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Worthington Reports Third Quarter Fiscal 2021 Results

03/24/2021

COLUMBUS, Ohio, March 24, 2021 (GLOBE NEWSWIRE) -- Worthington Industries, Inc. (NYSE: WOR) today reported net sales of $759.1 million and net earnings of $67.6 million, or $1.27 per diluted share, for its fiscal 2021 third quarter ended February 28, 2021. In the third quarter of fiscal 2020, the Company reported net sales of $764.0 million and net earnings of $15.3 million, or $0.27 per diluted share. Results in both the current and prior year quarter were impacted by several unique items, as summarized in the table below.

(U.S. dollars in million, except per share amounts)

    3Q 2021     3Q 2020  
    After-Tax     Per Share     After-Tax     Per Share  
Net earnings   $ 67.6     $ 1.27     $ 15.3     $ 0.27  
Impairment and restructuring charges     8.4       0.16       27.0       0.48  
Gain on investment in Nikola, net of incremental expenses     (3.7 )     (0.07 )     -       -  
Tank replacement program     -       -       (1.7 )     (0.03 )
Gain on consolidation of Samuel Steel Pickling     -       -       (4.6 )     (0.08 )
Adjusted net earnings   $ 72.3     $ 1.36     $ 36.0     $ 0.64  
                                 

Impairment and restructuring charges in both periods mostly related to the Company’s oil and gas equipment business, which was divested on January 29, 2021. See Recent Developments below for further information related to the divestiture.

Financial highlights for the current and comparative periods are as follows:

(U.S. dollars in millions, except per share amounts)

  3Q 2021       3Q 2020     9M 2021     9M 2020  
Net sales $ 759.1       $ 764.0     $ 2,193.1     $ 2,447.5  
Operating income (loss)   49.8         (1.4 )     57.0       16.1  
Equity income   31.7         25.5       80.9       97.6  
Net earnings   67.6         15.3       610.2       62.6  
Earnings per diluted share $ 1.27       $ 0.27     $ 11.28     $ 1.11  
                                 

"We delivered record earnings per share in our third quarter thanks to outstanding results in Steel Processing and solid performances from Pressure Cylinders and our joint ventures," said President & CEO Andy Rose. "Healthy demand across nearly all of our major end markets, combined with inventory holding gains and lower manufacturing costs drove the record performance."

Consolidated Quarterly Results

Net sales for the third quarter of fiscal 2021 were $759.1 million, down 1% from the comparable quarter in the prior year, when net sales were $764.0 million. The decrease was driven by lower sales in the oil and gas equipment business within Pressure Cylinders, which was divested in the current quarter, partially offset by higher average selling prices in Steel Processing and higher volume in the consumer products business within Pressure Cylinders.
        
Gross margin increased $48.6 million over the prior year quarter to $164.1 million primarily due to improved direct spreads in Steel Processing which benefitted from significant inventory holding gains, which were estimated to be $31.1 million in the current quarter compared to an inventory holding loss of $6.0 million in the prior year quarter.

Operating income for the current quarter was $49.8 million, an increase of $51.2 million over the operating loss in the prior year quarter. Excluding impairment and restructuring charges, and the impact of the reserve decrease for the tank replacement program in the prior year quarter, adjusted operating income for the current quarter was $77.2 million, an improvement of $44.9 million over the prior year quarter, as the impact of higher gross margin was partially offset by higher SG&A expense, which was up $6.0 million on increased profit sharing and bonus expense.

Interest expense was $7.6 million for the current quarter, compared to $7.4 million in the prior year quarter. The increase was due primarily to higher average debt levels.

Equity income from unconsolidated joint ventures increased $6.2 million over the prior year quarter to $31.7 million due to higher contributions from all joint ventures except for WAVE which was down slightly. The Company received cash distributions of $18.4 million from unconsolidated joint ventures during the current quarter.

Income tax expense was $4.5 million in the current quarter compared to $4.8 million in the prior year quarter. The decrease was driven by a $19.7 million discrete tax benefit realized in connection with the sale of the oil and gas equipment business in the current quarter, partially offset by the impact of higher pre-tax earnings. Tax expense in the current quarter reflects an estimated annual effective rate of 20.1% compared to 24.6% for the prior year quarter.

