Columbus, Ohio, November
30, 2000 – Worthington Industries, Inc. (NYSE: WOR) said today that it does
not expect fiscal second quarter earnings per share to reach consensus
estimates of $0.22. Earnings are expected to be substantially lower than
first quarter when it earned $0.15 per share. As a result, the Company
believes that current consensus estimates of $1.07, for the year ending May
31, 2001, are unrealistic. The Company also announced that it is tabling the
previously announced acquisition of the Techs.
Results
from the Company's Metal Framing and Pressure Cylinders business segments are
both marginally below last year's performance, but the majority of the
earnings shortfall is occurring within the Processed Steel Products business
segment. The Company had expected this segment's results to improve in the
second quarter as it reduced older, higher priced inventory that had
negatively impacted the first quarter.
While material costs have
declined somewhat, the degree to which business slowed during the second
quarter was not anticipated. The general softening of demand reduced expected
revenues and inventory turnover, while increasing the competitiveness of
market pricing. In addition, a contraction in demand for higher margin,
specialty grades of steel resulted in a less favorable product mix. A decline
in tolling volumes, more than 15% compared to last year, is also contributing
to the depressed results.
"Although our
results reflect the general state of our industry, we are disappointed with
our earnings in the second quarter," said John P. McConnell, Chairman
and CEO of Worthington Industries, Inc. "We will continue to
aggressively pursue cost reduction measures and look for additional
opportunities, but with the economy slowing, it is very unlikely that we will
generate growth in earnings per share this year."
"Given the
uncertainty in the current business environment," McConnell continued,
"we do not believe it is prudent to move forward with our planned
acquisition of the Techs at this time. We continue to believe that the
acquisition is fundamentally sound and plan to revisit the decision later
this fiscal year. We are taking this more conservative stance to keep our
balance sheet at levels where we have ample room to fund existing capital
requirements, while maintaining our investment grade credit rating and our
dividend."
"Though our
near-term results are below our original expectations, this fiscal year will
mark the 46th consecutive year of profitable operations since our
founding in 1955. Looking forward, we remain committed to, and confident in,
our strategy to create long-term growth and increase the value of our
shareholders' investment."
On December 20, 2000, the
Company will issue its regularly scheduled earnings release and hold a
conference call to discuss the actual results of the quarter.
Worthington Industries is
a leading diversified metal processing company with annual sales of
approximately $2 billion. The Columbus, Ohio, based Company is North
America's premier value-added steel processor and a leader in manufactured metal
products such as automotive aftermarket stampings, pressure cylinders, metal
framing, metal ceiling grid systems and laser welded blanks. The Company
employs 8,000 people and operates 55 facilities in 11 countries.
Founded in 1955, the
Company operates under a long-standing corporate philosophy rooted in the
golden rule, with earning money for its shareholders as the first corporate
goal. This philosophy, an unwavering commitment to the customer, and one of
the strongest employee/employer partnerships in American industry serve as
the Company's foundation.
Safe Harbor Statement
The Company wishes to
take advantage of the Safe Harbor provisions included in the Private
Securities Litigation Reform Act of 1995 ("the Act"). Statements by
the Company relating to future revenues, earnings and growth, stock
appreciation, plant capabilities and other statements which are not
historical information constitute "forward looking statements"
within the meaning of the Act. All forward-looking statements are subject to
risks and uncertainties which could cause actual results to differ from those
projected. Factors that could cause actual results to differ materially
include, but are not limited to, the following: general economic conditions;
conditions in the Company's major markets; competitive factors and pricing
pressures; product demand and changes in product mix; changes in pricing or
availability of raw material, particularly steel; delays in construction or
equipment supply; and other risks described from time to time in the
Company's filings with the Securities and Exchange Commission.