Worthington Enterprises WOR Form 10-Q filing Q3 FY2026

Use of Non-GAAP Financial Measures and Definitions 1 | Part I. Financial Information | | | | Item 1. Financial Statements Consolidated Balance Sheets – February 28, 2026 and May 31, 2025 5 Consolidated Statements of Earnings – Three Months and Nine Months Ended February 28, 2026 and 2025 6 Consolidated Statements of Comprehensive Income – Three Months and Nine Months Ended February 28, 2026 and 2025 7 Consolidated Statements of Cash Flows – Three Months and Nine Months Ended February 28, 2026 and 2025 8 Condensed Notes to Consolidated Financial Statements (Unaudited) 9 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 3. Quantitative and Qualitative Disclosures About Market Risk 37 Item 4. Controls and Procedures 37 | Part II. Other Information | | | | Item 1. Legal Proceedings 38 Item 1A. Risk Factors 38 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 38 Item 3. Defaults Upon Senior Securities 39 Item 4. Mine Safety Disclosures 39 Item 5. Other Information 39 Item 6. Exhibits 39 Signatures 40

COMMONLY USED OR DEFINED TERMS

References in this Form 10-Q to “we,” “our,” “us” or the “Company” are collectively to Worthington Enterprises and its consolidated subsidiaries. In addition, the following terms, when used in this Form 10-Q, have the meanings set forth below:

Term Definition

ABI Architecture Billings Index

AI Artificial intelligence

AOCI Accumulated other comprehensive income (loss)

ASU Accounting Standards Update

ATSR Annualized absolute total shareholder return

Board Board of Directors of Worthington Enterprises, Inc.

CARES Act Coronavirus Aid, Relief and Economic Security Act

CEO Chief Executive Officer

ClarkDietrich Clarkwestern Dietrich Building Systems LLC

CODM Chief Operating Decision Maker

common shares The common shares, no par value, of Worthington Enterprises

Credit Facility Our $500,000,000 unsecured revolving credit facility with a group of lenders

current year period The nine months ended February 28, 2026

current year quarter The three months ended February 28, 2026

DMI Dodge Momentum Index

EBIT Earnings before interest and taxes

EBITDA Earnings before interest, taxes, depreciation, and amortization

Elgen Elgen Manufacturing Company, Inc.

EPS Earnings per common share

equity income Equity in net income of unconsolidated affiliates

ETR Effective income tax rate

Exchange Act Securities Exchange Act of 1934, as amended

FASB Financial Accounting Standards Board

fiscal 2024 Our fiscal year ended May 31, 2024

fiscal 2025 Our fiscal year ended May 31, 2025

fiscal 2026 Our fiscal year ending May 31, 2026

Form 10-Q This Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2026

GAAP U.S. generally accepted accounting principles

Halo WH Products, LLC

Hexagon Composites Hexagon Composites ASA, which is traded on the Euronext Oslo as HEX

Hexagon Purus Hexagon Purus ASA, which is traded on the Euronext Oslo as HPUR

HMI National Association of Home Builders/Wells Fargo Housing Market Index

HVAC Heating, ventilation, and air conditioning

Hydrostat Hydrostat, Inc.

IEEPA International Emergency Economic Powers Act, as amended

LIRA Leading Indicator of Remodeling Activity

LPG Liquefied petroleum gas

LSI LSI Group, LLC

MD&A Management’s Discussion and Analysis of Financial Condition and Results of Operations

N.M. Not meaningful

OCI Other comprehensive income (loss)

prior year period The nine months ended February 28, 2025

prior year quarter The three months ended February 28, 2025

PSLRA Private Securities Litigation Reform Act of 1995, as amended

Ragasco Ragasco AS

SEC Securities and Exchange Commission

SES Sustainable Energy Solutions

Separation The separation of our former steel processing business, effective December 1, 2023

SG&A Selling, general and administrative expenses

simple SOFR Simple Secured Overnight Financing Rate

special PSA Special award of common shares subject to performance-based and time-based vesting restrictions

Term Definition

Steel Supply and Services Agreement Steel Supply and Services Agreement, dated November 30, 2023, by and between Worthington Steel and Worthington Enterprises.

third quarter of fiscal 2026 Our fiscal quarter ended February 28, 2026

Trademark License Agreement Trademark License Agreement, dated November 30, 2023, by and between Worthington Steel and Worthington Enterprises.

Transition Services Agreement Transition Services Agreement, dated November 30, 2023, by and between Worthington Steel and Worthington Enterprises.

U.S. United States of America

WAVE Worthington Armstrong Venture

Workhorse Taxi Workhorse Holdings, LLC

Worthington Enterprises Worthington Enterprises, Inc. (formerly known as Worthington Industries, Inc.)

Worthington Steel Worthington Steel, Inc.

2025 Form 10-K Our Annual Report on Form 10-K for fiscal 2025 as filed with the SEC on July 30, 2025

2026 Form 10-K Our Annual Report on Form 10-K for fiscal 2026

Also see the definitions included in the “Use of Non-GAAP Financial Measures and Definitions” section of this Form 10-Q.

USE OF NON-GAAP FINANCIAL MEASURES AND DEFINITIONS

NON-GAAP FINANCIAL MEASURES. This Form 10-Q includes certain financial measures that are not calculated and presented in accordance with GAAP. Non-GAAP financial measures typically exclude items that management believes are not reflective of our ongoing operations, and thus should not be included when evaluating our performance. Management uses these non-GAAP financial measures to evaluate ongoing performance, engage in financial and operational planning, and determine incentive compensation. Management believes these non-GAAP financial measures provide useful supplemental information regarding the performance of our ongoing operations and should not be considered as an alternative to the comparable GAAP financial measure. Additionally, management believes these non-GAAP financial measures allow for meaningful comparisons and analysis of trends in our business and enable investors to evaluate our operations and future prospects in the same manner as management.

