WORTHINGTON ENTERPRISES, INC.
For the period ended May 31, 2026. Filed Jul 30, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Jul 30, 2026
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-K
Period ended 2025-05-31; filed 2025-07-30.
0000950170-25-100137
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-05-31; filed 2026-07-30.
0001193125-26-325872
Item 7. 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 117 previous paragraphs and 112 current paragraphs.
58 unchanged; 32 reworded; 22 added; 27 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 11 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 (22)
Current report
Other includes our share of the equity earnings of two of our unconsolidated joint ventures, SES and Workhorse, and the related investments in these businesses.
Current report
On January 16, 2026, we acquired LSI, one of the largest U.S. manufacturers of standing-seam metal roof clips and retrofit components in the commercial roof market. The purchase price was $206.6 million, net of cash acquired, including an estimated tax equalization payment of approximately $3.0 million, subject to customary post-closing adjustments. Refer to “Note P – Acquisitions” for additional information.
Current report
On December 3, 2025, we acquired Hydrostat’s propane distribution and refurbishment assets. The purchase price was approximately $9.3 million, net of cash acquired, subject to customary post-closing adjustments. Refer to “Note P – Acquisitions” for additional information.
Current report
On October 16, 2025, we divested our 49% interest in the composite business of our SES joint venture. In exchange for our divested interest in the composite business, we received common shares of both Hexagon Composites and Hexagon Purus. The transaction aligns the core remaining capabilities of the SES joint venture – primarily Type 1 low-pressure, steel cylinder and storage infrastructure applications – with our long-term strategic priorities. Refer to “Note C – Investments in Unconsolidated Affiliates” and “Note R – Fair Value Measurements” for additional information.
Current report
On June 18, 2025, we acquired Elgen, a leading provider of HVAC parts and components. The purchase price was approximately $90.7 million, net of cash acquired. Elgen began operating as part of Building Products in the first quarter of fiscal 2026. Refer to “Note P – Acquisitions” for additional information.
Current report
The U.S. macroeconomic environment during fiscal 2026 was characterized by uneven growth and a resurgence of inflationary pressure that complicated the Federal Reserve's policy path and dampened consumer and business sentiment. GDP expanded at an annualized rate of 1.6% in the first quarter of calendar 2026, meaningfully below the prior-year pace, as gains in government spending and business investment were partially offset by decelerating consumer spending. Inflation reaccelerated through the second half of fiscal 2026, with the CPI rising 4.2% year over year in May 2026, its highest level since April 2023, driven largely by an energy price surge tied to the outbreak of geopolitical conflict in the Middle East in late February 2026. The Federal Reserve, which had reduced the federal funds target range from 4.25% – 4.50% to 3.50% – 3.75% through a series of rate cuts in the second quarter of fiscal 2026, held rates unchanged through fiscal year end as policymakers weighed the resurgence of inflation against continued labor market stability.
Current report
During fiscal 2026, inventory levels at most key retailer and distributor customers within Consumer Products remained aligned with end-consumer demand, and replenishment activity generally mirrored point-of-sale trends, with no material build-up in our distribution or retail channels. However, Building Products benefited from a load-in effect that began toward the end of fiscal 2025 and continued through the first nine months of fiscal 2026, driven by federal regulations requiring the use of A2L refrigerants in newly manufactured residential and commercial HVAC systems. As contractors, distributors, and dealers positioned inventory to adjust to the regulatory transition, order volumes were temporarily elevated above underlying demand. While this dynamic provided a near-term tailwind throughout most of fiscal 2026, it began to normalize in the fourth quarter, as channel inventories reached desired levels and the transition matured. As new and replacement HVAC systems utilizing A2L refrigerants continue to enter service, we expect the installed base to grow, supporting meaningful long-term opportunities for our business.
Current report
Conditions across our key end markets remained soft and uneven throughout fiscal 2026, with improvement in some forward-looking indicators offset by continuing weakness in current activity. In residential construction, U.S. private housing starts fell 8.7% year over year in May 2026, reaching an annualized rate of 1.2 million, the lowest monthly pace since May 2020. Authorized housing permits registered 886,000 units on a seasonally adjusted annualized basis in May 2026, below prior-year levels and consistent with the cautious builder posture reflected across the market. The HMI finished the fiscal year at 37 in May 2026, marking 25 consecutive months below the 50-point threshold that signals favorable conditions, as elevated mortgage rates near 6.5% and geopolitical uncertainty continued to suppress buyer demand. In non-residential construction, the ABI registered 44.5 in May 2026, remaining below the 50-point expansion threshold for the 41st consecutive month; billings have not crossed into growth territory since January 2023. The DMI rose 5.9% in May to 275.7, and stood 33.8% above the May 2025 level, driven primarily by data center and healthcare planning activity. While the DMI's sustained elevation signals stronger construction activity in future periods, the gap between planning momentum and current billings reflects a non-residential market still working through a prolonged contraction cycle. Within repair and remodel, the LIRA projected approximately 2.1% year-over-year growth through the first quarter of calendar 2026, decelerating to 1.6% by the fourth quarter and only 0.5% by the first quarter of calendar 2027, reflecting slowing remodeling permit activity and persistently weak housing turnover. We believe near-term demand across our construction-facing end markets will remain constrained by the elevated rate environment, while the strengthening non-residential planning pipeline and recurring purchase patterns are expected to provide support to overall volumes as we enter fiscal 2027.
