COLUMBUS, OH, Jan 05, 2012 (MARKETWIRE via COMTEX) --Worthington Industries, Inc. (NYSE: WOR) today reported net sales
of $570.4 million and net earnings of $18.5 million, or $0.27 per
share, for its fiscal 2012 second quarter ended November 30, 2011. In
last year's second quarter, the Company reported net sales of $580.7
million and net earnings of $14.5 million, or $0.20 per share.
Financial highlights for the current and comparative periods are as
follows:
(U.S. dollars in millions, except per share data)
2Q 2012 1Q 2012 2Q 2011 6M2012 6M2011
-------- -------- -------- -------- --------
Net sales $ 570.4 $ 602.4 $ 580.7 $1,172.8 $1,197.5
Operating income 12.5 21.2 12.9 33.7 34.0
Equity income 21.9 24.7 16.2 46.6 34.5
Net earnings 18.5 25.7 14.5 44.2 36.8
Earnings per share $ 0.27 $ 0.35 $ 0.20 $ 0.62 $ 0.49
"Our second quarter results were very good, showing solid incremental
growth," said John McConnell, Chairman and CEO. "The Steel Processing
and Pressure Cylinders businesses nearly made up for the lost revenue
from the exiting of the Metal Framing business in the year-to-year
comparison. Worthington Cylinders is strengthening its portfolio and
global footprint to achieve our strategic growth goals for that
business. We are pleased with the speed of integration in the
Cylinders' acquisitions of the BernzOmatic(R) and Coleman(R) product
lines, as well as the recent addition of STAKO and their strong
European market position in LPG tanks." McConnell added,
"Strengthening automotive demand and continued operating improvements
produced good results in Steel Processing."
Consolidated Quarterly Results
Net sales for the second quarter ended November 30, 2011, were $570.4
million, down 2% from the comparable quarter in the prior year, when
net sales were $580.7 million. The Steel Processing and Pressure
Cylinders segments reported an 18% and a 33% increase in sales,
respectively, aided by the recent acquisitions. These increases,
however, were more than offset by the impact of the deconsolidation
of the Company's former Metal Framing and Automotive Body Panels
operations, as reported in previous periods. Excluding the
deconsolidated operations, net sales rose 19% from the prior year
quarter primarily due to the acquisitions and higher average selling
prices.
Gross margin for the current quarter was $66.3 million, compared to
$69.8 million in the prior year quarter. The decrease was primarily
due to higher inventory holding losses for Steel Processing.
SG&A expense was $4.1 million lower than the prior year quarter
primarily due to the deconsolidation transactions, partially offset
by the impact of the acquisitions.
Operating income for the current quarter was $12.5 million, slightly
lower than the $12.9 million reported during the comparable quarter
of the prior year. Operating income for the current quarter was
adversely affected by restructuring expenses, while gains on the sale
of equipment and real estate related to the joint venture
transactions had a favorable impact. During the current quarter,
ongoing transformation efforts within Pressure Cylinders resulted in
$2.0 million of outside consulting expenses, which are included in
the "restructuring and other" expense line. The $1.2 million in the
"joint venture transactions" line reflects one-time gains on asset
disposals offset by facility exit and other costs related to the wind
down of the retained Metal Framing facilities during the second
quarter of fiscal 2012.
Interest expense was $4.8 million in the quarter, the same as in the
prior year. The impact of higher average debt levels was offset by
slightly lower interest rates.
Equity in net income from unconsolidated joint ventures was $21.9
million, an increase of $5.7 million from the comparable quarter in
the prior year, on sales of $420.1 million. Worthington Armstrong
Venture (WAVE) contributed $14.1 million of earnings in the current
quarter, a 10% increase from the comparable prior year quarter. In
addition, the new joint ventures, ClarkDietrich and ArtiFlex,
contributed $2.2 million and $2.1 million of earnings, respectively.
For the current quarter, income tax expense of $9.2 million compared
to $7.3 million in the comparable quarter in the prior year. Current
quarter income tax expense reflects an estimated annual effective tax
rate of 32.9% compared to 32.7% for the prior year quarter.
Balance Sheet
At quarter end, total debt was $476.3 million, up $16.9 million from
August 31, 2011, as the acquisition of STAKO and the repurchase of
common shares raised short-term borrowing needs. The Company had
utilized $85.0 million of its $100.0 million trade accounts
receivable securitization facility, and $136.1 million was drawn on
its $400.0 million revolving credit facility as of November 30, 2011.
