Worthington Enterprises (NYSE: WOR) reported first-quarter results for fiscal year 2027 that surpassed Wall Street expectations, driven by strong revenue growth and robust cash generation.
Adjusted earnings per share came in at $0.82, beating the consensus estimate of $0.75 by roughly 9%, compared with $0.78 a year earlier. On a GAAP basis, the company posted $0.87 per share against $0.70 in the prior-year period.
Revenue, or net sales, totaled $344 million, up 13% year-over-year and exceeding the $331.3 million forecast by 3.8%. The top-line gain included approximately $19 million from recent acquisitions — Elgen and LSI Group — and reflected 7% organic growth. Adjusted EBITDA rose 10% to $74 million from $67 million a year ago, with the margin holding steady at 21.5%.
Gross profit increased nearly 11%, though gross margin slipped to 26.4% from 27.1% in the year-ago quarter.
Cash flow performance was a standout. Operating cash flow more than doubled to $67 million from $41 million, while free cash flow jumped to $54 million from $28 million. Trailing 12-month free cash flow reached $196 million, CFO Colin Souza described as the highest since the company became Worthington Enterprises, with a conversion rate of 116% relative to adjusted net earnings.
"We had a strong start to fiscal 2027," CEO Joseph Hayek said. "While we face some market and operating headwinds, our team continued to execute, serve our customers, and make progress on our strategic initiatives."
Segment results showed Building Performance Solutions posting $215 million in sales, up 16% year-over-year, fueled by $19 million from acquisitions and 6% organic growth in its water and European businesses, offset in part by cooling and construction headwinds. Trade and Specialty Solutions grew 8% to $129 million, supported by pricing and volume strength in portable propane and tools.
A growing area of interest is the company's engineered ASME tanks used in data center liquid cooling. The business generated $13 million in Q1 revenue alone, matching the full-year total for fiscal 2026. Hayek called the tanks a "critical component" of liquid cooling systems. Industry sources cited during the call suggested the liquid cooling and thermal management ASME tank market could grow to exceed ten times the size of the legacy market over the coming years, compared with historical run rates of roughly $200 million annually.
On the capital return front, Worthington maintained its quarterly dividend at $0.20 per share, noting 54 consecutive years of dividend payments. The company returned $9 million via dividends and spent $18 million repurchasing 335,000 shares. Net debt stood at $250 million with a debt-to-equity ratio of 0.33.
Shares rose 9.55%, or $5.63, in after-hours trading to $64.57, approaching the 52-week high of $67.07.
Worthington Enterprises will hold its investor day in New York on November 10, 2027.