Balance Sheet

At quarter-end, total debt of $708.9 million was relatively consistent with debt at November 30, 2020, and the Company had $649.5 million of cash.

Quarterly Segment Results

Steel Processing’s net sales totaled $504.5 million, up 3%, or $13.3 million, over the comparable prior year quarter driven by higher average selling prices, which were partially offset by lower toll volume. Operating income of $62.9 million was $43.9 million higher than the prior year quarter on improved direct spreads primarily driven by estimated inventory holding gains of $31.1 million in the current quarter compared to an inventory holding loss of $6.0 million in the prior year quarter. The mix of direct versus toll tons processed was 48% to 52% in the current quarter, compared to 44% to 56% in the prior year quarter.

Pressure Cylinders’ net sales totaled $254.6 million, down 6%, or $16.4 million, from the comparable prior year quarter. The decrease was driven by a $24.3 million decline in the recently divested oil and gas equipment business, partially offset by higher volume in the consumer products business. Operating loss of $15.6 million was an improvement of $4.2 million over the prior year quarter. Excluding impairment and restructuring charges, and the impact of the reserve decrease for the tank replacement program in the prior year quarter, adjusted operating income was up slightly to $12.8 million, as declines in the oil and gas equipment business were more than offset by improvements in the consumer and industrial products businesses.

Recent Developments

  • On Jan. 4, 2021, the Company acquired PTEC Pressure Technology GmbH, a leading independent designer and manufacturer of valves and components for high-pressure hydrogen and compressed natural gas storage, transport and onboard fueling systems. The total purchase price was approximately $10.8 million.

  • On Jan. 13, 2021, the Company sold its remaining 7,048,020 shares of Nikola common stock for net proceeds of $146.6 million, resulting in a pre-tax gain of $2.7 million.

  • On Jan. 29, 2021, the Company sold its oil and gas equipment business to an affiliate of Ten Oaks Group. The Company retained the real estate associated with the business and received nominal consideration at closing, resulting in a pre-tax loss of $27.7 million within restructuring and other expense.

  • On Jan. 29, 2021, the Company acquired General Tools & Instruments Company LLC, a provider of feature-rich, specialized tools in various categories including environmental health & safety, precision measurement & layout, home repair & remodel, lawn & garden and specific purpose tools. The total purchase price was approximately $120.6 million, subject to closing adjustments.

  • On Mar. 12, 2021, the Company sold its Structural Composites Industries facility located in Pomona, CA, to Luxfer Holdings PLC for approximately $20.0 million, subject to closing adjustments. The Company expects to record a loss of approximately $7.0 million in the fourth quarter of fiscal 2021 related primarily to the allocation of goodwill associated with the divestiture.

  • During the third quarter of fiscal 2021, the Company repurchased a total of 1,000,000 of its common shares for $52.4 million, at an average purchase price of $52.37.

Outlook

“Our businesses are performing well and with the strategic acquisitions and divestitures we completed recently we are well positioned moving forward,” Rose said. “As strong as our record Q3 was, it could have been better. We faced challenges, some of which will persist, including a tight steel market, semi-conductor shortages that impacted our automotive customers, extreme weather, and continuing COVID related production issues. Our teams are exceptional, and they will continue to navigate these challenges, working safely to drive our business to new heights.”

Conference Call

Worthington will review fiscal 2021 third quarter results during its quarterly conference call on March 24, 2021, at 2:00 p.m., Eastern Time. Details regarding the conference call can be found on the Company website at www.WorthingtonIndustries.com.

About Worthington Industries

Worthington Industries (NYSE:WOR) is a leading industrial manufacturing company delivering innovative solutions to customers that span many industries including transportation, construction, industrial, agriculture, retail and energy. Worthington is North America’s premier value-added steel processor and producer of laser welded products; and a leading global supplier of pressure cylinders and accessories for applications such as fuel storage, water systems, outdoor living, tools and celebrations. The Company’s brands, primarily sold in retail stores, include Coleman®, Bernzomatic®, Balloon Time®, Mag Torch®, Well-X-Trol®, General®, Garden-Weasel®, Pactool International® and Hawkeye™. Worthington’s WAVE joint venture with Armstrong is the North American leader in innovative ceiling solutions.

