As a result of these charges, the reported loss for the third quarter was $45.9
million or $0.53 per diluted share. This compares to reported earnings of $1.8
million or $0.02 per diluted share for the same quarter last year. Excluding the
impact of the restructuring charge and the reserve, third quarter adjusted
earnings were $8.6 million or $0.10 per diluted share. This compares to earnings
of $5.9 million or $0.07 per diluted share for the same quarter last year,
adjusted to exclude the impact of the $6.5 million pre-tax restructuring charge
related to the partial closure of the Malvern, Pennsylvania, facility recorded
in the prior year quarter.
The reported loss for the nine-month period was $20.3 million or $0.24 per
diluted share. This compares to reported earnings of $21.1 million or $0.25 per
diluted share for the nine-month period last year. Excluding the impact of the
restructuring charge and asset impairment reserve mentioned above, adjusted
earnings for the nine-month period were $34.2 million or $0.40 per diluted
share. This compares to earnings of $25.2 million or $0.29 per diluted share,
adjusted to exclude the impact of the Malvern restructuring charge recorded last
year.
The $64.6 million pre-tax restructuring charge is related to a consolidation
plan involving eight locations and more than 500 employees. In an unrelated
event, a $21.2 million pre-tax reserve was also established for the potential
impairment of assets, consisting of preferred stock and notes receivable, that
were received as partial payment from the fiscal 1999 sale of discontinued
operations. Of the combined pre-tax charges, all but $11.8 million are non-cash
charges. The cash portion of the restructuring charge relates to severance and
employee related costs. Both the restructuring charge and the asset impairment
reserve were discussed in more detail in a press release and conference call on
January 24, 2002.
"The one time charges that we took this quarter are the result of a rigorous and
thorough review of all of our businesses with a view towards maximizing
profitability, asset utilization, efficiency and customer service," said John P.
McConnell, Chairman and CEO of Worthington Industries. "While only a few of the
facilities that we are closing have been unprofitable, the closures will improve
overall company profitability. The consolidation plan along with other efforts
to control costs, attack new markets, and streamline operations and staff
functions have put us in a good position as economy moves upward.
"During this economic downturn we have maintained our financial flexibility and
stability. We have retained an investment grade credit rating, continued
consistent dividend payments and contained debt even after investing $21.0
million in the newly formed Aegis Metal Framing joint venture. We have also been
recognized in two different Fortune magazine surveys as one of America's Most
Admired Companies and one of the 100 Best Companies to Work For in America.
Despite the short term challenges, we remain committed to, and confident of, our
strategy to create long term growth and increase the value of our shareholders'
investment," concluded McConnell.
Third quarter sales were $405.7 million, a 3% decrease from $418.7 million last
year. Sales for the nine-month period were $1,225.7 million, a 10% decrease from
$1,360.3 million last year. During the quarter, each of the company's three
business segments experienced reduced revenues: Processed Steel and Metal
Framing, as a result of lower average selling prices, and Pressure Cylinders, as
a result of reduced volumes.
Within the Processed Steel business segment, net sales decreased 1% or $3.4
million to $262.8 million from $266.2 million in the comparable quarter of
fiscal 2001. For the first time in several quarters, both direct and tolling
volumes were up over the prior year even though selling prices were down.
Within the Metal Framing business segment, net sales decreased 12% or $9.6
million to $68.5 million from $78.1 million in the comparable quarter of fiscal
2001. Despite increased volumes, revenues have declined as a slowing commercial
construction market has contributed to increased price competition. Average
selling prices for core building products have deteriorated nearly 15% in the
last year. Dietrich Metal Framing put into effect price increases effective
March 15, 2002.
Within the Pressure Cylinders business segment, net sales decreased 3% or $2.0
million to $70.7 million from $72.7 million in the comparable quarter of fiscal
2001. Volume decreases reduced sales by $3.0 million reflecting reduced
requirements at certain major customers. Improved sales at the European
locations helped offset domestic weakness. Higher average selling prices
increased sales by $1.0 million, partially offsetting the overall decrease.
Selling, general and administrative expense decreased 12% or $5.2 million to
$36.8 million for the third quarter of fiscal 2002 from $41.9 million in the
comparable quarter of fiscal 2001. This decrease resulted from a variety of
factors including $0.9 million lower depreciation and amortization expense
resulting from lower capital spending and the elimination of goodwill
amortization due to the adoption of Statement of Financial Accounting Standards
No. 142.
For the quarter, an operating loss of $50.5 million was reported. Excluding the
effect of third quarter restructuring charges, discussed above, in both the
current and prior year periods, operating income increased $2.4 million or 21%
to $14.1 million. In addition, reduced interest and miscellaneous expense as
well as increased equity in net income of unconsolidated affiliates contributed
to the improved financial results, excluding the one-time charges.
Worthington Industries, Inc. 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.
The company employs 7,500 people and operates 59 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.
