WORTHINGTON ENTERPRISES INC
For the period ended Nov 30, 2024. Filed Jan 10, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Nov 30, 2024 · Filed Jan 10, 2025
WOR$60.50-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-08-31; filed 2024-10-07.
0000950170-24-113225
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-11-30; filed 2025-01-10.
0000950170-25-004028
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 87 previous paragraphs and 118 current paragraphs.
49 unchanged; 25 reworded; 34 added; 13 removed; 0 previous and 10 current paragraphs rearranged.
Tables are not compared: 12 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (34)
Current report
Due to the retirement of our former CEO, effective November 1, 2024, we accelerated the vesting of certain outstanding equity awards, resulting in a charge of $2.7 million reported in restructuring and other expense, net in our consolidated statement of earnings for the three and six months ended November 30, 2024. Refer to “Note D – Restructuring and Other Expense, Net” for additional information.
Current report
Key Indicators
Current report
U.S. Bureau of Labor Statistics
Current report
Non-residential Construction: The near-term outlook for U.S. non-residential construction remains mixed. The November 2024 ABI was 49.6, indicating that the share of firms that reported declining billings was essentially equal to the share of firms that reported increasing billings. Despite declining interest rates and softening inflation, firms remain hesitant to start new projects, especially as some developers wait until the full scope of President-elect Trump's legislative agenda comes into better focus. While up year-over-year, the Dodge Momentum Index decreased 2.3% from October 2024 representing a moderate pullback in the number of projects planned. Some of this pullback is attributed to a decline in planned data center projects as well as weaker activity in healthcare, recreational, and religious projects. Despite the recent pullback in activity, there is optimism in market conditions as the planning queue remains strong and potential further rate cuts in calendar year 2025 have the potential to spur additional activity.
Current report
Repair and Remodel / Tools: Spending on home improvement has declined year-over-year through November 2024 due to multi-decade lows in existing home sales, driven by elevated interest rates, rising prices and supply constraints. Despite the recent pullback in repair and remodel spend, the October 2024 LIRA Report by the Joint Center for Housing Studies at Harvard University forecasts 1.2 percent of annual growth in home renovation and maintenance expenditures, rising to $477.1 billion through the third quarter of 2025. This projected growth comes as the average 30-year fixed mortgage rate decreased to 6.81% at November 30, 2024, from 7.22% at November 30, 2023, with further rate reductions expected over the medium to long-term as the U.S. Federal Reserve works to balance growth while keeping prices stable. However, it remains uncertain how far rates need to fall to entice home buyers to enter the market or leave their existing, lower fixed-rate mortgages.
Current report
Outdoor Living / Celebrations: Spending in the outdoor living and celebrations end markets is predominantly influenced by macroeconomic conditions affecting the general consumer (i.e., consumer spending), which have been adversely impacted by continued economic uncertainty, elevated interest rates, and lower than average housing turnover. However, the recent headwinds created by the combination of higher prices and higher interest rates should abate as prices stabilize and rates fall from their recent peak levels. While inflation has consistently dropped from its peak of 9.1% in June 2022, overall consumer demand continues to be adversely affected by a general moderation in consumer spending on non-essential items, driven by the combination of tighter monetary policy and persistently higher prices – the November 2024 Core CPI increased 3.30% relative to November 2023. We expect our consumers, who are price sensitive, to maintain a cautious posture in the near term as a result.
Current report
Building Products – Net sales totaled $157.3 million in the second quarter of fiscal 2025, up $6.0 million, or 4.0%, over the second quarter of fiscal 2024, primarily driven by contributions from Ragasco, partially offset by lower overall volumes, excluding Ragasco, primarily in our heating and cooking business where our production of gas grill tanks was limited due to ongoing facility modernization efforts.
Current report
Gross profit for the second quarter of fiscal 2025 was $74.1 million, an increase of $10.8 million, or 17.1% from the second quarter of fiscal 2024, largely driven by improved spread and higher volume in Consumer Products and contributions from Ragasco in Building Products. Gross profit for the second quarter of fiscal 2024 was negatively impacted by a $3.1 million reserve related to the voluntary recall of Consumer Products’ Balloon Time® Mini helium tank.
Current report
SG&A
Current report
Restructuring and other expense, net in the second quarter of fiscal 2025 was driven primarily by the accelerated vesting of certain outstanding equity awards upon retirement of our former CEO.
