WorthingtonSteelMemberwor:LongTermSteelSupplyAgreementMember2023-06-012024-02-2900001085162022-06-012022-08-31iso4217:USDxbrli:shareswor:Segmentxbrli:purexbrli:shareswor:Jointventureiso4217:USD

 

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 29, 2024

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 3, 2024, the number of common shares, without par value, of the Registrant issued and outstanding was 50,146,357.

 


 

TABLE OF CONTENTS

 

Safe Harbor Statement

 

iii

Part I. Financial Information

 

 

 

Item 1.

Financial Statements

 

 

 

 

Consolidated Balance Sheets – February 29, 2024 and May 31, 2023

 

2

 

 

Consolidated Statements of Earnings – Three and Nine Months Ended February 29, 2024 and February 28, 2023

 

3

 

 

Consolidated Statements of Comprehensive Income – Three and Nine Months Ended February 29, 2024 and February 28, 2023

 

4

 

 

Consolidated Statements of Cash Flows – Three and Nine Months Ended February 29, 2024 and February 28, 2023

 

5

 

 

Condensed Notes to Consolidated Financial Statements

 

6

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

26

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

38

 

Item 4.

Controls and Procedures

 

38

Part II. Other Information

 

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

39

 

Item 1A.

Risk Factors

 

39

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

39

 

Item 3.

Defaults Upon Senior Securities

 

40

 

Item 4.

Mine Safety Disclosures

 

40

 

Item 5.

Other Information

 

40

 

Item 6.

Exhibits

 

41

Signatures

 

43

 

 

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

AOCI

 

Accumulated other comprehensive income (loss)

ArtiFlex

 

ArtiFlex Manufacturing, LLC

AR Facility

 

Our former revolving trade accounts receivable securitization facility

Board

 

Board of Directors of Worthington Enterprises, Inc.

CARES Act

 

Coronavirus Aid, Relief and Economic Security Act

ClarkDietrich

 

Clarkwestern Dietrich Building Systems LLC

CODM

 

Chief Operating Decision Maker

common shares

 

The common shares, no par value, of Worthington Enterprises

COVID-19

 

The novel coronavirus disease first known to originate in December 2019

Credit Facility

 

Our $500,000,000 unsecured revolving credit facility with a group of lenders

Distribution

 

The pro-rata distribution of all outstanding shares of Worthington Steel whereby each holder of record of Worthington Enterprises common shares received one common share of Worthington Steel for every one common share of Worthington Enterprises held as of the Record Date.

EPS

 

Earnings per common share

Equity Income

 

Equity in net income of unconsolidated affiliates

Exchange Act

 

Securities Exchange Act of 1934, as amended

Form 10-Q

 

Our Quarterly Report on Form 10-Q for the quarterly period ended February 29, 2024

fiscal 2023

 

Our fiscal year ended May 31, 2023

fiscal 2024

 

Our fiscal year ending May 31, 2024

GAAP

 

U.S. generally accepted accounting principles

GDP

 

Gross domestic product

HPG

 

Halo Products Group, LLC

HMI

 

The National Association of Home Builders/Wells Fargo Housing Market Index

MD&A

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

NYSE

 

New York Stock Exchange

OCI

 

Other comprehensive income (loss)

PSLRA

 

Private Securities Litigation Reform Act of 1995, as amended

Record Date

 

Close of business on November 21, 2023

Samuel

 

Worthington Samuel Coil Processing LLC

SEC

 

Securities and Exchange Commission

Separation

 

The separation of our Steel Processing business, effective December 1, 2023

Serviacero

 

Serviacero Planos, S. de R. L. de C.V.

SG&A

 

Selling, general and administrative expenses

SOFR

 

Secured Overnight Financing Rate

Spartan

 

Spartan Steel Coating, L.L.C.

TWB

 

TWB Company, L.L.C.

U.S.

 

United States of America

Voestalpine

 

Voestalpine Automotive Components Nagold GmbH & Co. KG

WAVE

 

Worthington Armstrong Venture

Halo

 

WH Products, LLC

Worthington Enterprises

 

Worthington Enterprises, Inc. (formerly known as Worthington Industries, Inc.)

Workhorse

 

Taxi Workhorse Holdings, LLC

Worthington Steel

 

Worthington Steel, Inc.

