WORTHINGTON ENTERPRISES, INC.
For the period ended Aug 31, 2026. Filed Oct 9, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 31, 2026 · Filed Oct 9, 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-Q
Period ended 2026-02-28; filed 2026-04-09.
0001193125-26-149137
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-08-31; filed 2026-10-09.
0001193125-26-418645
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 100 previous paragraphs and 83 current paragraphs.
36 unchanged; 25 reworded; 21 added; 38 removed; 1 previous and 1 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 (21)
Current report
On September 15, 2026, we announced new names for our two operating segments that better reflect the markets they serve, the value they provide to customers and the evolution of our product portfolio. The Building Products segment is now Building Performance Solutions and the Consumer Products segment is now Trade & Specialty Solutions. The changes are to the segment names only and do not affect the composition of the operating segments or our historical financial results. For additional information, see “Note L – Segment Operations.”
Current report
Our Building Performance Solutions business delivers essential engineered products that support performance across the building systems and climate and comfort applications. Serving primarily OEMs and distributors, offerings include pressurized containment products for heating, cooling, construction and water applications, HVAC components, metal roofing clips, ceiling suspension systems (Worthington Armstrong Venture) and light gauge metal-framing products (ClarkDietrich).
Current report
Our Trade & Specialty Solutions business provides market-leading products used by professional tradespeople and consumers across tools, portable propane and helium, and other specialty categories. Offerings include cutting, siding and roofing tools, drywall, concrete and masonry hand tools, drywall finishing tools, fuel and torches, specialty hand tools and instruments, camping gas cylinders and portable helium tanks. Sales to one customer in Trade & Specialty Solutions accounted for 10.2% of our consolidated net sales in the first quarter of fiscal 2027.
Current report
During the first quarter of fiscal 2027, we operated in a macroeconomic environment marked by decelerating growth, still-elevated inflation, and cautious consumer sentiment. GDP increased at an annualized rate of 1.5% in the second quarter of calendar 2026, down from 2.1% in the preceding quarter, indicating slower economic growth. The CPI held at 3.4% year over year in August 2026, unchanged from July 2026, and above the 2.9% pace a year earlier, as a renewed rise in gasoline prices tied to geopolitical conflict in the Middle East offset moderation elsewhere. Inflation remained below its most recent peak of 4.2% reached in May 2026 but stayed well above the Federal Reserve’s 2% objective. During its September 2026 meeting, the Federal Reserve raised the target range by 25 basis points to a range of 3.75% to 4.00%, its first increase since 2023, citing persistently elevated inflation, and its projections indicated the potential for additional increases before the end of calendar year 2026. The average 30-year fixed mortgage rate remained elevated at 6.66% at the end of August 2026, relatively unchanged from 6.56% a year earlier.
Current report
Consumer confidence weakened during the quarter. The Conference Board’s Consumer Confidence Index fell to 89.4 in August 2026, its lowest level in seven months and down from 97.4 a year earlier, as elevated prices and gasoline costs weighed on household budgets, even as the labor market held steady with the unemployment rate at 4.1% in August 2026. We believe these dynamics, including persistent affordability pressure, elevated financing costs, and cautious discretionary spending, continued to weigh on both consumer and business sentiment during the first quarter of fiscal 2027. Within Trade & Specialty Solutions, inflation-driven cost consciousness influenced discretionary purchases and contributed to cautious buying patterns, while in Building Performance Solutions elevated financing costs constrained new construction demand. We expect demand across both operating segments to remain uneven in the near term. Other key end market trends are described below in the “End Market Trends” section.
