Second Quarter EPS up 85%; Six Months EPS up 87%
COLUMBUS, Ohio, Dec. 18 /PRNewswire-FirstCall/ --
FlashResults
Worthington Industries (WOR)
(Numbers in Thousands, Except
Per Share Data)
2nd quarter ended 2nd quarter ended
11/30/2002 YTD 11/30/2001 YTD
Sales $567,897 $1,093,361 $410,379 $819,937
Net Income $20,747 $48,237 $11,323 $25,608
Average Shares 86,834 86,666 85,775 85,787
EPS $0.24 $0.56 $0.13 $0.30
Worthington Industries, Inc. (NYSE: WOR) today reported results for the
three and six month periods ended November 30, 2002. For the quarter, net
income increased 83% to $20.7 million compared to $11.3 million for the same
period a year ago, and diluted earnings per share increased 85% to $0.24
compared to $0.13 last year. Sales were a record $567.9 million, an increase
of 38% from $410.4 million last year.
For the six-month period, earnings increased 88% from the prior year to
$48.2 million from $25.6 million, and diluted earnings per share increased
87% to $0.56 from $0.30. Sales increased 33% to $1,093.4 million from
$819.9 million.
Both the three and six month periods were impacted by nearly offsetting
one-time items recorded in the second quarter. A favorable adjustment of
$5.6 million was made to the restructuring charge originally recorded during
the third quarter of fiscal 2002 for the consolidation and closure of
facilities. The credit was the net result of higher-than-estimated proceeds
from the sale of real estate at our former Malvern, Pennsylvania, steel
processing facility and higher than estimated costs related to our
consolidation, including the closure of three additional facilities.
Offsetting the restructuring adjustment was a $5.4 million charge for
potential liability relating to certain workers' compensation claims of
Buckeye Steel Castings for the period prior to its sale by Worthington in
fiscal 1999, when a Worthington guarantee was in place. The buyer had assumed
these liabilities and agreed to indemnify Worthington, but economic conditions
forced Buckeye to close its doors, calling into question its ability to pay.
Second quarter results include a full quarter of operations for Unimast
Incorporated which was acquired on July 31, 2002. Unimast generated
approximately $54 million in sales and $2 million in operating income during
the quarter. Its operating income covered financing costs and thus the
transaction was accretive to second quarter earnings per share by
approximately $0.01. The integration of Unimast into Dietrich Metal Framing
is well underway, and it will not be possible to segregate financial results
going forward. The integration effort is expected to be completed during
calendar 2003.
"The second quarter of fiscal 2003 has been strong due, primarily, to
increased demand in Processed Steel Products and Pressure Cylinders offsetting
a severe decline in commercial construction activity that has negatively
impacted Metal Framing," said John P. McConnell, Chairman and CEO of
Worthington Industries. "We enter the normal seasonal slowdown of our
business in the third quarter with confidence in our ability to maximize every
opportunity," concluded McConnell.
Within the Processed Steel Products business segment, net sales increased
28% or $77.2 million to $352.7 million from $275.5 million in the comparable
quarter of fiscal 2002. Sales to the automotive sector, the largest end
market for this business segment, were up. Direct volumes were up over the
prior year offsetting a decline in the spread between selling prices and
material costs. Although much improved from the prior year, the segment
operating margin is still below historical levels and includes an $8.7 million
one time benefit from the favorable adjustment to the restructuring charge.
Within the Metal Framing business segment, net sales increased 90% or
$68.4 million to $144.1 million from $75.7 million in the comparable quarter
of fiscal 2002. The increase in metal framing sales is due both to the
Unimast acquisition and to higher selling prices, driven by raw material
increases. Excluding Unimast, sales increased $14.4 million or 19% but pounds
shipped were down 13% due to weakness in commercial construction activity.
The volume decline, coupled with Unimast integration costs, higher material
costs and a $1.6 million charge for the closure of two Dietrich facilities,
contributed to a segment operating margin well below historical averages.
Within the Pressure Cylinders business segment, net sales increased 20% or
$11.4 million to $67.5 from $56.1 million in the comparable quarter of fiscal
2002. The increase was generated by significantly greater international
activity as well as continuing demand resulting from U.S. regulatory
requirements mandating that all propane cylinders have overfill prevention
devices. As a result, the segment operating margin was much improved from
the prior year period, despite a $1.4 million one-time charge for the closure
of a facility in Citronelle, Alabama.
Excluding the $5.6 million restructuring adjustment, second quarter
operating income of $33.9 million, and the related operating margin, were up
significantly from the same quarter last year. Worthington's joint ventures
also contributed positively to second quarter results. Equity in the net
income of our five unconsolidated affiliates totaled $7.2 million, up 41% from
$5.1 million in the year ago quarter.
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 and a leader in
manufactured metal products such as automotive aftermarket stampings, pressure
cylinders, metal framing, metal ceiling grid systems and laser welded blanks.
Worthington employs more than 8,000 people and operates 64 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. Worthington Industries is listed
as one of the 100 Best Companies to Work For in America by Fortune Magazine.