Worthington Steel Credit Facility

 

Worthington Steel’s $550,000,000 senior secured revolving credit facility with a group of lenders

WSP

 

Worthington Specialty Processing

2023 Form 10-K

 

Our Annual Report on Form 10-K for fiscal 2023 as filed with the SEC on July 31, 2023

2024 Notes

 

The senior unsecured notes that we issued on August 10, 2012, in the principal amount of $150,000,000, which bore interest at a rate of 4.60% and were set to mature on August 10, 2024

2026 Notes

 

The senior unsecured notes that we issued on April 15, 2014, in the principal amount of $250,000,000, which bore interest at a rate of 4.55% and were scheduled to mature on April 15, 2026

 

ii


Safe Harbor Statement

Selected statements contained in this Form 10-Q, including, without limitation, in MD&A, constitute “forward-looking statements,” as that term is used in the PSLRA. 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,” or other 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;
outlooks, strategies or business plans;
anticipated benefits of 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, form joint ventures and consolidate operations, 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, laws and regulations;
the ever-changing effects of COVID-19 and the various responses of governmental and nongovernmental authorities thereto on economies and markets, and on the Company’s customers, counterparties, employees and third-party service providers; and
other non-historical matters.

Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected. Any number of factors could affect actual results, including, without limitation, those that follow:

the uncertainty of obtaining regulatory approvals in connection with the Separation, including rulings from the Internal Revenue Service;
the Company’s ability to successfully realize the anticipated benefits of the Separation;
the risks, uncertainties and impacts related to the COVID-19 pandemic – the duration, extent and severity of which are impossible to predict, including the possibility of future resurgence in the spread of COVID-19 or variants thereof – and the availability, effectiveness and acceptance of vaccines, and other actual or potential public health emergencies and actions taken by governmental authorities or others in connection therewith;

iii


the effect of national, regional and global economic conditions generally and within major product markets, including significant economic disruptions from COVID-19, the actions taken in connection therewith and the implementation of related fiscal stimulus packages;
the effect of conditions in national and worldwide financial markets, including inflation, increases in interest rates and economic recession, and with respect to the ability of financial institutions to provide capital;
the impact of tariffs, the adoption of trade restrictions affecting the Company’s products or suppliers, a U.S. withdrawal from or significant renegotiation of trade agreements, the occurrence of trade wars, the closing of border crossings, and other changes in trade regulations or relationships;
changing oil prices and/or supply;
product demand and pricing;
changes in product mix, product substitution and market acceptance of the Company’s products;
volatility or fluctuations in the pricing, quality or availability of raw materials (particularly steel), supplies, transportation, utilities, labor and other items required by operations (especially in light of the COVID-19 pandemic and Russia’s invasion of Ukraine);
effects of sourcing and supply chain constraints;
the outcome of adverse claims experience with respect to workers’ compensation, product recalls or product liability, casualty events or other matters;
effects of facility closures and the consolidation of operations;
the effect of financial difficulties, consolidation and other changes within the steel, automotive, construction and other industries in which the Company participates;
failure to maintain appropriate levels of inventories;
financial difficulties (including bankruptcy filings) of original equipment manufacturers, end-users and customers, suppliers, joint venture partners and others with whom the Company does business;
the ability to realize targeted expense reductions from headcount reductions, facility closures and other cost reduction efforts;
the ability to realize cost savings and operational, sales and sourcing improvements and efficiencies, and other expected benefits from transformation initiatives, on a timely basis;
the overall success of, and the ability to integrate, newly-acquired businesses and joint ventures, maintain and develop their customers, and achieve synergies and other expected benefits and cost savings therefrom;
capacity levels and efficiencies, within facilities, within major product markets and within the industries in which the Company participates as a whole;
the effect of disruption in the business of suppliers, customers, facilities and shipping operations due to adverse weather, casualty events, equipment breakdowns, labor shortages, interruption in utility services, civil unrest, international conflicts (especially in light of Russia’s invasion of Ukraine), terrorist activities, or other causes;
changes in customer demand, inventories, spending patterns, product choices, and supplier choices;
risks associated with doing business internationally, including economic, political and social instability (especially in light of Russia’s invasion of Ukraine), foreign currency exchange rate exposure and the acceptance of the Company’s products in global markets;
the ability to improve and maintain processes and business practices to keep pace with the economic, competitive and technological environment;
the effect of inflation, interest rate increases and economic recession, which may negatively impact the Company’s operations and financial results;
deviation of actual results from estimates and/or assumptions used by the Company in the application of its significant accounting policies;
the level of imports and import prices in the Company’s markets;
the impact of environmental laws and regulations or the actions of the U.S. Environmental Protection Agency or similar regulators which increase costs or limit the Company’s ability to use or sell certain products;
the impact of increasing environmental, greenhouse gas emission and sustainability regulations or considerations;
the impact of judicial rulings and governmental regulations, both in the U.S. and abroad, including those adopted by the SEC and other governmental agencies as contemplated by the CARES Act, the Consolidated Appropriations Act, 2021, the American Rescue Plan Act of 2021, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010;
the effect of healthcare laws in the U.S. and potential changes for such laws, which may increase the Company’s healthcare and other costs and negatively impact the Company’s operations and financial results;
the effect of tax laws in the U.S. and potential changes for such laws, which may increase the Company’s costs and negatively impact the Company’s operations and financial results;
cyber security risks;

iv


the effect of privacy and information security laws and standards; and
other risks described from time to time in the Company’s filings with the SEC, including those described in “Part I – Item 1A. – Risk Factors” of the 2023 Form 10-K.

