WORTHINGTON ENTERPRISES, INC.

(In thousands, except common share and 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.

We own an 80% controlling interest in Halo, which was acquired on February 1, 2024. Halo is consolidated with the equity owned by the other joint venture members shown as “noncontrolling interests” in our consolidated balance sheets, and the other joint venture members’ portions of net earnings and OCI are shown as net earnings or comprehensive income attributable to noncontrolling interests in our consolidated statements of earnings and consolidated statements of comprehensive income, respectively.

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 B – 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 first quarter of fiscal 2026 are not necessarily indicative of the results that may be expected for the full fiscal year. For further information, refer to the consolidated financial statements and notes thereto included in the 2025 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.

Relationship with Worthington Steel

We are party to several agreements with Worthington Steel that govern our ongoing relationship following the Separation, including a Trademark License Agreement, both a short and long-term Transition Services Agreement, and a Steel Supply and Services Agreement. Transactions governed by these agreements are considered related party transactions.

Pursuant to the Steel Supply and Services 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 the Steel Supply and Services Agreement totaled $37,036 and $28,431 for thethree months ended August 31, 2025 and August 31, 2024, respectively. Accounts payable related to these purchases were $10,598 and $9,099 as of August 31, 2025 and May 31, 2025, respectively.

Activity under all other agreements between Worthington Steel and us related to the Separation was immaterial for the periods presented.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This standard requires enhanced income tax disclosures, including more detailed information in the effective tax rate reconciliation and disaggregated disclosures of income taxes paid by jurisdiction. The standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. While adoption of this ASU is not expected to have a material effect on our consolidated financial condition, results of operations, or cash flows, it will result in expanded income tax disclosures beginning in our 2026 Form 10-K.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures,” which expands disclosure of significant costs and expenses. This ASU requires expanded disclosures of significant costs and expenditures within cost of goods sold and SG&A, including amounts of inventory purchased, employee compensation, depreciation, amortization and selling expenses. This ASU also requires expanded qualitative disclosures, including a description of selling expenses and a description of non-disaggregated expenses. This standard is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We expect this ASU to only impact our disclosures with no impact to our result of operations, cash flows and financial condition.

Note B – Investments in Unconsolidated Affiliates

Investments in joint ventures that we do not control, either through majority ownership or otherwise, are unconsolidated and accounted for using the equity method. At August 31, 2025, we held investments in the following unconsolidated joint ventures: ClarkDietrich (25%); Sustainable Energy Solutions (49%); WAVE (50%); and Workhorse (20%).

We received distributions from unconsolidated affiliates totaling $36,476 during the three months ended August 31, 2025. We have received cumulative distributions from WAVE in excess of our investment balance, which resulted in a negative asset balance of $103,166 and $103,767 at August 31, 2025 and May 31, 2025, respectively. In accordance with the applicable accounting guidance, we have reclassified the negative balances to distributions in excess of investment in unconsolidated affiliate within our consolidated balance sheets. We will continue to record our equity in the net income of WAVE as a debit to the investment account, and if it becomes positive, it will again be shown as an asset on our consolidated balance sheets. If it becomes probable that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will immediately recognize any balance classified as a liability as income.

We use the cumulative earnings approach to determine the cash flow presentation of distributions from our unconsolidated joint ventures. Distributions received are included in our consolidated statements of cash flows as operating activities unless the cumulative distributions exceed our share of the cumulative equity in the net earnings of the joint venture. In such cases, the excess distributions are considered returns of investment and are classified as investing activities in our consolidated statements of cash flows.

WAVE and ClarkDietrich are included within the Building Products segment, while the Sustainable Energy Solutions and Workhorse joint ventures are reported within Other. The following tables present summarized financial information for our unconsolidated affiliates forthree months ended August 31, 2025 and 2024:

Note C – Restructuring and Other Expense, Net

Restructuring activities consist of established programs that are intended to fundamentally change our operations. 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 operating items associated with our ongoing businesses that are nonrecurring in nature but incremental to our normal business activities.

A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other expense, net financial statement caption in our consolidated statement of earnings for thethree months ended August 31, 2025, is summarized below:

The total liability associated with our restructuring activities as of August 31, 2025 is expected to be paid in the next 12 months.

Note D – Contingent Liabilities and Commitments

Legal Proceedings

We are defendants in certain legal actions. In the opinion of management, the outcome of these actions, which is not clearly determinable at the present time, would not significantly affect our consolidated financial position or future results of operations. We also believe that environmental issues will not have a material effect on our capital expenditures, consolidated financial position or future results of operations.

Note E – Guarantees

We do not have guarantees that we believe are reasonably likely to have a material current or future effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

At August 31, 2025, we also had in place$9,204 of outstanding stand-by letters of credit issued to third-party service providers. The fair value of these guaranteed instruments, based on premiums paid, was not material andno amounts were drawn against them at August 31, 2025.