Current report
Interest expense, net was up $0.5 million over the second quarter of fiscal 2024, driven primarily by lower interest income.
Current report
Equity income decreased $4.0 million from the second quarter of fiscal 2024 to $34.6 million, on lower contributions from ClarkDietrich and a $2.8 million gain in the second quarter of fiscal 2024 related to the divestiture of the Brazilian operations of Workhorse, partially offset by a $3.2 million increase in equity earnings from WAVE.
Current report
Consumer Products –Adjusted EBITDA from continuing operations was $15.5 million in the second quarter of fiscal 2025, an increase of $2.8 million over the second quarter of fiscal 2024, primarily driven by higher gross profit and margin improvement. Adjusted EBITDA in the current quarter includes incremental bad debt expense of $1.9 million related to a customer bankruptcy whereas the second quarter of fiscal 2024 included a $3.1 million reserve related to the recall of our Balloon Time® Mini helium tank initiated in November 2023.
Current report
Building Products –Adjusted EBITDA from continuing operations increased $1.4 million from the second quarter of fiscal 2024 as contributions from Ragasco and a favorable product mix, particularly in our heating and cooking business, where volume in our higher margin large format propane tank offering increased, was partially offset by lower volumes, excluding Ragasco. Equity income was down less than $1.0 million as lower earnings from ClarkDietrich more than offset the strong performance at WAVE.
Current report
Unallocated Corporate and Other –Adjusted EBITDA from continuing operations was down $3.1 million from the second quarter of fiscal 2024, primarily due to lower contributions of equity income driven by a $2.8 million gain in the second quarter of fiscal 2024 related to the divestiture of the Brazilian operations of Workhorse.
Current report
Six Months Year-to-Date - Fiscal 2025 Compared to Fiscal 2024
Current report
Net Sales and Volume
Current report
Consumer Products – Net sales totaled $234.3 million in the current year period, down slightly from the prior year period as unfavorable mix more than offset the impact of higher overall volume.
Current report
Building Products – Net sales totaled $297.0 million in the current year period, down $20.2 million, or 6.4%, from the prior year period, as contributions from Ragasco were more than offset by the combined impact of lower volume and an unfavorable product mix.
Current report
Gross Profit
Current report
Gross profit was $136.6 million for the current year period, an increase of $3.7 million, or 2.8%, over the prior year period, primarily due to improvements within Consumer Products, up $10.9 million, on the combined impact of higher volume and improvement in gross margin due, in part, to a $3.1 million reserve related to the voluntary recall of our Balloon Time® Mini helium tank in the prior year quarter, partially offset by lower contributions from Building Products, down $6.5 million on lower volume.
Current report
SG&A
Current report
Other Operating Items
Current report
Restructuring activity in the current year period was driven by $2.7 million of non-cash stock-based compensation expense related to the accelerated vesting of certain outstanding equity awards upon retirement of our former CEO and a $1.1 million true-up of the loss on deconsolidation of our former Sustainable Energy Solutions operating segment.
Current report
Loss on Extinguishment of Debt
Current report
Loss on extinguishment of debt of $1.5 million resulted from the July 28, 2023 early redemption of the 2026 Notes and consisted primarily of unamortized debt issuance costs and the remaining loss deferred in AOCI associated with an interest rate swap executed prior to the issuance of the 2026 Notes.
Current report
Interest Expense, Net
Current report
Interest expense, net of $1.5 million was flat compared to the prior year period as lower interest income was largely offset by lower average debt levels.
Current report
Equity Income
Current report
Equity income was down $14.0 million from the prior year period, driven by lower contributions from ClarkDietrich, which was down $12.0 million, as declining steel prices compressed margins, and lower contributions from Workhorse, which benefited from a $2.8 million gain in the prior year period related to the divestiture of its Brazilian operations.
Current report
Income Taxes
Current report
Income tax expense was $15.9 million in the current year period compared to $15.6 million in the prior year period. The increase was primarily driven by higher pre-tax earnings. Income tax expense in the current year period reflected an estimated annual ETR of 24.1% compared to 25.7% in the prior year period.
Current report
Adjusted EBITDA from Continuing Operations
Current report
Consumer Products –Adjusted EBITDA from continuing operations was $33.3 million in the current year period, an increase of $6.4 million over the prior year period, primarily due to the impact of higher volume and improved spread in gross margin. Adjusted EBITDA in the prior year period was negatively impacted by a $3.1 million reserve related to the recall of our Balloon Time® Mini helium tank.