Current report
During the current year quarter, conditions across our key end markets remained soft and uneven, although residential construction showed tentative signs of stabilization late in the quarter. Single-family housing starts rebounded 7.6% in August 2026 to a seasonally adjusted annualized rate of 918,000, while total housing starts eased to 1.28 million, down 1.2% from a year earlier, as multifamily activity declined; authorized building permits totaled 1.39 million, up 3.5% year over year, pointing to a modestly firmer forward pipeline. Existing home sales, by contrast, slipped below 4 million for the first time since June 2025, easing 1.2% year over year to a 3.98 million annualized pace in August 2026, as elevated mortgage rates constrained turnover, and the median existing-home price rose to $429,100. Builder sentiment remained depressed, with the HMI at 35 in August 2026, up modestly from 32 a year earlier, but marking the 16th consecutive month below 40. In non-residential construction, the ABI registered 47.2 in August 2026, continuing to hold below the 50 mark that separates expanding from contracting billings, while the DMI stood at 282.0 in August 2026, up 4.2% from a year earlier though down slightly from July, supported by data center, healthcare, and institutional planning even as broader commercial activity stayed soft. Within repair and remodel, the latest LIRA projects year over year growth in homeowner improvement spending to decelerate from approximately 2.1% at mid-2026 to 0.5% by the second quarter of calendar 2027, reflecting flattening remodeling permits 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 the recurring purchase patterns of key product categories within our diversified portfolio may support overall volumes as we progress through fiscal 2027.
Current report
Steel: Steel is our most significant direct material cost across both Building Performance Solutions and Trade & Specialty Solutions. Steel prices continued the upward trend that began in the second half of fiscal 2026 and rose throughout the first quarter of fiscal 2027. Hot rolled steel prices averaged approximately $1,157 per ton during the first quarter of fiscal 2027, increasing from $1,120 per ton in June 2026 to $1,193 per ton in August 2026, compared to $834 per ton in August 2025. Cold rolled steel prices followed a similar trajectory, averaging $1,369 per ton during the first quarter of fiscal 2027 and increasing to approximately $1,415 per ton in August 2026, compared to $1,050 per ton in August 2025. In addition to higher benchmark prices, domestic steel availability was constrained, particularly for cold rolled steel, where lead times were extended and spot availability was limited. These conditions were most pronounced for highly specified products, for which qualified substitutes were not readily available in the spot market. We continue to work closely with our partners to protect existing supply and secure incremental tons. Our sourcing strategy is intended to mitigate near-term volatility associated with these pricing trends.
Current report
Aluminum: During the first quarter of fiscal 2027, aluminum costs were higher than the prior year quarter, reflecting higher global benchmark prices and elevated U.S. Midwest delivery premiums. The Section 232 tariffs on aluminum imports, which increased from 25% to 50% effective June 4, 2025, remained in effect throughout the quarter and continued to support elevated U.S. premiums, which held near the record levels reached earlier in calendar 2026. These costs affected aluminum-intensive components and finished good assemblies. Where possible, we mitigated these increases through strategic purchasing, but tariff-related cost pressure on aluminum is expected to persist through fiscal 2027.
Current report
IEEPA Tariffs
Current report
In February 2026, the U.S. Supreme Court ruled that tariffs imposed under IEEPA on goods imported into the U.S. were unauthorized. Following this ruling, and effective on April 20, 2026, the U.S. Customs and Border Protection launched a platform for importers of record to begin IEEPA tariff refund requests, where eligible. Following the ruling, we submitted claims with U.S. Customs and Border Protection seeking refunds for tariffs previously paid. During the current year quarter, we recognized a net benefit of approximately $4.0 million related to these refunds in cost of goods sold and SG&A in our consolidated statements of earnings. Substantially all of our refund claim has been collected as of August 31, 2026.
Current report
The tables throughout this section present, on a comparative basis, our consolidated results of operations for the periods presented. For a discussion of the non-GAAP financial measures presented in the following table, as well as a reconciliation of the differences between each non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP, refer to the “Use of Non-GAAP Financial Measures and Definitions” section preceding Part I, Item 1 of this Form 10-Q.
Current report
Building Performance Solutions – Net sales totaled $215.1 million in the current year quarter, an increase of $30.3 million, or 16.4%, over the prior year quarter, primarily driven by the impact of acquisitions, which contributed $19.2 million to net sales, and strength in the water business. These increases were partially offset by lower volume and a less favorable mix in the cooling and construction business, driven primarily by the A2L load-in during the prior fiscal year and subsequent destocking of inventory by our customers.
Current report
Trade & Specialty Solutions – Net sales totaled $128.8 million in the current year quarter, an increase of $9.9 million, or 8.3%, over the prior year quarter, driven by higher overall volume and higher average selling prices.
Current report
Gross profit for the current year quarter increased $8.6 million, or 10.4%, over the prior year quarter to $90.9 million, primarily driven by the net benefit of IEEPA tariff refunds and higher net sales, partially offset by higher conversion costs, primarily in the cooling and construction business within Building Performance Solutions.