Quarterly Segment Results
Steel Processing's net sales of $373.5 million were up 18%, or $56.3
million, over the prior year quarter. Higher average selling prices
increased net sales by $35.9 million and a 12% increase in volumes
favorably impacted sales by $20.4 million. The mix of direct versus
toll tons processed was 51% to 49% this quarter, compared with 54% to
46% in the comparable quarter in the prior year. Operating income
declined $1.0 million as increased volumes were more than offset by
the impact of higher manufacturing expenses and inventory holding
losses.
Pressure Cylinders' net sales of $181.5 million were up 33% from the
comparable prior year quarter. Net sales in the North American
operations increased 33% over prior year, aided by the Bernz
acquisition. Net sales for the European operations were higher
primarily due to the STAKO acquisition and a more favorable product
mix, but overall volumes were down. Worthington Nitin Cylinders, the
Company's Indian consolidated joint venture, contributed $1.9 million
to net sales. Pressure Cylinders' operating income increased $0.7
million, or 7%, from the prior year quarter to $10.2 million. The
improvement in operating income was driven by higher overall volumes
and an increased spread between selling prices and material costs.
However, higher SG&A expenses of $5.5 million, driven primarily by
the impact of acquisitions and the absorption of a larger portion of
corporate allocated expenses resulting from the deconsolidated
operations offset the improvement.
Metal Framing's net sales were $1.3 million during the quarter,
reflecting two months of operations for the vinyl business, which was
sold on October 31, 2011. The prior year quarter included the full
Metal Framing operations, which were contributed into the new
ClarkDietrich joint venture on March 1, 2011.
Noteworthy Developments
-- On September 30, 2011, the Company completed the acquisition of
Poland-based STAKO, a leading European producer of automotive
liquefied propane gas and compressed natural gas tanks. The acquired
net assets are now a part of the Pressure Cylinders business segment.
The purchase price was $41.5 million.
-- On December 1, 2011, the propane fuel business of The Coleman Company,
Inc. became part of the Pressure Cylinders segment. The Company also
licensed the Coleman name, adding the Coleman brand to the Cylinders
growing retail portfolio. The purchase price was $23.4 million.
-- A quarterly dividend of $0.12 was declared by the Company's Board of
Directors on December 14, 2011, payable on March 29, 2012 to
shareholders of record March 15, 2012.
-- The Company repurchased 1.2 million shares for $16.7 million during
the quarter.
-- In December, the Company received a non-recurring distribution of
$50.0 million from WAVE, the ceiling grid joint venture, as WAVE
expanded its revolving credit facility to $225.0 million and issued a
$50.0 million 10-year senior unsecured note.
-- On December 29, 2011, the Company acquired the stock of Angus
Industries for $180.0 million. Angus designs and manufacturers OEM
cabs for mobile equipment in industries serving the agriculture,
construction and mining industries. For its fiscal year ended December
31, 2011, Angus recognized approximately $200.0 million of revenue.
Post-closing, the Company has approximately $569.0 million of funded
debt and availability under its revolving credit facilities of $184.0
million.
Outlook
"Our Company continues to leverage our core competency as a diversified
metals manufacturer by acquiring high return and high value-added
businesses that serve attractive end markets," McConnell said. "The
acquisition of Angus Industries is a result of that focus and we are
pleased to have this market leader in the design and manufacturing of
high quality, custom-engineered cabs in the Worthington family.
"We are aggressively positioning Worthington Industries for growth.
Our focus over the last three years has been on improving our
existing businesses or exiting them, and finding new, complementary
businesses to help us achieve our strategic goal of decreasing
earnings volatility. We are strengthening our brand offerings and
added new growth opportunities in Cylinders. Our Steel Processing
segment is operating at a high level and we have positioned our joint
ventures to continue their strong results. Even with the slow
economy, we have seen incremental improvements in many of our markets
and believe we can continue to grow our bottom line."
Conference Call
Worthington will review second quarter results during its quarterly
conference call on January 5, 2012, at 1:30 p.m., Eastern Time.
Details regarding the conference call can be found on the Company
website at www.WorthingtonIndustries.com.
Corporate Profile
Worthington Industries is a leading diversified metals manufacturing
company with 2011 fiscal year sales of $2.4 billion. The Columbus,
Ohio based company is North America's premier value-added steel
processor and a leader in manufactured pressure cylinders, such as
propane, oxygen and helium tanks, hand torches, refrigerant and
industrial cylinders, camping cylinders, scuba tanks, and compressed
natural gas storage cylinders; custom-engineered open and enclosed
cabs and operator stations for heavy mobile equipment; framing
systems and stairs for mid-rise buildings; steel pallets and racks;
and through joint ventures, suspension grid systems for concealed and
lay-in panel ceilings, current and past model automotive service
stampings; laser welded blanks, and light gauge steel framing for
commercial and residential construction. Worthington employs more
than 9,500 people and operates 80 facilities in 12 countries.