Removed paragraphs (13)
Previous report
Selected statements contained in this MD&A constitute “forward-looking statements” as that term is used in the PSLRA. Such forward-looking statements are based, in whole or in part, on management’s beliefs, estimates, assumptions and currently available information. For a more detailed discussion of what constitutes a forward-looking statement and of some of the factors that could cause actual results to differ materially from such forward-looking statements, please refer to the “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this Form 10-Q and “Part I – Item 1A. – Risk Factors” of the 2024 Form 10-K.
Previous report
Non-residential Construction: The near-term outlook for U.S. non-residential construction is mixed. The ABI fell to 45.7 in August 2024 from 48.1 in August 2023, indicating a continued decline in demand for architectural services. This marks the nineteenth consecutive month of declining billings, reflecting ongoing challenges in converting project inquiries into actual contracts. However, the Dodge Momentum Index offers a more optimistic view, rising to 220.4 in August 2024 from 178.0 in August 2023, driven by gains in both commercial and institutional planning. This suggests that while current billings are down, there is a pipeline of projects that could bolster future construction activity. Overall, the sector faces headwinds but also holds potential for growth as economic conditions stabilize and interest rates are expected to decrease.
Previous report
Repair and Remodel: Spending on home improvement is expected to continue declining in the near term as existing home sales remain at multi-decade lows. Although the average 30-year fixed mortgage rate decreased to 6.35% at August 31, 2024, from 7.18% at August 31, 2023, this decline isn’t significant enough to entice most buyers to enter the market or leave their existing lower fixed rate mortgages. Despite these challenges, the long-term outlook remains strong as interest rates are expected to decline further and the aging housing stock will drive the need for renovations. As economic conditions stabilize, we expect homeowners to access their record levels of equity and drive spending in the long-term.
Previous report
Tools: Spending in the tools end market is predominantly influenced by macroeconomic conditions. Recently, the market has experienced positive tailwinds as inflation has eased, with the annual inflation rate dropping to 2.5% in August 2024, a significant decrease from its peak in 2022. Despite moderating inflation, overall demand in this sector continued to be adversely affected by a general moderation in consumer spending on non-essential items, resulting in lower overall demand from both DIY and professional customers. Notwithstanding these short-term headwinds, we believe that the outlook remains positive as we continue to grow market share with our well-known brands and innovation of new products.
Previous report
Outdoor Living: Participation in outdoor recreation is beginning to normalize to pre-pandemic levels. This trend is evident in the number of new U.S. camping households, a key metric that measures the influx of first-time campers. After peaking in 2020, driven by the desire for safe, socially-distanced activities during the height of the pandemic, the number has steadily declined. However, the long-term fundamentals in the outdoor living category remain positive, driven by diverse participation across different age groups, socio-economic classes, and geographic regions.
Previous report
Celebrations: The celebrations end market has shown a gradual recovery, propelled by the increasing demand for personalized and unique event experiences. Consumer income and the debt-to-income ratio have gradually recovered, approaching levels observed prior to COVID-19, alongside moderating inflation. Despite these positive indicators, inflation and interest rates continue to influence disposable income and spending power. It is anticipated that consumer spending on non-essential items will remain constrained, primarily due to a larger share of income being allocated towards essential purchases and mortgage payments.
Previous report
Consumer Products – Net sales totaled $117.6 million in the first quarter of fiscal 2025, up slightly from the first quarter of fiscal 2024 on marginally higher volume.
Previous report
Gross profit was $62.5 million for the first quarter of fiscal 2025, a decrease of $7.1 million, or 10.2% from the first quarter of fiscal 2024, driven by the reduction in net sales at Building Products.
Previous report
Selling, General and Administrative Expense
Previous report
Restructuring expense in the first quarter of fiscal 2025 was driven by a $0.7 million true-up of our accrual for final transaction costs associated with the deconsolidation of our former Sustainable Energy Solutions operating segment, as well as severance costs.
Previous report
Interest expense, net was down $0.6 million from the prior year quarter, driven primarily by lower average debt levels as a result of the redemption of the 2024 Notes and 2026 Notes in December 2024.
Previous report
Equity income decreased $9.9 million from the first quarter of fiscal 2024, driven by lower contributions from ClarkDietrich, which was down $8.0 million, as declining steel prices compressed margins, and equity losses at the Sustainable Energy Solutions joint venture in the first quarter of fiscal 2025.
