Worthington Enterprises (NYSE:WOR) executives highlighted year-over-year growth in revenue, adjusted EBITDA, and adjusted earnings per share during the company’s fiscal 2026 second-quarter earnings call, while also outlining integration work at Elgen and a newly announced acquisition agreement for LSI, a manufacturer of metal roofing components.
Second-quarter results show revenue growth and higher adjusted earnings
President and CEO Joe Hayek said the company delivered “a strong Q2” despite what he described as mixed market conditions. Hayek noted revenue grew more than 19% year over year, and said that excluding recently acquired Elgen, revenue increased by more than 10%.
On profitability, Souza said adjusted EBITDA was $60 million, up from $56 million a year earlier, with an adjusted EBITDA margin of 18.5%. Hayek added that over the last 12 months adjusted EBITDA reached $284 million, up $49 million from a year earlier, and said trailing 12-month adjusted EBITDA margin was nearly 23% compared with 20% a year ago. He also noted a $15 million negative swing in equity earnings from ClarkDietrich over that same period.
Worthington reported GAAP earnings of $0.55 per share, compared with $0.56 per share in the prior-year period. Souza said the current quarter included $0.10 per share of “unique items,” primarily losses tied to a divestiture within the SES joint venture and the revaluation of marketable securities received as consideration. The prior-year quarter included $0.04 per share of restructuring and other expenses. Excluding those items, Souza reported adjusted earnings of $0.65 per share, up from $0.60 per share a year earlier.
Acquisition pipeline: LSI deal announced, Elgen integration continues
Management emphasized the company’s acquisition strategy, which Hayek described as focusing on niche markets with sustainable competitive advantages and core manufacturing capabilities aligned with Worthington’s. The company announced a planned acquisition of LSI, a manufacturer of standing seam metal roofing clips, components, and retrofit systems.
Hayek said the purchase price is approximately $205 million. He cited LSI’s last-12-month results ended Sept. 30, stating the business reported adjusted EBITDA of about $22.4 million and net sales of $51.1 million. Worthington expects LSI to be accretive to adjusted EBITDA margins, adjusted EPS, and free cash flow, with closing expected in January 2026.
On the call, executives pointed to LSI’s positioning in OEM-certified roof systems, which they said creates requalification requirements and high switching costs, as well as a domestic manufacturing footprint and long-standing customer relationships. Hayek also described LSI’s demand profile as “resilient retrofit,” noting the business is not reliant on new construction for much of its growth and referencing a retrofit offering that allows a new metal roof to be installed over an existing roof.
Worthington also discussed Elgen, which it acquired in June. Hayek said Elgen’s second-quarter results reflected a “reset” of operations, with a focus on safety, equipment additions, and workforce retention. He said those efforts temporarily limited the company’s ability to “shift to demand,” weighing on Elgen’s revenue and margins and impacting consolidated gross margins, but added that Worthington believes it has the team in place to drive profitable growth.
Segment performance: building products growth offsets cautious consumer backdrop
In Consumer Products, Souza said net sales rose 3% year over year to $120 million, as momentum in the celebrations category offset modestly lower volumes. Adjusted EBITDA was flat at $15 million, with margin of 12.7% compared with 13.3% a year earlier. Souza said results reflected stable performance in a cautious consumer environment and higher conversion costs on lower volumes.
Hayek said the consumer portfolio includes affordable products and also serves professionals and contractors in certain categories, which he suggested are less impacted by consumer softness. He highlighted expanded retail placement, including the company’s Balloon Time products in Costco stores nationwide, as well as additional placement at Sherwin-Williams and Home Depot. Hayek also referenced prior placements discussed in earlier quarters, including CVS, Staples, Walgreens, and said store count is up 63% overall.
In Building Products, Souza said net sales increased 32% year over year to $208 million, including $25 million of sales from Elgen. Excluding Elgen, net sales were up 16%. He said growth was broad-based, citing heating and cooking, water, cooling, and construction, and highlighted adoption of “more environmentally friendly refrigerants” as a driver in cooling and construction. Adjusted EBITDA rose to $53 million from $47 million, with margin of 25.5%.
Equity earnings were mixed. Souza said WAVE contributed $26 million in equity earnings, while ClarkDietrich contributed $4 million, down from $10 million a year earlier due to what management called a challenging market environment. Executives said ClarkDietrich is experiencing margin pressure tied to subdued new construction and increased competition, particularly from smaller players, while noting the business remains a market leader. Souza said ClarkDietrich’s project mix has shifted toward larger projects, which he described as carrying a lower profitability profile than its traditional drywall stud business. He added the company expects ClarkDietrich performance to be “no worse than flat sequential” moving forward.
Cash flow, capital return, and balance sheet positioning
Souza reported operating cash flow of $52 million and free cash flow of $39 million for the quarter. Trailing 12-month free cash flow totaled $161 million, which he said represented a 96% conversion rate relative to adjusted net earnings. Capital expenditures were $12 million in the quarter, including $6 million for the “last of our planned facility modernization projects.” Souza said the company has about $30 million of modernization spending remaining, expected mostly over the next three quarters, and anticipates capex will return to more normalized levels as the project wraps up.
Worthington returned capital to shareholders through $10 million in dividends and share repurchases of 250,000 shares for $14 million at an average price of $54.87 per share. The board declared a quarterly dividend of $0.19 per share payable in March 2026.
On liquidity, Souza said Worthington ended the quarter with $305 million in long-term funded debt and $180 million in cash, with a $500 million revolving credit facility undrawn at quarter end. Net debt was $125 million, and net debt to trailing adjusted EBITDA was approximately 0.4 times. Souza said the planned LSI acquisition is expected to be funded primarily with cash on hand and supplemented by modest revolver borrowings.
Operational initiatives and market themes
Hayek highlighted product and operational initiatives across the portfolio, including innovation in large ASME water tanks used to cool data centers and a newly expanded capability to refurbish large-format propane tanks. He also referenced an “80/20 initiative” in the water business and broader use of AI tools as part of the company’s transformation efforts.
During Q&A, executives detailed the company’s exposure to data centers, citing products from WAVE, ClarkDietrich, Elgen, and LSI. Souza said data center demand is not a significant portion of any one business, but is meaningful in aggregate and one of the faster-growing areas within those businesses, estimating it is likely less than 10% of sales for the businesses mentioned.
Management also discussed tariffs, saying Worthington believes it is a net beneficiary of announced and in-place tariffs and describing mitigation efforts through supplier negotiations, supply chain cost reductions, and pricing actions. Hayek said by early December the company felt it was “where we need to be” across those levers while balancing profitability and customer partnerships.
Souza closed by noting the quarter marked the company’s fifth consecutive quarter of year-over-year growth in adjusted EPS and adjusted EBITDA, as Worthington enters what management described as its seasonally strongest quarters.
About Worthington Enterprises (NYSE:WOR)
Worthington Enterprises (NYSE:WOR) is a diversified metal manufacturing company that produces pressure vessels, engineered assemblies and fabricated metal products. The company’s portfolio includes the design and manufacture of cylinders for compressed gases, such as propane, natural gas and hydrogen, as well as transport tanks and other pressure-containment solutions for the industrial gas, energy and transportation markets. In addition to its pressure vessel operations, Worthington Enterprises offers metal processing and distribution services, supplying coil, sheet and plate products to customers across multiple industries.
Founded in 1955 and headquartered in Columbus, Ohio, Worthington Enterprises has grown from a single steel processing facility into a multi‐division organization with operations in the United States, Canada and Mexico.