Current report
Other Non-Operating Items
Current report
Miscellaneous income in the current year quarter was driven by a pre-tax gain of $4.0 million related to an earnout arrangement associated with the sale of our former oil and gas products business, which was divested in January 2021.
Current report
Equity income increased $3.9 million over the prior year quarter to $40.6 million, driven by higher contributions from WAVE and ClarkDietrich, up $2.7 million and $1.5 million, respectively.
Current report
Building Performance Solutions –Adjusted EBITDA was relatively flat at $59.8 million in the current year quarter as higher contributions of equity income from WAVE and ClarkDietrich and earnings from recent acquisitions were offset by lower overall volume and unfavorable product mix.
Current report
Trade & Specialty Solutions –Adjusted EBITDA totaled $24.0 million in the current year quarter, an increase of $7.9 million, or 49.1%, compared to the prior year quarter. The increase was driven by the impact of higher net sales and the net benefit of IEEPA tariff refunds.
Current report
Other –Adjusted EBITDA was slightly down from the prior year quarter, driven by lower contributions from the heiserTEC and Workhorse joint ventures.
Current report
Net cash provided by operating activities was $66.7 million during the current year quarter, up $25.7 million over the prior year quarter, driven by higher net earnings and more favorable changes in operating working capital, including accounts receivable, inventory, and accounts payable.
Removed paragraphs (38)
Previous report
Our Building Products business is a market-leading provider of pressurized containment solutions, providing critical components in essential end markets, such as heating, cooking, cooling and water, HVAC systems and components, metal roofing clips and components and, 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. Refrigerant gas cylinders are used to hold refrigerant gases for commercial, residential, and automotive air conditioning and refrigeration systems. LPG cylinders hold fuel for residential and light commercial heating systems, barbeque grills and recreational vehicle equipment, industrial forklifts and commercial/residential cooking (the latter, generally outside North America). Well water tanks and expansion tanks are used primarily in the residential market with certain products also sold to commercial markets. Specialty products include a variety of fire suppression tanks, chemical tanks, and foam and adhesive tanks.
Previous report
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. Sales to one customer in Consumer Products accounted for 12.1% of our consolidated net sales in the third quarter of fiscal 2026.
Previous report
Acquisitions and Divestitures
Previous report
Fiscal 2026
Previous 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 $206.1, net of cash acquired, including an estimated tax equalization payment of approximately $3.0 million, subject to customary post-closing adjustments. Refer to “Note M – Acquisitions” for additional information.
Previous report
On December 3, 2025, we acquired Hydrostat’s propane distribution and refurbishment assets. The purchase price was approximately $9.6 million, subject to customary post-closing adjustments. Refer to “Note M – Acquisitions” for additional information.
Previous 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 B – Investments in Unconsolidated Affiliates” and “Note O – Fair Value Measurements” for additional information.
Previous 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 M – Acquisitions” for additional information.
Previous report
Fiscal 2025
Previous report
On June 3, 2024, we completed the acquisition of Ragasco, a leading global manufacturer of composite propane cylinders based in Norway. The purchase price consisted of cash consideration of $108.6 million, including an earnout that was settled in March 2025. Ragasco began operating as part of Building Products in the first quarter of fiscal 2025. Changes in the fair value of this earnout were reflected in Restructuring and other expense, net.
Previous report
During the third quarter of fiscal 2026, we operated in a macroeconomic environment marked by moderating inflation and mixed housing and construction activity. The Federal Reserve reduced the federal funds target range to 3.50% – 3.75% in December 2025 and maintained that range through January and February 2026, signaling a transition from tightening to a more neutral stance. Although mortgage rates eased modestly during the quarter, the 30-year fixed rate remained approximately 6% at quarter end, continuing to pressure affordability and contributing to subdued existing-home sales and limited housing turnover. In Building Products, housing starts showed sequential stabilization but remained below prior-year levels, while builder sentiment remained depressed. Nonresidential construction activity leveled off, while forward-planning data reflects cautious project pipelines, particularly outside large-scale infrastructure and data center categories.
