WORTHINGTON ENTERPRISES, INC.

(In thousands, except per common share amounts)

NON-GAAP FINANCIAL MEASURES. This Form 10-K includes certain financial measures that are not calculated and presented in accordance with GAAP. Non-GAAP financial measures typically exclude items that management believes are not reflective of, and thus should not be included when evaluating the performance of our ongoing operations. Management uses these non-GAAP financial measures to evaluate ongoing performance, engage in financial and operational planning, and determine incentive compensation. Management believes these non-GAAP financial measures provide useful supplemental information regarding the performance of our ongoing operations and should not be considered as an alternative to the comparable GAAP financial measure. Additionally, management believes these non-GAAP financial measures allow for meaningful comparisons and analysis of trends in our business and enables investors to evaluate our operations and future prospects in the same manner as management.

The following provides an explanation of each non-GAAP financial measure presented in this Form 10-K:

Adjusted operating income (loss)is defined as operating income (loss) excluding the items listed below, to the extent naturally included in operating income (loss).

Adjusted net earnings from continuing operations is defined as net earnings from continuing operations attributable to controlling interest (“net earnings from continuing operations”) excluding the after-tax effect of the excluded items outlined below.

Adjusted earnings per diluted share from continuing operations (“Adjusted EPS from continuing operations - diluted”) is defined as adjusted net earnings from continuing operations divided by diluted weighted-average shares outstanding.

Adjusted EBITDA from continuing operationsis the measure by which we evaluate segment performance and our overall profitability. EBITDA is defined as earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA from continuing operations excludes additional items including, but not limited to, those listed below, as well as other items that management believes are not reflective of, and thus should not be included when evaluating the performance of our ongoing operations. Adjusted EBITDA from continuing operations also excludes stock-based compensation due to its non-cash nature, which is consistent with how management assesses operating performance and determines incentive compensation. At the segment level, adjusted EBITDA from continuing operations includes expense allocations for centralized corporate back-office functions that exist to support the day-to-day business operations. Public company and other governance costs are held at the corporate level within the unallocated corporate and other category.

Adjusted EBITDA from continuing operations margin is calculated by dividing adjusted EBITDA from continuing operations by net sales.

EXCLUSIONS FROM NON-GAAP FINANCIAL MEASURES

Management believes it is useful to exclude the following items from its non-GAAP financial measures for its own and investors’ assessment of the business for the reasons identified below. Additionally, management may exclude other items from non-GAAP financial measures that do not occur in the ordinary course of our ongoing business operations and note them in the reconciliation from net earnings from continuing operations to the non-GAAP financial measure adjusted EBITDA from continuing operations.

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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 management believes facilitates the comparison of historical, current and forecasted financial results.

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Restructuring activities consists of established programs that are intended to fundamentally change our operations, and as such are excluded from our non-GAAP financial measures. Our restructuring programs may include closing or consolidating production facilities or moving manufacturing of a product to another location, realignment of the management structure of a business unit in response to changing market conditions or general rationalization of headcount. Our restructuring activities generally give rise to employee-related costs, such as severance pay, and facility-related costs, such as exit costs and gains or losses on asset disposals but may include other incremental costs associated with our restructuring activities. Restructuring and other expense, net, may also include other nonrecurring items included in operating income but incremental to our normal business activities. These items are excluded because they are not part of the ongoing operations of our underlying business.

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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.

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Non-cash charges in miscellaneous expense are excluded due to 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.

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Loss on 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.

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Corporate costs eliminated at Separation reflect certain corporate overhead costs that no longer exist post-Separation. These costs were included in continuing operations as they represent general corporate overhead that was historically allocated to our former steel processing business but did not meet the requirements to be presented as discontinued operations.

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Pension settlement charges are excluded due to 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.

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One-time tax effects of Separation are charges to income tax expense primarily related to non-deductible transaction costs. They are excluded because they are one-time in nature and not expected to occur in periods following the Separation.

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Non-recurring (gain) loss in equity income is excluded because it does not occur in the normal course of business and is inherently unpredictable in timing and amount.

Consolidated Results – Selected Non-GAAP Adjusted Results

The following provides a reconciliation of these non-GAAP financial measures from their most comparable GAAP measure for fiscal 2025, fiscal 2024, and fiscal 2023.

(1)

Excludes the impact of noncontrolling interest.

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Consolidated Results - Adjusted EBITDA from Continuing Operations

(1)

EBIT and adjusted EBIT are non-GAAP financial measures. However, these measures are not used by management to evaluate our performance, engage in financial and operational planning, or to determine incentive compensation. Instead, they are included as subtotals in the reconciliation of earnings before income taxes from continuing operations to adjusted EBITDA from continuing operations, which is a non-GAAP financial measure used by management.

(2)

Significant pre-tax impairment and restructuring charges include the following:

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Impairment of goodwill and long-lived assets: We recognized non-cash charges of $50,050 in fiscal 2025 related to the write-down of intangible assets associated with GTI and $32,203 in fiscal 2024 due to the deconsolidation of our former Sustainable Energy Solutions operating segment.

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Restructuring and other expense, net: We recognized a charge of $4,536 in fiscal 2025 related to an increase in the fair value of the contingent liability associated with the Ragasco earnout arrangement and a loss of $30,502 in fiscal 2024 due to the deconsolidation of our former Sustainable Energy Solutions operating segment during the fourth quarter of fiscal 2024.

(3)

Reflects the following non-cash charges in miscellaneous expense:

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Pre-tax charges of $5,000 and $11,077 during fiscal 2025 and fiscal 2024, respectively, to write down an investment that was determined to be other than temporarily impaired.

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Pre-tax charges of $8,010 and $4,774 from separate pension lift-out transaction completed in fiscal 2024 and fiscal 2023, respectively, to transfer the pension benefit obligation under the Gerstenslager Plan to third-party insurance companies.

(4)

Includes the following activity within equity income:

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A non-cash impairment charge of $3,387 at the Sustainable Energy Solutions joint venture during fiscal 2025.

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A net gain of $2,780 associated with the divestiture of the Brazilian operations of Workhorse during fiscal 2024 and the settlement of certain participant balances within the pension plan maintained by WAVE.

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A pre-tax loss of $16,059 related to the sale of our 50% noncontrolling equity investment in ArtiFlex during fiscal 2023.

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A net gain of $2,063 related to a sale-leaseback transaction during fiscal 2023.

(5)

Excludes $2,655 of stock-based compensation reported in restructuring and other expense, net in our consolidated statement of earnings during fiscal 2025 related to the accelerated vesting of certain outstanding equity awards upon the retirement of our former CEO effective November 1, 2024.

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