Note F – Debt

Our multi-year revolving Credit Facility is scheduled to mature on September 27, 2028. Borrowings under the Credit Facility have maturities of up toone year. We have the option to borrow at rates equal to an applicable margin over the overnight bank funding rate, the prime rate of PNC Bank, National Association or the adjusted daily simple SOFR. The applicable margin is determined by our total leverage ratio. There wereno borro wings outstanding under the Credit Facility at August 31, 2025 or May 31, 2025, leaving $500,000 available for use.

Note G – Other Comprehensive Income (Loss)

The following table summarizes the tax effects on each component of OCI for the periods presented:

Note H – Changes in Equity

The following tables summarize the changes in equity by component and in total for the periods presented:

The following table summarizes the changes in AOCI for the periods presented:

(1)

The statement of earnings classification of amounts reclassified to net income for cash flow hedges is disclosed in “Note N – Derivative Financial Instruments and Hedging Activities.”

On March 24, 2021, the Board authorized the repurchase of up to 5,618,464 common shares. During the three months ended August 31, 2025, we repurchased a total of 100,000 common shares under this authorization leaving 5,265,000 common shares available for repurchase at August 31, 2025.

Common shares may be repurchased from time to time, with consideration given to the market price of the common shares, the nature of other investment opportunities, cash flows from operations, general economic conditions and other relevant considerations. Repurchases may be made on the open market or through privately-negotiated transactions.

Note I – Stock-Based Compensation

Service-Based Restricted Common Shares

During the three months ended August 31, 2025, we granted an aggregate of 63,330 service-based restricted common shares under our stock-based compensation plans, which cliff vest three years from the grant date. The weighted average grant date fair value of these restricted common shares, based on the weighted average closing price of the underlying common shares on the grant date, was $63.05 per share, or $3,993 in total, and will be recognized on a straight-line basis over thethree-year vesting period, net of any forfeitures.

Market-Based Restricted Common Shares

On June 30, 2025, we granted market-based restricted common shares covering an aggregate of 92,500 common shares (at target levels)to certain members of executive management. Vesting of the awards is contingent on the achievement of specified levels of ATSR over a three-year service period ending June 30, 2028, in which annualized ATSR must exceed a threshold level in order to be satisfied. The fair value of these market-based restricted common shares was estimated using a Monte-Carlo simulation model that incorporates key assumptions such as the risk-free interest rate, expected volatility and expected dividends. Compensation expense is recognized on a straight-line basis over the three-year vesting period, net of forfeitures, regardless of whether the market condition is satisfied. The estimated grant date fair value of these market-based restricted common shares was $45.39 per common share or $4,199 in total (at target levels).

The following assumptions were used to determine the grant date fair value for our market-based restricted common shares during thethree months ended August 31, 2025.

Performance Shares

Performance shares awarded under our stock-based compensation plans are earned based on the level of achievement with respect to a set of measurement criteria for corporate and business unit targets. The awards generally cover three-year performance periods ending May 31, 2026, 2027, and 2028.

These performance share awards will be paid, to the extent earned, in common shares in the fiscal quarter following the end of the applicable performance period. The fair values of our performance shares are determined by the closing market prices of the underlying common shares at the respective grant dates of the performance shares and the pre-tax stock-based compensation expense is based on our periodic assessment of the probability of the targets being achieved and our estimate of the number of common shares that will ultimately be issued. The ultimate pre-tax stock-based compensation expense to be recognized over the performance period on all tranches will vary based on our periodic assessment of the probability of the targets being achieved. During the three months ended August 31, 2025, we granted performance share awards covering an aggregate of 53,130 common shares (at target levels). The aggregate grant-date fair value at target for these performance shares is $3,395, which will be recognized over the performance period and adjusted based on our periodic assessment of the probability of achieving the performance targets. The ultimate pre-tax stock-based compensation expense to be recognized over the performance period on all tranches will vary based on our periodic assessment of the probability of the targets being achieved.

Note J – Income Taxes

Income tax expense for the three months ended August 31, 2025 and August 31, 2024 reflected estimated annual ETRs of 23.8% and 24.5%, respectively. Management is required to estimate the annual ETR based upon its forecast of annual pre-tax income for domestic and foreign operations. Our actual ETR for fiscal 2026 could be materially different from the forecasted rate as of August 31, 2025.

Note K – Earnings per Share

The following table sets forth the computation of basic and diluted EPS attributable to controlling interest for the periods presented:

Stock options and restricted common shares covering an aggregate of 13,610 and 77,837 common shares for thethree months ended August 31, 2025 and August 31, 2024, respectively have been excluded from the computation of diluted EPS because the effect would have been antidilutive for those periods.