Beginning in the third quarter of fiscal 2026, we updated our definition of adjusted operating income, adjusted net earnings, adjusted EBITDA, and adjusted EPS – diluted to exclude the acquisition-related amortization of inventory step-up charges. Non-GAAP financial measures for prior periods presented in this Form 10-Q have been recast for comparability.

The following provides an explanation of each non-GAAP financial measure presented in this Form 10-Q:

Adjusted operating income (loss) is defined as operating income (loss) excluding the items listed below, to the extent naturally included in operating income (loss).

Adjusted net earnings is defined as net earnings attributable to controlling interest excluding the after-tax effect of the excluded items outlined below.

Adjusted EPS - diluted is defined as adjusted net earnings divided by diluted weighted-average common shares outstanding for the applicable period.

Adjusted EBITDA is the measure by which management evaluates segment performance and overall profitability. Adjusted EBITDA excludes additional items including, but not limited to, those listed below, as well as other items that management believes are not reflective of, and thus should not be included when evaluating the performance of ongoing operations. Adjusted EBITDA also excludes stock-based compensation due to its non-cash nature, which is consistent with how management assesses operating performance and determines incentive compensation. At the segment level, adjusted EBITDA includes expense allocations for centralized corporate back-office functions that exist to support the day-to-day business operations. Public company and other governance costs are held at the corporate level within the unallocated corporate and other category.

Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by net sales.

EXCLUSIONS FROM NON-GAAP FINANCIAL MEASURES

Management believes it is useful to exclude the following items from its non-GAAP financial measures for its own and investors’ assessment of the business for the reasons identified below. Additionally, management may exclude other items from non-GAAP financial measures that do not occur in the ordinary course of our ongoing business operations and note them in the reconciliation from net earnings to the non-GAAP financial measure adjusted EBITDA.

• Amortization of inventory step-up represents the increase in inventory fair value associated with our acquisitions. The increase in inventory fair value is amortized to cost of sales over the period that the related inventory is sold. The amortization of inventory step-up is excluded because it is a non-cash expense that is not indicative of ongoing operating results.
• Impairment charges are excluded because they do not occur in the ordinary course of our ongoing business operations, are inherently unpredictable in timing and amount, and are non-cash, which management believes facilitates the comparison of historical, current and forecasted financial results.
• Restructuring and other expense, net consist of established programs that are intended to fundamentally change our operations, and as such are excluded from our non-GAAP financial measures. Our restructuring programs may include closing or consolidating production facilities or moving manufacturing of a product to another location, realignment of the management structure of a business unit in response to changing market conditions or general rationalization of headcount. Our restructuring activities generally give rise to employee-related costs, such as severance pay, and facility-related costs, such as exit costs and gains or losses on asset disposals but may include other incremental costs associated with our restructuring activities. Restructuring and other expense, net, may also include other nonrecurring items included in operating income but incremental to our normal business activities. These items are excluded because they are not indicative of the ongoing operations of our underlying business.
• Loss on partial sale of investment in SES, which resulted from the divestiture of our 49% interest in the Composites business of the SES joint venture, is excluded because it did not occur in the normal course of business.
• Unrealized loss on investment in marketable equity securities represents the net impact of unrealized losses resulting from mark-to-market adjustments on our marketable equity securities. We exclude this activity because it is not reflective of on-going operating activity and does not provide a meaningful evaluation of operating performance.

(In thousands, except per common share amounts)

Consolidated Results – Selected Non-GAAP Adjusted Results

(In thousands, except per common share amounts)

Consolidated Results - Adjusted EBITDA

(1)

Excludes the impact of noncontrolling interest.

(2)

Reflects the amortization of the step-up to fair market value of acquired inventory related to the LSI and Elgen acquisitions in fiscal 2026 and the Ragasco acquisition in fiscal 2025. We updated the definition of our non-GAAP financial measures to exclude inventory step-up charges in the third quarter of fiscal 2026. All previously reported amounts in this Form 10-Q have been recast to conform to this change.

(3)

Reflects the loss incurred in connection with divestment of our 49% interest in the composite assets of our SES joint venture on October 16, 2025. In exchange for our interest in the divested assets, we received common shares of both Hexagon Composites and Hexagon Purus.

(4)

Reflects the unrealized loss associated with the marketable securities noted in footnote (3) above.

(5)

EBIT and adjusted EBIT are non-GAAP financial measures. However, these measures are not used by management to evaluate our performance, engage in financial and operational planning, or to determine incentive compensation. Instead, they are included as subtotals in the reconciliation of net earnings to adjusted EBITDA, which is a non-GAAP financial measure used by management.

(6)

Excludes $2.7 million of stock-based compensation reported in restructuring and other expense, net in the consolidated statement of earnings for the prior year period related to the accelerated vesting of certain outstanding equity awards upon retirement of a key employee.

Item 1. – Financial Statements

See condensed notes to consolidated financial statements.

See condensed notes to consolidated financial statements.

See condensed notes to consolidated financial statements.

See condensed notes to consolidated financial statements.

WORTHINGTON ENTERPRISES, INC.

CONDENSED Notes to Consolidated Financial Statements (UNAUDITED)

(In thousands, except common share and per common share amounts)

Note A – Basis of Presentation

Basis of Presentation

These interim unaudited consolidated financial statements include the accounts of Worthington Enterprises and its consolidated subsidiaries. Significant intercompany accounts and transactions have been eliminated.