 

The Company notes 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. 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.

 

v


 

USE OF NON-GAAP FINANCIAL MEASURES AND DEFINITIONS


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 typically excludes items that management believes are not reflective of, and thus should not be included when evaluating the performance of our ongoing operations. Management uses the non-GAAP financial measures to evaluate our performance, engage in financial and operational planning, and determine incentive compensation. Management believes these non-GAAP financial measures provide useful supplemental information and additional perspective on the performance of our ongoing operations and should not be considered as an alternative to the comparable GAAP measure. Additionally, management believes these non-GAAP financial measures allow for meaningful comparisons and analysis of trends in our businesses and enables investors to evaluate operations and future prospects in the same manner as management.

 

Exclusions from adjusted EBITDA

 

Management believes it is useful to exclude the following items from adjusted EBITDA 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 periods 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 fiscal 2024 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.

 

 

1


PART I. FINANCIAL INFORMATION

Item 1. – Financial Statements

WORTHINGTON ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

(Unaudited)

 

 

 

 

 

 

February 29,

 

 

May 31,

 

 

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

227,310

 

 

$

422,268

 

Receivables, less allowances of $750 and $803 at February 29, 2024 and May 31, 2023, respectively

 

 

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

 

Investments in unconsolidated affiliates

 

 

120,707

 

 

 

138,041

 

Operating lease assets

 

 

21,285

 

 

 

24,686

 

Goodwill

 

 

345,445

 

 

 

336,178

 

Other intangible assets, net of accumulated amortization of $82,190 and $73,308 at February 29, 2024 and
 May 31, 2023, respectively

 

 

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 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

 

Non-current operating lease liabilities

 

 

15,103

 

 

 

18,326

 

Deferred income taxes, net

 

 

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

 

 

See condensed notes to consolidated financial statements.

 

2


WORTHINGTON ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per common share amounts)

(Unaudited)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

February 29,

 

 

February 28,

 

 

February 29,

 

 

February 28,

 

 

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), net

 

(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 common share

$

0.16

 

 

$

0.31

 

 

$

0.80

 

 

$

0.93

 

 

See condensed notes to consolidated financial statements.

3


WORTHINGTON ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

February 29,

 

 

February 28,

 

 

February 29,

 

 

February 28,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net earnings

$

22,000

 

 

$

50,258

 

 

$

149,869

 

 

$

135,007

 

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

(700

)

 

 

1,563

 

 

 

1,643

 

 

 

(7,680

)

Pension liability adjustment

 

6,805

 

 

 

323

 

 

 

6,802

 

 

 

3,180

 

Cash flow hedges

 

218

 

 

 

34,342

 

 

 

6,916

 

 

 

17,042

 

Other comprehensive income

 

6,323

 

 

 

36,228

 

 

 

15,361

 

 

 

12,542

 

Comprehensive income

 

28,323

 

 

 

86,486

 

 

 

165,230

 

 

 

147,549

 

Comprehensive income attributable to noncontrolling interests

 

-

 

 

 

3,933

 

 

 

7,460

 

 

 

8,382

 

Comprehensive income attributable to controlling interest

$

28,323

 

 

$

82,553

 

 

$

157,770

 

 

$

139,167

 

 

See condensed notes to consolidated financial statements.

4


WORTHINGTON ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

Three Months Ended

 

 

Nine Months Ended

 

 

February 29,

 

 

February 28,

 

 

February 29,

 

 

February 28,

 

 

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

 

35

 

 

 

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 ArtiFlex

 

-

 

 

 

(300

)

 

 

-

 

 

 

35,795

 

Excess distributions from unconsolidated affiliate

 

-

 

 

 

-

 

 

 

1,085

 

 

 

-

 

Net cash used by investing activities

 

(18,664

)

 

 

(23,017

)

 

 

(116,504

)

 

 

(53,733

)

 

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

Dividend from Worthington Steel at Separation

 

150,000

 

 

 

-

 

 

 

150,000

 

 

 

-

 

Distribution to Worthington Steel at Separation

 

(218,048

)

 

 

-

 

 

 

(218,048

)

 

 

-

 

Net proceeds from (repayments of) 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 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

$

227,310

 

 

$

267,244

 

 

$

227,310

 

 

$

267,244

 

 

 

(1)
Net proceeds in the nine months ended February 29, 2024 consisted of borrowings under short-term credit facilities assumed by Worthington Steel in conjunction with the Separation.