Note L – Segment Operations

Our operating segments reflect the way in which internally-reported financial information is regularly reviewed by the CODM to analyze performance, make decisions and allocate resources. We have identified our CEO as our CODM. Our CODM evaluates segment performance on the basis of adjusted EBITDA, as described in the “Use of Non-GAAP Financial Measures and Definitions” section. Factors used to identify operating segments include the nature of the products provided by each business, the management reporting structure, similarity of economic characteristics and certain quantitative measures, as prescribed by GAAP. Our operations are organized undertwo operating segments: Consumer Products and Building Products. Unallocated Corporate and Other also includes certain assets and liabilities (e.g., cash and cash equivalents and public debt) held at the corporate level as well as general corporate expenses that are not directly attributable to our business operations and are administrative in nature, such as public company and other governance-related costs that benefit the organization as a whole. Activity outside of our two operating segments is presented within “Other” and “Unallocated Corporate” as described further below.

Other includes our share of the equity earnings of two of our unconsolidated joint ventures, Sustainable Energy Solutions and Workhorse.

Unallocated Corporate includes certain assets and liabilities (e.g. public debt) held at the corporate level as well as general corporate expenses that are not directly attributable to our business operations and are administrative in nature, such as public company and other governance-related costs that benefit the organization as a whole, have not been allocated to our operating segments and are held at the corporate level.

The following tables present summarized financial information for our reportable operating segments and Unallocated Corporate and Other for the periods indicated. A reconciliation from the GAAP financial measure of earnings (loss) before income taxes to the non-GAAP financial measure of adjusted EBITDA is provided directly following the summarized information below.

(1)

Other segment items consist of non-operating activity included in adjusted EBITDA, which is our segment profit measure.

Total assets for each of our reportable operating segments at the dates indicated were as follows:

The following table presents capital expenditures for each of our reportable operating segments for thethree months ended August 31, 2025 and August 31, 2024

Note M – Acquisitions

On June 18, 2025, we acquired Elgen, a leading provider of HVAC parts and components, ductwork, and structural framing used primarily in commercial building applications across North America. The purchase price was $91,185, net of cash acquired. Elgen operates as part of the Building Products operating segment and its results have been included in our consolidated statements of earnings since the date of acquisition. Pro forma results, including the acquired business since the beginning of fiscal 2024, would not be materially different from reported results.

The information included herein is based on the preliminary allocation of the purchase price using estimates of the fair value and useful lives of the assets acquired. The purchase price allocation is subject to further adjustment until all pertinent information regarding the assets acquired is fully evaluated by us, including but not limited to, the fair value accounting.

The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under accounting rules (e.g., assembled workforce) or of immaterial value. The purchase price also includes strategic and synergistic benefits (i.e., investment value) specific to us, which resulted in a purchase price in excess of the fair value of the identifiable net assets. This additional investment value resulted in goodwill, which is not expected to be deductible for income tax purposes. During the three months ended August 31, 2025, we incurred approximately $1,700 of acquisition related expenses related to the transaction, which are recorded in restructuring and other expense, net in our consolidated statement of earnings.

In connection with the acquisition of Elgen, we identified and valued the following intangible assets:

The following table summarizes the consideration paid and the final fair value assigned to the assets and liabilities assumed at the acquisition date.

Note N – Derivative Financial Instruments and Hedging Activities

We primarily utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative financial instruments include interest rate risk, foreign currency exchange risk and commodity price risk. While certain of our derivative financial instruments are designated as hedging instruments, we also enter into derivative financial instruments that are designed to hedge a risk, but are not designated as hedging instruments and therefore do not qualify for hedge accounting. These derivative financial instruments are adjusted to current fair value through earnings at the end of each period.

Interest Rate Risk Management– We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities along with both fixed-rate and variable-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs.

Foreign Currency Exchange Rate Risk Management – We conduct business in several major international currencies and are, therefore, subject to risks associated with changing foreign currency exchange rates. We enter into various contracts that change in value as foreign currency exchange rates change to manage this exposure. Such contracts limit exposure to both favorable and unfavorable foreign currency exchange rate fluctuations. The translation of foreign currencies into U.S. dollars also subjects us to exposure related to fluctuating foreign currency exchange rates; however, derivative financial instruments are not used to manage this risk.

Commodity Price Risk Management – We are exposed to changes in the price of certain commodities, including steel, natural gas, copper, zinc, aluminum and other raw materials, and our utility requirements. Our objective is to reduce earnings and cash flow volatility associated with forecasted purchases and sales of these commodities to allow management to focus its attention on business operations. Accordingly, we enter into derivative financial instruments to manage the associated price risk.