We own an 80% controlling interest in Halo. Halo is consolidated with the equity owned by the other joint venture members shown as “noncontrolling interests” in our consolidated balance sheets, and the other joint venture members’ portions of net earnings and OCI are shown as net earnings or comprehensive income attributable to noncontrolling interests in our consolidated statements of earnings and consolidated statements of comprehensive income, respectively.

Investments in unconsolidated affiliates that we do not control are accounted for using the equity method with our proportionate share of income or loss recognized within equity income in our consolidated statements of earnings. See further discussion of our unconsolidated affiliates in “Note B – Investments in Unconsolidated Affiliates.”

These interim unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, which are of a normal and recurring nature except those which have been disclosed elsewhere in this Form 10-Q, necessary for a fair presentation of the consolidated financial statements for these interim periods, have been included. Operating results for the third quarter of fiscal 2026 are not necessarily indicative of the results that may be expected for the full fiscal year. For further information, refer to the consolidated financial statements and notes thereto included in the 2025 Form 10-K.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Relationship with Worthington Steel

We are party to several agreements with Worthington Steel that govern our ongoing relationship following the Separation, including a Trademark License Agreement, both a short and long-term Transition Services Agreement, and a Steel Supply and Services Agreement. Transactions governed by these agreements are considered related party transactions.

Pursuant to the Steel Supply and Services Agreement, Worthington Steel manufactures and supplies to us, at reasonable market rates, certain flat rolled steel products, and will provide us with certain related support services such as design, engineering/technical services, price risk management, scrap management, steel purchasing, supply chain optimization and product rework services, and other services at our request that are ancillary to the supply of the flat rolled steel products. Purchases from Worthington Steel under the Steel Supply and Services Agreement totaled $34,607 and $27,536 for the current year quarter and prior year quarter, respectively, and $103,508 and $78,991 for the current year period and prior year period, respectively. Accounts payable related to these purchases were $10,614 and $9,099 as of February 28, 2026 and May 31, 2025, respectively.

Activity under all other agreements between Worthington Steel and us related to the Separation was immaterial for the periods presented.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This standard requires enhanced income tax disclosures, including more detailed information in the effective tax rate reconciliation and disaggregated disclosures of income taxes paid by jurisdiction. The standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. While adoption of this ASU is not expected to have a material effect on our consolidated financial condition, results of operations, or cash flows, it will result in expanded income tax disclosures beginning in the 2026 Form 10-K.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures,” which expands the disclosure of significant costs and expenses. This ASU requires expanded disclosures of significant costs and expenditures within cost of goods sold and SG&A, including amounts of inventory purchased, employee compensation, depreciation, amortization and selling expenses. This ASU also requires expanded qualitative disclosures, including a description of selling expenses and a description of non-disaggregated expenses. This standard is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We expect this ASU to only impact our disclosures with no impact on our results of operations, cash flows and financial condition.

In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software,” which modernizes and clarifies the threshold entities apply to begin capitalizing development costs for internal-use software. This guidance is effective for interim and annual periods beginning after December 15, 2027. Early adoption is permitted. We are evaluating the impact the adoption of this ASU will have on our results of operations, cash flows and financial condition.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the application, form and content, and required disclosures for interim financial statements prepared in accordance with GAAP. The ASU improves the organization and clarity of Topic 270 by specifying interim reporting requirements, consolidating required interim disclosures and introducing a disclosure principle for events and changes occurring after the end of the most recent annual reporting period that have a material impact on the entity. This guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 for public business entities. Early adoption is permitted. The amendments in this ASU are not expected to have a material effect on our financial position or results of operations.

Note B – Investments in Unconsolidated Affiliates

Investments in joint ventures that we do not control, either through majority ownership or otherwise, are unconsolidated and accounted for using the equity method. At February 28, 2026, we held investments in the following unconsolidated joint ventures: ClarkDietrich (25%); SES (49%); WAVE (50%); and Workhorse (20%).

On October 16, 2025, we divested our 49% interest in the composite business of the SES joint venture, resulting in a loss of $2,950, recorded in miscellaneous income (expense), net in the consolidated statement of earnings for the current year period. In exchange for our interest in the divested assets, we received common shares of both Hexagon Composites and Hexagon Purus. Refer to “Note O – Fair Value Measurements” for information regarding the fair value measurement of these common shares.

We received distributions from unconsolidated affiliates totaling $105,481 during the current year period. We have received cumulative distributions from WAVE in excess of our investment balance, which resulted in a negative asset balance of $109,592 and $103,767 at February 28, 2026 and May 31, 2025, respectively. In accordance with the applicable accounting guidance, we have reclassified the negative balances to distributions in excess of investment in unconsolidated affiliate within our consolidated balance sheets. We will continue to record our equity in the net income of WAVE as a debit to the investment account, and if it becomes positive, it will again be shown as an asset on our consolidated balance sheets. If it becomes probable that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will immediately recognize any balance classified as a liability as income.

We use the cumulative earnings approach to determine the cash flow presentation of distributions from our unconsolidated joint ventures. Distributions received are included in our consolidated statements of cash flows as operating activities unless the cumulative distributions exceed our share of the cumulative equity in the net earnings of the joint venture. In such cases, the excess distributions are considered returns of investment and are classified as investing activities in our consolidated statements of cash flows.

WAVE and ClarkDietrich are included within the Building Products segment, while the SES and Workhorse joint ventures are reported within Other. The following tables summarize financial information for our unconsolidated affiliates for the periods presented:

Note C – Restructuring and Other Expense, Net

Restructuring activities consist of established programs that are intended to fundamentally change our operations. Our restructuring programs may include closing or consolidating production facilities or moving manufacturing of a product to another location, realignment of the management structure of a business unit in response to changing market conditions or general rationalization of headcount. Our restructuring activities generally give rise to employee-related costs, such as severance pay, and facility-related costs, such as exit costs and gains or losses on asset disposals but may include other incremental operating items associated with our ongoing businesses that are nonrecurring in nature but incremental to our normal business activities.