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 Nine Months Ended
Feb. 28, Feb. 28,
2002 2001 2002 2001
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Net Sales:
Processed Steel Products $262,840 $266,211 $803,946 $890,902
Metal Framing 68,515 78,080 223,752 262,305
Pressure Cylinders 70,710 72,707 188,375 202,498
Other 3,675 1,719 9,604 4,605
Total Net Sales 405,740 418,717 1,225,677 1,360,310
Cost of Goods Sold 354,889 365,134 1,053,532 1,186,228
Gross Margin 50,851 53,583 172,145 174,082
Selling, General &
Administrative Expense 36,753 41,916 115,367 125,882
Restructuring Expense 64,575 6,474 64,575 6,474
Operating Income (Loss):
Processed Steel Products 10,366 6,235 38,807 20,628
Metal Framing 403 3,703 10,230 20,144
Pressure Cylinders 4,882 2,920 9,220 11,405
Other (1,553) (1,191) (1,479) (3,977)
Restructuring Expense (64,575) (6,474) (64,575) (6,474)
Total Operating Income
(Loss) (50,477) 5,193 (7,797) 41,726
Other Income (Expense):
Miscellaneous Expense (117) (353) (1,245) (700)
Nonrecurring Loss (21,223) - (21,223) -
Interest Expense (5,815) (7,300) (17,000) (26,207)
Equity in Net Income of
Unconsolidated Affiliates 5,404 5,261 15,365 18,465
Earnings (Loss) Before Taxes (72,228) 2,801 (31,900) 33,284
Income Tax Expense (Benefit) (26,363) 1,023 (11,643) 12,149
Net Earnings (Loss) $(45,865) $1,778 $(20,257) $21,135
Average Common Shares
Outstanding - Diluted 85,985 85,477 85,853 85,662
Earnings (Loss) Per Share -
Diluted $(0.53) $0.02 $(0.24) $0.25
Common Shares Outstanding at End
of Period 85,418 85,375 85,418 85,375
Net Earnings Excluding
Restructuring Expense and
Nonrecurring Loss
Reported Net Earnings (Loss) $(45,865) $1,778 $(20,257) $21,135
Add back:
Restructuring Expense, net
of tax 41,005 4,111 41,005 4,111
Nonrecurring Loss, net of
tax 13,477 - 13,477 -
Net Earnings Excluding
Restructuring Expense and
Nonrecurring Loss $8,617 $5,889 $34,225 $25,246
WORTHINGTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
Feb. 28, May 31,
2002 2001
(Unaudited) (Audited)
ASSETS
Current Assets
Cash and cash equivalents $610 $194
Accounts receivable, net 144,610 169,330
Inventories 225,897 227,506
Other current assets 47,601 52,689
Total Current Assets 418,718 449,719
Investments in Unconsolidated
Affiliates 89,420 58,638
Goodwill 75,679 76,439
Other Assets 35,845 54,317
Property, Plant and Equipment, net 783,173 836,749
Total Assets $1,402,835 $1,475,862
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $209,644 $207,568
Notes payable 29,039 13,794
Current maturities of long-term
debt 1,622 1,748
Other current liabilities 92,146 83,509
Total Current Liabilities 332,451 306,619
Other Liabilities 74,255 69,396
Long-Term Debt 291,430 309,208
Deferred Income Taxes 116,306 140,974
Shareholders' Equity 588,393 649,665
Total Liabilities and
Shareholders' Equity $1,402,835 $1,475,862
WORTHINGTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Nine Months Ended
Feb. 28,
2002 2001
(Unaudited) (Unaudited)
Operating Activities
Net earnings (loss) $(20,257) $21,135
Adjustments to reconcile net
earnings (loss) to
net cash provided by operating
activities:
Depreciation and amortization 51,413 53,931
Restructuring expense 64,575 6,474
Nonrecurring loss 21,223 -
Other adjustments (32,680) (7,075)
Changes in current assets and
liabilities 3,564 144,662
Net Cash Provided By Operating
Activities 87,838 219,127
Investing Activities
Investment in property, plant and
equipment, net (33,119) (46,885)
Acquisitions, net of cash acquired - (2,043)
Investment in equity affiliates (21,000) -
Proceeds from sale of assets 10,037 818
Net Cash Used By Investing
Activities (44,082) (48,110)
Financing Activities
Proceeds from (payments on) short-
term borrowings 15,246 (120,916)
Proceeds from long-term debt - 2,210
Principal payments on long-term
debt (18,004) (2,215)
Repurchase of common shares - (3,406)
Dividends paid (40,986) (41,162)
Other 404 (5,280)
Net Cash Used By Financing
Activities (43,340) (170,769)
Increase in cash and cash equivalents 416 248
Cash and cash equivalents at
beginning of period 194 538
Cash and cash equivalents at end of
period $610 $786
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
URL:
http://www.worthingtonindustries.com
Copyright (C) 2002 PR Newswire. All rights reserved.