Worthington Enterprises (NYSE:WOR) reported strong third-quarter fiscal 2026 results, posting year-over-year growth in revenue, profitability, and earnings per share despite what management described as “mixed” market conditions. Executives credited disciplined execution under the Worthington Business System (WBS), a growing stream of new products, and contributions from recent acquisitions.
Quarterly results show revenue growth and higher profitability
President and CEO Joe Hayek said the company “performed very well” in the quarter, pointing to revenue growth of more than 24% and improved operating leverage, including a 70-basis-point decline in SG&A as a percentage of sales. CFO Colin Souza added that the quarter marked the company’s sixth consecutive quarter of year-over-year growth in adjusted EPS and Adjusted EBITDA.
Consolidated net sales were $379 million, up 24% from $305 million. The increase was driven by higher volumes in both building and consumer products, plus acquisition contributions of $32 million in the quarter. Excluding acquisitions, the company said net sales increased $42 million, or 14%, year over year.
Gross profit rose to $109 million from $89 million, while gross margin was 28.9% compared to 29.3% a year ago. Souza said the modest margin contraction primarily reflected purchase accounting impacts from the inventory step-up at LSI.
Adjusted EBITDA increased to $85 million from $74 million, with an Adjusted EBITDA margin of 22.3%. On a trailing 12-month basis, adjusted EBITDA reached $297 million, up $54 million (or 22%) compared to the prior-year trailing period.
Cash flow, capital allocation, and balance sheet
Worthington Enterprises reported operating cash flow of $62 million and free cash flow of $48 million in the quarter. On a trailing 12-month basis, free cash flow totaled $164 million, which management said represented a 95% free cash flow conversion rate relative to adjusted net earnings.
Capital expenditures were $14 million in the quarter, including $4 million for a consumer products facility modernization project. Souza said facility modernization spending totaled roughly $27 million over the trailing 12 months, with roughly $25 million remaining. The company expects to complete the modernization work by mid-fiscal year 2027, after which capex should return to more normalized levels.
Shareholder returns included $9 million in dividends and the repurchase of 100,000 shares. The board declared a quarterly dividend of $0.19 per share, payable in June 2026.
The company ended the quarter with net debt of $306 million, or approximately 1x trailing adjusted EBITDA. Worthington Enterprises reported $495 million of availability under its revolving credit facility at quarter-end.
Segment performance: Building Products and Consumer Products
Building Products posted net sales of $224 million, up 36% from $165 million a year ago. The company said acquisitions accounted for $32 million of sales, while organic net sales increased 16%, driven by “strong organic growth across multiple value streams,” particularly water and cooling construction businesses. Adjusted EBITDA for the segment was $59 million versus $53 million a year earlier, with margin of 26.3%.
Management said the EBITDA increase included about $5 million from recent acquisitions, partially offset by lower combined equity earnings from joint ventures. WAVE contributed $27 million in equity earnings. ClarkDietrich, operating in what management described as a “challenging non-residential construction environment,” contributed $6 million versus $9 million a year ago, though it improved modestly sequentially from the second quarter.
Consumer Products delivered net sales of $155 million, up 11% year over year on improved volumes and higher average selling prices. Adjusted EBITDA rose to $35 million from $29 million, with margin expanding to 22.9% from 20.5%. Management cited strong performance in Balloon Time, including expanded retail placement and innovation such as the Balloon Time Mini.
Growth drivers: innovation, transformation, and M&A
Hayek emphasized the company’s WBS growth drivers—innovation, transformation, and M&A—as key contributors to performance. He highlighted ASME water tanks used for liquid cooling in data centers as an innovation example, saying the pipeline is “rapidly growing” as data centers increasingly utilize liquid cooling solutions. He also pointed to new store placements for Balloon Time as another product-driven growth lever.
On transformation, management discussed the company’s 80/20 initiative and said AI is “embedded across many of our applications,” with focus shifting toward operational impact in specific workflows. The company also said it continues to invest in automation to drive efficiencies.
Regarding M&A, Worthington Enterprises completed the acquisition of LSI in January, describing LSI as a leading U.S. manufacturer of standing seam metal roofing clips, components, and retrofit systems. Management said LSI’s products are engineered into OEM-certified roof systems, creating requalification requirements and high switching costs. In Q&A, Souza said integration is in the early days but “meeting expectations so far,” and management cited cultural fit and a strong margin profile.
Management commentary on data centers, tariffs, and macro factors
Data centers were a major topic during the Q&A. Hayek said Worthington’s ASME cooling tank business tied to data centers will “probably triple” this year and that management sees “additional incremental growth” next year, adding that the opportunity appears to extend for “several years” rather than one or two. He noted there is typically a lag between announced data centers and when projects are built and incorporate the company’s solutions.
Executives also said several businesses have data center exposure, including WAVE, ClarkDietrich, Elgen, LSI, and Amtrol. Souza said data center revenue is “less than 10%” of each of those businesses individually, but in all cases it is the fastest-growing area. Management said it is making targeted investments in resources and equipment to capture demand while avoiding becoming “over-indexed” to the vertical.
On geopolitical risk, Hayek said interruptions in global shipping would be inflationary and noted higher energy costs. He added that the company’s European LPG business has some customers in the Middle East and that it is currently unable to ship to those customers, while emphasizing Worthington is not over-indexed to oil prices given its predominately U.S. manufacturing footprint.
On tariffs, management said it still views Worthington as a net beneficiary due to domestic manufacturing positions in certain value streams, while acknowledging some negative impacts through commodity costs and consumer products manufactured overseas. Hayek outlined mitigation actions including supplier negotiations, supply chain cost reductions, and pricing actions when necessary.
Worthington Enterprises did not provide specific guidance for the fourth quarter. Management said it expects many of the trends seen to continue, citing diversification across end markets and ongoing efforts to drive organic growth and pursue acquisitions.
About Worthington Enterprises (NYSE:WOR)
Worthington Enterprises (NYSE:WOR) is a diversified metal manufacturing company that produces pressure vessels, engineered assemblies and fabricated metal products. The company’s portfolio includes the design and manufacture of cylinders for compressed gases, such as propane, natural gas and hydrogen, as well as transport tanks and other pressure-containment solutions for the industrial gas, energy and transportation markets. In addition to its pressure vessel operations, Worthington Enterprises offers metal processing and distribution services, supplying coil, sheet and plate products to customers across multiple industries.
Founded in 1955 and headquartered in Columbus, Ohio, Worthington Enterprises has grown from a single steel processing facility into a multi‐division organization with operations in the United States, Canada and Mexico.