Headquartered in Columbus, Ohio, Worthington operates 50 facilities in 15 states and seven countries, sells into over 90 countries and employs approximately 8,000 people. Founded in 1955, the Company follows a people-first philosophy with earning money for its shareholders as its first corporate goal. Relentlessly finding new ways to drive progress and practicing a shared commitment to transformation, Worthington makes better solutions possible for customers, employees, shareholders and communities.

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 the ever-changing effects of the novel coronavirus (“COVID-19”) pandemic – the duration, extent and severity of which are impossible to predict, including the possibility of further resurgence in the spread of COVID-19 – on economies (local, national and international) and markets, and on our customers, counterparties, employees and third-party service providers, as well as the effects of various responses of governmental and nongovernmental authorities to the COVID-19 pandemic (such as quarantines, shut downs and other restrictions on travel and commercial, social or other activities), the development, availability and effectiveness of vaccines, and the implementation of fiscal stimulus packages; future or expected cash positions, liquidity and ability to access financial markets and capital; outlook, strategy or business plans; future or expected growth, growth potential, forward momentum, performance, competitive position, sales, volumes, cash flows, earnings, margins, balance sheet strengths, debt, financial condition or other financial measures; pricing trends for raw materials and finished goods and the impact of pricing changes; the ability to improve or maintain margins; expected demand or demand trends for the Company or its markets; additions to product lines and opportunities to participate in new markets; expected benefits from Transformation and innovation efforts; the ability to improve performance and competitive position at the Company’s operations; anticipated working capital needs, capital expenditures and asset sales; anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing and the supply chain and the results thereof; projected profitability potential; the ability to make acquisitions and the projected timing, results, benefits, costs, charges and expenditures related to acquisitions, joint ventures, headcount reductions and facility dispositions, shutdowns and consolidations; projected capacity and the alignment of operations with demand; the ability to operate profitably and generate cash in down markets; the ability to capture and maintain market share and to develop or take advantage of future opportunities, customer initiatives, new businesses, new products and new markets; expectations for Company and customer inventories, jobs and orders; expectations for the economy and markets or improvements therein; expectations for generating improving and sustainable earnings, earnings potential, margins or shareholder value; effects of judicial rulings; uncertainty regarding the impact of changes to the U.S. presidential administration and Congress on the regulatory landscape, capital markets, and the response to and management of the COVID-19 pandemic; 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. Any number of factors could affect actual results, including, without limitation, the risks, uncertainties and impacts related to COVID-19 and other actual or potential public health emergencies and actions taken by governmental authorities or others in connection therewith, their potential impacts related to the ability and costs to continue to operate facilities and their potential to exacerbate other risks; the effect of national, regional and global economic conditions generally and within major product markets, including significant economic disruptions from COVID-19 and the actions taken therewith; the effect of conditions in national and worldwide financial markets and with respect to the ability of financial institutions to provide capital; the impact of tariffs, the adoption of trade restrictions affecting the Company’s products or suppliers, a United States withdrawal from or significant renegotiation of trade agreements, the occurrence of trade wars, the closing of border crossings, and other changes in trade regulations or relationships; lower oil prices as a factor in demand for products; product demand and pricing; changes in product mix, product substitution and market acceptance of the Company’s products; fluctuations in the pricing, quality or availability of raw materials (particularly steel), supplies, transportation, utilities and other items required by operations; the outcome of adverse claims experience with respect to workers’ compensation, product recalls or product liability, casualty events or other matters; effects of facility closures and the consolidation of operations; the effect of financial difficulties, consolidation and other changes within the steel, automotive, construction, oil and gas, and other industries in which the Company participates; failure to maintain appropriate levels of inventories; financial difficulties (including bankruptcy filings) of original equipment manufacturers, end-users and customers, suppliers, joint venture partners and others with whom the Company does business; the ability to realize targeted expense reductions from headcount reductions, facility closures and other cost reduction efforts; the ability to realize cost savings and operational, sales and sourcing improvements and efficiencies, and other expected benefits from Transformation initiatives, on a timely basis; the overall success of, and the ability to integrate, newly-acquired businesses and joint ventures, maintain and develop their customers, and achieve synergies and other expected benefits and cost savings therefrom; capacity levels and efficiencies, within facilities, within major product markets and within the industries in which the Company participates as a whole; the effect of disruption in the business of suppliers, customers, facilities and shipping operations due to adverse weather, casualty events, equipment breakdowns, interruption in utility services, civil unrest, international conflicts, terrorist activities or other causes; changes in customer demand, inventories, spending patterns, product choices, and supplier choices; risks associated with doing business internationally, including economic, political and social instability, foreign currency exchange rate exposure and the acceptance of the Company’s products in global markets; the ability to improve and maintain processes and business practices to keep pace with the economic, competitive and technological environment; deviation of actual results from estimates and/or assumptions used by the Company in the application of its significant accounting policies; the level of imports and import prices in the Company’s markets; the impact of judicial rulings and governmental regulations, both in the United States and abroad, including those adopted by the United States governmental agencies as contemplated by the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Consolidated Appropriations Act, 2021 and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the effect of healthcare laws in the United States and potential changes for such laws especially in light of the COVID-19 pandemic, which may increase the Company’s healthcare and other costs and negatively impact the Company’s operations and financial results; cyber security risks; the effects of privacy and information security laws and standards; and other risks described from time to time in the Company’s filings with the United States Securities and Exchange Commission, including those described in “Part I – Item 1A. – Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2020.