Current report
Steel: Steel is our most significant direct material cost across both Building Products and Consumer Products. During fiscal 2026, hot-rolled steel prices averaged $919 per ton for the fiscal year, compared to approximately $755 per ton in fiscal 2025. Prices entered fiscal 2026 in the mid-$800s per ton and softened through the first half, reaching a low of approximately $808 per ton in September 2025, as demand conditions were relatively subdued. The market shifted meaningfully in the second half of fiscal 2026. Beginning in December 2025, prices rose each successive month, closing May 2026 at approximately $1,081 per ton. Cold-rolled steel prices followed a similar pattern, averaging approximately $1,093 per ton in fiscal 2026, compared to approximately $999 per ton in fiscal 2025, declining through the first half before rising through the balance of the fiscal year consistent with the trend in hot-rolled steel. The expansion of Section 232 tariffs on imported steel from 25% to 50%, effective June 4, 2025, contributed to domestic price appreciation, particularly as the tariff impact worked through the supply chain during the second half of the fiscal year.
Current report
Aluminum: Aluminum prices increased substantially in fiscal 2026, reflecting a combination of tightening global supply conditions and the expansion of Section 232 tariffs on aluminum imports, which increased from 25% to 50% effective June 4, 2025. Prices were relatively stable through the first half of fiscal 2026 before accelerating sharply in the second half as the tariff impact worked through the supply chain and global supply constraints intensified. By the end of fiscal 2026, prices had reached levels meaningfully higher than where the year began. These increases affected input costs across aluminum-intensive components, including fuel cylinder valves and other assemblies. Where possible, we mitigated the impact of rising aluminum costs through forward purchasing arrangements and supplier negotiations, though the overall commodity environment remained a headwind throughout the year.
Current report
Propane, propylene, and other gases: Propane represented a meaningful offset to higher metal costs during fiscal 2026. Prices softened through most of the fiscal year, reflecting ample domestic supply conditions, before partially recovering in the fourth quarter. Despite the recovery, propane ended the year meaningfully below prior year levels, providing a favorable tailwind to input costs in both Building Products and Consumer Products. Propylene prices also declined during fiscal 2026, driven by abundant Gulf Coast supply and softer downstream demand conditions in North America. A portion of our propane and propylene requirements are secured under fixed-price supply agreements, which limited our exposure to spot price fluctuations during the year. Costs for certain other industrial gases were lower compared to the prior year, providing a margin benefit in select product lines within Consumer Products.
Current report
Net Sales
Current report
Building Products –Net sales totaled $861.5 million in fiscal 2026, an increase of $207.4 million, or 31.7%, over the prior fiscal year, driven by higher overall volume and the impact of acquisitions, which contributed $121.7 million to net sales in fiscal 2026.
Current report
Consumer Products –Net sales totaled $519.8 million in fiscal 2026, an increase of $20.1 million, or 4.0%, over the prior fiscal year, as higher average selling prices more than offset the impact of lower overall volume.
Current report
Gross profit was $378.3 million in fiscal 2026, an increase of $59.3 million, or 18.6%, over the prior fiscal year, on higher overall volume, including contributions from our fiscal 2026 acquisitions, and higher average selling prices. While gross profit was up over the prior fiscal year, gross margin was relatively flat as the impact of higher overall volume and higher average selling prices was partially offset by higher amortization of the inventory step-up associated with the LSI and Elgen acquisitions.
Current report
SG&A
Current report
SG&A increased $26.6 million, or 9.9%, from fiscal 2025, primarily due to the addition of LSI and Elgen. As a percentage of net sales, SG&A was down from 23.3% to 21.4%.
Current report
Interest expense, net increased $4.1 million over the prior fiscal year due to lower interest income generated from cash on hand and higher average debt levels associated with amounts drawn under the Credit Facility to fund the LSI acquisition.
Current report
Equity income was down $10.2 million from fiscal 2025, driven by lower contributions from ClarkDietrich, which were down $18.9 million, as continued pricing pressure and an unfavorable shift in project mix led to lower gross profit, partially offset by higher contributions from WAVE, up $8.0 million.
Current report
Adjusted EBITDA
Current report
Building Products –Adjusted EBITDA was $240.3 million in fiscal 2026, an increase of $27.5 million, or 12.9%, over fiscal 2025. The increase was driven by higher overall volume and the impact of acquisitions, which contributed $17.6 million of adjusted EBITDA in fiscal 2026, partially offset by a $10.9 million decline in equity income, as lower contributions at ClarkDietrich more than offset higher equity earnings at WAVE.
Current report
Other –Adjusted EBITDA decreased $2.8 million compared to fiscal 2025, driven by lower contributions of equity earnings from the SES joint venture.
Removed paragraphs (27)
Previous report
Other includes the activity of our Sustainable Energy Solutions and Workhorse unconsolidated joint ventures, as well as the activity of our former Sustainable Energy Solutions operating segment, on an historical basis, through May 29, 2024.
Previous report
On May 29, 2024, we became a noncontrolling equity partner in an unconsolidated joint venture with Hexagon, a leading global manufacturer of Type 4 composite cylinders used for storing gas under high-pressure, by selling 51% of the nominal share capital of our former Sustainable Energy Solutions operating segment in Europe. We now hold a 49% noncontrolling equity stake in the joint venture, which is accounted for under the equity method. Our retained interest does not qualify as a standalone operating segment and is reported within Other. As a result of the transaction, the financial position and results of operations of the former Sustainable Energy Solutions business are reflected in Other on a historical basis through May 29, 2024 and post deconsolidation. See “Note O – Segment Data” for additional information.
Previous report
On February 1, 2024, we acquired an 80% ownership stake in Halo, an affiliate of HPG, an asset-light business with technology-enabled solutions in the outdoor cooking space. The total purchase price was approximately $9.6 million. Refer to “Note P – Acquisitions” for additional information.