We are exposed to counterparty credit risk on all of our derivative financial instruments. Accordingly, we have established and maintain strict counterparty credit guidelines. We have credit support agreements in place with certain counterparties to limit our credit exposure. These agreements require either party to post cash collateral if its cumulative market position exceeds a predefined liability threshold. Amounts posted to the margin accounts accrue interest at market rates and are required to be refunded in the period in which the cumulative market position falls below the required threshold. We do not have significant exposure to any one counterparty and management believes the risk of loss is remote and, in any event, would not be material.

Refer to “Note O – Fair Value Measurements” for additional information regarding the accounting treatment for our derivative financial instruments, as well as how fair value is determined. Thefollowing table summarizes the fair value of our derivative financial instrumentsand the respective lines in which they were recorded in the consolidated balance sheet at August 31, 2025 and May 31, 2025:

The amounts in the table above reflect the fair value of our derivative financial instruments on a net basis where allowed under master netting arrangements. Had these amounts been recognized on a gross basis, the impact would have been an increase in receivables with a corresponding increase in accounts payable of $548 and $356 at August 31, 2025 and May 31, 2025, respectively.

Cash Flow Hedges

We enter into derivative financial instruments to hedge our exposure to changes in cash flows attributable to interest rate and commodity price fluctuations associated with certain forecasted transactions. These derivative financial instruments are designated and qualify as cash flow hedges. Accordingly, the effective portion of the gain or loss on each of these derivative financial instruments is reported as a component of OCI and reclassified into earnings in the same line associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings.

The following table summarizes the net notional positions of our cash flow hedges at August 31, 2025:

The following table summarizes the gain (loss) recognized in OCI and the gain (loss) reclassified from AOCI into net earnings for derivative financial instruments designated as cash flow hedges for the periods presented:

The estimated amount of net gains recognized in AOCI at August 31, 2025, expected to be reclassified into net earnings within the succeeding 12 monthsis $559 (net of tax of $151). This amount was computed using the fair value of the cash flow hedges at August 31, 2025, and will change before actual reclassification from OCI to net earnings during the fiscal years ending May 31, 2026 and May 31, 2027.

Net Investment Hedges

At August 31, 2025, we designated our Euro-denominated debt held in the U.S. with an initial notional amount of €91,700 ($99,479) as a non-derivative net investment hedge of our foreign operations in Portugal. The full principal amount is considered fully effective. We did not reclassify any gains or losses related to the net investment hedge from AOCI into earnings during any of the fiscal years presented. The foreign currency loss recognized in OCI for the non-derivative instruments designated as net investment hedges during thethree months ended August 31, 2025 and 2024 was $3,100 and $1,835, respectively.

Economic (Non-designated) Hedges

We enter into foreign currency exchange contracts to manage our foreign currency exchange rate exposure related to inter-company and financing transactions that do not meet the requirements for hedge accounting treatment. We also enter into certain commodity contracts that do not qualify for hedge accounting treatment. Accordingly, these derivative financial instruments are adjusted to current market value at the end of each period through gain (loss) recognized in earnings.

The following table summarizes the net notional positions of our economic (non-designated) derivative financial instruments outstanding at August 31, 2025:

The following table summarizes the gain (loss) recognized in earnings for economic (non-designated) derivative financial instruments for the periods presented:

Note O – Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability. Current accounting guidance establishes a three-tier fair value hierarchy as a basis for considering such assumptions and for classifying the inputs used in the valuation methodologies. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair values are as follows:

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Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

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Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

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Level 3 - Unobservable inputs for the asset or liability and that are significant to the fair value of the assets and liabilities (i.e., allowing for situations in which there is little or no market activity for the asset or liability at the measurement date).

Recurring Fair Value Measurements

At August 31, 2025, our assets and liabilities measured at fair value on a recurring basis were as follows:

At May 31, 2025, our assets and liabilities measured at fair value on a recurring basis were as follows:

(1)

The fair value of our derivative financial instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note N – Derivative Financial Instruments and Hedging Activities” for additional information regarding our use of derivative financial instruments.

Non-Recurring Fair Value Measurements

At August 31, 2025, there wereno assets measured at fair value on a non-recurring basis on our consolidated balance sheet. See “Note R – Fair Value Measurements” in the fiscal 2025 Form 10-K for information regarding non-recurring fair value measurements as of May 31, 2025.

The fair value of non-derivative financial instruments included in the carrying amounts of cash and cash equivalents, receivables, income taxes receivable, other assets, accounts payable, accrued compensation, contributions to employee benefit plans and related taxes, other accrued items, income taxes payable and other liabilities approximate carrying value due to their short-term nature. The fair value of long-term debt, including current maturities, based upon models utilizing market observable (Level 2) inputs and credit risk, was $276,990 and $263,547 at August 31, 2025 and May 31, 2025, respectively. The carrying amount of long-term debt was$306,010 and$302,868 at August 31, 2025 and May 31, 2025, respectively.