Founded in 1955, the Company operates under a long-standing corporate
philosophy rooted in the golden rule. Earning money for its
shareholders is the first corporate goal. This philosophy serves as
an unwavering commitment to the customer, supplier, and shareholder,
and it serves as the Company's foundation for one of the strongest
employee-employer partnerships in American industry.
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 business plans or
future or expected growth, performance, sales, volumes, cash flows,
earnings, balance sheet strengths, debt, financial condition or other
financial measures; projected profitability potential, capacity, and
working capital needs; demand trends for the Company or its markets;
pricing trends for raw materials and finished goods and the impact of
pricing changes; anticipated capital expenditures and asset sales;
anticipated improvements and efficiencies in costs, operations,
sales, inventory management, sourcing and the supply chain and the
results thereof; the ability to make acquisitions and the projected
timing, results, benefits, costs, charges and expenditures related to
acquisitions, newly-created joint ventures, headcount reductions and
facility dispositions, shutdowns and consolidations; the alignment of
operations with demand; the ability to operate profitably and
generate cash in down markets; the ability to maintain margins and
capture and maintain market share and to develop or take advantage of
future opportunities, new products and new markets; expectations for
Company and customer inventories, jobs and orders; expectations for
the economy and markets or improvements therein; expected benefits
from transformation plans, cost reduction efforts and other new
initiatives; expectations for increasing volatility or improving and
sustaining earnings, earnings potential, margins or shareholder
value; effects of judicial rulings 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, 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 conditions in national and worldwide
financial markets; product demand and pricing; changes in product
mix, product substitution and market acceptance of the Company's
products; fluctuations in the pricing, quality or availability of raw
materials (particularly steel), supplies, transportation, utilities
and other items required by operations; effects of facility closures
and the consolidation of operations; the effect of financial
difficulties, consolidation and other changes within the steel,
automotive, construction and other industries in which the Company
participates; failure to maintain appropriate levels of inventories;
financial difficulties (including bankruptcy filings) of original
equipment manufacturers, end-users and customers, suppliers, joint
venture partners and others with whom the Company does business; the
ability to realize targeted expense reductions from head count
reductions, facility closures and other cost reduction efforts; the
ability to realize other cost savings and operational, sales and
sourcing improvements and efficiencies, and other expected benefits
from transformation initiatives, on a timely basis; the overall
success of, and the ability to integrate, newly-acquired businesses
and achieve synergies and other expected benefits therefrom; the
overall success of newly-created joint ventures, including the demand
for their products, and the ability to achieve the anticipated
benefits therefrom; capacity levels and efficiencies, within
facilities, within major product markets and within the industry as a
whole; the effect of disruption in the business of suppliers,
customers, facilities and shipping operations due to adverse weather,
casualty events, equipment breakdowns, acts of war or terrorist
activities or other causes; changes in customer demand, inventories,
spending patterns, product choices, and supplier choices; risks
associated with doing business internationally, including economic,
political and social instability, foreign currency exposure and the
acceptance of our products in new markets; the ability to improve and
maintain processes and business practices to keep pace with the
economic, competitive and technological environment; adverse claims
experience with respect to worker's compensation, product recalls or
product liability, casualty events or other matters; 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
judicial rulings and governmental regulations, including those
adopted by the United States Securities and Exchange Commission and
other governmental agencies as contemplated by the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010, both in the United
States and abroad; and other risks described from time to time in the
Company's filings with the United States Securities and Exchange
Commission, including those described in "Part I - Item 1A. - Risk
Factors" of our Annual Report on Form 10-K for the fiscal year ended
May 31, 2011.
WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share)
Three Months Ended Six Months Ended
November 30, November 30,
---------------------- ----------------------
2011 2010 2011 2010
---------- ---------- ---------- ----------
Net sales $ 570,389 $ 580,687 $1,172,776 $1,197,492
Cost of goods sold 504,112 510,868 1,035,037 1,048,759
---------- ---------- ---------- ----------
Gross margin 66,277 69,819 137,739 148,733
Selling, general and
administrative expense 52,901 56,971 98,262 113,749
Restructuring and other
expense (income) 2,048 (76) 3,751 988
Joint venture transactions (1,192) - 2,023 -
---------- ---------- ---------- ----------
Operating income 12,520 12,924 33,703 33,996
Other income (expense):
Miscellaneous income
(expense) 279 (94) 680 (137)
Interest expense (4,756) (4,838) (9,444) (9,546)
Equity in net income of
unconsolidated affiliates 21,912 16,223 46,609 34,512
---------- ---------- ---------- ----------
Earnings before income
taxes 29,955 24,215 71,548 58,825
Income tax expense 9,207 7,332 22,459 17,689
---------- ---------- ---------- ----------
Net earnings 20,748 16,883 49,089 41,136
Net earnings attributable to
noncontrolling interest 2,216 2,414 4,904 4,313
---------- ---------- ---------- ----------
Net earnings attributable to
controlling interest $ 18,532 $ 14,469 $ 44,185 $ 36,823
========== ========== ========== ==========
Basic
Average common shares
outstanding 69,350 74,062 70,440 75,870
---------- ---------- ---------- ----------
Earnings per share
attributable to controlling
interest $ 0.27 $ 0.20 $ 0.63 $ 0.49
========== ========== ========== ==========
Diluted
Average common shares
outstanding 69,356 74,077 70,925 75,882
---------- ---------- ---------- ----------
Earnings per share
attributable to controlling
interest $ 0.27 $ 0.20 $ 0.62 $ 0.49
========== ========== ========== ==========
Common shares outstanding at
end of period 68,937 74,108 68,937 74,108
Cash dividends declared per
share $ 0.12 $ 0.10 $ 0.24 $ 0.20
WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
November 30, May 31,
2011 2011
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 53,806 $ 56,167
Receivables, less allowances of $3,254 and
$4,150 at November 30, 2011 and May 31, 2011 333,375 388,550
Inventories:
Raw materials 165,232 189,450
Work in process 85,175 98,940
Finished products 85,764 82,440
------------ ------------
Total inventories 336,171 370,830
Income taxes receivable 10,001 1,356
Assets held for sale 22,962 9,681
Deferred income taxes 22,290 28,297
Prepaid expenses and other current assets 32,744 36,754
------------ ------------
Total current assets 811,349 891,635
Investments in unconsolidated affiliates 233,187 232,149
Goodwill 102,379 93,633
Other intangible assets, net of accumulated
amortization of $12,715 and $12,688 at November
30, 2011 and May 31, 2011 43,235 19,958
Other assets 23,150 24,540
Property, plant and equipment, net 398,989 405,334
------------ ------------
Total assets $ 1,612,289 $ 1,667,249
============ ============
Liabilities and equity
Current liabilities:
Accounts payable $ 177,194 $ 253,404
Short-term borrowings 226,086 132,956
Accrued compensation, contributions to employee
benefit plans and related taxes 43,155 72,312
Dividends payable 8,391 7,175
Other accrued items 30,160 52,023
Income taxes payable 502 7,132
------------ ------------
Total current liabilities 485,488 525,002
Other liabilities 71,522 67,309
Long-term debt 250,263 250,254
Deferred income taxes 88,126 83,981
------------ ------------
Total liabilities 895,399 926,546
Shareholders' equity - controlling interest 670,110 689,910
Noncontrolling interest 46,780 50,793
------------ ------------
Total equity 716,890 740,703
------------ ------------
Total liabilities and equity $ 1,612,289 $ 1,667,249
============ ============
WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended Six Months Ended
November 30, November 30,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Operating activities
Net earnings $ 20,748 $ 16,883 $ 49,089 $ 41,136
Adjustments to reconcile net
earnings to net cash provided
(used) by operating activities:
Depreciation and amortization 13,119 15,646 25,973 31,470
Restructuring and other
expense (income), non-cash - (32) - 225
Provision for deferred income
taxes 500 (1,365) 8,178 (4,464)
Bad debt expense (income) (140) 776 (111) 781
Equity in net income of
unconsolidated affiliates,
net of distributions 2,782 (2,160) (2,287) (3,816)