Previous report
Demand for our products is closely tied to broader macroeconomic conditions and overall consumer and business sentiment. Shifts in inflation, interest rates, disposable income, and construction activity directly influence purchase behavior, capital investment, and distributor inventory management.
Previous report
The macroeconomic and geopolitical environment remained complex and evolving through the end of fiscal 2025, as easing inflation was offset by continued elevated interest rates, slowing economic activity, and heightened global tensions. U.S. GDP declined at an annualized rate of 0.5% during the first quarter of calendar year 2025, down sequentially from 2.4% growth in the fourth quarter of calendar year 2024, signaling a clear loss of economic momentum. Inflation continued to moderate, with the Consumer Price Index rising 2.4% year-over-year in May 2025, down from 3.1% in February 2025, and moving closer to the Federal Reserve’s 2% target. The Federal Reserve held the federal funds rate steady at 4.25% – 4.50% during the fiscal 2025 fourth quarter, while borrowing costs remained high; the average 30-year fixed mortgage rate was 6.89% at the end of May 2025, relatively unchanged from May 2024. In May 2025, the U.S. and China began a 90-day trade negotiation period following mutual tariff reductions, offering tentative relief on the trade front, even as U.S. military strikes on Iranian nuclear facilities raised geopolitical risk and market volatility.
Previous report
During fiscal 2025, inventory positions for most of our key customers was aligned with end-user demand, and ordering behavior become more consistent with point-of-sale trends. While we expect our customers to remain sensitive to the softer macroeconomic environment, we believe the broad destocking cycle impacting fiscal 2024 has largely run its course. We continue to monitor customer inventory and sell-through levels closely and remain focused on aligning production, fulfillment, and working capital strategies accordingly.
Previous report
Overall demand across our key end markets remained mixed, but generally stable during fiscal 2025. In residential construction, U.S. private housing starts declined 5% from May 2024, and the HMI fell to 34, its lowest level since November 2023 and second-lowest since June 2012, signaling a notably subdued new home pipeline. We believe homebuilder sentiment continues to be weighed down by persistently high mortgage rates, tariff-driven increases in material costs, and broader macroeconomic uncertainty. In non-residential construction, the ABI has remained below the 50-point growth threshold for more than a year, indicating that broad-based commercial and institutional starts will likely remain uneven. However, demand tied to data centers and federally funded manufacturing projects continues to be a bright spot. The repair and remodel industry has shown encouraging signs, with Harvard’s LIRA projecting homeowner improvement spending to rise approximately 2.5% through early 2026, supporting steady demand for many of our tools and DIY products. Taken together, we anticipate continued caution from both consumers and builders and expect demand across our key end markets to remain mixed in the near term.
Previous report
Steel remains our most significant direct material cost across both the Consumer Products and Building Products segments. During fiscal 2025, prices for both hot-rolled and cold-rolled steel moderated from the elevated levels experienced in fiscal 2024. This decline contributed to improved spread as we maintained consistent pricing discipline across our product portfolio. Our sourcing strategy, combining firm-price contracts for select inputs with index-based agreements for others, allowed us to manage volatility and capture cost advantages as prices declined.
Previous report
In contrast, aluminum costs increased during fiscal 2025, largely driven by changes to U.S. trade policy. In the fourth quarter of fiscal 2025, Section 232 tariffs on imported aluminum were raised from 25% to 50%, significantly increasing the cost of certain components used in our products. These changes impacted components such as fuel cylinder valves and other aluminum-intensive assemblies. Where possible, we mitigated these increases through forward purchasing and supplier negotiations, but tariff-related cost pressure on aluminum is expected to persist into fiscal 2026.
Previous report
Other key inputs such as propane and propylene were relatively stable throughout fiscal 2025, with a portion of our requirements secured through fixed-price agreements. Helium and other gases also declined modestly in cost compared to fiscal 2024, benefiting margins in select consumer-facing product lines.
Previous report
Reconciliations for 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.
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Net Sales and Volume
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The following table provides volume (in units) by operating segment for the periods presented:
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Consumer Products –Net sales totaled $499.7 million in fiscal 2025, an increase of $4.4 million, or 0.9%, from the prior fiscal year, primarily due to higher volumes and a slightly favorable product mix.
Previous report
Building Products –Net sales totaled $654.1 million in fiscal 2025, an increase of $35.1 million, or 5.7%, compared to the prior fiscal year, which was largely driven by contributions from Ragasco and favorable product mix, partially offset by lower overall volumes, excluding Ragasco.
Previous report
Other –Net sales in the prior year period are related to our former Sustainable Energy Solutions operating segment, which
Previous report
was deconsolidated on May 29, 2024, when we sold a 51% interest in the business. In periods after the sale
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transaction, our 49% retained interest is accounted for under the equity method as discussed in “Note C – Investments in Unconsolidated Affiliates.”
Previous report
Gross profit was $319.0 million in fiscal 2025, an increase of $34.0 million, or 11.9%, over the prior fiscal year, driven by higher contributions from both Consumer Products and Building Products. In Consumer Products, gross profit increased $15.8 million on favorable product mix and higher overall volume. In Building Products, gross profit increased $21.5 million on contributions from Ragasco and favorable mix. In addition to the factors described above, gross margin benefited from the deconsolidation of our Sustainable Energy Solutions business on May 29, 2024.