 

 

WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)

  Three Months Ended
    Nine Months Ended
 
  February 28, 
2021
    February 29, 
2020
    February 28, 
2021
    February 29, 
2020
 
Net sales $ 759,109     $ 763,996     $ 2,193,110     $ 2,447,492  
Cost of goods sold   595,011       648,451       1,780,180       2,094,045  
Gross margin   164,098       115,545       412,930       353,447  
Selling, general and administrative expense   86,895       80,928       251,220       260,294  
Impairment of goodwill and long-lived assets   -       34,627       13,739       75,228  
Restructuring and other expense, net   28,212       1,376       37,656       1,781  
Incremental expenses related to Nikola gains   (781 )     -       53,300       -  
Operating income (loss)   49,772       (1,386 )     57,015       16,144  
Other income (expense):                              
Miscellaneous income, net   539       6,985       1,366       8,316  
Interest expense   (7,558 )     (7,362 )     (22,696 )     (24,157 )
Equity in net income of unconsolidated affiliates   31,674       25,479       80,939       97,592  
Gains on investment in Nikola   2,740       -       655,102       -  
Loss on extinguishment of debt   -       -       -       (4,034 )
Earnings before income taxes   77,167       23,716       771,726       93,861  
Income tax expense   4,485       4,828       148,818       20,506  
Net earnings   72,682       18,888       622,908       73,355  
Net earnings attributable to noncontrolling interests   5,073       3,577       12,668       10,734  
Net earnings attributable to controlling interest $ 67,609     $ 15,311     $ 610,240     $ 62,621  
                               
Basic                              
Average common shares outstanding   52,149       54,930       53,076       55,078  
Earnings per share attributable to controlling interest $ 1.30     $ 0.28     $ 11.50     $ 1.14  
                               
Diluted                              
Average common shares outstanding   53,217       55,898       54,077       56,164  
Earnings per share attributable to controlling interest $ 1.27     $ 0.27     $ 11.28     $ 1.11  
                               
                               
Common shares outstanding at end of period   51,813       54,598       51,813       54,598  
                               
Cash dividends declared per share $ 0.25     $ 0.24     $ 0.75     $ 0.72  

WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)