Previous report
In Consumer Products, this macroeconomic environment is expected to continue pressuring discretionary spending, as elevated interest rates and cautious sentiment weigh on large-ticket purchases and project timing. As a result, we expect point-of-sale activity to remain uneven as consumers seek clearer direction on inflation trends, interest rate stability, and overall economic momentum.
Previous report
During the third quarter of fiscal 2026, conditions across our key end markets remained mixed. U.S. Residential Construction Spend was modestly below prior-year levels, while Authorized Housing Permits and U.S. Private Housing Starts both declined from a year ago, indicating that current activity remained soft and that the near-term pipeline from new residential construction was still under pressure. Existing Home Sales, by contrast, improved to a 4.09 million seasonally adjusted annual rate in February 2026, up 1.7% from January 2026, suggesting some stabilization in housing turnover that could modestly support downstream demand in some of our key end markets. Builder sentiment remained weak, with the HMI at 36 in February 2026, well below the neutral 50 level and consistent with continued affordability-related caution among home buyers and builders. The ABI remained below the 50 threshold, signaling continued contraction in design activity, while the DMI fell 7.3% in February 2026 to 250.0 from January 2026, indicating further moderation in the future non-residential pipeline. The LIRA continued to project modest homeowner improvement spending in calendar year 2026, with growth expected to slow from 2.9% early in the year to 1.6% by calendar year-end. Taken together, these indicators suggest uneven demand across our end markets, with some stabilization in resale housing activity, but continued softness in new residential construction, builder sentiment, and non-residential planning activity. Against this backdrop, we are prioritizing disciplined execution, portfolio diversification, and operational efficiency initiatives to mitigate near-term macroeconomic pressures while positioning the business for long-term success and value creation.
Previous report
Steel: Steel is our most significant direct material cost across both Building Products and Consumer Products. During February 2026, hot-rolled steel prices increased meaningfully from late-fiscal 2026 second quarter levels, averaging approximately $984 per ton compared to $855 per ton in November 2025, reflecting a clear firming in market conditions versus the second quarter of fiscal 2026. Cold-rolled steel also moved higher, averaging approximately $1,126 per ton in February 2026 compared to $1,040 per ton in November 2025. Overall, the sequential move and the strength late in the quarter indicate that steel has shifted from a period of softness into a firmer pricing environment. Our balanced sourcing strategy, combining firm-price contracts for select inputs with index-based agreements for others, enabled us to effectively manage these pricing trends and support margin stability.
Previous report
Aluminum: During the third quarter of fiscal 2026, aluminum costs increased meaningfully on a sequential basis, reflecting a firming in global base metal pricing. In addition to higher global benchmark pricing, U.S. delivered aluminum costs continue to be influenced by regional premiums and trade policy dynamics, including the Section 232 tariffs, which can affect overall transaction prices for aluminum-intensive components. Where possible, we mitigated these increases through forward purchasing and supplier negotiations, but tariff-related cost pressure on aluminum is expected to persist through the remainder of fiscal 2026.
Previous report
Global Trade Policy
Previous report
On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the IEEPA exceeded presidential authority and were therefore invalid. The President immediately replaced the IEEPA tariffs with tariffs under alternative statutory authority, though the scope and duration of future tariffs remain uncertain. We are evaluating the impacts of these developments on our supply chain costs and pricing. We may be entitled to refunds of IEEPA tariffs, though the process and timing for obtaining such refunds remain uncertain. As of February 28, 2026, we have not recorded any impact for potential recovery of tariff-related costs as refunds are uncertain.
Previous report
The following discussion provides an overview of results for the three and nine months ended February 28, 2026 and 2025:
Previous report
Reconciliations for each of these non-GAAP financial measures to their most comparable GAAP financial measure are provided in the “Use of Non-GAAP Financial Measures and Definitions” section.
Previous report
Building Products – Net sales totaled $223.9 million in the current year quarter, up $59.1 million, or 35.9%, over the prior year quarter, driven by higher overall volume and the impact of acquisitions, which contributed $32.2 million to net sales in the current year quarter.
Previous report
Consumer Products – Net sales totaled $154.8 million in the current year quarter, up $15.1 million, or 10.8% over the prior year quarter, driven by higher volume and higher average selling prices.
Previous report
Building Products – Net sales totaled $616.1 million in the current year period, an increase of $154.3 million, or 33.4%, over the prior year period, driven by higher overall volume and the impact of acquisitions, which contributed $77.6 million to net sales in the current year period.
