Worthington Enterprises reported its second quarter fiscal 2025 earnings, highlighting significant changes in various financial metrics compared to the prior year quarter. The company's GAAP earnings from continuing operations were $0.56 per share compared to $0.36 in the prior year quarter. Excluding unique items, adjusted earnings from continuing operations were $0.60 per share in the current quarter compared to $0.57 per share in the prior year.
Consolidated net sales in the quarter decreased by 8.1% to $274 million from $298 million in the prior year, primarily due to the deconsolidation of the former Sustainable Energy Solutions segment, which contributed $28 million in sales in the prior year quarter.
Gross profit for the quarter increased to $74 million compared to $63 million in the prior year quarter, and gross margin increased by approximately 580 basis points to 27% in the current quarter.
Adjusted EBITDA in Q2 was $56 million, up slightly from $55 million in Q2 of the previous year and up sequentially from $48 million in Q1. The trailing twelve months (TTM) adjusted EBITDA stood at $235 million, with a TTM adjusted EBITDA margin of 20.1%.
Cash flow from operations was $49 million in the quarter, with free cash flow at $34 million. The company invested $15 million in capital projects, paid $9 million in dividends, and repurchased $8 million worth of its common stock.
Worthington Enterprises closed the quarter with $296 million in long-term funded debt at an average interest rate of 3.6%, along with $194 million in cash. The company's leverage remains low, with a net debt to trailing adjusted EBITDA leverage ratio of less than 0.5 turn.
In terms of business segments, Consumer Products reported net sales of $117 million, down 2% year-over-year, while Building Products reported net sales of $157 million, a 4% increase from the prior year. The growth in Building Products was primarily driven by the recent acquisition of Ragasco, which contributed $18 million in sales for the quarter.
The company's executives expressed optimism for the future, emphasizing their people-first culture, market-leading brands, and commitment to sustainability as core tenets that position them well for the future. Worthington also declared a quarterly dividend of $0.17 per share payable in March 2025.
The earnings call also included a Q&A session with analysts, where the management provided further insights into the company's performance and strategic initiatives.
The market has reacted to these announcements by moving the company's shares -1.0% to a price of $40.81. For the full picture, make sure to review Worthington Enterprises's 8-K report.