  February 28,
2021
    May 31,
2020
 
Assets              
Current assets:              
Cash and cash equivalents $ 649,505     $ 147,198  
Receivables, less allowances of $1,051 and $1,521 at February 28, 2021              
and May 31, 2020, respectively   525,768       341,038  
Inventories:              
Raw materials   172,735       234,629  
Work in process   135,233       76,497  
Finished products   105,213       93,975  
Total inventories   413,181       405,101  
Income taxes receivable   3,351       8,376  
Assets held for sale   21,202       12,928  
Prepaid expenses and other current assets   73,909       68,538  
Total current assets   1,686,916       983,179  
Investments in unconsolidated affiliates   220,415       203,329  
Operating lease assets   33,245       31,557  
Goodwill   358,543       321,434  
Other intangible assets, net of accumulated amortization of $87,052 and              
$92,774 at February 28, 2021 and May 31, 2020, respectively   245,543       184,416  
Other assets   32,986       34,956  
Property, plant and equipment:              
Land   23,159       24,197  
Buildings and improvements   288,009       302,796  
Machinery and equipment   1,105,686       1,055,139  
Construction in progress   48,972       52,231  
Total property, plant and equipment   1,465,826       1,434,363  
Less: accumulated depreciation   905,601       861,719  
Total property, plant and equipment, net   560,225       572,644  
Total assets $ 3,137,873     $ 2,331,515  
               
Liabilities and equity              
Current liabilities:              
Accounts payable $ 412,793     $ 247,017  
Accrued compensation, contributions to employee benefit plans and              
related taxes   112,781       64,650  
Dividends payable   14,847       14,648  
Other accrued items   48,475       49,974  
Current operating lease liabilities   10,396       10,851  
Income taxes payable   37,516       949  
Current maturities of long-term debt   453       149  
Total current liabilities   637,261       388,238  
Other liabilities   87,419       75,786  
Distributions in excess of investment in unconsolidated affiliate   104,391       103,837  
Long-term debt   708,511       699,516  
Noncurrent operating lease liabilities   26,440       25,763  
Deferred income taxes, net   110,666       71,942  
Total liabilities   1,674,688       1,365,082  
Shareholders' equity - controlling interest   1,311,790       820,821  
Noncontrolling interests   151,395       145,612  
Total equity   1,463,185       966,433  
Total liabilities and equity $ 3,137,873     $ 2,331,515  
               


WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

  Three Months Ended     Nine Months Ended  
  February 28, 
2021
    February 29, 
2020
    February 28, 
2021
    February 29, 
2020
 
Operating activities:                              
Net earnings $ 72,682     $ 18,888     $ 622,908     $ 73,355  
Adjustments to reconcile net earnings to net cash provided by operating activities:                              
Depreciation and amortization   21,893       22,780       65,664       69,553  
Impairment of goodwill and long-lived assets   -       34,627       13,739       75,228  
Provision for (benefit from) deferred income taxes   (30,129 )     (5,006 )     9,126       (1,661 )
Bad debt (income) expense   (95 )     273       (160 )     584  
Equity in net income of unconsolidated affiliates, net of distributions   (13,288 )     (4,474 )     (15,437 )     (19,271 )
Net (gain) loss on sale of assets   27,641       (5,838 )     35,314       (5,237 )
Stock-based compensation   4,727       2,725       14,437       10,000  
Gains on investment in Nikola   (2,740 )     -       (655,102 )     -  
Charitable contribution of Nikola shares   -       -       20,653       -  
Loss on extinguishment of debt   -       -       -       4,034  
Changes in assets and liabilities, net of impact of acquisitions:                              
Receivables   (32,105 )     5,992       (110,719 )     15,517  
Inventories   (96,836 )     3,024       (6,591 )     90,907  
Accounts payable   62,299       29,630       157,629       (28,347 )
Accrued compensation and employee benefits   10,779       (9,144 )     48,591       (22,740 )
Income taxes payable   (2,474 )     390       36,567       (742 )
Other operating items, net   (13,098 )     (6,546 )     (2,547 )     (5,330 )
Net cash provided by operating activities   9,256       87,321       234,072       255,850  
                               
Investing activities:                              
Investment in property, plant and equipment   (16,377 )     (21,219 )     (65,321 )     (71,774 )
Proceeds from sale of Nikola shares   146,590       -       634,449       -  
Acquisitions, net of cash acquired   (129,743 )     (500 )     (129,818 )     (29,783 )
Proceeds from sale of assets   (985 )     119       20,595       9,318  
Net cash provided (used) by investing activities   (515 )     (21,600 )     459,905       (92,239 )
                               