Previous report
SG&A was $268.4 million in fiscal 2025, a decrease of $15.1 million, or 5.3%, from the prior fiscal year. The decrease was primarily attributable to the elimination of certain corporate costs that no longer exist following the Separation, but were included in net earnings from continuing operations in the prior year, as well as the net impact of acquisitions and divestitures. This was partially offset by higher profit sharing and bonus expense to correspond with the improvement in pre-tax earnings.
Previous report
Separation costs in the prior fiscal year reflect direct and incremental costs incurred in connection with the Separation and attributable to our continuing operations.
Previous report
Equity income totaled $144.8 million in fiscal 2025, a decrease of $22.9 million compared to the prior fiscal year, as higher contributions from WAVE were offset by a decline at ClarkDietrich, down $19.0 million, largely due to margin compression driven by lower steel prices. The decrease also reflects lower contributions from Workhorse, which benefited from a $2.8 million gain in the prior fiscal year, and from the Sustainable Energy Solutions joint venture, which included a $3.4 million non-cash impairment charge in fiscal 2025.
Previous report
Building Products –Adjusted EBITDA from continuing operations was $211.3 million, an increase of $1.2 million, or 0.6% compared to the prior fiscal year. The increase was largely due to contributions from Ragasco and favorable product mix, nearly offset by lower overall volume, excluding Ragasco, and lower overall contributions of equity income.
Previous report
Other –Adjusted EBITDA from continuing operations improved $0.6 million compared to the prior fiscal year, driven by lower losses following the deconsolidation of our former Sustainable Energy Solutions operating segment in May 2024, partially offset 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.
Previous report
On March 20, 2019, the Board authorized the repurchase of up to 6,600,000 of the common shares. On March 24, 2021, the Board authorized the repurchase of up to an additional 5,618,464 of the common shares, increasing the total number of common shares then authorized for repurchase to 10,000,000 (net of previously repurchased common shares). The total number of common shares available for repurchase under these authorizations at May 31, 2025 was 5,365,000.
Previous report
During the fourth quarter of fiscal 2025, we were able to qualitatively conclude that the goodwill associated with our Consumer Products and Building Products reporting units was not impaired. We also determined that our indefinite-lived intangible assets were not impaired, with the exception of those related to GTI. During the fourth quarter of fiscal 2025, we identified an impairment indicator for the long-lived assets of the GTI business within the Consumer Products operating segment. As a result, we conducted an impairment review of the GTI asset group and concluded that the fair value of its indefinite-lived intangible assets was below their carrying amount. Accordingly, we recognized an impairment charge in the fourth quarter of fiscal 2025 to reduce the carrying value of the assets to their estimated fair market values. Refer to “Note D – Goodwill and Other Long-Lived Assets” for additional information.
Previous report
During the fourth quarter of fiscal 2025, we identified an impairment indicator for the GTI business within the Consumer Products operating segment. As a result, we performed a recoverability test on the GTI asset group, which indicated that the carrying amount was not fully recoverable. We subsequently measured and recognized an impairment charge to write down GTI’s primary finite-lived intangible asset to its estimated fair value. Refer to “Note D – Goodwill and Other Long-Lived Assets” for additional information.
Reworded paragraphs (32)
Previous wording
This MD&A should be read in conjunction with our consolidated financial statements and the related Notes in this Form 10-K. It is intended to provide insight into the financial condition and results of operations to allow investors to view the Company from the perspective of management. The historical results discussed herein include the operations of Worthington Steel, which are presented as discontinued operations in all periods prior to the Separation, as further described in “Note A – Summary of Significant Accounting Policies.”
Current wording
This MD&A should be read in conjunction with our consolidated financial statements and the related Notes in this Form 10-K. It is intended to provide insight into the financial condition and results of operations to allow investors to view our business from the perspective of management.
Previous wording
We are a market-leading designer and manufacturer of innovative products and services, including manufactured metal products, organized around attractive end markets under two separate and distinct reportable operating segments: Consumer Products and Building Products. Our primary goal is to create value for our shareholders. Built on the successful foundation of the Worthington Business System, we apply a disciplined approach to capital deployment and seek to grow earnings by optimizing our operations and supply chain, developing and commercializing new products and applications, and pursuing strategic investments and acquisitions.
Current wording
We are a market-leading designer and manufacturer of innovative products and services, including manufactured metal products, organized around attractive end markets under two separate and distinct operating segments: Building Products and Consumer Products. Our primary goal is to create value for our shareholders. Built on the successful foundation of the Worthington Business System, we apply a disciplined approach to capital deployment and seek to grow earnings by optimizing our operations and supply chain, developing and commercializing innovative products and applications, and pursuing strategic investments and acquisitions.
Previous wording
Our Building Products business is a market-leading provider of pressurized containment solutions, providing critical components in the residential, non-residential, and repair and remodel end markets through essential categories, such as heating, cooking, cooling and water, and, through our unconsolidated joint ventures, WAVE and ClarkDietrich, ceiling suspension systems and light gauge metal framing products, respectively. Our pressurized containment solutions include refrigerant and LPG cylinders, well water and expansion tanks, and other specialty products which are generally sold to gas producers and distributors.
Current wording
Our Building Products business is a market-leading provider of critical components in essential categories, including: (i) pressurized containment solutions for heating, cooking, cooling and water applications; (ii) HVAC systems; (iii) metal roofing clips; and (iv), through our unconsolidated joint ventures, WAVE and ClarkDietrich, ceiling suspension systems and light gauge metal framing products. Our pressurized containment solutions include refrigerant and LPG cylinders, well water and expansion tanks, and other specialty products which are generally sold to gas producers and distributors.