A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other expense, net financial statement caption in our consolidated statement of earnings for the current year period is summarized below:

(1)

During the current year period, other restructuring charges consisted primarily of acquisition-related costs such as advisory, legal, and other professional fees.

The total liability associated with our restructuring activities as of February 28, 2026 is expected to be paid in the next 12 months.

Note D – Contingent Liabilities and Commitments

Legal Proceedings

We are defendants in certain legal actions. In the opinion of management, the outcome of these actions, which is not clearly determinable at the present time, would not significantly affect our consolidated financial position or future results of operations. We also believe that environmental issues will not have a material effect on our capital expenditures, consolidated financial position or future results of operations.

Note E – Guarantees

We do not have guarantees that we believe are reasonably likely to have a material current or future effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

At February 28, 2026, we also had in place $9,204 of outstanding stand-by letters of credit issued to third-party service providers. The fair value of these guaranteed instruments, based on premiums paid, was not material and no amounts were drawn against them at February 28, 2026.

Note F – Debt

Our multi-year revolving Credit Facility is scheduled to mature on September 27, 2028. Borrowings under the Credit Facility have maturities of up to one year. We have the option to borrow at rates equal to an applicable margin over the overnight bank funding rate, the prime rate of PNC Bank, National Association or the adjusted daily simple SOFR. The applicable margin is determined by our total leverage ratio. At February 28, 2026, there were $4,792 of borrowings outstanding under the Credit Facility bearing interest at a weighted average of 4.9%, leaving $495,208 available for use. At May 31, 2025, there were no borrowings outstanding under the Credit Facility.

Note G – Other Comprehensive Income (Loss)

The following table summarizes the tax effects on each component of OCI for the periods presented:

Note H – Changes in Equity

The following tables summarize the changes in equity by component and in total for the periods presented:

The following table summarizes the changes in AOCI for the periods presented:

——————————————————

(1)

The statement of earnings classification of amounts reclassified to net income for cash flow hedges is disclosed in “Note N – Derivative Financial Instruments and Hedging Activities.”

On March 24, 2021, the Board authorized the repurchase of up to 5,618,464 common shares. During the current year period, we repurchased a total of 450,000 common shares under this authorization leaving 4,915,000 common shares available for repurchase at February 28, 2026.

Common shares may be repurchased 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.

Note I – Stock-Based Compensation

Service-Based Restricted Common Shares

During the current year period, we granted an aggregate of 120,725 service-based restricted common shares under our stock-based compensation plans, which cliff vest three years from the grant date. The weighted average grant date fair value of these restricted common shares, based on the weighted average closing price of the underlying common shares on the grant date, was $58.25 per share, or $7,032 in total, and will be recognized on a straight-line basis over the three-year vesting period, net of any forfeitures.

Special PSAs

On June 30, 2025, we granted special PSAs covering an aggregate of 92,500 common shares (at target levels) to certain members of executive management. Vesting of the awards is subject to time-based restrictions and the achievement of specified levels of ATSR over a three-year service period ending June 30, 2028, in which ATSR must exceed a threshold level in order to be satisfied. The fair value of these market-based restricted common shares was estimated using a Monte-Carlo simulation model that incorporates key assumptions such as the risk-free interest rate, expected volatility and expected dividends. Compensation expense is recognized on a straight-line basis over the three-year vesting period, net of forfeitures, regardless of whether the market condition is satisfied. The estimated grant date fair value of these market-based restricted common shares was $45.39 per common share or $4,199 in total (at target levels).

The following assumptions were used to determine the grant date fair value for our market-based restricted common shares during the current year period:

Performance Shares

Performance shares awarded under our stock-based compensation plans are earned based on the level of achievement with respect to a set of measurement criteria for corporate and business unit targets. The awards generally cover three-year performance periods ending May 31, 2026, 2027, and 2028.

These performance share awards will be paid, to the extent earned, in common shares in the fiscal quarter following the end of the applicable performance period. The fair values of our performance shares are determined by the closing market prices of the underlying common shares at the respective grant dates of the performance shares and the pre-tax stock-based compensation expense is based on our periodic assessment of the probability of the targets being achieved and our estimate of the number of common shares that will ultimately be issued. The ultimate pre-tax stock-based compensation expense to be recognized over the performance period on all tranches will vary based on our periodic assessment of the probability of the targets being achieved. During the current year period, we granted performance share awards covering an aggregate of 53,130 common shares (at target levels). The aggregate grant-date fair value at target for these performance shares is $3,395, which will be recognized over the performance period and adjusted based on our periodic assessment of the probability of achieving the performance targets.

Note J – Income Taxes

Income tax expense for both the current year period and the prior year period reflected estimated annual ETRs of 24.3% and 24.4%, respectively. Management is required to estimate the annual ETR based upon its forecast of annual pre-tax income for domestic and foreign operations. Our actual ETR for fiscal 2026 could be materially different from the forecasted rate as of February 28, 2026.

Note K – Earnings per Share

The following table sets forth the computation of basic and diluted EPS attributable to controlling interest for the periods presented:

Stock options and restricted common shares covering an aggregate of 43,228 and 94,521 common shares for the current year quarter and the prior year quarter, respectively, and 11,729 and 104,608 for current year period and the prior year period, respectively, have been excluded from the computation of diluted EPS because the effect would have been antidilutive for those periods.