Previous report
Consumer Products – Net sales totaled $393.7 million in the current year period, an increase of $19.6 million, or 5.2%, over the prior year period, as higher average selling prices more than offset the impact of slightly lower volume.
Previous report
Gross profit for the current year quarter increased $20.3 million, or 22.8%, over the prior year quarter to $109.5 million, driven by the impact of higher overall volume, including contributions from our fiscal 2026 acquisitions, and higher average selling prices. While gross profit was up over the prior year quarter, gross margin decreased slightly, primarily due to the amortization of a portion of the inventory step-up associated with the LSI acquisition.
Previous report
Gross profit was $276.4 million for the current year period, an increase of $50.6 million, or 22.4% over the prior year period on higher overall volume, including contributions from our fiscal 2026 acquisitions, and higher average selling prices.
Previous report
SG&A increased $20.0 million, or 10.2%, from the prior year period, primarily due to the addition of LSI and Elgen. As a percentage of net sales, SG&A was down from 23.6% in the prior year period to 21.5%.
Previous report
Miscellaneous Income (Expense), Net
Previous report
Miscellaneous expense in both the current year quarter and current year period was driven 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.
Previous report
Equity income decreased $1.4 million from the prior year quarter to $30.7 million, on lower contributions from ClarkDietrich, which were down $3.8 million, driven by the impact of weak non-residential construction activity and pricing pressure, partially offset by higher contributions from WAVE, up $2.1 million.
Previous report
Equity income was down $5.6 million from the prior year period, driven by lower contributions from ClarkDietrich, which were down $12.2 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 $8.4 million.
Previous report
Income tax expense was $34.6 million in the current year period compared to $29.1 million in the prior year period. The increase was primarily driven by higher pre-tax earnings.
Previous report
Building Products –Adjusted EBITDA was $58.8 million, an increase of $5.6 million, or 10.5% compared to the prior year quarter, driven by the impact of higher net sales, partially offset by lower overall contributions of equity income.
Previous report
Consumer Products –Adjusted EBITDA was $35.5 million, an increase of $6.9 million, or 24.1% over the prior year quarter, primarily driven by the impact of higher net sales and gross margin improvement, partially offset by higher SG&A. Adjusted EBITDA in the prior year quarter was negatively impacted by $1.1 million of bad debt expense related to a customer bankruptcy.
Previous report
Other –Adjusted EBITDA increased $0.3 million compared to the prior year quarter, as higher equity earnings from Workhorse offset lower equity earnings from SES.
Previous report
Building Products –Adjusted EBITDA was $171.8 million in the current year period, an increase of $30.2 million, or 21.3%, over the prior year period. The increase was driven by higher overall volumes and the impact of acquisitions, which contributed $9.0 million of adjusted EBITDA in the current year period, partially offset by lower overall contributions of equity income.
Previous report
Consumer Products –Adjusted EBITDA increased $5.0 million, or 8.1%, from the prior year period, as the impact of higher average selling prices was partially offset by lower overall volume, higher conversion costs, and higher SG&A.
Previous report
Other –Adjusted EBITDA decreased $1.8 million compared to the prior year period, driven by lower contributions of equity earnings from the SES joint venture.
Previous report
Net cash provided by operating activities was $154.5 million during the current year period, up $7.2 million over the prior year period as higher net earnings in the current year period was partially offset by a $7.5 million decrease in distributions received from unconsolidated affiliates.
Reworded paragraphs (25)
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: 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.
Current wording
We are a designer and manufacturer of market-leading products and solutions serving building and specialty applications, organized around attractive end markets under two separate and distinct operating segments: Building Performance Solutions and Trade & Specialty Solutions. 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
Activity outside of our two reportable operating segments is presented within Other and Unallocated Corporate, as described further below.
Current wording
Activity outside of our two operating segments is presented within Other and Unallocated Corporate as described below.
Previous wording
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 wording
Other includes our share of the equity income of two of our unconsolidated joint ventures, heiserTEC and Workhorse, and the related investments in these businesses.
Previous 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.
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.
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 Consumer Products, 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 Trade & Specialty Solutions, where a large volume of products flow through big box retailers.
Previous wording
Throughout the first nine months of fiscal 2026, inventory levels at most key retailer and distributor customers 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.