Previous report
Consumer Products –Adjusted EBITDA from continuing operations was $17.8 million in the first quarter of fiscal 2025, an increase of $3.5 million over the first quarter of fiscal 2024, on improved gross margin driven by lower material costs.
Reworded paragraphs (25)
Previous wording
On June 3, 2024, we acquired Ragasco, a leading global manufacturer of composite propane cylinders based in Norway. The purchase price included cash consideration of approximately $102.2 million, with a future earnout opportunity of up to $14.0 million. The results of Ragasco are included within the Building Products operating segment for periods subsequent to the acquisition date. See “Note N – Acquisitions” for additional information.
Current wording
On June 3, 2024, we acquired Ragasco, a leading global manufacturer of composite propane cylinders based in Norway. The purchase price included cash consideration of approximately $101.4 million, with a future earnout opportunity of up to $14.0 million. The results of Ragasco are included within the Building Products operating segment for periods subsequent to the acquisition date. See “Note N – Acquisitions” for additional information.
Previous wording
During the first quarter of fiscal 2025, we repurchased 150,000 common shares under existing repurchase authorizations for $6.8 million, at an average purchase price of $45.35.
Current wording
During the six months ended November 30, 2024, we repurchased a total of 350,000 of our common shares for $14.9 million, at an average purchase price of $42.52.
Previous wording
We also actively monitor other publicly available macroeconomic trends that provide insight into the activity in our end markets. These trends include, but are not limited to, the ABI, the Dodge Momentum Index, the HMI, steel prices, retail sales, state and local government spending, interest rate environment and inflation metrics. Current macro-economic trends within our end markets are described in additional detail below, as well as selected key indicators for the periods presented.
Current wording
We actively monitor publicly available macroeconomic trends that provide insight into the activity in our end markets and raw material pricing trends that provide insight into our cost of goods sold. These trends include, but are not limited to, the ABI, the Dodge Momentum Index, the HMI, hot-rolled and cold-rolled steel prices, retail sales, state and local government spending, interest rate environment and inflation metrics. Selected key indicators are presented below.
Previous wording
We offer a wide range of products and services to a diverse customer base across various end markets. These markets include residential construction, non-residential construction, and repair and remodeling, which drive demand in our Building Products operating segment, including our unconsolidated joint ventures, WAVE and ClarkDietrich. Additionally, tools, outdoor living, and celebrations drive demand in our Consumer Products operating segment, including our consolidated joint venture, Halo. Given the extensive range of products and services we provide, our competitors vary by industry, product type, service type, program size, and geography. Competition is primarily based on price, product quality, brand recognition, product innovation, and customer service. Sales to one customer in the Consumer Products operating segment accounted for 13% of our consolidated net sales in the first quarter of fiscal 2025. Trends and factors impacting each of our end markets are described in additional detail below.
Current wording
We offer a wide range of products and services to a diverse customer base across various end markets, primarily in the U.S., including the residential and non-residential construction markets, repair and remodeling, which drive demand for our building products offerings, as well as the tools, outdoor living, and celebrations end markets, which drive demand for our consumer products offerings. Given the range of products and services we provide, our competitors vary by industry, product type, service type, program size, and geography. Competition is primarily based on price, product quality, brand recognition, product innovation, and customer service. Sales to one customer in the Consumer Products operating segment accounted for 12.9% of our consolidated net sales in the second quarter of fiscal 2025.
Previous wording
Residential Construction: The near-term outlook for U.S. residential construction spending remains cautiously optimistic, with spending increasing by approximately 7.4% between August 2024 and August 2023. While construction data continues to show positive year-over-year growth, housing starts and authorized permits remain flat, reflecting a cautious approach by both builders and potential home buyers. The HMI also fell to 39.0 in August 2024, indicating persistent challenges such as high mortgage rates and elevated home prices. Builders continue to grapple with high interest rates for construction loans and ongoing labor shortages, which are impacting their ability to meet demand. Additionally, rising material costs add further pressure on the end market. However, we are optimistic that recent interest rate cuts could spur new construction activity in the near term and we remain well-positioned to meet the anticipated demand. More broadly, the solid underlying fundamentals of the housing market, including favorable demographics and a chronic undersupply of homes, provide strong support for this end market in the long-term.
