Worthington Enterprises posted a 13% sales increase and record free cash flow in Q1, driven by emerging data-center demand despite ongoing steel supply and refrigerant-transition headwinds.
Worthington Enterprises delivered strong fiscal Q1 results with sales up 13%, adjusted EPS up to $0.82, record free cash flow, and growing data-center ASME tank demand, though A2L refrigerant transition and steel supply headwinds pressured comparisons.
Worthington Enterprises reported a strong fiscal Q1 with sales reaching $344 million, a 13% increase year-over-year. Despite headwinds in the housing market and A2L refrigerant transitions, the company achieved record free cash flow of $54 million and identified significant growth potential in ASME tanks for data-center liquid cooling.
The company is seeing accelerating demand for engineered ASME tanks used in liquid-cooling and thermal-management systems, which management expects to grow significantly over the next several years.
The transition caused a normalization in cylinder demand after a period of inventory building, resulting in an estimated $7 million negative impact on adjusted EBITDA compared to prior expectations.