Financing activities:                              
Proceeds from long-term debt, net of issuance costs   -       -       -       101,464  
Principal payments on long-term obligations and debt redemption costs   (99 )     (344 )     (292 )     (154,811 )
Proceeds from issuance of common shares, net of tax withholdings   565       429       1,709       (6,595 )
Payments to noncontrolling interests   (7,250 )     -       (7,810 )     (1,453 )
Repurchase of common shares   (52,367 )     (21,373 )     (145,250 )     (50,972 )
Dividends paid   (13,215 )     (13,263 )     (40,027 )     (40,177 )
Net cash used by financing activities   (72,366 )     (34,551 )     (191,670 )     (152,544 )
                               
Increase (decrease) in cash and cash equivalents   (63,625 )     31,170       502,307       11,067  
Cash and cash equivalents at beginning of period   713,130       72,260       147,198       92,363  
Cash and cash equivalents at end of period $ 649,505     $ 103,430     $ 649,505     $ 103,430  
                               

WORTHINGTON INDUSTRIES, INC.
SUPPLEMENTAL DATA
(In thousands, except volume)

This supplemental information is provided to assist in the analysis of the results of operations.                
   
  Three Months Ended
    Nine Months Ended
 
    February 28, 
2021
      February 29, 
2020
      February 28, 
2021
      February 29, 
2020
 
Volume:                              
Steel Processing (tons)   1,014,873       1,139,280       2,967,296       3,035,514  
Pressure Cylinders (units)   20,683,470       17,381,319       61,607,281       59,173,363  
                               
Net sales:                              
Steel Processing $ 504,477     $ 491,136     $ 1,404,220     $ 1,531,448  
Pressure Cylinders   254,643       270,995       787,831       865,527  
Other   (11 )     1,865       1,059       50,517  
Total net sales $ 759,109     $ 763,996     $ 2,193,110     $ 2,447,492  
                               
Material cost:                              
Steel Processing $ 314,124     $ 342,620     $ 933,041     $ 1,109,822  
Pressure Cylinders   103,140       119,285       327,787       373,267  
                               
Selling, general and administrative expense:                              
Steel Processing $ 42,333     $ 36,001     $ 116,700     $ 109,000  
Pressure Cylinders   46,169       45,417       134,303       140,631  
                               
Operating income (loss):                              
Steel Processing $ 62,874     $ 19,021     $ 114,315     $ 42,361  
Pressure Cylinders   (15,641 )     (19,865 )     (3,694 )     25,405  
Other   111       (1,785 )     (970 )     (48,835 )
Segment operating income (loss)   47,344       (2,629 )     109,651       18,931  
Unallocated corporate and other   1,647       1,243       664       (2,787 )
Incremental expenses related to Nikola gains   781       -       (53,300 )     -  
Total operating income (loss) $ 49,772     $ (1,386 )   $ 57,015     $ 16,144  
                               
Equity income (loss) by unconsolidated affiliate:                              
WAVE $ 19,473     $ 20,074     $ 54,409     $ 85,729  
ClarkDietrich   5,906       4,909       16,213       13,916  
Serviacero Worthington   4,223       797       7,393       2,354  
ArtiFlex   1,734       1,688       2,879       3,028  
Other   338       (1,989 )     45       (7,435 )
Total equity income $ 31,674     $ 25,479     $ 80,939     $ 97,592  
                               

WORTHINGTON INDUSTRIES, INC.
SUPPLEMENTAL DATA
(In thousands, except volume)

The following provides detail of Pressure Cylinders volume and net sales by principal class of products.  
   
  Three Months Ended     Nine Months Ended  
  February 28, 
2021
    February 29, 
2020
    February 28, 
2021
    February 29, 
2020
 
Volume (units):                              
Consumer products   16,980,470       14,096,440       50,753,077       49,669,887  
Industrial products   3,702,888       3,284,605       10,853,769       9,501,983  
Oil & gas equipment   112       274       435       1,493  
Total Pressure Cylinders   20,683,470       17,381,319       61,607,281       59,173,363  
                               
Net sales:                              
Consumer products $ 120,808     $ 113,258     $ 375,208     $ 360,803  
Industrial products   129,428       129,042       391,673       411,994  
Oil & gas equipment   4,407       28,695       20,950       92,730  
Total Pressure Cylinders $ 254,643     $ 270,995     $ 787,831     $ 865,527  
                               
   
The following provides detail of impairment of goodwill and long-lived assets and restructuring and other expense, net included in operating income by segment.  
   