Previous wording
Our Consumer Products business has a diverse product offering in the tools, outdoor living and celebrations categories, including propane-filled cylinders for torches and related accessories, handheld torches, specialized hand tools and instruments, drywall tools, propane-filled camping cylinders helium-filled balloon kits, and accessories and gas grills and pizza ovens sold primarily to mass merchandisers, retailers and distributors.
Current wording
Our Consumer Products business has a diverse product offering in the tools, outdoor living and celebrations categories, including propane-filled cylinders for torches and related accessories, handheld torches, specialized hand tools and instruments, drywall tools, propane-filled camping cylinders, helium-filled balloon kits, and accessories and gas griddles and pizza ovens sold primarily to mass merchandisers, retailers and distributors.
Previous wording
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, including direct and incremental costs incurred in connection with the Separation but not attributed to discontinued operations in fiscal 2024 and fiscal 2023.
Current wording
Unallocated Corporate 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, have not been allocated to our operating segments and are held at the corporate level, including direct and incremental costs incurred in connection with the Separation but not attributed to discontinued operations in fiscal 2024.
Previous wording
On December 1, 2023, we completed the Separation of our former steel processing business into a separate public company in a transaction intended to qualify as tax free to our shareholders, which was accomplished via the Distribution. Worthington Steel is an independent public company trading under the symbol “WS” on the NYSE. Following the Separation, Worthington Industries, Inc. changed its name to Worthington Enterprises, Inc. and its common shares continue trading on the NYSE under the ticker symbol “WOR.” In connection with the Separation, we received a one-time cash dividend of $150.0 million from Worthington Steel, the proceeds of which were used to pay off in full the 2024 Notes. The dividend was funded by cash drawn on the Worthington Steel Credit Facility of $175.0 million immediately prior to the Distribution.
Current wording
On December 1, 2023, we completed the Separation of our former steel processing business into a separate public company in a transaction intended to qualify as tax free to our shareholders, which was accomplished via the Distribution. Worthington Steel is an independent public company trading on the NYSE under the symbol “WS”. Following the Separation, Worthington Industries, Inc. changed its name to Worthington Enterprises, Inc. and its common shares continue trading on the NYSE under the ticker symbol “WOR.” In connection with the Separation, we received a one-time cash dividend of $150.0 million from Worthington Steel, the proceeds of which were used to pay off in full the 2024 Notes. The dividend was funded by cash drawn on the Worthington Steel Credit Facility of $175.0 million immediately prior to the Distribution.
Previous wording
We believe these dynamics — tight credit conditions, softening industrial activity, and global uncertainty — continued to weigh on both consumer and business sentiment throughout fiscal 2025 and may impact new activity across our key end markets entering fiscal 2026. Within our Consumer Products segment, inflation-driven cost consciousness and elevated interest rates influenced discretionary purchases and contributed to cautious buying patterns. In Building Products, rising financing costs constrained new construction demand, while slowing industrial activity impacted select commercial and infrastructure-related channels. We expect demand to remain uneven in the near term.
Current wording
We believe these dynamics, including persistent inflationary pressure, an extended pause in monetary easing, and elevated mortgage rates near 6.5%, continued to weigh on consumer and business sentiment throughout fiscal 2026 and may impact new activity across our key end markets entering fiscal 2027. In Building Products, elevated financing costs constrained new construction demand, while geopolitical uncertainty and energy price volatility introduced additional headwinds for contractor and distributor confidence. Within our Consumer Products segment, inflation-driven cost consciousness and elevated interest rates influenced discretionary purchases and contributed to cautious buying patterns. We expect demand within both operating segments to remain uneven in the near term.
Previous wording
Demand for our products is influenced by the inventory management strategies of our retail and distribution partners. Periods of customer destocking, when our customers reduce their own inventories, can lead to lower order volumes, even when consumer sell-through remains steady. Conversely, customers’ restocking can temporarily elevate shipments above underlying end-user demand. As a result, shifts in customers’ inventory levels can meaningfully impact our reported revenue and margin performance, particularly in the Consumer Products segment, where a large volume of products flow through big box retailers.
Current wording
Demand for our products is influenced by the inventory management strategies of our retail and distribution partners. Periods of customer destocking, when our customers reduce their own inventories, can lead to lower order volumes, even when consumer sell-through remains steady. Conversely, customers' restocking can temporarily elevate shipments above underlying end-user demand. As a result, shifts in customers’ inventory levels can meaningfully impact our reported revenue and margin performance, particularly in Consumer Products, where a large volume of products flow through big box retailers.
Previous wording
We offer a wide range of products and services to a diverse, primarily domestic, customer base across several end markets, including U.S. residential and non-residential construction, repair/remodel, which collectively drive overall demand for the Building Products segment. These end markets also drive demand for many of our consumer products sold in the tools and outdoor living categories. Demand for our remaining consumer products, including helium-filled balloon kits sold into the celebrations category, is generally driven by the general health of the consumer, including the macroeconomic and geopolitical conditions discussed above.
Current wording
We offer a wide range of products and services to a diverse, primarily domestic, customer base across several end markets, including U.S. residential and non-residential construction, repair/remodel, which collectively drive demand for the Building Products segment. These end markets also drive demand for many of our consumer products sold in the tools and outdoor living categories. Demand for our remaining consumer products, including helium-filled balloon kits sold into the celebrations category, is generally driven by the general health of the consumer, including the macroeconomic and geopolitical conditions discussed above.
Previous wording
Our largest raw material expenditures include cold-rolled and hot-rolled steel, propane, propylene, and aluminum. Fluctuations in the prices of these inputs have a direct impact on our cost of goods sold and overall financial performance.