Current wording
Residential Construction: The near-term outlook for U.S. residential construction spend remains cautiously optimistic, growing a modest 3.0% year-over-year in November 2024. The year-over-year growth, however, continues to follow the trend of the overall inflationary rate rather than organic growth, as housing starts and authorized permits remain flat indicating that both builders and potential buyers remain cautious in their spending approach. The HMI was up 12 points year-over-year in November 2024 to 46.0, highlighting resilience in this end market, despite persistent macro-economic challenges, including high mortgage rates, elevated home prices, and increasing material and labor costs. Although there are short-term challenges posed by higher interest rates and inflation that have impacted demand and affordability for consumers, we are optimistic that the underlying fundamentals of the U.S. residential housing market remains sound due to favorable demographics and a chronic undersupply of homes and we remain well-positioned to take advantage of these positive long-term trends.
Previous wording
U.S. GDP growth rate trends typically reflect the strength of demand and, in many cases, pricing for our products. A year-over-year increase in U.S. GDP growth rates generally signals a stronger economy and higher demand and pricing for our products. Conversely, declining U.S. GDP growth rates usually indicate a weaker economy and reduced demand and pricing our products. Fluctuations in U.S. GDP growth rates can affect conversion costs related to production and SG&A.
Current wording
GDP growth rate trends are generally indicative of the underlying demand trends and, in many cases, pricing for our products. Increasing. GDP growth rates, which are an indication of a strengthening economy, typically drive higher demand for our products. Conversely, declining GDP growth rates usually indicate a weaker economy potentially reducing demand for many of our products. Fluctuations in GDP growth rates can affect conversion costs related to production and SG&A.
Previous wording
The macroeconomic and geopolitical outlook has been complex and evolving. Although the U.S. economy continues to grow at a modest pace, prolonged inflationary pressures continue to negatively impact the discretionary spending of many of our customers. The recent 0.50% rate cut by the Federal Reserve is expected to alleviate some of this pressure in the near-term as borrowing becomes cheaper, stimulating spending in our residential construction, non-residential construction, and repair and remodel end markets. Besides inflation, consumer spending habits for our products are influenced by prevailing global economic conditions, the costs of basic necessities and other goods, employment levels, salaries and wage rates, and prevailing interest rates. Additionally, consumer purchasing patterns are generally affected by consumers’ disposable income, credit availability, and debt levels.
Current wording
The macroeconomic and geopolitical outlook remains complex and evolving. Although the U.S. economy continues to grow at a modest pace, prolonged inflationary pressures have negatively impacted discretionary spending, reducing demand for certain of our products and services. Recent rate cuts by the U.S. Federal Reserve, including 0.50% in September 2024 and an additional 0.25% in November 2024, are expected to alleviate some of this pressure in the near-term by reducing borrowing costs and stimulating spending, particularly in the U.S. residential and non-residential construction end markets. However, the extent and magnitude of future rate cuts will be predicated on price stability and the Federal Reserve’s ability to lower the core CPI, currently at 3.30%, down to its target of 2%. In addition to inflation, consumer spending habits and demand for our products and services are influenced by prevailing global economic conditions, the costs of basic necessities and other goods, employment levels, salaries and wage rates, and prevailing interest rates. Additionally, consumer purchasing patterns are generally affected by consumers’ disposable income, credit availability, and debt levels.
Previous wording
Historically, sales tend to be stronger in the third and fourth quarters of our fiscal year for our Consumer Products operating segment when our facilities perform at seasonal peaks, matching consumer demand. Sales in our Building Products operating segment are generally stronger in the first and fourth quarters of our fiscal year due to weather conditions, customer business cycles, and the timing of renovation and new construction projects. Demand in our Building Products operating segment during the first quarter of fiscal 2025 was not reflective of the cyclical strength we typically see in in the first quarter of our fiscal year due to continued destocking at certain distributors as well as unfavorable weather patterns.
Current wording
Historically, sales tend to be stronger in the third and fourth quarters of our fiscal year for our Consumer Products businesses when our facilities perform at seasonal peaks, matching consumer demand. Sales in our Building Products businesses are generally stronger in the first and fourth quarters of our fiscal year due to weather conditions, customer business cycles, and the timing of renovation and new construction projects.
Previous wording
First Quarter – Fiscal 2025 Compared to Fiscal 2024
Current wording
Second Quarter – Fiscal 2025 Compared to Fiscal 2024
Previous wording
A reconciliation of each of these non-GAAP financial measures to their most comparable GAAP financial measure is provided in the “Use of Non-GAAP Measures and Definitions” section.