Net loss (gain) on sale of
assets (1,653) 354 (2,068) (329)
Stock-based compensation 2,578 1,579 5,779 3,033
Changes in assets and
liabilities:
Receivables 23,981 8,100 51,355 (15,122)
Inventories 47,809 31,799 53,724 26,330
Prepaid expenses and other
current assets 6,063 1,437 6,674 695
Other assets 1,567 107 2,840 807
Accounts payable and accrued
expenses (54,164) (15,158) (151,012) (94,143)
Other liabilities 1,165 1,491 1,381 3,658
--------- --------- --------- ---------
Net cash provided (used) by
operating activities 64,355 59,457 49,515 (9,739)
--------- --------- --------- ---------
Investing activities
Investment in property, plant
and equipment, net (3,559) (4,477) (10,031) (10,810)
Acquisitions, net of cash
acquired (38,782) - (79,782) (12,175)
Investments in unconsolidated
affiliates - - (785) -
Proceeds from sale of assets 6,306 4,366 11,347 6,508
--------- --------- --------- ---------
Net cash used by investing
activities (36,035) (111) (79,251) (16,477)
--------- --------- --------- ---------
Financing activities
Net proceeds from short-term
borrowings 16,881 (41,375) 93,131 123,735
Proceeds from issuance of
common shares 315 1,036 8,523 1,338
Payments to noncontrolling
interest (3,456) (3,457) (6,576) (6,577)
Repurchase of common shares (16,715) (12,137) (52,120) (75,092)
Dividends paid (8,414) (7,408) (15,583) (15,334)
--------- --------- --------- ---------
Net cash provided (used) by
financing activities (11,389) (63,341) 27,375 28,070
--------- --------- --------- ---------
Increase (decrease) in cash and
cash equivalents 16,931 (3,995) (2,361) 1,854
Cash and cash equivalents at
beginning of period 36,875 64,865 56,167 59,016
--------- --------- --------- ---------
Cash and cash equivalents at end
of period $ 53,806 $ 60,870 $ 53,806 $ 60,870
========= ========= ========= =========
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 Six Months Ended
November 30, November 30,
---------------------- ----------------------
2011 2010 2011 2010
---------- ---------- ---------- ----------
Volume:
Steel Processing (tons) 681 608 1,385 1,224
Pressure Cylinders (units) 14,585 13,684 29,178 27,953
Metal Framing (tons) 1 60 1 125
Net sales:
Steel Processing $ 373,462 $ 317,147 $ 781,636 $ 672,011
Pressure Cylinders 181,454 136,218 350,283 272,292
Metal Framing 1,257 77,084 4,402 161,588
Other 14,216 50,238 36,455 91,601
---------- ---------- ---------- ----------
Total net sales $ 570,389 $ 580,687 $1,172,776 $1,197,492
========== ========== ========== ==========
Material cost:
Steel Processing $ 281,784 $ 232,845 $ 588,434 $ 494,032
Pressure Cylinders 89,410 62,784 175,962 126,301
Metal Framing 1,003 55,128 1,946 111,845
Operating income (loss):
Steel Processing $ 7,387 $ 8,429 $ 23,664 $ 25,047
Pressure Cylinders 10,202 9,523 22,117 19,077
Metal Framing 372 (6,684) (3,315) (10,613)
Other (5,441) 1,656 (8,763) 485
---------- ---------- ---------- ----------
Total operating income $ 12,520 $ 12,924 $ 33,703 $ 33,996
========== ========== ========== ==========
The following provides detail of the restructuring and other expense
(income) and joint venture transactions included in the operating income
by segment presented above.
Three Months Ended Six Months Ended
November 30, November 30,
---------------------- ---------------------
2011 2010 2011 2010
---------- ---------- ---------- ----------
Pre-tax restructuring and
other expense (income):
Steel Processing $ - $ (270) $ - $ (373)
Pressure Cylinders - - - -
Metal Framing - 56 - 976
Other 2,048 138 3,751 385
---------- ---------- ---------- ----------
Total restructuring and
other expense (income) $ 2,048 $ (76) $ 3,751 $ 988
========== ========== ========== ==========
Three Months Ended Six Months Ended
November 30, November 30,
---------------------- ---------------------
2011 2010 2011 2010
---------- ---------- ---------- ----------
Pre-tax joint venture
transactions:
Steel Processing $ - $ - $ - $ -
Pressure Cylinders - - - -
Metal Framing (1,192) - 2,023 -
Other - - - -
---------- ---------- ---------- ----------
Total joint venture
transactions $ (1,192) $ - $ 2,023 $ -
========== ========== ========== ==========
CONTACTS:
Cathy M. Lyttle
VP, Corporate Communications and Investor Relations
Phone: (614) 438-3077
E-mail: Email Contact
Sonya L. Higginbotham
Director, Corporate Communications
Phone: (614) 438-7391
E-mail: Email Contact
SOURCE: Worthington Industries, Inc.
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