Current wording
Our largest raw material expenditures include cold-rolled and hot-rolled steel, propane, propylene, and aluminum. Fluctuations in the prices of these inputs have a direct impact on our cost of goods sold and financial performance.
Previous 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.
Current wording
Historically, net sales in both Building Products and Consumer Products tend to be stronger in our fiscal third and fourth quarters. In Building Products, this seasonality is generally driven by weather conditions, customer business cycles, and the timing of renovation and new construction projects, while in Consumer Products, it is driven by our facilities performing at seasonal peaks, matching consumer demand.
Previous wording
Impairment activity in fiscal 2025 primarily reflects the non-cash write-down of intangible assets associated with GTI, totaling $50.1 million. Impairment charges in the prior fiscal year related primarily to the impairment of goodwill and other assets immediately prior to the deconsolidation of our Sustainable Energy Solutions business in May 2024. Refer to “Note D – Goodwill and Other Long-Lived Assets” for additional information.
Current wording
Impairment activity in fiscal 2025 primarily reflects the non-cash write-down of intangible assets associated with GTI, totaling $50.1 million. Refer to “Note D – Goodwill and Other Long-Lived Assets” for additional information.
Previous wording
Restructuring and other expense, net during fiscal 2025 included a $4.5 million increase in the fair value of the contingent liability associated with the Ragasco earnout arrangement, as well as stock-based compensation expense of $2.6 million related to the accelerated vesting of certain equity awards upon the retirement of our former CEO. Restructuring charges in the prior fiscal year were primarily related to the deconsolidation of our Sustainable Energy Solutions business.
Current wording
Restructuring and other expense, net in fiscal 2026 consisted primarily of transaction costs related to acquisitions and divestitures, as well as employee severance. Restructuring activity in the prior fiscal year included a $4.5 million increase in the fair value of the contingent liability associated with the Ragasco earnout arrangement, as well as stock-based compensation expense of $2.6 million related to the accelerated vesting of certain equity awards upon the retirement of our former CEO.
Previous wording
Miscellaneous expense in fiscal 2025 was driven primarily by the write down of an investment in notes receivable that was determined to be other than temporarily impaired, resulting in a pre-tax charge of $5.0 million. Miscellaneous expense in fiscal 2024 was primarily driven by (1) the annuitization of the remaining projected benefit obligation of the inactive Gerstenslager Plan, which resulted in a pre-tax charge of $8.0 million and (2) the write-down of an investment in notes receivable that was determined to be other than temporarily impaired, resulting in a pre-tax charge of $11.2 million.
Current wording
Miscellaneous expense, net in fiscal 2026 was driven primarily by the divestiture of our 49% interest in the composite business of our SES joint venture on October 16, 2025, and the related mark-to-market loss on the marketable securities received in exchange for our interest in the divested assets. Miscellaneous expense, net in the prior fiscal year was driven primarily by the write down of an investment in notes receivable that was determined to be other than temporarily impaired, resulting in a pre-tax charge of $5.0 million.
Previous wording
Equity income contributed by WAVE and ClarkDietrich is reported within our Building Products segment.
Current wording
Equity income contributed by WAVE and ClarkDietrich is reported within Building Products.
Previous wording
Includes our share of equity earnings of the Workhorse and the Sustainable Energy Solutions joint ventures.
Current wording
Includes our share of the equity earnings from the Workhorse and the SES joint ventures.
Previous wording
Income tax expense totaled $33.8 million in fiscal 2025, compared to $39.0 million in the prior fiscal year. The decrease was primarily due to the impact of one-time discrete tax charges related to the Separation and charges associated with the deconsolidation of our Sustainable Energy Solutions business in the prior fiscal year, partially offset by higher pre-tax earnings in fiscal 2025. The effective tax rate for fiscal 2025 was 26.1%, compared to 52.6% in the prior fiscal year. On an adjusted basis, the annual effective tax rate was 23.0% in fiscal 2025, compared to 23.5% in the prior fiscal year. Refer to “Note M – Income Taxes” for additional information.
Current wording
Income tax expense totaled $46.3 million in fiscal 2026, compared to $33.8 million in the prior fiscal year. The increase was primarily driven by higher pre-tax earnings. The effective tax rate for fiscal 2026 was 22.9%, compared to 26.1% in the prior fiscal year, which was impacted by certain discrete items. On an adjusted basis, the annual effective tax rate was 23.3% in fiscal 2026, compared to 23.0% in the prior fiscal year. Refer to the “Use of Non-GAAP Financial Measures and Definitions” section preceding Part I, Item 1 of this Form 10-K for additional information regarding our use of non-GAAP financial measures. Refer to “Note M – Income Taxes” for additional information.
Previous wording
Consumer Products –Adjusted EBITDA from continuing operations totaled $82.7 million in fiscal 2025, an increase of $13.1 million, or 18.8%, compared to the prior fiscal year. The increase was primarily driven by favorable product mix and higher overall volume.
Current wording
Consumer Products – Adjusted EBITDA totaled $91.2 million in fiscal 2026, an increase of $8.5 million, or 10.3%, compared to the prior fiscal year. The increase was primarily driven by higher gross margin, partially offset by an increase in SG&A.
Previous wording
Unallocated Corporate –Unallocated SG&A increased $2.5 million compared to the prior fiscal year, primarily due to higher profit sharing and bonus expense to correspond with improvements in pre-tax earnings.
Current wording
Unallocated Corporate – Unallocated SG&A increased $2.4 million, or 8.6%, from fiscal 2025, primarily driven by higher profit sharing and bonus accruals to correspond with improvements in pre-tax earnings.
