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Worthington Industries Reports Fourth Quarter and Fiscal Year Results


Fourth Quarter EPS up 82%

COLUMBUS, Ohio, Jun 19, 2002 /PRNewswire-FirstCall via COMTEX/ --Worthington Industries, Inc. (NYSE: WOR) today reported results for the three and twelve month periods ended May 31, 2002.

Sales for the fourth quarter were $519.3 million, an increase of 11% from $465.8 million last year, and for the year were $1,745.0 million, a decrease of 4% from $1,826.1 million last year.

Fourth quarter earnings were $26.8 million and earnings per diluted share were $0.31 compared to earnings of $14.4 million, or $0.17 per diluted share, for the same period last year. The increase in earnings and diluted earnings per share was 85% and 82%, respectively, for the comparable fourth quarters.

Full year fiscal 2002 results include the pre-tax impact of a $64.6 million plant consolidation restructuring charge and a $21.2 million reserve for the impairment of certain assets. Full year fiscal 2001 results include the pre-tax impact of a $6.5 million restructuring charge for the partial closure of the Malvern, Pennsylvania, steel processing facility. Including these one-time charges, earnings for the fiscal year 2002 were $6.5 million and earnings per diluted share were $0.08 compared to fiscal 2001 earnings of $35.6 million, or $0.42 per diluted share. Excluding these charges, earnings for fiscal 2002 were $61.0 million compared to $39.7 million for fiscal 2001, an increase of 54%.

"Fourth quarter is normally a seasonally strong quarter for Worthington," said John P. McConnell, Chairman and CEO. "This quarter's results were especially encouraging. Operating income was up significantly in all three of our primary business segments. Increased automotive demand in processed steel, stronger pricing in metal framing and record demand for propane cylinders, propelled by the mandated new overfill protection device, all contributed to a successful conclusion to fiscal 2002.

"During the course of a difficult and challenging year, we performed well, repaid debt, returned cash to our shareholders through the payment of a regular dividend and provided for future growth. We are optimistic that the improving economy, realization of the benefits of our consolidation plan and growth in Dietrich Metal Framing will add up to an improved fiscal 2003," concluded McConnell.

The fourth quarter marked the first time in eight quarters that total revenues exceeded the prior comparable period. Although top line strength was most evident in the Processed Steel Products and Pressure Cylinders business segments, all business segments reported increased volumes.

Within the Processed Steel Products business segment, net sales increased 12% or $34.8 million to $328.8 million from $294.0 million in the comparable quarter of fiscal 2001. Direct and tolling volumes were up over the prior year offsetting a decline in the spread between selling prices and material costs.

Within the Metal Framing business segment, net sales decreased 2% or $1.5 million to $82.2 million from $83.7 million in the comparable quarter of fiscal 2001. Revenues declined modestly as the commercial construction market remained slow. However, price increases implemented March 15 and April 15 have begun to restore margins and profitability to their prior levels.

Within the Pressure Cylinders business segment, net sales increased 21% or $17.9 million to $104.5 million from $86.6 million in the comparable quarter of fiscal 2001. The increase is due to significantly greater demand for propane cylinders as a result of certain regulatory requirements mandating that all propane cylinders have overfill protection devices. Inventory built in prior quarters in anticipation of this change peaked at $20 million and has been completely depleted.

Operating income of $42.1 million was generated in the fourth quarter, an 80% improvement over the same quarter last year.

Worthington Industries, Inc. 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 7,500 people and operates 59 facilities in 10 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. Worthington Industries is listed as one of the 100 Best Companies to Work For in America by Fortune magazine.

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 sales and operating results; projected capacity levels; anticipated capital expenditures; projected timing, results, costs, charges and expenditures related to plant closures and consolidations; and other non-historical information constitute "forward- looking statements" within the meaning of the Act. Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected. Any number of factors could affect actual results, including, without limitation, product demand, changes in product mix and market acceptance of products; changes in pricing or availability of raw materials, particularly steel; effects of plant closures and the consolidation of operations; capacity restraints and efficiencies; conditions in major product markets; delays in construction or equipment supply; financial difficulties of customers, suppliers and others with whom we do business; the effect of national, regional and worldwide economic conditions; risks associated with doing business internationally, including economical, political and social instability, and foreign currency exposure; acts of war and terrorist activities; the ability to improve processes and business practices to keep pace with the economic, competitive and technological environment; the business environment and impact of governmental regulations, both in the United States and abroad; and other risks described from time to time in filings with the SEC.

