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Worthington Industries Inc (NYSE:WOR) released its fourth quarter fiscal year 2025 earnings presentation on June 25, 2025, highlighting significant margin expansion and strategic growth initiatives despite flat revenue. The company’s stock jumped 10.72% in premarket trading following the announcement, building on the previous day’s 1.6% gain.
Quarterly Performance Highlights
Worthington reported consolidated net sales of $318 million for Q4 FY25, essentially flat compared to $319 million in the same period last year. However, profitability metrics showed substantial improvement, with gross margin increasing to 29.3% from 24.8% and adjusted EBITDA margin rising to 26.8% from 19.8% in the prior year quarter.
Adjusted earnings per share reached $1.06, up significantly from $0.74 in Q4 FY24, reflecting the company’s successful focus on operational efficiency and higher-margin products. The company also reported free cash flow of $49 million for the quarter, with capital expenditures of $13 million.
As shown in the following financial summary chart, both operating segments delivered strong margin improvement despite modest sales growth:
The company’s adjusted net earnings from continuing operations increased to $53 million from $38 million in the prior year quarter, despite impairment charges of $40 million related to goodwill and long-lived assets.
Segment Performance Analysis
The Building Products segment, which includes heating, cooling, water, and ceiling solutions, delivered net sales of $192 million, up from $154 million in Q4 FY24. Adjusted EBITDA for this segment reached $71 million with a margin of 37.0%, compared to $52 million and 33.7% in the prior year quarter.
The Consumer Products segment, which encompasses tools and outdoor living products, reported net sales of $126 million, slightly up from $125 million in Q4 FY24. This segment’s adjusted EBITDA improved to $21 million with a margin of 16.6%, compared to $17 million and 13.7% in the prior year quarter.
Worthington’s joint ventures continue to contribute significantly to overall results. The WAVE joint venture with Armstrong, which produces ceiling suspension systems, generated $496 million in net sales and $244 million in EBITDA for FY25. The ClarkDietrich joint venture in metal framing reported $1,168 million in net sales and $180 million in EBITDA for the fiscal year.
Strategic Initiatives & Acquisitions
On June 19, 2025, Worthington acquired Elgen Manufacturing, a market-leading designer and manufacturer of HVAC parts and components, for approximately $93 million. This acquisition aligns with the company’s strategy of adding high-margin, market-leading businesses to its portfolio.
The company’s established portfolio of market-leading brands continues to drive strong performance, with over 80% of adjusted EBITDA coming from brands and products with leading market positions:
Worthington is focusing on organic growth through innovation and new product development. Recent innovations include the SureSense IoT-enabled propane level sensor, PowerCore corrosion-resistant spray cylinder, and a mini Balloon Time helium tank. The company has also secured strategic wins with retail partners, including placement of Level5 drywall tools at 3,500 Sherwin-Williams (NYSE:SHW) locations and expanded offerings at Tractor Supply (NASDAQ:TSCO).
The company’s business system accelerates growth and profitability through a balanced approach to acquisition, innovation, and transformation:
Financial Position & Capital Allocation
Worthington maintains a strong financial position with low leverage, ample liquidity, and solid free cash flow generation. The company reported total debt of $303 million and adjusted EBITDA of $263 million, resulting in a leverage ratio of 1.2x. Available liquidity stands at $750 million, including $250 million in cash and $500 million in undrawn revolver capacity.
The company’s financial flexibility is illustrated in the following chart:
In terms of capital allocation, Worthington redeployed $211 million in FY25, with a focus on both growth investments and shareholder returns. The company increased its quarterly dividend by 12% to $0.19 per share, marking the continuation of dividend payments since becoming a public company in 1968. Additionally, Worthington repurchased 200,000 shares during Q4 for $10 million at an average price of $49.16, with 5.4 million shares remaining on the repurchase authorization.
Forward-Looking Statements
Worthington is well-positioned to capitalize on several strong secular trends, including U.S. infrastructure investment, housing supply needs, and manufacturing re-shoring:
The company’s strategic moat provides competitive advantages through its strong culture, manufacturing operations, regulatory expertise, product innovation, and commercial excellence:
Management highlighted key investment considerations, including the company’s portfolio of market-leading brands, strong underlying secular trends, high free cash flow business model, and financial flexibility:
These results build on the momentum seen in Q3 FY25, when the company reported an earnings beat with adjusted EPS of $0.91 against expectations of $0.70. The consistent performance across quarters demonstrates Worthington’s ability to execute its strategic initiatives while improving profitability in a challenging market environment.
With its strong balance sheet, diverse portfolio of market-leading brands, and focus on innovation and strategic acquisitions, Worthington appears well-positioned for continued growth and shareholder value creation in the coming quarters.
Full presentation:
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