Current wording
A reconciliation of each of these non-GAAP financial measures to their most comparable GAAP financial measure is provided in the “Use of Non-GAAP Financial Measures and Definitions” section.
Previous wording
The following table provides volume by operating segment for the periods presented (in units):
Current wording
The following table provides volume by operating segment for the periods presented:
Previous wording
Building Products – Net sales totaled $139.7 million in the first quarter of fiscal 2025, down $26.2 million, or 15.8%, from the first quarter of fiscal 2024, primarily due to lower volume and an unfavorable shift in product mix, which more than offset contributions from the acquisition of Ragasco in June 2024.
Current wording
Consumer Products – Net sales totaled $116.7 million in the second quarter of fiscal 2025, down $2.7 million, or 2.3% from the second quarter of fiscal 2024 primarily due to an unfavorable shift in product mix, partially offset by an increase in volume.
Previous wording
Other - Net sales in the first quarter of fiscal 2024 are related to our former Sustainable Energy Solutions operating segment, which was deconsolidated in May 2024 when we sold a 51% interest in the business. In periods subsequent to the sales transaction, our 49% interest is accounted for under the equity method.
Current wording
Other - Net sales in the second quarter of fiscal 2024 are related to our former Sustainable Energy Solutions operating segment, which was deconsolidated on May 29, 2024, when we sold a 51% interest in the business. In periods subsequent to the sale transaction, our retained 49% interest is accounted for under the equity method as discussed in “Note C – Investments in Unconsolidated Affiliates.”
Previous wording
SG&A decreased $8.5 million, or 11.4%, from the first quarter of fiscal 2024, primarily driven by the elimination of certain corporate overhead costs that no longer exist post-Separation, but have been presented within net earnings from continuing operations in our consolidated statements of earnings.
Current wording
SG&A decreased $2.7 million, or 3.8%, from the second quarter of fiscal 2024, primarily driven by the elimination of certain corporate overhead costs that no longer exist post-Separation, but have been presented within net earnings from continuing operations in our consolidated statements of earnings, partially offset by a $2.8 million increase due to the acquisition of Ragasco on June 3, 2024.
Previous wording
Income tax expense was $6.8 million in the first quarter of fiscal 2025 compared to income tax expense of $9.0 million in the first quarter of fiscal 2024. The decrease was primarily driven by lower pre-tax earnings. Income tax expense in the first quarter of fiscal 2025 reflected an estimated annual effective rate of 24.5% compared to 25.1% in the first quarter of fiscal 2024.
Current wording
Income tax expense was $9.1 million in the second quarter of fiscal 2025 compared to $6.6 million in the second quarter of fiscal 2024. The increase was driven by higher pre-tax earnings. Income tax expense in the second quarter of fiscal 2025 reflected an estimated annual ETR of 24.1% compared to 25.7% in the second quarter of fiscal 2024.
Previous wording
The following table provides a summary of adjusted EBITDA from continuing operations by reportable segment, a non-GAAP financial measure, along with the respective percentage of the total of each reportable segment. See the “Use of Non-GAAP Financial Measures” section preceding Part I, Item 1 of this Form 10-Q for additional information regarding our use of non-GAAP financial measures. A reconciliation from earnings before income taxes to adjusted EBITDA from continuing operations is provided in “Note M – Segment Operations.”
Current wording
The following table provides a summary of adjusted EBITDA from continuing operations by reportable segment, a non-GAAP financial measure, along with the respective percentage of the total of each reportable segment. See the “Use of Non-GAAP Financial Measures and Definitions” section preceding Part I, Item 1 of this Form 10-Q for additional information regarding our use of non-GAAP financial measures. A reconciliation from earnings before income taxes to adjusted EBITDA from continuing operations is provided in “Note M – Segment Operations.”
Previous wording
Building Products –Adjusted EBITDA from continuing operations decreased $20.0 million from the first quarter of fiscal 2024, on lower volume, particularly in our heating and cooking products, and unfavorable mix combined with lower equity earnings at ClarkDietrich. Adjusted EBITDA from continuing operations in the first quarter of fiscal 2025 included $1.9 million of incremental expense related to the Ragasco acquisition resulting primarily from the step up of inventory to fair value.