Note L – Segment Operations

Our operating segments reflect the way in which internally-reported financial information is regularly reviewed by the CODM to analyze performance, make decisions and allocate resources. We have identified our CEO as our CODM. Our CODM evaluates segment performance on the basis of adjusted EBITDA, as described in the “Use of Non-GAAP Financial Measures and Definitions” section. Factors used to identify operating segments include the nature of the products provided by each business, the management reporting structure, similarity of economic characteristics and certain quantitative measures, as prescribed by GAAP. Our operations are organized under two operating segments: Consumer Products and Building Products. Activity outside of our two operating segments is presented within “Other” and “Unallocated Corporate” as described further below.

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.

Unallocated Corporate includes certain assets and liabilities (e.g. 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.

The following tables present summarized financial information for our reportable operating segments, Other, and Unallocated Corporate for the periods indicated. A reconciliation from the GAAP financial measure of earnings (loss) before income taxes to the non-GAAP financial measure of adjusted EBITDA is provided directly following the summarized information below.

(1)

Except as noted herein, Other segment items consist of non-operating activity included in adjusted EBITDA. For the current year period, Other segment items also included certain non-cash charges in Miscellaneous income (expense), net related to the divestiture of the composite assets of our SES joint venture, including the unrealized loss on the common shares of Hexagon Composites and Hexagon Purus that we received as consideration. These charges were excluded from adjusted EBITDA as shown in the Reconciling items to adjusted EBITDA section in the tables above for the current year period. See “Use of Non-GAAP Financial Measures and Definitions” for additional information.

(2)

See “Use of Non-GAAP Financial Measures and Definitions” for additional information.

Total assets for each of our reportable operating segments at the dates indicated were as follows:

The following table reports the capital expenditures for each of our reportable operating segments for the periods presented:

Note M – Acquisitions

LSI

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 $206,064, net of cash acquired, and includes an estimated tax equalization payment of approximately $3,000 that was not settled at closing. The purchase price is subject to customary post-closing adjustments. LSI operates as part of the Building Products operating segment and its results have been included in our consolidated statements of earnings since the date of acquisition.

The information included herein is based on the preliminary allocation of the purchase price using estimates of the fair value and useful lives of the assets acquired. The purchase price allocation is subject to further adjustment until all pertinent information regarding the assets acquired is fully evaluated by us, including but not limited to, the fair value accounting.

The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under GAAP (e.g., assembled workforce) or of immaterial value. The purchase price also includes strategic and synergistic benefits (i.e., investment value) specific to us, which resulted in a purchase price in excess of the fair value of the identifiable net assets. This additional investment value resulted in goodwill, which is expected to be deductible for income tax purposes. During the current year period, we incurred approximately $2,568 of acquisition-related costs associated with the LSI transaction, which are recorded in restructuring and other expense, net in our consolidated statement of earnings.

In connection with the acquisition of LSI, we identified and valued the following intangible assets:

The following table summarizes the consideration paid, as of February 28, 2026, and the preliminary fair value assigned to the assets and liabilities assumed at the LSI acquisition date:

Hydrostat

On December 3, 2025, we acquired Hydrostat’s propane distribution and refurbishment assets. The purchase price was approximately $9,578, subject to customary post-closing adjustments. In connection with the acquisition of these assets, we recognized total intangible assets of $8,085, consisting of customer relationships of $2,000 and goodwill of $6,085. The remaining purchase price was allocated primarily to working capital and fixed assets. This business operates as part of the Building Products operating segment and its results have been included in our consolidated statements of earnings since the date of acquisition.

Elgen

On June 18, 2025, we acquired Elgen, a leading provider of HVAC parts and components, ductwork, and structural framing used primarily in commercial building applications across North America. The purchase price was $90,734, net of cash acquired. Elgen operates as part of the Building Products operating segment and its results have been included in our consolidated statements of earnings since the date of acquisition.

The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under GAAP (e.g., assembled workforce) or of immaterial value. The purchase price also includes strategic and synergistic benefits (i.e., investment value) specific to us, which resulted in a purchase price in excess of the fair value of the identifiable net assets. This additional investment value resulted in goodwill, which is not expected to be deductible for income tax purposes. During the current year period, we incurred approximately $1,756 of acquisition-related costs associated with the Elgen transaction, which are recorded in restructuring and other expense, net in our consolidated statement of earnings.

In connection with the acquisition of Elgen, we identified and valued the following intangible assets:

The following table summarizes the consideration paid and the final fair value assigned to the assets and liabilities assumed at the Elgen acquisition date.

Unaudited Pro Forma Information

The following unaudited pro forma financial information presents combined results of operations for each of the periods presented as if the acquisitions, described above in “Note M – Acquisitions”, had taken place at the beginning of fiscal 2025. The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisitions occurred at the beginning of fiscal 2025 or of the results of our future operations of the combined business.

Note N – Derivative Financial Instruments and Hedging Activities

We primarily utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative financial instruments include interest rate risk, foreign currency exchange risk and commodity price risk. While certain of our derivative financial instruments are designated as hedging instruments, we also enter into derivative financial instruments that are designed to hedge a risk, but are not designated as hedging instruments and therefore do not qualify for hedge accounting. These derivative financial instruments are adjusted to current fair value through earnings at the end of each period.

Interest Rate Risk Management – We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities along with both fixed-rate and variable-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs.

Foreign Currency Exchange Rate Risk Management – We conduct business in several major international currencies and are, therefore, subject to risks associated with changing foreign currency exchange rates. We enter into various contracts that change in value as foreign currency exchange rates change to manage this exposure. Such contracts limit exposure to both favorable and unfavorable foreign currency exchange rate fluctuations. The translation of foreign currencies into U.S. dollars also subjects us to exposure related to fluctuating foreign currency exchange rates; however, derivative financial instruments are not used to manage this risk.

