Worthington Enterprises Inc. (NYSE: WOR) reported higher fiscal first-quarter sales, adjusted earnings and free cash flow, with stronger profitability in Trade & Specialty Solutions offsetting margin compression in Building Performance Solutions.
For the quarter ended Aug. 31, 2026, net sales increased 13% to $344 million from $304 million a year earlier. Adjusted EBITDA rose 10% to $74 million, while the adjusted EBITDA margin narrowed to 21.5% from 22.1%, indicating that profit growth did not fully keep pace with the increase in revenue.
Adjusted diluted earnings per share increased to $0.82 from $0.78. Free cash flow, defined as operating cash flow less capital expenditures, nearly doubled to $54 million from $28 million.
Segment performance diverges
Building Performance Solutions generated net sales of $215 million, up 16% from $185 million in the prior-year quarter. Adjusted EBITDA was unchanged at $60 million, resulting in a margin decline to 27.8% from 32.4%.
The segment supplies engineered products for residential and commercial buildings, including data centers and other critical facilities. Worthington said its exposure to data-center construction spans structural systems, steel framing, suspended ceilings, hot-aisle containment, heat rejection and liquid-cooling applications. Segment adjusted EBITDA also includes equity income from the WAVE and ClarkDietrich joint ventures, while segment net sales reflect wholly owned businesses and exclude joint ventures.
Trade & Specialty Solutions posted a stronger profit increase. Sales rose 8% to $129 million from $119 million, while adjusted EBITDA climbed 50% to $24 million from $16 million. Its adjusted EBITDA margin expanded to 18.6% from 13.6%.
The segment serves professional tradespeople and consumers through tools, portable propane, helium and other specialty products. Recent commercial initiatives included expanded product offerings at Tractor Supply, wider retail distribution for redesigned Balloon Time helium tanks and placement of Level5 drywall tools at 3,500 Sherwin-Williams locations.
Corporate and other unallocated adjusted EBITDA was a loss of $10 million, compared with a $9 million loss a year earlier.
Cash flow supports investment and shareholder returns
On a trailing-12-month basis, Worthington reported $1.4 billion in net sales, $303 million in adjusted EBITDA and a 21.3% adjusted EBITDA margin. Free cash flow totaled $196 million, with free cash flow conversion of 116.3%.
The company ended the quarter with $555 million of liquidity, consisting of $55 million in cash and $500 million available under its bank revolving facility. Net leverage was 0.8 times trailing-12-month adjusted EBITDA.
Since its fiscal 2024 third-quarter business separation, Worthington said it has redeployed $760 million of capital, including $423 million for acquisitions, $141 million for capital expenditures, $104 million for dividends and $93 million for share repurchases. The company pays a quarterly dividend of $0.20 per share and has authorization remaining to repurchase 4.2 million shares.
Management’s stated operating priorities include product innovation, manufacturing and supply-chain improvements, strategic market-share gains and acquisitions in niche markets with leading positions, attractive margins and relatively low capital intensity. Recent purchases in Building Performance Solutions included HVAC components maker LSI in June 2025 and commercial metal-roof products provider Elgen Manufacturing in January 2026.
Worthington identified economic weakness, inflation, interest rates, tariffs and trade restrictions among the factors that could affect future results. Other risks include volatility in steel and other input costs, supply-chain constraints, changes in customer demand, acquisition integration, cybersecurity threats and regulatory changes.
The company’s adjusted results are non-GAAP measures and exclude items management considers unrepresentative of ongoing operations. Beginning in the third quarter of fiscal 2026, Worthington revised its definitions of several adjusted measures to exclude acquisition-related inventory step-up amortization and recast prior periods for comparability.
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