Current wording
Building Products –Adjusted EBITDA from continuing operations decreased $18.5 million from the prior year period, on lower volume, particularly in our gas grill tanks, and lower contributions from ClarkDietrich. Adjusted EBITDA from continuing operations in the current year period included $1.9 million of incremental expense related to the Ragasco acquisition resulting primarily from the step up of inventory to fair value.
Previous wording
Unallocated Corporate and Other –Adjusted EBITDA from continuing operations was down $1.0 million from the first quarter of fiscal 2024, driven by higher SG&A partially offset by lower losses due to the deconsolidation of our former Sustainable Energy Solutions operating segment in May 2024.
Current wording
Unallocated Corporate and Other –Adjusted EBITDA from continuing operations was down $4.2 million from the prior year period, driven by lower equity earnings from Workhorse, which benefited from a $2.8 million gain related to the divestiture of its Brazilian operations in the prior year period, and higher SG&A, partially offset by lower losses due to the deconsolidation of our former Sustainable Energy Solutions operating segment in May 2024.
Previous wording
During the three months ended August 31, 2024, we generated $41.1 million of cash from operating activities, invested $9.6 million in property, plant and equipment, spent $88.9 million to acquire Ragasco, and received $11.8 million for the sale of 51% of our former Sustainable Energy Solutions operating segment. Additionally, we paid $6.8 million to repurchase 150,000 common shares and paid dividends of $8.1 million on the common shares in the first quarter of fiscal 2025.
Current wording
During the six months ended November 30, 2024, we generated $90.2 million of cash from operating activities, invested $24.8 million in property, plant and equipment, spent $88.2 million to acquire Ragasco, and received $11.4 million for the sale of 51% of our former Sustainable Energy Solutions operating segment. Additionally, we paid $14.9 million to repurchase 350,000 common shares and paid dividends of $17.1 million on the common shares during the six months ended November 30, 2024.
Previous wording
Net cash provided by operating activities was $41.1 million during the first quarter of fiscal 2025, down from $59.7 million in the first quarter of fiscal 2024. The decrease was primarily due to lower net earnings from core operations and a $25.7 million decrease in dividends from unconsolidated joint ventures.
Current wording
Net cash provided by operating activities was $90.2 million during the six months ended November 30, 2024, down from $194.7 million from the prior year period. The decrease was primarily due to lower net earnings in the current year period driven by the Separation and a $26.2 million decrease in dividends from unconsolidated joint ventures.
Previous wording
Net cash used by investing activities was $88.7 million during the first quarter of fiscal 2025, compared to $44.3 million during the first quarter of fiscal 2024. Net cash used by investing activities in the first quarter of fiscal 2025 was driven primarily by the acquisition of Ragasco and capital expenditures partially offset by proceeds from the sale of 51% of the nominal share capital of our former Sustainable Energy Solutions operating segment on May 29, 2024.
Current wording
Net cash used by investing activities was $101.6 million during the six months ended November 30, 2024 compared to $97.8 million from the prior year period. Net cash used by investing activities during the six months ended November 30, 2024 was driven primarily by the acquisition of Ragasco and capital expenditures partially offset by proceeds from the sale of 51% of the nominal share capital of our former Sustainable Energy Solutions operating segment on May 29, 2024.
Previous wording
Net cash used by financing activities was $18.1 million during the first quarter of fiscal 2025, compared to $269.3 million in the first quarter of fiscal 2024. During the first quarter of fiscal 2025, we paid $6.8 million to repurchase 150,000 common shares and paid dividends of $8.1 million on the common shares. During the first quarter of fiscal 2024, we paid dividends of $15.7 million on the common shares and repaid $243.8 million of long-term debt associated with the redemption of the 2026 Notes.
Current wording
Net cash used by financing activities was $39.0 million during the six months ended November 30, 2024, compared to $120.9 million in the prior year period. During the six months ended November 30, 2024, we paid $14.9 million to repurchase 350,000 common shares and paid dividends of $17.1 million on the common shares. During the six months ended November 30, 2023, we received $172.2 million in net proceeds of short-term borrowings and repaid $243.8 million of long-term debt associated with the redemption of the 2026 Notes.
Previous wording
Common shares – On September 24, 2024, the Board declared a quarterly dividend of $0.17 per common share payable on December 27, 2024, to shareholders of record at the close of business on December 13, 2024. During the first quarter of fiscal 2024, we declared dividends totaling $0.32 per common share under our pre-Separation capital structure.