  Three Months Ended     Nine Months Ended  
  February 28, 
2021
    February 29, 
2020
    February 28, 
2021
    February 29, 
2020
 
Impairment of goodwill and long-lived assets:                              
Steel Processing $ -     $ 1,274     $ -     $ 1,274  
Pressure Cylinders   -       33,353       13,739       33,353  
Other   -       -       -       40,601  
Total impairment of goodwill and long-lived assets $ -     $ 34,627     $ 13,739     $ 75,228  
                               
Restructuring and other expense (income), net:                              
Steel Processing $ (42 )   $ 728     $ 1,804     $ 702  
Pressure Cylinders   28,435       747       36,006       747  
Other   (181 )     (99 )     (154 )     332  
Total restructuring and other expense, net $ 28,212     $ 1,376     $ 37,656     $ 1,781  
                               

WORTHINGTON INDUSTRIES, INC.
NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP). The Company also presents adjusted earnings per diluted share and adjusted operating income to assist in the understanding of its results of operations. These represent non-GAAP financial measures and are used by management as measures of operating performance. In general, these measures exclude impairment and restructuring charges, but may also exclude other items that management does not believe reflect the Company’s core operations.

The following provides a reconciliation of adjusted operating income and adjusted earnings per diluted share to the most comparable GAAP measures for the periods presented.

  Three Months Ended February 28, 2021  
  Operating
Income
    Earnings
Before Income
Taxes
    Income Tax
Expense
(Benefit)
    Net Earnings
Attributable to
Controlling
Interest
    Earnings per
Diluted
Share
 
GAAP $ 49,772     $ 77,167     $ 4,485     $ 67,609     $ 1.27  
Restructuring and other expense, net   28,212       28,212       (19,843 )     8,372       0.16  
Incremental expenses related to Nikola gains   (781 )     (781 )     (755 )     (1,536 )     (0.03 )
Gain on investment in Nikola   -       (2,740 )     575       (2,165 )     (0.04 )
Non-GAAP $ 77,203     $ 101,858     $ 24,508     $ 72,280     $ 1.36  

 

  Three Months Ended February 29, 2020  
  Operating
Income
(Loss)
    Earnings
Before Income
Taxes
    Income Tax
Expense
(Benefit)
    Net Earnings
Attributable to
Controlling
Interest
    Earnings per
Diluted
Share
 
GAAP $ (1,386 )   $ 23,716     $ 4,828     $ 15,311     $ 0.27  
Impairment of goodwill and long-lived assets   34,627       34,627       (7,988 )     26,611       0.48  
Restructuring and other expense, net   1,376       1,376       (111 )     344       -  
Tank replacement program   (2,265 )     (2,265 )     555       (1,710 )     (0.03 )
Gain on consolidation of Samuel Steel Pickling   -       (6,055 )     1,483       (4,572 )     (0.08 )
Non-GAAP $ 32,352     $ 51,399     $ 10,889     $ 35,984     $ 0.64  
                                       
                                                            Change $ 44,851     $ 50,459     $ 13,619     $ 36,296     $ 0.72  

The following provides a reconciliation of adjusted operating income to the most comparable GAAP measure for the Company’s Pressure Cylinders segment for the periods presented.

  Three Months Ended  
  February 28, 
2021
    February 29, 
2020
 
Operating loss $ (15,641 )   $ (19,865 )
Impairment of goodwill and long-lived assets   -       33,353  
Restructuring and other expense, net   28,435       747  
Tank replacement program   -       (2,265 )
Adjusted operating income $ 12,794     $ 11,970  
               

Contacts:
SONYA L. HIGGINBOTHAM
VP, CORPORATE COMMUNICATIONS AND BRAND MANAGEMENT
614.438.7391 | sonya.higginbotham@worthingtonindustries.com 

MARCUS A. ROGIER
TREASURER AND INVESTOR RELATIONS OFFICER
614.840.4663 | marcus.rogier@worthingtonindustries.com 

200 Old Wilson Bridge Rd. | Columbus, Ohio 43085
WorthingtonIndustries.com 


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Source: Worthington Industries, Inc.

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