Commodity Price Risk Management – We are exposed to changes in the price of certain commodities, including steel, natural gas, copper, zinc, aluminum and other raw materials, and our utility requirements. Our objective is to reduce earnings and cash flow volatility associated with forecasted purchases and sales of these commodities to allow management to focus its attention on business operations. Accordingly, we enter into derivative financial instruments to manage the associated price risk.

We are exposed to counterparty credit risk on all of our derivative financial instruments. Accordingly, we have established and maintain strict counterparty credit guidelines. We have credit support agreements in place with certain counterparties to limit our credit exposure. These agreements require either party to post cash collateral if its cumulative market position exceeds a predefined liability threshold. Amounts posted to the margin accounts accrue interest at market rates and are required to be refunded in the period in which the cumulative market position falls below the required threshold. We do not have significant exposure to any one counterparty and management believes the risk of loss is remote and, in any event, would not be material.

Refer to “Note O – Fair Value Measurements” for additional information regarding the accounting treatment for our derivative financial instruments, as well as how fair value is determined. The following table summarizes the fair value of our derivative financial instruments and the respective lines in which they were recorded in the consolidated balance sheet at February 28, 2026 and May 31, 2025:

The amounts in the table above reflect the fair value of our derivative financial instruments on a net basis where allowed under master netting arrangements. Had these amounts been recognized on a gross basis, the impact would have been an increase in receivables with a corresponding increase in accounts payable of $365 and $356 at February 28, 2026 and May 31, 2025, respectively.

Cash Flow Hedges

We enter into derivative financial instruments to hedge our exposure to changes in cash flows attributable to interest rate and commodity price fluctuations associated with certain forecasted transactions. These derivative financial instruments are designated and qualify as cash flow hedges. Accordingly, the effective portion of the gain or loss on each of these derivative financial instruments is reported as a component of OCI and reclassified into earnings in the same line associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings.

The following table summarizes the net notional positions of our cash flow hedges at February 28, 2026:

The following table summarizes the gain (loss) recognized in OCI and the gain (loss) reclassified from AOCI into net earnings for derivative financial instruments designated as cash flow hedges for the periods presented:

The estimated amount of net losses recognized in AOCI at February 28, 2026, expected to be reclassified into net earnings within the succeeding 12 months is $714 (net of tax of $202). This amount was computed using the fair value of the cash flow hedges at February 28, 2026, and will change before actual reclassification from OCI to net earnings during the fiscal years ending May 31, 2026 and May 31, 2027.

Net Investment Hedges

At February 28, 2026, we designated our Euro-denominated debt held in the U.S. with an initial notional amount of €91,700 ($99,479) as a non-derivative net investment hedge of our foreign operations in Portugal. The full principal amount is considered fully effective. We did not reclassify any gains or losses related to the net investment hedge from AOCI into earnings during any of the fiscal years

presented. The following table summarizes the foreign currency gain (loss) recognized in OCI for the non-derivative instruments designated as net investment hedges for the periods presented.

Economic (Non-designated) Hedges

The following table summarizes the net notional positions of our economic (non-designated) derivative financial instruments outstanding at February 28, 2026:

The following table summarizes the gain (loss) recognized in earnings for economic (non-designated) derivative financial instruments for the periods presented:

Note O – Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability. Current accounting guidance establishes a three-tier fair value hierarchy as a basis for considering such assumptions and for classifying the inputs used in the valuation methodologies. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair values are as follows:

• Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.
• Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
• Level 3 - Unobservable inputs for the asset or liability and that are significant to the fair value of the assets and liabilities (i.e., allowing for situations in which there is little or no market activity for the asset or liability at the measurement date).

Recurring Fair Value Measurements

At February 28, 2026, our assets and liabilities measured at fair value on a recurring basis were as follows:

At May 31, 2025, our assets and liabilities measured at fair value on a recurring basis were as follows:

——————————————————

(1)

The fair value of our derivative financial instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note N – Derivative Financial Instruments and Hedging Activities” for additional information regarding our use of derivative financial instruments.

(2)

In exchange for our interest in the divested assets of the composite business of the SES joint venture, we received common shares of both Hexagon Composites and Hexagon Purus, which are recorded at fair value on a recurring basis and included in other assets in the consolidated balance sheet. Unrealized losses of $340 and $1,584, respectively, were recognized within Miscellaneous income (expense), net, during the current year quarter and current year period, as a result of this fair value measurement.

Non-Recurring Fair Value Measurements

At February 28, 2026, there were no assets measured at fair value on a non-recurring basis on our consolidated balance sheet. See “Note R – Fair Value Measurements” in the 2025 Form 10-K for information regarding non-recurring fair value measurements as of May 31, 2025.

The fair value of non-derivative financial instruments included in the carrying amounts of cash and cash equivalents, receivables, income taxes receivable, other assets, accounts payable, accrued compensation, contributions to employee benefit plans and related taxes, other accrued items, income taxes payable and other liabilities approximate carrying value due to their short-term nature. The fair value of long-term debt, including current maturities, based upon models utilizing market observable (Level 2) inputs and credit risk, was $287,121 and $263,547 at February 28, 2026 and May 31, 2025, respectively. The carrying amount of long-term debt was $307,256 and $302,868 at February 28, 2026 and May 31, 2025, respectively.

Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless otherwise indicated, all Note references contained in this MD&A refer to the Condensed Notes to Consolidated Financial Statements included in “Part I – Item 1. – Financial Statements” of this Form 10-Q. All amounts are presented in millions except common share and per common share amounts.

Introduction

The following discussion and analysis of market and industry trends, business developments, and the results of our operations and financial position should be read in conjunction with our consolidated financial statements and notes thereto included in “Part I – Item 1. – Financial Statements” of this Form 10-Q. The 2025 Form 10-K includes additional information about our business, operations and consolidated financial position and should be read in conjunction with this Form 10-Q. This MD&A is designed to provide a reader with material information relevant to an assessment of our financial condition and results of operations and to allow investors to view the Company from the perspective of management.

