(Source: Business Wire)
Worthington Industries, Inc. (NYSE: WOR) today reported net sales of
$417.5 million and net earnings of $6.7 million, or $0.08 per diluted
share for the fiscal 2010 first quarter ended August 31, 2009, showing
improvement from fourth quarter results when the company reported a net
loss of $13.7 million, or $0.17 per diluted share. In last year's first
quarter, the Company posted record sales of $913.2 million and record
net earnings of $68.6 million, or $0.86 per diluted share.
"I am pleased to see improvements in our performance as we begin to move
forward from a difficult and challenging period," stated John P.
McConnell, Chairman and CEO. "Despite lower volumes in Steel Processing
and Metal Framing, we are benefiting from our work to increase
operational efficiencies and from new selling strategies. The Steel
Processing business received a temporary lift from the Cash for Clunkers
program, and the Pressure Cylinders business saw strength in many of its
business lines. Metal Framing is focused on keeping costs in line with
low demand which is a condition we expect to continue into 2010."
First Quarter Results
Financial highlights for the first quarter:
(U.S. dollars in millions, except per share data)
1Q2010 4Q2009 1Q2009
Net sales $ 417.5 $ 471.6 $ 913.2
Operating income (loss) (4.5 ) (19.2 ) 79.7
Equity income 16.1 8.7 25.0
Net earnings (loss) 6.7 (13.7 ) 68.6
Earnings (loss) per share $ 0.08 $ (0.17 ) $ 0.86
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Operating income for the first quarter included $3.6 million in pre-tax
restructuring charges, primarily related to the announced facility
closures in Metal Framing. These charges had a negative impact of $0.03
on earnings per share. Results for the first quarter of the prior year
included $8.8 million in restructuring charges, which had a negative
impact of $0.08 on earnings per share.
In the Steel Processing segment, volumes continue to be down
substantially, 47% lower than last fiscal year's first quarter. This
year's quarterly net sales of $181.6 million are down compared to the
record $459.9 million from the same quarter in fiscal 2009, when volumes
and pricing were substantially higher. Net sales were up slightly from
the fourth quarter, helped by increased demand from the Cash for
Clunkers program and customers advancing orders ahead of announced steel
price increases. Versus last quarter, direct and toll volume improved
10% and 7%, respectively, and operating income is up $22.9 million.
In Metal Framing, quarterly net sales were $95.4 million compared to
$232.9 million in last year's first quarter, as volumes were down 46%.
Demand remains weak and, despite price increase announcements to keep up
with rising material costs, the average selling price is down 24% from
the year ago quarter, primarily due to higher steel costs in the prior
year. The selling price in this low demand environment remains very
competitive. As a result, the Metal Framing segment reported a $4.3
million operating loss compared to a $3.5 million operating loss in the
previous quarter.
In the Pressure Cylinders segment, net sales declined 32% to $101.3
million from a record $148.4 million in the comparable quarter of fiscal
2009. Units shipped increased 15% due in part to the addition of the
high-volume, low priced products from the Piper acquisition. While 16.4
oz. camping cylinders and LPG cylinders were strong performers,net
salesdeclined due to significantly lower industrial and refrigerant gas
cylinder volumes resulting from the steep declines in these global
markets.
Income from Worthington's joint ventures was $16.1 million from the six
unconsolidated affiliates, compared to $25.0 million for the year ago
quarter. Despite sales volume being down 32% for the quarter, WAVE
continued to contribute the vast majority of equity earnings.
First Quarter Highlights
Dividends paid to shareholders totaled $7.9 million for the quarter.
Based on the quarter-end stock price, the dividend yielded a 3.0%
annualized return.
The Company continued to pay down debt, reducing it from $239.4
million at May 31, the end of the fiscal year, to $215.3 million on
August 31, 2009. Availability under the revolving credit facility
totaled $339.6 million at quarter's end.
The ratio of total debt to capitalization was 22.4% at quarter end,
compared to 24.4% at May 31, 2009.
Cash provided by operating activities was $96.2 million for the first
quarter of fiscal 2010. Capital expenditures were $7.7 million for the
same period.
Dietrich announced a joint venture with ClarkWestern to develop a new
ProSTUD drywall framing system.
The Serviacero Worthington joint venture opened its greenfield steel
processing facility in the Monterrey region of Mexico.
Outlook
"Looking forward, we anticipate a normal seasonal drop in demand
beginning in November and bottoming in December," McConnell said. "We
are optimistic that volumes will begin to trend higher next year, but we
will watch the opening months of 2010 closely. They should provide
foreshadowing for the remainder of the year."
Other
Dividend Declared
On August 27, 2009, the board of directors declared a quarterly cash
dividend of $0.10 per share payable September 29, 2009, to shareholders
of record on September 15, 2009.
Announcements
On September 3, 2009, Worthington acquired Structural Composites
Industries, LLC (SCI). SCI is a leading manufacturer of DOT-approved
lightweight, aluminum-lined, composite-wrapped high pressure cylinders
used in commercial, military, marine and aerospace applications.
Revenues were approximately $36 million in calendar year 2008.
Conference Call
Worthington will review first quarter results during its quarterly
conference call tomorrow, September 30, 2009, at 10:30 a.m. Eastern
Daylight Time. Details regarding the conference call can be found on the
company web site at www.WorthingtonIndustries.com
Corporate Profile
Worthington Industries is a leading diversified metal processing company
with annual sales of approximately $2.6 billion. The Columbus, Ohio
based company is North America's premier value-added steel processor and
a leader in manufactured metal products such as light gauge steel
framing for commercial and residential construction; framing systems and
stairs for mid-rise buildings; pressure cylinder products such as
propane, oxygen and helium tanks, hand torches, camping cylinders, and
scuba tanks; current and past model automotive service stampings; metal
ceiling grid systems; steel pallets and racks; and laser welded blanks.
Worthington employs approximately 6,400 people and operates 63
facilities in 10 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,
financial condition or other financial measures; projected 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 operations, sales, sourcing and the
supply chain; projected timing, results, benefits, costs, charges and
expenditures related to acquisitions, headcount reductions and facility
dispositions, shutdowns and consolidations; the alignment of operations
with demand; the ability to develop or take advantage of future
opportunities, new products and 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 improving earnings, 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.