Current wording
During the first quarter of fiscal 2027, inventory levels at most key retailer and distributor customers within Trade & Specialty Solutions 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 Performance Solutions 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 of fiscal 2026, 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.
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 Building Products. 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. We actively monitor the following publicly available economic data and selected key indicators for our major end markets.
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 and repair/remodel, which collectively drive demand for the Building Performance Solutions segment. These same end markets also drive demand for the trade-focused products within our Trade & Specialty Solutions segment, including professional tools, torches and other contractor-focused products. Demand for the specialty products within Trade & Specialty Solutions, including portable propane and helium products, such as helium-filled balloon kits, 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, aluminum, propane, propylene, and other industrial gases. Fluctuations in the prices of these inputs have a direct impact on our cost of goods sold and overall financial performance. Our primary raw material and energy inputs are subject to significant price volatility driven by global supply-demand imbalances, tariffs, and other external factors. We manage this risk through a combination of supply contracts, forward purchasing, and selective hedging strategies designed to reduce near-term cost swings and support margin stability.
Current wording
Our largest raw material expenditures include cold rolled and hot rolled steel, aluminum, propane, and propylene. Fluctuations in the prices of these inputs have a direct impact on our cost of goods sold and overall financial performance. Our primary raw material and energy inputs are subject to significant price volatility driven by global supply-demand imbalances, tariffs, and other external factors. We manage this risk through a combination of supply contracts, forward purchasing, and selective hedging strategies designed to reduce near-term cost swings and support margin stability.
Previous wording
Propane, propylene, and other gases: Propane and propylene costs were generally stable to modestly favorable through the first nine months of fiscal 2026, with market prices trending below the prior year period. This trend was driven by strong overall supply levels and softer end-market demand. A portion of our propane and propylene requirements are secured under fixed-price supply agreements, which limited our exposure to spot fluctuations. Costs for helium and other industrial gases declined from the prior year quarter, providing a margin benefit in select consumer-facing product lines, particularly within Consumer Products.
Current wording
Propane, propylene, and other gases: Propane and propylene costs were generally stable during the first quarter of fiscal 2027, supported by ample domestic supply conditions.
Previous 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.
Current wording
Net sales in both Building Performance Solutions and Trade & Specialty Solutions tend to be stronger in our third and fourth fiscal quarters. In Building Performance Solutions, this seasonality is generally driven by weather conditions, customer business cycles, and the timing of renovation and new construction projects, while in Trade & Specialty Solutions, it is driven by our facilities performing at seasonal peaks, matching consumer demand.
Previous wording
SG&A increased $12.7 million, or 20.2%, from the prior year quarter, primarily due to the addition of LSI and Elgen. As a percentage of net sales, SG&A was down from 20.7% in the prior year quarter to 20.0%.
Current wording
SG&A increased $6.6 million, or 9.3%, from the prior year quarter, due primarily to the addition of LSI. As a percentage of net sales, SG&A was down from 23.2% in the prior year quarter to 22.4%.
Previous wording
Restructuring and other expense, net in the current year quarter and current year period consisted primarily of transaction costs related to acquisitions and divestitures, as well as employee severance. Restructuring activity in the prior year quarter and prior year period was driven by the accelerated vesting of certain outstanding equity awards upon the retirement of our former CEO and a change in fair value of an earnout associated with the Ragasco acquisition.
Current wording
Restructuring and other expense, net in both periods consisted primarily of employee severance and transaction costs related to acquisitions and divestitures.
Previous wording
Interest expense, net increased $1.2 million in both the current year quarter and current year period 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 wording
Interest expense, net increased $2.0 million in the current year quarter primarily due to lower interest income generated from cash on hand.
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 Performance Solutions.
Previous wording
Includes our share of the equity earnings from the Workhorse and the SES joint ventures.
Current wording
Includes our share of the equity income of the heiserTEC and Workhorse joint ventures.
Previous wording
Income tax expense was $15.0 million in the current year quarter compared to $13.2 million in the prior year quarter. The increase was primarily driven by higher pre-tax earnings.
Current wording
Income tax expense was $13.0 million in the current year quarter compared to $10.9 million in the prior year quarter. The increase was primarily driven by higher pre-tax earnings.