Business Overview

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.

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.

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.

Activity outside of our two reportable operating segments is presented within Other and Unallocated Corporate, as described further below.

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.

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.

Acquisitions and Divestitures

Fiscal 2026

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.

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.

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.

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.

Fiscal 2025

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.

Demand Trends

General Economic Conditions

Demand for our products is closely tied to broader macroeconomic conditions and overall consumer and business sentiment. Shifts in inflation, interest rates, disposable income, and construction activity directly influence purchase behavior, capital investment, and distributor inventory management.

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.

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.

Inventory Demand Cycles

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.

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.

End Market Trends

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.

Key Indicator Description

U.S. Residential Construction Spend Represents total expenditures on residential construction projects, including new builds, renovations, and improvements.

U.S. Non-residential Construction Spend Measures total spending on commercial, institutional, and industrial construction projects across the country.

Existing Home Sales Reports the number of previously owned homes sold in a given period, reflecting demand in the housing market.

Authorized Housing Permits Indicates the number of building permits issued for new housing construction, serving as a leading indicator for future housing starts.

U.S. Private Housing Starts Measures the number of new residential construction projects that have begun, signaling housing market activity.

HMI Measures homebuilder sentiment on current and future single-family home sales and buyer traffic.

ABI A leading economic indicator for non-residential construction, based on monthly billings reported by architecture firms.

DMI Tracks the value of non-residential building projects in planning stages, serving as a leading indicator for future construction activity.

LIRA Projects short-term trends in U.S. home improvement and repair spending, serving as a forward-looking gauge of residential remodeling activity.

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.

Factors Affecting Operating Costs

Raw Materials

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.

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.

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.

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.

We continue to actively monitor commodity markets and maintain a diversified sourcing strategy to ensure continuity of supply and cost discipline. Our approach to material procurement supports margin stability and helps mitigate the impact of input price volatility on our results.

Global Trade Policy

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.

Seasonality

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.

Results of Operations

The following discussion provides an overview of results for the three and nine months ended February 28, 2026 and 2025:

——————————————————

(1)

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.

Net Sales

The following table provides a breakdown of our consolidated net sales by operating segment for the periods indicated:

Quarterly Comparison

• 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.
• 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.

Year-to-Date Comparison

• 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.
• 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.

Gross Profit

Quarterly Comparison

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.

Year-to-Date Comparison

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.

SG&A

Quarterly Comparison

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%.

Year-to-Date Comparison

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%.

Restructuring and Other Expense, Net

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.

Miscellaneous Income (Expense), Net

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.

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.

Equity Income

——————————————————

(1)

Equity income contributed by WAVE and ClarkDietrich is reported within our Building Products segment.

(2)

Includes our share of the equity earnings from the Workhorse and the SES joint ventures.

Quarterly Comparison

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.

Year-to-Date Comparison

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.

Income Tax Expense

Quarterly Comparison

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.

Year-to-Date Comparison

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.

Adjusted EBITDA

The following table provides a summary of adjusted EBITDA, a non-GAAP financial measure, by reportable operating segment and on a consolidated basis, along with the respective percentage of net sales for each reportable operating segment and on a consolidated basis. See the “Use of Non-GAAP Financial Measures and Definitions” section preceding Part I, Item 1 of this Form 10-Q for additional information regarding our use of non-GAAP financial measures. A reconciliation from earnings before income taxes to adjusted EBITDA is provided in “Note L – Segment Operations.”

Quarterly Comparison

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.

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.

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.

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.

Year-to-Date Comparison

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.

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.

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.

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.

Liquidity and Capital Resources

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.

The following table summarizes our consolidated cash flows for the periods presented:

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.

Although we do not currently anticipate a need, we believe that we could access the financial markets to sell long-term debt or equity securities. However, the continuation of uncertain economic conditions, including those caused by a high interest rate environment, could create volatility in the financial markets, which may impact our ability to access capital and the terms under which we can do so.

We routinely monitor current operational requirements, financial market conditions, and credit relationships and we may choose to seek additional capital by issuing new debt and/or equity securities to strengthen our liquidity or capital structure. Should we seek additional capital, there can be no assurance that we would be able to obtain such additional capital on terms acceptable to us, if at all, and such additional equity or debt financing could dilute the interests of our existing shareholders and/or increase our interest costs. We may also from time to time seek to retire or repurchase our outstanding debt through cash purchases, in open-market purchases, privately-negotiated transactions or otherwise. Such repurchases, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved in any such transaction may or may not be material.

Operating Activities

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.

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.

Investing Activities

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.

Investment activities are largely discretionary and future investment activities could be reduced significantly, or eliminated, as economic conditions warrant. We assess acquisition opportunities as they arise, and any such opportunities may require additional financing. However, there can be no assurance that any such opportunities will arise, that any such acquisition opportunities will be consummated, or that any additional financing will be available on satisfactory terms if required.

Financing Activities

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.

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.

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.

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.