Previous wording
During fiscal 2025, we generated $209.7 million of cash from operating activities, invested $50.6 million in property, plant and equipment, spent $95.0 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 $30.9 million to repurchase 700,000 common shares and paid dividends of $33.9 million on the common shares during fiscal 2025.
Current wording
During fiscal 2026, we generated $226.1 million of cash from operating activities, invested $55.9 million in property, plant and equipment, and spent approximately $304.1 million to acquire 100% of the outstanding equity interests in Elgen and LSI, and the propane and distribution assets of Hydrostat. Additionally, we paid $43.7 million to repurchase 800,000 common shares and paid dividends of $36.9 million on the common shares during fiscal 2026.
Previous wording
The cash flows related to discontinued operations have not been segregated. Accordingly, the consolidated statements of cash flows include the results of discontinued operations. See “Note B – Discontinued Operations” for a summarization of significant non-cash items related to discontinued operations
Current wording
The cash flows related to discontinued operations have not been segregated. Accordingly, the consolidated statements of cash flows for fiscal 2024 included the results of discontinued operations. See “Note B – Discontinued Operations” for a summary of significant non-cash items related to discontinued operations.
Previous wording
We believe we have access to adequate resources to meet the needs of our existing businesses for normal operating costs, mandatory capital expenditures, debt redemptions, dividend payments, and working capital, to the extent not funded by cash provided by operating activities, for at least the next 12 months and for the foreseeable future thereafter. These resources include cash and cash equivalents and unused committed lines of credit under our Credit Facility. The Credit Facility had a total of $500.0 million of borrowing capacity available to be drawn as of May 31, 2025.
Current wording
We believe we have access to adequate resources to meet the needs of our existing businesses for normal operating costs, maintenance capital expenditures, debt redemptions, dividend payments, and working capital, to the extent not funded by cash provided by operating activities, for at least the next 12 months and for the foreseeable future thereafter. These resources include cash and cash equivalents and unused committed lines of credit under our Credit Facility, which had a total of $500.0 million of borrowing capacity to be drawn as of May 31, 2026.
Previous wording
We routinely monitor current operational requirements, financial market conditions, and credit relationships and we may choose to seek additional capital by issuing new debt and/or equity securities to strengthen our liquidity or capital structure. Should we seek additional capital, there can be no assurance that we would be able to obtain such additional capital on terms acceptable to us, if at all, and such additional equity or debt financing could dilute the interests of our existing shareholders and/or increase our interest costs. We may also from time to time seek to retire or repurchase our outstanding debt through cash purchases, in open-market purchases, privately-negotiated transactions or otherwise. Such repurchases, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved in any such transaction may or may not be material.
Current wording
We routinely monitor operational requirements, financial market conditions, and credit relationships and we may choose to seek additional capital by issuing new debt and/or equity securities to strengthen our liquidity or capital structure. Should we seek additional capital, there can be no assurance that we would be able to obtain such additional capital on terms acceptable to us, if at all, and such additional equity or debt financing could dilute the interests of our existing shareholders and/or increase our interest costs. We may also from time to time seek to retire or repurchase our outstanding debt through cash purchases, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved in any such transaction may or may not be material.
Previous wording
Our business is cyclical and cash flows from operating activities may fluctuate during the year and from year to year due to economic and industry conditions. We rely on cash and short-term borrowings to meet cyclical increases in working capital needs. These needs generally arise during periods of increased economic activity or increasing raw material prices, requiring higher levels of inventory and accounts receivable. During economic slowdowns or periods of decreasing raw material costs, working capital needs generally decrease as a result of the reduction of inventories and accounts receivable.
Current wording
Certain of our diversified end markets are cyclical and cash flows from operating activities may fluctuate during the year and from year to year due to economic and industry conditions. We use operating cash flow and, when appropriate, short-term borrowings to manage normal fluctuations in working capital needs. These needs generally arise during periods of increased economic activity or increasing raw material prices, requiring higher levels of inventory and accounts receivable. During economic slowdowns or periods of decreasing raw material costs, working capital needs generally decrease as a result of the reduction of inventories and accounts receivable.
Previous wording
Net cash provided by operating activities was $209.7 million during fiscal 2025, compared to $290.0 million during fiscal 2024. The decrease was primarily due to lower net earnings in fiscal 2025 driven by the Separation and a $33.7 million decrease in dividends received from unconsolidated joint ventures.
Current wording
Net cash provided by operating activities was $226.1 million during fiscal 2026, compared to $209.7 million during fiscal 2025, as higher net earnings and lower net working capital requirements (accounts receivable, inventory, and accounts payable) in fiscal 2026 were partially offset by a $13.6 million decrease in distributions received from unconsolidated affiliates.
Previous wording
Net cash used by investing activities was $135.1 million during fiscal 2025, compared to $140.8 million during fiscal 2024. Net cash used by investing activities during fiscal 2025 was driven primarily by the acquisition of Ragasco for $95.0 million, including an earnout, and capital expenditures of $50.6 million, partially offset by $11.5 million of proceeds from the sale of 51% of the nominal share capital of our former Sustainable Energy Solutions operating segment on May 29, 2024. Net cash used by investing activities in fiscal 2024 resulted primarily from capital expenditures of $83.5 million, investment in notes receivable of $14.9 million, a deposit of $11.4 million for the June 3, 2024 acquisition of Ragasco, and the acquisitions of Halo and Voestalpine for net cash consideration of $9.6 million and $21.0 million, respectively.