Previous wording
Unallocated Corporate – Unallocated SG&A increased $2.0 million, or 35.7%, from the prior year quarter, primarily driven by higher profit sharing and bonus accruals.
Current wording
Unallocated Corporate – Unallocated SG&A increased $0.9 million, or 12.7%, from the prior year quarter, primarily driven by higher profit sharing and bonus accruals in the current year quarter.
Previous wording
During the current year period, we generated $154.5 million of cash from operating activities, invested $39.4 million in property, plant and equipment, and spent approximately $303.4 million to acquire 100% of the outstanding equity interests in Elgen and LSI, and the propane and distribution assets of Hydrostat. Additionally, we paid $25.3 million to repurchase 450,000 common shares and paid dividends of $27.5 million on the common shares during the current year period.
Current wording
During the current year quarter, we generated $66.7 million of cash from operating activities, invested $12.8 million in property, plant and equipment, paid $18.2 million to repurchase 335,000 common shares, and paid dividends of $9.4 million on the common shares.
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 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 $495.2 million of borrowing capacity available to be drawn as of February 28, 2026.
Current 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 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 available as of August 31, 2026. On August 31, 2026, we amended and restated our Credit Facility to extend its maturity from September 27, 2028 to August 31, 2031, while maintaining aggregate commitments of $500.0 million.
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 used by investing activities was $343.9 million during the current year period compared to $115.1 million from the prior year period. Net cash used by investing activities during the current year period was driven primarily by cash paid to acquire the outstanding equity interests in Elgen and LSI, and capital expenditures, including $18.5 million related to ongoing facility modernization projects.
Current wording
Net cash used by investing activities was $14.1 million during the current year quarter compared to $105.4 million in the prior year quarter. Net cash used by investing activities during the current year quarter was driven primarily by capital expenditures, including $3.2 million related to ongoing facility modernization projects, and $2.4 million of acquisition-related payments, partially offset by $1.0 million of proceeds from asset sales. Net cash used by investing activities during the prior year quarter was primarily driven by cash paid to acquire the outstanding equity interests in Elgen.
Previous wording
Net cash used by financing activities was $54.7 million during the current year period, compared to $53.6 million in the prior year period. During the current year period, we paid $25.3 million to repurchase 450,000 common shares and paid dividends of $27.5 million on the common shares.
Current wording
Net cash used by financing activities was $25.2 million during the current year quarter, compared to $18.6 million in the prior year quarter. During the current year quarter, we paid $18.2 million to repurchase 335,000 common shares and paid dividends of $9.4 million on the common shares.
Previous wording
Common shares – On March 24, 2026, the Board declared a quarterly dividend of $0.19 per common share payable on June 29, 2026, to shareholders of record at the close of business on June 15, 2026.
Current wording
Common shares – On September 22, 2026, the Board declared a quarterly dividend of $0.20 per common share payable on December 29, 2026, to shareholders of record at the close of business on December 15, 2026.
Previous wording
On March 24, 2021, the Board authorized the repurchase of up to 5,618,464 common shares. As of February 28, 2026, 4,915,000 common shares remained available for repurchase under this authorization. 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.
Current wording
On March 24, 2021, the Board authorized the repurchase of up to 10,000,000 common shares. At August 31, 2026, a total of 4,230,000 common shares remained available for repurchase under the authorization, which is not subject to a fixed expiration date. The common shares may be repurchased under this authorization 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
Long-term debt and short-term borrowings – As of February 28, 2026, we were in compliance with the financial covenants of our short-term and long-term debt agreements. Our debt agreements do not include credit rating triggers or material adverse change provisions. We had $4.8 million outstanding under the Credit Facility as of February 28, 2026, leaving $495.2 million available for future use.
Current wording
Long-term debt and short-term borrowings – As of August 31, 2026, we were in compliance with the financial covenants of our short-term and long-term debt agreements. Our debt agreements do not include credit rating triggers or material adverse change provisions. There were no outstanding borrowings drawn against the Credit Facility at August 31, 2026, leaving the full borrowing capacity of $500.0 million available for use.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
We actively monitor the following publicly available economic data and select key indicators for our major end markets:
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Unallocated Corporate – Unallocated SG&A increased $1.0 million, or 4.9%, from the prior year period, primarily driven by higher profit sharing and bonus accruals.