Dividend Policy

We currently have no material contractual or regulatory restrictions on the payment of dividends. Dividends are declared at the discretion of the Board. The Board reviews the dividend quarterly and establishes the dividend rate based upon our consolidated financial condition, results of operations, capital requirements, current and projected cash flows, business prospects, and other relevant factors. While we have paid a dividend every quarter since becoming a public company in 1968, there is no guarantee that payments of dividends will continue in the future.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements and related disclosure, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to use judgment and make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. We continually evaluate our estimates, including those related to our valuation of receivables, inventories, intangible assets, accrued liabilities, income and other tax accruals, contingencies and litigation, and business combinations. We base our estimates on historical experience, current trends and other factors that we believe to be relevant and reasonable under the circumstances at the time the estimate was made. These results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Critical accounting estimates are defined as those that reflect our significant judgments and uncertainties that could potentially result in materially different results under different assumptions and conditions. Although actual results historically have not deviated significantly from those determined using our estimates, our consolidated financial position or results of operations could be materially different if we were to report under different conditions or to use different assumptions in the application of accounting policies. We believe that our estimates, assumptions, and judgments are reasonable in that they were based on information available when the estimates, assumptions and judgments were made. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from those implied by our assumptions and estimates. Our critical accounting estimates have not significantly changed from those discussed in “Part II – Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” of the 2025 Form 10-K.

Item 3. – Quantitative and Qualitative Disclosures About Market Risk

Market risks have not materially changed from those disclosed in “Part II – Item 7A. – Quantitative and Qualitative Disclosures About Market Risk” of the 2025 Form 10-K.

Item 4. – Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in the reports that Worthington Enterprises files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including Worthington Enterprises’ principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management, under the supervision of and with the participation of Worthington Enterprises’ principal executive officer and principal financial officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Form 10-Q. Based on that evaluation, Worthington Enterprises’ principal executive officer and principal financial officer have concluded that such disclosure controls and procedures were designed at the reasonable assurance level and were effective at a reasonable assurance level as of the end of the quarterly period covered by this Form 10-Q.

Changes in Internal Control Over Financial Reporting

There were no changes that occurred during the period covered by this Form 10-Q in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. – Legal Proceedings

We are involved in various judicial and administrative proceedings, as both plaintiff and defendant, arising in the ordinary course of business. We do not believe that any such proceedings, individually and in the aggregate, will have a material adverse effect on our business, financial position, results of operations or cash flows.

Item 1A. – Risk Factors

There are certain risks and uncertainties in our business that could cause our actual results to differ materially from those anticipated. In “PART I – Item 1A. – Risk Factors” of the 2025 Form 10-K, we included a detailed discussion of our risk factors. Our risk factors have not changed significantly from those disclosed in the 2025 Form 10-K. Those risk factors should be read carefully in connection with evaluating our business and investments in the common shares and in connection with the forward-looking statements and other information contained in this Form 10-Q. Any of the risks described in the 2025 Form 10-K could materially affect our business, consolidated financial condition or future results and the actual outcome of matters as to which forward-looking statements are made. The risk factors described in the 2025 Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may materially adversely affect our business, consolidated financial condition and/or future results.

Item 2. – Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

There were no equity securities of Worthington Enterprises sold by Worthington Enterprises during the current year period that were not registered under the Securities Act of 1933, as amended.

Issuer Purchases of Equity Securities

Common shares withheld to cover tax withholding obligations in connection with the vesting of restricted common shares are treated as common share purchases for purposes of the following table. However, those withheld common shares are not considered common share repurchases under an authorized common share repurchase plan or program. The total number of common shares purchased, as indicated in the table below, includes (1) common shares withheld from our employees to satisfy minimum statutory tax withholding obligations arising from the vesting of restricted common shares and (2) common shares repurchased as part of publicly announced plans or programs.

——————————————————

(1)

The number shown represents, as of the end of each period, the maximum number of common shares that could be purchased under the publicly announced repurchase authorizations then in effect. On March 24, 2021, the Board authorized the repurchase of up to 5,618,464 common shares without a fixed expiration date. The common shares available for repurchase under the authorization currently in effect may be purchased 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.

Item 3. – Defaults Upon Senior Securities

Not applicable.

Item 4. – Mine Safety Disclosures

Not applicable.

Item 5. – Other Information

During the current year quarter, no director or officer (as defined under Rule 16a-1 of the Exchange Act) adopted or terminated any Rule 10b5-1 trading arrangements or any non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

Item 6. – Exhibits

Exhibit No. Exhibit Description Incorporated by Reference / Form Incorporated by Reference / Exhibit Incorporated by Reference / Filing Date

3.1 Amended Articles of Incorporation of Worthington Enterprises, Inc. [This document represents the articles of incorporation of Worthington Enterprises, Inc. in compiled form incorporating all amendments.] 10-Q 3.1 1/09/2024 3.2 Code of Regulations of Worthington Enterprises, Inc. [This document represents the code of regulations of Worthington Enterprises, Inc. in compiled form incorporating all amendments.] 10-Q 3(b) 10/16/2000 10.1 Worthington Enterprises, Inc. 2025 Equity Plan for Non-Employee Directors† 8-K 10.1 9/26/2025 31.1 Rule 13a - 14(a)/15d - 14(a) Certifications (Principal Executive Officer)* 31.2 Rule 13a - 14(a)/15d - 14(a) Certifications (Principal Financial Officer)* 32.1 Section 1350 Certification of Principal Executive Officer** 32.2 Section 1350 Certification of Principal Financial Officer** (101) Interactive Data Files Pursuant to Rule 405 of Regulation S-T, formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at February 28, 2026 and May 31, 2025; (ii) Consolidated Statements of Earnings for the three and nine months ended February 28, 2026 and February 28, 2025; (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended February 28, 2026 and February 28, 2025; (iv) Consolidated Statements of Cash Flows for the three and nine months ended February 28, 2026 and February 28, 2025 and (v) Condensed Notes to Consolidated Financial Statements.* (104) The cover page from this Quarterly Report on Form 10-Q for the quarter ended February 28, 2026, formatted in Inline XBRL and included in Exhibit 101.*

——————————————————

• Filed herewith.

** Furnished herewith.

† Indicates a management contract or compensatory plan or arrangement.

40