Current wording
Common shares – On December 24, 2024, the Board declared a quarterly dividend of $0.17 per common share payable on March 28, 2025, to shareholders of record at the close of business on March 14, 2025. During the second quarter of fiscal 2024, we declared dividends totaling $0.32 per common share under our pre-Separation capital structure.
Previous wording
On March 24, 2021, the Board authorized the repurchase of up to an additional 5,618,464 common shares, increasing the total number of common shares then authorized for repurchase to 10,000,000. As of August 31, 2024, 5,915,000 common shares remained available for repurchase under these two authorizations.
Current wording
On March 24, 2021, the Board authorized the repurchase of up to an additional 5,618,464 common shares, increasing the total number of common shares then authorized for repurchase to 10,000,000. As of November 30, 2024, 5,715,000 common shares remained available for repurchase under these two authorizations.
Previous wording
The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. We continually evaluate our estimates, including those related to our valuation of receivables, inventories, intangible assets, accrued liabilities, income and other tax accruals, contingencies and litigation, and business combinations. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. These results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Critical accounting policies are defined as those that reflect our significant judgments and uncertainties that could potentially result in materially different results under different assumptions and conditions. Although actual results historically have not deviated significantly from those determined using our estimates, our consolidated financial position or results of operations could be materially different if we were to report under different conditions or to use different assumptions in the application of such policies. Our critical accounting policies have not significantly changed from those discussed in “Part II – Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” of the 2024 Form 10-K.
Current wording
The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements and related disclosure, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to use judgment and make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. We continually evaluate our estimates, including those related to our valuation of receivables, inventories, intangible assets, accrued liabilities, income and other tax accruals, contingencies and litigation, and business combinations. We base our estimates on historical experience, current trends and other factors that we believe to be relevant and reasonable under the circumstances at the time the estimate was made. These results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Critical accounting policies are defined as those that reflect our significant judgments and uncertainties that could potentially result in materially different results under different assumptions and conditions. Although actual results historically have not deviated significantly from those determined using our estimates, our consolidated financial position or results of operations could be materially different if we were to report under different conditions or to use different assumptions in the application of such policies. We believe that our estimates, assumptions, and judgments are reasonable in that they were based on information available when the estimates, assumptions and judgments were made. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from those implied by our assumptions and estimates. Our critical accounting policies have not significantly changed from those discussed in “Part II – Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” of the 2024 Form 10-K.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
The following discussion provides a review of results for the six months ended November 30, 2024 and November 30, 2023:
Current report — wording carried from elsewhere
A reconciliation of each of these non-GAAP financial measures to their most comparable GAAP financial measure is provided in the “Use of Non-GAAP Financial Measures and Definitions” section.
Current report — wording carried from elsewhere
The following table provides a breakdown of our consolidated net sales by operating segment for the periods indicated:
Current report — wording carried from elsewhere
The following table provides volume by operating segment for the periods presented:
Current report — wording carried from elsewhere
Other - Net sales in the prior year period are related to our former Sustainable Energy Solutions operating segment, which was deconsolidated on May 29, 2024, when we sold a 51% interest in the business. In periods subsequent to the sales transaction, our 49% retained interest is accounted for under the equity method as discussed in “Note C – Investments in Unconsolidated Affiliates.”
Current report — wording carried from elsewhere
SG&A decreased $11.1 million, or 7.6%, from the prior year period, largely driven by the elimination of certain corporate overhead costs that no longer exist post-Separation, but have been presented within net earnings from continuing operations in our consolidated statements of earnings, partially offset by a $5.4 million increase due to the acquisition of Ragasco on June 3, 2024.
Current report — wording carried from elsewhere
Separation costs in the prior year quarter reflect direct and incremental costs incurred in connection with the Separation.
Current report — wording carried from elsewhere
Equity income contributed by WAVE and ClarkDietrich is reported within our Building Products segment.
Current report — wording carried from elsewhere
Includes our share of equity earnings of the Workhorse and the Sustainable Energy Solutions joint ventures.
Current report — wording carried from elsewhere
The following table provides a summary of adjusted EBITDA from continuing operations by reportable segment, a non-GAAP financial measure, along with the respective percentage of the total of each reportable segment. See the “Use of Non-GAAP Financial Measures and Definitions” section preceding Part I, Item 1 of this Form 10-Q for additional information regarding our use of non-GAAP financial measures. A reconciliation from earnings before income taxes to adjusted EBITDA from continuing operations is provided in “Note M – Segment Operations.”