Columbus, Ohio, February 1, 2001 -- Worthington Industries (NYSE: WOR) announced today the shutdown of a portion of its Malvern, Pa., Worthington Steel facility. This action will result in the elimination of a total of 160 hourly and salaried positions.
The production lines being idled include two rolling mills, a cleaning line and a tension leveler. Earlier this fiscal year, the pickle line and a slitter were idled. The company is evaluating its options for disposition of these assets. If all the equipment currently being idled were written off, the company would recognize a charge of as much as $6 million, most of which would relate to the equipment.
"Malvern has been a marginal operation for several years, and today's difficult market environment presents added challenges," Chairman and CEO John P. McConnell said. "Our efforts to improve the operations have yielded only modest results. To go forward as previously configured, Malvern would require additional capital which would not yield an acceptable return on our investment.
“Though necessary, the resulting elimination of jobs and its affect on people and their families always make this type of decision difficult,” McConnell said. “This move is part of an ongoing strategy to maximize the use of capacity, cut costs and maintain our commitment to our customers and our shareholders."
Malvern will continue to operate its coating lines, which produce nickel, zinc and painted products, currently generating approximately $60 million in annual sales. "These coating operations provide unique value-added processing capabilities and operate at higher levels of profitability and capacity than the idled production. Sharpening the focus on the coating business gives Malvern a chance to be profitable,” said McConnell.
The company will transfer approximately $25 million of business affected by the closure to other Worthington Steel facilities with better production capabilities including Baltimore, Columbus and Decatur, Ala. Once the closure and related matters are complete, Worthington estimates the annual savings to be at least $0.03 per share.
Worthington Industries 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, a leader in manufactured metal products such as after-market stampings, pressure cylinders, metal framing, metal ceiling grid systems and laser welded blanks. The company employs 8,000 people and operates 57 facilities in 11 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.
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 revenues, costs, or earnings, stock appreciation, job elimination, plant startups and closures, capabilities and other statements which are not historical information constitute “forward looking statements” within the meaning of the Act. All forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those projected. Factors that could cause actual results to differ materially include, but are not limited to, the following: general economic conditions; conditions in the company's major markets; competitive factors and pricing pressures; product demand and changes in product mix; changes in pricing or availability of raw material, particularly steel; delays in construction or equipment supply; delays in, or other issues related to, idling operations or transferring business; and other risks described from time to time in the company's filings with the Securities and Exchange Commission.