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 and operating results;
projected capacity levels; anticipated capital expenditures; projected timing,
results, costs, charges and expenditures related to plant closures and
consolidations; and other non-historical information 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, changes in product mix
and market acceptance of products; changes in pricing or availability of raw
materials, particularly steel; effects of plant closures and the consolidation
of operations; capacity restraints and efficiencies; conditions in major
product markets; delays in construction or equipment supply; financial
difficulties of customers, suppliers and others with whom we do business; the
effect of national, regional and worldwide economic conditions; risks
associated with doing business internationally, including economical,
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; the business environment and impact of governmental regulations,
both in the United States and abroad; and other risks described from time to
time in filings with the SEC.
WORTHINGTON INDUSTRIES, INC.
EARNINGS HIGHLIGHTS
(In Thousands, Except Per Share)
Three Months Ended Six Months Ended
Nov. 30, Nov. 30,
2002 2001 2002 2001
(Unaudited) (Unaudited)(Unaudited) (Unaudited)
Net sales:
Processed Steel Products $352,680 $275,535 $671,601 $541,106
Metal Framing 144,078 75,691 264,916 155,237
Pressure Cylinders 67,449 56,063 149,585 117,665
Other 3,690 3,090 7,259 5,929
Total net sales 567,897 410,379 1,093,361 819,937
Cost of goods sold 487,527 349,082 923,567 698,643
Gross margin 80,370 61,297 169,794 121,294
Selling, general &
administrative expense 46,452 41,203 93,555 78,614
Restructuring adjustment (5,622) - (5,622) -
Operating income:
Processed Steel Products 32,000 14,903 54,317 28,441
Metal Framing 1,908 3,261 18,272 9,827
Pressure Cylinders 6,633 2,521 13,827 4,338
Other (1,001) (591) (4,555) 74
Total operating income 39,540 20,094 81,861 42,680
Other income (expense):
Miscellaneous expense (2,316) (1,655) (3,657) (1,128)
Nonrecurring loss (5,400) - (5,400) -
Interest expense (6,340) (5,688) (12,443) (11,185)
Equity in net income of
unconsolidated
affiliates 7,187 5,081 15,602 9,961
Earnings before taxes 32,671 17,832 75,963 40,328
Income tax expense 11,924 6,509 27,726 14,720
Net earnings $20,747 $11,323 $48,237 $25,608
Average common shares
outstanding - diluted 86,834 85,775 86,666 85,787
Earnings per share - diluted $0.24 $0.13 $0.56 $0.30
Common shares outstanding at end
of period 85,838 85,392 85,838 85,392
Cash dividends declared per
common share $0.16 $0.16 $0.32 $0.32
Restructuring adjustment by segment
Processed Steel Products $(8,717) $- $(8,717) $-
Metal Framing 1,574 - 1,574 -
Pressure Cylinders 1,420 - 1,420 -
Other 101 - 101 -
Total restructuring
adjustment $(5,622) $- $(5,622) $-
WORTHINGTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
Nov. 30, May 31,
2002 2002
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $714 $496
Accounts receivable, net 110,536 197,240
Inventories 345,086 219,950
Deferred income taxes 35,473 43,538
Other current assets 30,163 29,116
Total current assets 521,972 490,340
Investments in unconsolidated
affiliates 95,151 91,759
Goodwill 101,766 75,400
Other assets 32,020 33,219
Property, plant and equipment, net 781,287 766,596
Total assets $1,532,196 $1,457,314
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $271,284 $233,181
Notes payable 17,743 5,281
Current maturities of long-term
debt 725 1,082
Other current liabilities 81,302 99,807
Total current liabilities 371,054 339,351
Other liabilities 81,483 73,731
Long-term debt 295,267 289,250
Deferred income taxes 150,706 148,726
Shareholders' equity 633,686 606,256
Total liabilities and
shareholders' equity $1,532,196 $1,457,314
WORTHINGTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Six Months Ended
Nov. 30,
2002 2001
(Unaudited) (Unaudited)
Operating activities
Net earnings $48,237 $25,608
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 35,705 34,406
Restructuring adjustment (5,622) -
Nonrecurring loss 5,400 -
Other adjustments 17,191 (4,484)
Changes in current assets and
liabilities 31,654 13,562
Net cash provided by operating
activities 132,565 69,092
Investing activities
Investment in property, plant and
equipment, net (13,657) (25,147)
Acquisitions, net of cash acquired (113,740) -
Proceeds from sale of assets 12,956 9,651
Net cash used by investing
activities (114,441) (15,496)
Financing activities
Proceeds from (payments on) short-
term borrowings 9,258 (8,361)
Principal payments on long-term
debt (464) (17,488)
Dividends paid (27,366) (27,323)
Other 666 201
Net cash used by financing
activities (17,906) (52,971)
Increase in cash and cash equivalents 218 625
Cash and cash equivalents at
beginning of period 496 194
Cash and cash equivalents at end of
period $714 $819
SOURCE Worthington Industries, Inc.
/CONTACT: Cathy Mayne Lyttle, VP, Corporate Communications,
+1-614-438-3077, or cmlyttle@WorthingtonIndustries.com, or Allison McFerren
Sanders, Director, Investor Relations, +1-614-840-3133, or
asanders@WorthingtonIndustries.com, both of Worthington Industries/