Worthington Enterprises Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kathryn Thompson - Thompson Research Group - Analyst : Hi, thank you for taking my questions today. Good morning. First, I wanted to get kicked off on your gross margins, which were up a healthy clip in the quarter and definitely higher than most recent quarters. And you've touched on some aspects of it in the prepared commentary, but could you help us understand the larger drivers, even if you have, say half is from some categories or another, but really looking at mix shift from the stock and comps, M&A, or just better environment. Just help rank order what drove the margin performance.

Question: Kathryn Thompson - Thompson Research Group - Analyst : Okay. Helpful. And with the addition of Ragasco and just kind of shift overall structurally this year, how should we think about SG&A kind of just given different focus as we look forward?

Question: Kathryn Thompson - Thompson Research Group - Analyst : Okay. Great. Thank you. Just to follow up on WAVE, the WAVE JV, it continues to perform well, double digits for six of the past seven quarters. Obviously, there's more than just office and -- but could you talk about just expand on trends that are driving this performance and how we should think about growth as we face tougher comps going to the next calendar year? Thank you.

Question: Kathryn Thompson - Thompson Research Group - Analyst : Okay, perfect. And then just final question, you know, one thing that we have seen in terms of talking to some of our industry contacts in the field and the construction industrial value chain is that it just transfer kind of lackluster in the spring and into the summer. But man over the past [coup] one to two months, you've seen a definite [pay cut] in activity. What are you seeing in terms of your businesses, or are there some areas that are performing better more recently versus others? Thanks so much, and best of luck.

Question: Kathryn Thompson - Thompson Research Group - Analyst : Great. Thanks so much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 18, 2024 / 1:30PM, WOR.N - Q2 2025 Worthington Enterprises Inc Earnings Call

Question: Daniel Moore - CJS Securities, Inc - Analyst : Thank you. Good morning Joe. Good morning Colin. I appreciate the color.

Question: Daniel Moore - CJS Securities, Inc - Analyst : Maybe start with building products. Just elaborate and maybe differentiate from what you're seeing. I said building products, but just more generally, I should say, on the heating and cooking space, you know, between I guess the large format on the one side and, you know, kind of smaller consumer on the other. And I know this is, you know, seasonally not the strongest period, but, you know, what are you seeing in terms of maybe bottoming and expectations as we think about calendar '25?

Question: Daniel Moore - CJS Securities, Inc - Analyst : Really helpful. And maybe kind of taking it back up to 30,000 feet, but one of the comments you made was trying to think more like a startup. I'm wondering if you can elaborate on that and then just talk about any meaningful differences or in strategic direction now that you've been at the helm of CEO for a couple of months and both organically and in terms of where you're focused from an M&A perspective.

Question: Daniel Moore - CJS Securities, Inc - Analyst : It's helpful, maybe one or two quick ones. Just housekeeping, but the sustainable energy, now JV, was just above breakeven. You expect to remain around those levels. Just wondering if you expect it to be a modest drag or a modest contributor as we think about the next sort of four to eight quarters.

Question: Daniel Moore - CJS Securities, Inc - Analyst : Got it. And then lastly, from a capital allocation perspective, you know, bought back 2,00,000 shares, still have, you know, well over 5 million remaining on the authorization. The shares still trading relatively depressed valuations. My words, not yours, but wondering what their aggressiveness from a buyback perspective might be going forward. Thanks again for all the color.

Question: Susan Maklari - Goldman Sachs - Analyst : Thank you. Good morning, everyone.

Question: Susan Maklari - Goldman Sachs - Analyst : Good morning, Joe and congrats to you and calling on both of your new roles there.

Question: Susan Maklari - Goldman Sachs - Analyst : Yeah. My first question is, can you talk a bit about price cost as we think about the deflation that's come through steel, just where we are in that process of realizing those moves and then how you're thinking about price as we look to the next couple of quarters?

Question: Susan Maklari - Goldman Sachs - Analyst : Okay. That's helpful color and then maybe thinking about the administration that will come in next year and some of the policies that they could implement, as you think about the global competitive environment that you operate within and the potential for some tariffs or some other trade actions to come through, what could that mean for Worthington? How are you positioning the business relative to that? Any thoughts there strategically on how things could come together? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 18, 2024 / 1:30PM, WOR.N - Q2 2025 Worthington Enterprises Inc Earnings Call

Question: Susan Maklari - Goldman Sachs - Analyst : Yeah. Okay. I appreciate all the color. Thank you. Good luck with everything.

Question: Brian McNamara - Canaccord Genuity - Analyst : Good morning guys. Thanks for taking our questions.

Question: Brian McNamara - Canaccord Genuity - Analyst : Congrats to Joe and Colin on the promotions. I'm curious, was this the plan all along in terms of succession, and does anything change in terms of

Question: Brian McNamara - Canaccord Genuity - Analyst : Great, appreciate the color on that. Secondly, on gross margin. I just want to confirm, I think Colin said 27% is where you expect to be moving forward. Is that, did I hear that? Right.

Question: Brian McNamara - Canaccord Genuity - Analyst : And then just one final one on M&A particularly in consumer, you're in three pretty different end markets with tools, outdoor living celebrations. Where are the M&A opportunities as you see them today? And kind of where in consumer do you want a bigger pres presence in order priority? Thank you.