COLUMBUS, Ohio--(BUSINESS WIRE)--Sept. 22, 2004--Worthington
Industries, Inc. (NYSE:WOR) today reported record first quarter
results for the three months ended August 31, 2004.
Highlights
Sales for the first quarter of fiscal 2005 were $769.3 million, an
increase of 54% from last year's $498.0 million. First quarter net
earnings were $57.9 million and earnings per diluted share were $0.66,
compared to first quarter net earnings of $5.9 million, or $0.07 per
diluted share, for the same period last year.
Earnings for the current quarter were reduced by a $5.6 million
pre-tax charge related to the sale of the Decatur, Alabama, cold mill
and related assets. This charge is mainly due to contract termination
costs that could not be accrued until the sale closed, which occurred
on August 1, 2004, and other adjustments to the charge recorded at May
31, 2004. The after-tax impact of this charge was a reduction in net
earnings of $3.5 million or $0.04 per diluted share.
"I am pleased to report our second consecutive quarter of record
results," said John McConnell, Chairman and CEO of Worthington
Industries. "We achieved these results even though two of our key
market segments, automotive and commercial construction, were not at
their peak. While we did experience some benefit from selling lower
priced inventory in a higher price environment, that impact has
lessened considerably, and this quarter's results would have been
record-breaking regardless. I look forward to what our Metal Framing
segment can accomplish as commercial construction -- particularly
office construction -- continues to pick up from what has been a
multi-year low," concluded McConnell.
Segment Results
In the Processed Steel Products segment, quarterly net sales rose
58%, or $166.6 million, to $453.8 million from $287.2 million in the
comparable quarter of fiscal 2004. The increase in net sales was due
to higher volumes (up 14%) and pricing (up 39%). Excluding the impact
of the $5.6 million charge related to the Decatur asset sale,
operating income was significantly improved due to higher volumes and
a wider spread between selling prices and material costs.
In the Metal Framing segment, net sales increased 69%, or
$97.3 million, to $238.4 million from $141.1 million in the comparable
quarter of fiscal 2004. The increase was the result of higher pricing
as volumes were down 10% from the year ago quarter largely due to
weather related and other project delays. The wider spread between
selling prices and material costs was responsible for a significant
improvement in operating income.
In the Pressure Cylinders segment, net sales increased 10%, or
$6.7 million, to $73.2 million from $66.5 million in the comparable
quarter of fiscal 2004. Unit volumes were up 2% overall as strength in
the European market was partially offset by softer domestic propane
cylinder demand. A portion of the increase in European revenues was
the result of a weakened U.S. dollar which boosted reported revenues
in dollars by $1.6 million. Operating income fell due to costs related
to the partial closure of the Portugal facility.
Worthington's joint ventures continued to perform well. Equity in
net income of the six unconsolidated affiliates totaled $13.3 million
for the quarter, up 68% from $7.9 million in the year ago quarter.
Results at all six joint ventures were up significantly from the prior
year.
Outlook
Relative to last year, economic and industry conditions have
improved across all customer segments except "Big 3" automotive,
Processed Steel's largest customer segment. "Big 3" vehicle production
is projected to be down 7% for the coming fiscal quarter compared to
the same quarter last year but up 12% from this quarter. In commercial
construction, Metal Framing's primary market, the U.S. Census Bureau's
Index of Private Construction Spending confirms that commercial
construction activity has shown year-over-year improvement during the
last six months. This index serves as a leading indicator for the
Metal Framing business segment as metal framing products are generally
used in the latter stages of commercial construction projects.
Other
Dividends declared
On August 19, 2004, the board of directors declared a quarterly
cash dividend of $0.16 per share payable September 29, 2004, to
shareholders of record September 15, 2004. This is the 147th
consecutive quarter that Worthington has paid a dividend since it
became a public company in 1968.
Corporate Profile
Worthington Industries is a leading diversified metal processing
company with annual sales of more than $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 metal framing,
pressure cylinders, automotive past model service stampings, metal
ceiling grid systems and laser welded blanks. Worthington employs more
than 8,000 people and operates 61 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.
Conference Call
Worthington will review its first quarter results during its
quarterly conference call today, September 22, 2004, at 1:30 p.m.
Eastern Daylight Time. Details on the conference call can be found on
the company's web site at www.WorthingtonIndustries.com
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, operating
results and earnings per share; projected capacity and working capital
needs; pricing trends for raw materials and finished goods;
anticipated capital expenditures and asset sales; projected timing,
results, costs, charges and expenditures related to facility
dispositions, shutdowns and consolidations; new products and markets;
expectations for the economy and markets; and other non-historical
matters 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 and pricing,
changes in product mix and market acceptance of products; fluctuations
in pricing, quality or availability of raw materials (particularly
steel), supplies, utilities and other items required by operations;
effects of facility closures and the consolidation of operations; the
ability to realize cost savings and operational efficiencies on a
timely basis; the ability to integrate newly acquired businesses and
achieve synergies therefrom; capacity levels and efficiencies within
facilities and within the industry as a whole; financial difficulties
of customers, suppliers, joint venture partners and others with whom
the company does business; the effect of national, regional and
worldwide economic conditions generally and within major product
markets, including a prolonged or substantial economic downturn; the
effect of adverse weather on customers, markets, facilities and
shipping operations; changes in customer spending patterns and
supplier choices and risks associated with doing business
internationally, including economic, 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;
deviation of actual results from estimates and/or assumptions used by
the company in the application of its significant accounting policies;
level of imports and import prices in the company's markets; the
impact of governmental regulations, both in the United States and
abroad; and other risks described from time to time in filings with
the United States Securities and Exchange Commission.