 

The cash flows related to discontinued operations have not been segregated. Accordingly, the consolidated statements of cash flows include the results from continuing and discontinued operations. See “Note B – Discontinued Operations” for a summarization of significant non-cash items related to discontinued operations.

 

See condensed notes to consolidated financial statements.

5


WORTHINGTON ENTERPRISES, INC.

CONDENSED Notes to Consolidated Financial Statements (UNAUDITED)

(In thousands, except 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.

Prior to the Separation, we owned controlling interests in the following four joint ventures: Spartan (52%); TWB (55%); Samuel (63%); and WSP (51%). These joint ventures were consolidated with the equity owned by the other joint venture members and shown as noncontrolling interests in our consolidated balance sheet at May 31, 2023, and their portions of net earnings and OCI are shown as net earnings from discontinued operations or comprehensive income attributable to noncontrolling interests in our consolidated statements of earnings and consolidated statements of comprehensive income, respectively. As of the Separation, Spartan, TWB, Samuel and WSP became joint ventures of Worthington Steel and are no longer reported in our current results. On February 1, 2024, we acquired an 80% controlling interest in Halo. See further discussion of Halo in “Note P – Acquisitions.”

 

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 D – 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 of the SEC. 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 three and nine months ended February 29, 2024 are not necessarily indicative of the results that may be expected for fiscal 2024. For further information, refer to the consolidated financial statements and notes thereto included in our 2023 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.

 

Revenue Recognition

 

We recognize all revenue at the point in time the performance obligation is satisfied and control of the product is transferred to the customer upon shipment or delivery. There were no contract assets or unbilled receivables at February 29, 2024. Unbilled receivables of $3,708 at May 31, 2023 were attributed to Worthington Steel and recorded in current assets of discontinued operations on the consolidated balance sheet.

 

The Separation of Worthington Steel

 

On December 1, 2023, we completed the previously announced Separation of our Steel Processing business segment into a separate public company in a transaction intended to qualify as tax free to our shareholders, which was accomplished via the distribution of 100% of the outstanding common shares of Worthington Steel to holders of record of the Company’s common shares as of the close of business on November 21, 2023. Each holder of record received one share of Worthington Steel for every one share of the Company’s common stock held on the Record Date for the Distribution. Worthington Steel is an independent public company trading under the symbol “WS” on the NYSE.

In connection with the Separation, we entered into several agreements with Worthington Steel, effective November 30, 2023, that, among other things, provide a framework for our relationship with Worthington Steel after the Separation, including a long-term Steel Supply Agreement, a Trademark License Agreement, and Transition Services Agreement.

 

6


Pursuant to the long-term Steel Supply 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 this agreement for the three and nine months ended February 29, 2024, totaled $20,274, of which $10,702 was payable at February 29, 2024.

 

We have incurred direct and incremental costs associated with the Separation, including approximately $30,986 and $15,593 during the nine months ended February 29, 2024, and February 28, 2023, respectively, of which $18,521 and $12,021 have been attributed to discontinued operations. These costs consisted primarily of third-party advisory fees and certain non-recurring employee-related costs and, to the extent not attributed to Worthington Steel, are presented as a separate component of operating expense in our consolidated statements of earnings and held at the corporate level.

 

Note B - Discontinued Operations

 

The following table summarizes the assets and liabilities from discontinued operations at May 31, 2023:

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

 

$

32,678

 

Receivables, less allowances of $2,581

 

 

468,024

 

Inventories:

 

 

 

Raw materials

 

 

172,580

 

Work in process

 

 

164,059

 

Finished products

 

 

76,830

 

Total inventories

 

 

413,469

 

Income taxes receivable

 

 

2,517

 

Prepaid expenses and other current assets

 

 

58,656

 

Assets held for sale

 

 

3,381

 

Total current assets

 

 

978,725

 

Investments in unconsolidated affiliates

 

 

114,550

 

Operating lease assets

 

 

75,281

 

Goodwill

 

 

78,642

 

Other intangible assets, net of accumulated amortization of $38,894

 

 

83,375

 

Other assets

 

 

10,984

 

 Property, plant and equipment:

 

 

 

 Land

 

 

37,577

 

 Buildings and improvements

 

 

169,155

 

 Machinery and equipment

 

 

860,077

 

 Construction in progress

 

 

20,386

 

 Total property, plant and equipment

 

 

1,087,195

 

 Less: accumulated depreciation

 

 

667,956

 

Total property, plant and equipment, net

 

 

419,239

 

Total assets

 

$

1,760,796

 

 

 

 

Liabilities

 

 

 

Current liabilities:

 

 

 

Accounts payable

 

$

402,177

 

Short-term borrowings

 

 

2,813

 

Accrued compensation, contributions to employee benefit plans and related taxes