Worthington Enterprises (WOR) Q3 2025 earnings summary

Executive summary

• Q3 FY2025 net sales were $304.5M, down 3.9% year-over-year due to SES deconsolidation, but gross margin improved to 29.3% from 23.1% and adjusted EBITDA margin rose to 24.2% from 21.1%.

• Adjusted EPS increased to $0.91 from $0.80 year-over-year; diluted EPS from continuing operations was $0.79, up from $0.44.

• Free cash flow for Q3 was $44M; operating cash flow grew 14% to $57.1M; capex included $8M for facility modernization.

• Completed acquisition of Ragasco, boosting segment growth and margins; launched new products and expanded distribution.

• Repurchased 150,000 shares for $6.2M and declared a $0.17/share dividend payable in June 2025.

Financial highlights

• Q3 net sales: $305M (down from $317M prior year); adjusted EBITDA: $74M (up from $67M); adjusted EBITDA margin: 24.2% (up from 21.1%).

• Gross profit increased to $89M (29.3% margin); operating income rose to $20.9M; adjusted operating income up to $26.2M.

• Free cash flow (TTM): $144M; net working capital: $284M; net debt: $71M; leverage: 1.2x.

• Cash at quarter end was $222.8M; no borrowings under $500M credit facility.

• Equity income from JVs fell $11.2M to $32.1M, mainly due to lower ClarkDietrich contributions.

Outlook and guidance

• Targeting sustained gross margins in the high 20s, aiming for 30% over the next few years.

• Management remains confident in long-term growth, citing strong balance sheet and disciplined capital allocation.

• Expecting continued growth from new product launches, market share gains, and robust M&A pipeline.

• CapEx for facility modernization expected to total $50M over the next 6-8 quarters, mostly in fiscal 2026.

• Recent tariff announcements introduce some market uncertainty, but company is well-positioned as a domestic manufacturer.