Worthington Enterprises Kicks Off Fiscal 2027 with Strong Q1 Performance
Worthington Enterprises, a leading provider of industrial and specialty products, has kicked off its fiscal year 2027 on a strong note, delivering a 13% year-over-year increase in sales and $74 million in adjusted EBITDA for the first quarter.
In a call with investors and analysts earlier this month, Joseph Hayek, President and Chief Executive Officer of Worthington Enterprises, highlighted the company's progress despite facing some market and operating headwinds. "We had a strong start to fiscal 2027," said Hayek. "While we face some market and operating headwinds, our team continued to execute, serve our customers, and make progress on our strategic initiatives."
The company's sales growth was driven by its Creative Specialty Solutions segment, which delivered strong sales and EBITDA growth in the quarter. The water business also performed well, with the 80/20 work matured and helping the company focus resources on high-value products and opportunities.
Worthington Enterprises' adjusted EPS came in at $0.82 compared to $0.78 a year ago, while free cash flow generated nearly double the prior year quarter's amount at $54 million. The company also continued to deploy capital thoughtfully, repurchasing 335,000 shares of its common stock in the quarter.
However, the company faced challenges in its Building Performance Solutions segment, which experienced headwinds in its cooling and construction business due to lower demand for newly mandated A2L refrigerant cylinders. Additionally, steel availability across the industry remained tight, leading to extended lead times and some disruptions in production and scheduling.
Despite these headwinds, Hayek was optimistic about the company's performance, stating that it was a reflection of its businesses and people. "We remain disciplined about growth through M&A, and we are focused on opportunities where we believe we can bring unique advantages as an owner and create long-term value," said Hayek.
The company's strategy to leverage the Worthington Business System for transformation, disciplined M&A, innovation, and 80/20 optimization is paying off, with meaningful progress in its water business and continued improvement in productivity through automation and AI-enabled tools.
Worthington Enterprises' integration of LSI Group continues to progress well, with a focus on reaching more prospective customers and introducing them to the company's compelling value proposition. The company's innovation capabilities are also translating into meaningful commercial opportunities, with its engineered ASME tanks being a notable example.
