Worthington Enterprises Inc Q4 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. For this quarter reported the theme this quarter is pretty similar to the prior quarter, which was a pretty solid margin expansion for your wholly owned margins. Part of this is we acknowledge is lapping some easier comps, but also a large portion REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 25, 2025 / 12:30PM, WOR.N - Q4 2025 Worthington Enterprises Inc Earnings Call is company initiatives. Can you break down or break out what margin growth is, what is it more onetime? And how much of it is more company-specific initiatives?

Question: Kathryn Thompson - Thompson Research Group - Analyst : Okay. That's helpful. I wanted to shift to WAVE, contributions were above $30 million this quarter is the first time we've seen that. Can you talk about the drivers for this is timing of projects, price or the true uptick in volume demand? And is this level achievable going forward? Or maybe help us to think about how to frame WAVE based on what you're seeing in the market right now?

Question: Kathryn Thompson - Thompson Research Group - Analyst : Okay. And tying into that for ClarkDietrich, which could that I mean that's very heavily tied to just traditional commercial construction. But you saw a nice uplift at $13 million, which is higher than the sub-$10 million range you've had in the past few quarters. Is that a signaling that we're we've hit more of a trough, but or is it more and you have some demand? Or is it more kind of like what we talked about with WAVE timing, price, true volume demand?

Question: Kathryn Thompson - Thompson Research Group - Analyst : Okay, great. I'll hope back in the queue. Thanks so much.

Question: Dan Moore - CJS Securities - Analyst : Thank you. Good morning, Joe, Colin Marcus. Thanks for taking questions. Dan. If I missed it, forgive me, what were the revenue and EBITDA contributions from Ragasco in the quarter if you break those out? And what are your expectations for organic wholly owned top line growth, both consumer and building products for Q1 and the balance of the year. I know you don't like to give specific guidance. But just wondering if you expect to generate positive organic growth in fiscal '26 or were thinking closer to flat given all the current macro uncertainty?

Question: Dan Moore - CJS Securities - Analyst : Understood. Appreciate it, Joe. Maybe just provide a little bit more detail on Elgen, how it came about, how their HVAC components fit into the rest of your wholly owned building products and any potential revenue or cost synergies?

Question: Dan Moore - CJS Securities - Analyst : And just out of curiosity, the purchase price is pretty attractive at, I think, around 7 times EBITDA. Anything with the word HVAC and it generally trading at much higher levels. So just talk about maybe the customer base they serve and kind of growth outlook organically would be really helpful.

Question: Dan Moore - CJS Securities - Analyst : Alright, very good. I'll circle back with you and follow thank you.

Question: Susan Maklari - Goldman Sachs - Analyst : Thank you. Good morning, everyone my first question is on steel. Can you talk a bit about what you're seeing in terms of input costs across the business? And maybe how you're also approaching pricing relative to any inflation that you're seeing there, just given the softness that we are seeing across both the consumer and perhaps some of that building products base.

Question: Susan Maklari - Goldman Sachs - Analyst : Okay. That's helpful. And then turning to the modernization efforts. It's good to hear that spend is coming through, and it seems like it's been a really good effort there. Can you talk about the benefits that we should expect as we look to fiscal 2026? Anything that you're especially focused on how we should think about perhaps some of that flow through across the various segments?

Question: Susan Maklari - Goldman Sachs - Analyst : Okay. And then just one last question. You mentioned in a response to a prior question that the M&A pipeline has perhaps softened a bit, just given the backdrop that we're in. Can you talk a bit more about capital allocation, how you're thinking about the potential for deals in this environment? And it's nice to see the dividend raise come through yesterday. Any thoughts on how you're balancing M&A versus shareholder return?

Question: Susan Maklari - Goldman Sachs - Analyst : Yeah, okay, thank you for all the color. Good luck with everything.

Question: Brian McNamara - Canaccord Genuity - Analyst : Good morning, guys. Congrats on the strong results. So I'm curious what you're seeing in the marketplace as it relates to tariffs being a domestic manufacturer, presumably your advantage. But a lot of this change as you mentioned on China tariffs since your Q3 report in late March. What specifically are your China source competitors doing that you're observing? Are they running down inventories on head? Have they already taken price on the shelf? Are they doing something else? That would be helpful.

Question: Brian McNamara - Canaccord Genuity - Analyst : Great. And then secondly, on gross margins, obviously, a big improvement in H2. I think you said Q3 is typically a little stronger than Q4, and they are kind of in line is. So like is it reasonable to assume kind of 29-plus percent sustains next year? I know the I guess, the medium-term target is 30%. I'm just trying to figure out the nuances I know I think H1 is typically a bit weaker than H2. But any help there on the gross margin line for next year would be helpful.

Question: Brian McNamara - Canaccord Genuity - Analyst : Okay. And then finally, on Elgen, just three quick ones. One, in terms of modeling any seasonality on revenues two, I think the trailing 12-month EBITDA margin was a bit south of 12%. Is there a path to get that to 20% just in line with your M&A framework? And if so, how do you get there? And then three, is there any China sourcing there? .

Question: Brian McNamara - Canaccord Genuity - Analyst : Excellent. All right, thanks a lot guys. Best of luck. Thanks Brian.

Question: Walt Liptak - Seaport Research - Analyst : Hey, thanks. Good morning, Joe and Colin. I'm Walter Liptak. But great quarter, and I wanted to ask about Building Products. And you've gone into some detail already about the tariff impact, but I wonder if we could talk a little bit kind of specifically about building products and any just your thoughts on how tariffs impacted pricing, supply, demand, those kind of issues?

Question: Walt Liptak - Seaport Research - Analyst : Okay. Great. And kind of along those lines, I think you're talking about a little bit of this question here, but in building products, it's out when in your prepared remarks, it sounded like you're gaining some market share? Or is there a share opportunity. I wonder if you could talk about that.

Question: Walt Liptak - Seaport Research - Analyst : Okay. That sounds great. And then in your prepared remarks, also, Colin, I think you talked about consumer mix. Was that consumer mix the Balloon Time? Or is there some other consumer mix that was positive for you guys?

Question: Walt Liptak - Seaport Research - Analyst : Okay. Good. And you guys you gave some idea about the stability of the market, but no guidance. I wonder, Joe, if you could help us just by talking about the year ahead is a new-ish CEO, what are your objectives? What would you like to see happen over the next four quarters?

Question: Walt Liptak - Seaport Research - Analyst : Whatever you do.

Question: Walt Liptak - Seaport Research - Analyst : Okay, great, yeah, good luck in 2026. I hope you keep Winning.