Jul. 16--Worthington Industries posted an annual loss for the first time in its 54-year history yesterday, amid the deepest economic downturn in generations.

"While I am very disappointed in that outcome ... results could have been much worse," said John P. McConnell, chairman and CEO, referring to a variety of cost-cutting measures the company has taken.

The Columbus-based company had $2.6 billion in revenue, down 14 percent from last year, and the loss was $108 million, down from a profit of $107 million a year ago.

McConnell did not predict a quick recovery, but he said the company is well-positioned to come back.

"I am confident that as volumes increase -- and they will at some point -- the great work of our employees will be richly rewarded as well as that of our shareholders," he said.

The company lost $14 million during the fourth quarter on sales of $472 million, which were down 46 percent from a year ago.

The losses were unavoidable, considering the depths of the downturn for Worthington's top customers, said Charles Bradford, a New York-based partner with Affiliated Research Group.

"Their two biggest markets are in the tank -- automobiles and construction," he said. "That makes it really tough."

Sal Tharani, an analyst for Goldman Sachs, had predicted a loss of 10 cents per share for the quarter, which was a larger loss than the 2 cents per share that Worthington reported after one-time charges. Despite this, he maintained his pessimistic outlook for the company, because of its exposure "to weak end-markets, particularly commercial construction," he said in a research note.

The fiscal year results were skewed by a series of one-time events, including $105 million in inventory write-downs, a $97 million goodwill-impairment charge and $43 million worth of restructuring charges.

Worthington's two largest segments, steel processing and metal framing, both had operating losses for the quarter. The best-performing segment was pressure cylinders, which had an operating income of $9 million.

McConnell said that steel processing was "at or near bottom" of its drop in sales. He couldn't say that about metal framing, which he expects to continue to decline.

The company has taken far-reaching action to cut costs over the past year, including the following:

--Three plants were closed -- a steel processing plant in Louisville, Ky., and metal-framing plants in Renton, Wash., and Lunenburg, Mass.

--A joint venture, Viking-Worthington Steel, was discontinued, and Worthington sold its interest in three other joint ventures.

--Through plant closings and other layoffs, 1,200 workers left the company, or about 20 percent of the work force.

--The company match for the 401(k) retirement plan was temporarily suspended.

--Salaried employees' wages were cut for the current quarter, with a reduction of up to 20 percent for top-level employees and a 25 percent cut for McConnell.

--Hourly employees' work hours were cut, and merit-pay increases were suspended.

--The fourth-quarter dividend payment was reduced to 10 cents per share from 17 cents per share.

dgearino@dispatch.com

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