                           WORTHINGTON INDUSTRIES, INC.
                               EARNINGS HIGHLIGHTS
                         (In Thousands, Except Per Share)

                                   Three Months Ended   Twelve Months Ended
                                        May 31,               May 31,
                                     2002      2001       2002        2001
                                 (Unaudited)(Unaudited)(Unaudited)  (Audited)

    Net Sales:
      Processed Steel Products     $328,751  $294,016  $1,132,697  $1,184,918
      Metal Framing                  82,242    83,691     305,994     345,996
      Pressure Cylinders            104,454    86,578     292,829     289,076
      Other                           3,837     1,505      13,441       6,110
        Total Net Sales             519,284   465,790   1,744,961   1,826,100

    Cost of Goods Sold              426,652   394,950   1,480,184   1,581,178
        Gross Margin                 92,632    70,840     264,777     244,922

    Selling, General &
     Administrative Expense          50,518    47,382     165,885     173,264
    Restructuring Expense                --        --      64,575       6,474

    Operating Income:
      Processed Steel Products       26,929    15,147      65,736      35,775
      Metal Framing                   9,819     3,603      20,049      23,747
      Pressure Cylinders             12,466     7,859      21,686      19,264
      Other                          (7,100)   (3,151)     (8,579)     (7,128)
      Restructuring Expense              --        --     (64,575)     (6,474)
        Total Operating Income       42,114    23,458      34,317      65,184

    Other Income (Expense):
      Miscellaneous Expense          (1,979)     (228)     (3,224)       (928)
      Nonrecurring Loss                  --        --     (21,223)         --
      Interest Expense               (5,740)   (7,242)    (22,740)    (33,449)
      Equity in Net Income of
        Affiliates                    7,745     6,736      23,110      25,201
          Earnings Before Taxes      42,140    22,724      10,240      56,008
    Income Tax Expense               15,381     8,294       3,738      20,443

        Net Earnings                $26,759   $14,430      $6,502     $35,565

    Average Common Shares
     Outstanding - Diluted           86,155    85,508      85,929      85,623

        Earnings Per Share -
         Diluted                      $0.31     $0.17       $0.08       $0.42

    Common Shares Outstanding at
     End of Period                   85,512    85,375      85,512      85,375

    Net Earnings Excluding Restructuring Expense and Nonrecurring Loss
      Reported Net Earnings         $26,759   $14,430      $6,502     $35,565
      Add back:
        Restructuring Expense, net
         of tax                          --        --      41,005       4,111
        Nonrecurring Loss, net of
         tax                             --        --      13,477          --
      Net Earnings Excluding
        Expense and Nonrecurring
        Loss                        $26,759   $14,430     $60,984     $39,676

                           WORTHINGTON INDUSTRIES, INC.
                                  (In Thousands)

                                                   May 31,            May 31,
                                                    2002               2001
                                                 (Unaudited)         (Audited)
    Current Assets
      Cash and cash equivalents                       $496               $194
      Accounts receivable, net                     197,240            169,330
      Inventories                                  219,950            227,506
      Other current assets                          72,654             52,689

        Total Current Assets                       490,340            449,719

    Investments in Unconsolidated
     Affiliates                                     91,759             58,638
    Goodwill                                        75,400             76,439
    Other Assets                                    33,219             54,317
    Property, Plant and Equipment, net             766,596            836,749

        Total Assets                            $1,457,314         $1,475,862


    Current Liabilities
      Accounts payable                            $233,181           $207,568
      Notes payable                                  5,281             13,794
      Current maturities of long-term
       debt                                          1,082              1,748
      Other current liabilities                     99,807             83,509

        Total Current Liabilities                  339,351            306,619

    Other Liabilities                               73,731             69,396
    Long-Term Debt                                 289,250            309,208
    Deferred Income Taxes                          148,726            140,974

    Shareholders' Equity                           606,256            649,665

        Total Liabilities and
         Shareholders' Equity                   $1,457,314         $1,475,862

                           WORTHINGTON INDUSTRIES, INC.
                                  (In Thousands)

                                                       Twelve Months Ended
                                                             May 31,
                                                     2002              2001
                                                 (Unaudited)         (Audited)
    Operating Activities
      Net earnings                                  $6,502            $35,565
      Adjustments to reconcile net
       earnings to net cash provided by
       operating activities:
          Depreciation and amortization             68,887             70,582
          Restructuring expense                     64,575              6,474
          Nonrecurring loss                         21,223                 --
          Other adjustments                        (19,634)            (6,668)
          Changes in current assets and
           liabilities                              (6,296)           215,501

          Net Cash Provided By Operating
           Activities                              135,257            321,454

    Investing Activities
      Investment in property, plant and
       equipment, net                              (39,100)           (62,900)
      Acquisitions, net of cash acquired                --             (2,043)
      Investment in equity affiliates              (21,000)                --
      Proceeds from sale of assets                  10,459              1,030

          Net Cash Used By Investing
           Activities                              (49,641)           (63,913)

    Financing Activities
      Payments on short-term borrowings             (8,513)          (146,401)
      Proceeds from long-term debt                      --              2,064
      Principal payments on long-term
       debt                                        (20,872)           (50,643)
      Repurchase of common shares                       --             (3,406)
      Dividends paid                               (54,655)           (54,822)
      Other                                         (1,274)            (4,677)

          Net Cash Used By Financing
           Activities                              (85,314)          (257,885)

    Increase (decrease) in cash and cash
     equivalents                                       302               (344)
    Cash and cash equivalents at
     beginning of period                               194                538

    Cash and cash equivalents at end of
     period                                           $496               $194

Cathy Mayne Lyttle, VP, Corporate Communications, +1-614-438-3077, or , or Allison McFerren Sanders, Director, Investor Relations, +1-614-840-3133, or,
both of Worthington Industries, Inc.


Copyright (C) 2002 PR Newswire. All rights reserved.

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