Current wording
Net cash used by investing activities was $360.1 million during fiscal 2026, compared to $135.1 million during fiscal 2025. Net cash used by investing activities during fiscal 2026 was driven primarily by cash paid to acquire the outstanding equity interests in Elgen and LSI, and capital expenditures, including $25.1 million related to ongoing facility modernization projects. Net cash used by investing activities during fiscal 2025 was driven primarily by the acquisition of Ragasco for $95.0 million, including an earnout, and capital expenditures of $50.6 million, partially offset by $11.5 million of 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 $68.8 million in fiscal 2025 compared to $359.9 million in fiscal 2024. The change was primarily due to activity related to the Separation transaction including the net distribution of $68.0 million to Worthington Steel and net proceeds of $172.2 million under Worthington Steel’s short-term credit facilities, which were assumed by Worthington Steel. During fiscal 2025, we paid $30.9 million to repurchase 700,000 common shares and paid dividends of $33.9 million on the common shares. During fiscal 2024, we redeemed in full our 2026 Notes for $243.6 million and our 2024 Notes for $150.0 million, as further discussed in “Note H – Debt.”
Current wording
Net cash used by financing activities was $88.4 million during fiscal 2026, compared to $68.8 million in fiscal 2025. During fiscal 2026, we paid $43.7 million to repurchase 800,000 common shares and paid dividends of $36.9 million on the common shares. During fiscal 2025, we paid $30.9 million to repurchase 700,000 common shares and paid dividends of $33.9 million on the common shares.
Previous wording
We maintain the $500.0 million Credit Facility that matures on September 27, 2028. Borrowings under the Credit Facility have maturities of up to one year. We have the option to borrow at rates equal to an applicable margin over the Simple SOFR, the Prime Rate of PNC Bank, National Association, or the Overnight Bank Funding Rate. The applicable margin is determined by our credit rating. There were no borrowings outstanding under the Credit Facility at May 31, 2025.
Current wording
We maintain the $500.0 million Credit Facility that matures on September 27, 2028. Borrowings under the Credit Facility have maturities of up to one year. We have the option to borrow at rates equal to an applicable margin over the Simple SOFR, the Prime Rate of PNC Bank, National Association, or the Overnight Bank Funding Rate. The applicable margin is determined by our total leverage ratio. There were no borrowings outstanding under the Credit Facility at May 31, 2026.
Previous wording
As discussed in “Note G – Guarantees,” we had in place $9.5 million in outstanding letters of credit for third-party beneficiaries as of May 31, 2025. No amounts were drawn against these outstanding letters of credit at May 31, 2025, and the fair value of these guaranteed instruments, based on premiums paid, was not material.
Current wording
As discussed in “Note G – Guarantees,” we had in place $9.2 million in outstanding letters of credit for third-party beneficiaries as of May 31, 2026. No amounts were drawn against these outstanding letters of credit at May 31, 2026, and the fair value of these guaranteed instruments, based on premiums paid, was not material.
Previous wording
Common shares –During fiscal 2025, we declared dividends totaling $0.68 per common share at a quarterly rate of $0.17 per common share. During fiscal 2024, we declared dividends totaling $0.96 per common share, which consisted of three quarters of declared dividends under our pre-Separation capital structure and one quarter as a standalone company. Dividends paid on our common shares totaled $33.9 million in fiscal 2025 compared to $56.8 million during fiscal 2024. On June 23, 2025, the Board declared a quarterly dividend of $0.19 per common share for the first quarter of fiscal 2026, a $0.02 per share increase from the previous quarterly rate. The dividend is payable on September 29, 2025 to shareholders of record at the close of business on September 15, 2025.
Current wording
Common shares –During fiscal 2026, we declared dividends totaling $0.76 per common share at a quarterly rate of $0.19 per common share. During fiscal 2025, we declared dividends totaling $0.68 per common share at a quarterly rate of $0.17 per common share. Dividends paid on our common shares totaled $36.9 million in fiscal 2026 compared to $33.9 million during fiscal 2025. On June 23, 2026, the Board declared a quarterly dividend of $0.20 per common share for the first quarter of fiscal 2027, a $0.01 per share increase from the previous quarterly rate. The dividend is payable on September 29, 2026 to shareholders of record at the close of business on September 15, 2026.
Previous wording
These 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.
Current wording
On March 24, 2021, the Board authorized the repurchase of up to 10,000,000 common shares. At May 31, 2026, a total of 4,565,000 common shares remain available for repurchase under the authorization, which is not subject to a fixed expiration date. The common shares may be repurchased under these authorizations 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.
Previous wording
For goodwill and indefinite lived intangible assets, we test for impairment by first evaluating qualitative factors including macroeconomic conditions, industry and market considerations, cost factors, and overall financial performance. If there are no concerns raised from this evaluation, no further testing is performed. If, however, our qualitative analysis indicates it is more likely than not that the fair value is less than the carrying amount, a quantitative analysis is performed. The quantitative analysis compares the fair value of each reporting unit or indefinite-lived intangible asset to the respective carrying amount, and an impairment loss is recognized in our consolidated statements of earnings equivalent to the excess of the carrying amount over the fair value.
Current wording
For goodwill and indefinite lived intangible assets, we test for impairment by first evaluating qualitative factors including macroeconomic conditions, industry and market considerations, cost factors, and financial performance. If there are no concerns raised from this evaluation, no further testing is performed. If, however, our qualitative analysis indicates it is more likely than not that the fair value is less than the carrying amount, a quantitative analysis is performed. The quantitative analysis compares the fair value of each reporting unit or indefinite-lived intangible asset to the respective carrying amount, and an impairment loss is recognized in our consolidated statements of earnings equivalent to the excess of the carrying amount over the fair value.