WORTHINGTON INDUSTRIES, INC.
EARNINGS HIGHLIGHTS
(In Thousands, Except Per Share)
Three Months Ended
August 31,
-----------------------
2004 2003
----------- -----------
(Unaudited) (Unaudited)
Net sales $769,340 $498,035
Cost of goods sold 609,696 449,052
----------- -----------
Gross margin 159,644 48,983
Selling, general & administrative expense 64,831 41,620
Impairment charges and other 5,608 -
----------- -----------
Operating income 89,205 7,363
Other income (expense):
Miscellaneous income (expense) (3,459) (389)
Interest expense (5,722) (5,591)
Equity in net income of unconsolidated
affiliates 13,296 7,936
----------- -----------
Earnings before income taxes 93,320 9,319
Income tax expense 35,461 3,402
----------- -----------
Net earnings $57,859 $5,917
=========== ===========
Average common shares outstanding - diluted 88,112 86,517
----------- -----------
Earnings per share - diluted $0.66 $0.07
=========== ===========
Common shares outstanding at end of period 87,325 86,054
Cash dividends declared per common share $0.16 $0.16
WORTHINGTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
August 31, May 31,
2004 2004
----------- -----------
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $10,932 $1,977
Receivables, net 355,023 348,833
Inventories 445,070 362,906
Deferred income taxes 3,869 3,963
Other current assets 32,803 115,431
----------- -----------
Total current assets 847,697 833,110
Investments in unconsolidated affiliates 122,265 109,040
Goodwill 117,882 117,769
Other assets 27,734 27,826
Property, plant and equipment, net 552,356 555,394
----------- -----------
Total assets $1,667,934 $1,643,139
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $299,143 $313,909
Current maturities of long-term debt 1,013 1,346
Other current liabilities 159,536 159,805
----------- -----------
Total current liabilities 459,692 475,060
Other liabilities 99,600 95,067
Long-term debt 287,915 288,422
Deferred income taxes 91,212 104,216
Shareholders' equity 729,515 680,374
----------- -----------
Total liabilities and shareholders'
equity $1,667,934 $1,643,139
=========== ===========
WORTHINGTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Three Months Ended
August 31,
-----------------------
2004 2003
----------- -----------
(Unaudited) (Unaudited)
Operating activities
Net earnings $57,859 $5,917
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 14,059 16,952
Impairment charges and other 5,608 -
Other adjustments (21,137) (4,485)
Changes in current assets and
liabilities (105,470) (1,348)
----------- -----------
Net cash provided (used) by operating
activities (49,081) 17,036
Investing activities
Investment in property, plant and equipment,
net (11,484) (5,816)
Investment in unconsolidated affiliate - (490)
Proceeds from sale of assets 81,960 2,880
----------- -----------
Net cash provided (used) by investing
activities 70,476 (3,426)
Financing activities
Proceeds from short-term borrowings - (1,077)
Principal payments on long-term debt (1,851) (556)
Dividends paid (13,915) (13,754)
Other 3,326 1,236
----------- -----------
Net cash used by financing activities (12,440) (14,151)
Increase (decrease) in cash and cash
equivalents 8,955 (541)
Cash and cash equivalents at beginning of
period 1,977 1,139
----------- -----------
Cash and cash equivalents at end of period $10,932 $598
=========== ===========
WORTHINGTON INDUSTRIES, INC.
SUPPLEMENTAL DATA
(In Thousands)
This supplemental information is provided to assist in the
analysis of the results of operations.
Three Months Ended
August 31,
-------------------------
2004 2003
------------ ------------
(Unaudited) (Unaudited)
Volume:
Processed Steel Products (tons) 964 849
Metal Framing (tons) 178 198
Pressure Cylinders (units) 3,191 3,123
Net sales:
Processed Steel Products $453,827 $287,198
Metal Framing 238,391 141,064
Pressure Cylinders 73,227 66,535
Other 3,895 3,238
------------ ------------
Total net sales $769,340 $498,035
============ ============
Material cost:
Processed Steel Products $309,749 $188,985
Metal Framing 118,104 92,954
Pressure Cylinders 32,975 29,020
Operating income:
Processed Steel Products $35,795 $8,169
Metal Framing 51,512 (3,654)
Pressure Cylinders 3,189 3,538
Other (1,291) (690)
------------ ------------
Total operating income $89,205 $7,363
============ ============
The following provides detail of the impairment charges and other
included in the operating income by segment presented above.
Three Months Ended
August 31,
-------------------------
2004 2003
------------ ------------
(Unaudited) (Unaudited)
Pre-tax impairment charges and other by
segment
Processed Steel Products $5,608 $-
Metal Framing - -
Pressure Cylinders - -
Other - -
------------ ------------
Total impairment charges and other $5,608 $-
============ ============
CONTACT: Worthington Industries, Inc.
Cathy Mayne Lyttle, 614-438-3077
cmlyttle@WorthingtonIndustries.com
or
Allison McFerren Sanders, 614-840-3133
asanders@WorthingtonIndustries.com
SOURCE: Worthington Industries, Inc.