Worthington Industries, Inc. reported net earnings of $28.4 million on sales of $694.1 million for the three months ended August 31, 2005.

The $28.4 million net earnings ($0.32 per diluted share) compare to record first quarter net earnings of $57.9 million ($0.66 per diluted share) for the same period last year. Earnings were impacted by a $5.3 million ($0.06 per diluted share) tax reduction related to the modification of corporate tax laws in the state of Ohio effective July 1, 2005. Last year’s earnings were reduced by a $5.6 million pre-tax charge related to the sale of the Decatur, Ala., cold mill and related assets; the after-tax impact of that charge was a reduction in net earnings of $3.5 million ($0.04 per diluted share).

Sales of $694.1 million reflect a 10% decrease from last year's record $769.3 million sales for the same quarter.

CEO Comments—"I am very pleased to report the second best first quarter results in our company's history," said John P. McConnell, Chairman and CEO. "Rapidly declining steel prices made our opening quarter a challenge. Solid management of our inventories, however, not only contributed to our success this quarter, by limiting the effects of falling prices, but leaves us in a stronger position going forward as steel pricing is rebounding."

Segment Results—In the Processed Steel Products segment, quarterly net sales fell 18% ($80.4 million) to $373.4 million, which compares to $453.8 million in the comparable quarter of fiscal 2005. The decrease was due to lower volumes (down 13%) and pricing (down 6%). Sale of the Decatur, Ala., assets contributed to a 6% decline in volume compared to the prior-year period. Operating income was lower due to reduced volumes and a narrower spread between selling prices and material costs — a direct result of higher-priced inventory in a falling price environment. In comparison, last year's first quarter represented the most profitable quarter in history for this segment.

In the Metal Framing segment, volumes rose 3% from the year-ago first quarter as customers looked to restock depleted inventories. The increase in volume was more than offset by lower selling prices, which resulted in a sales decline of 12% ($29.7 million) to $208.7 million. The spread between selling prices and material costs contracted due to the impact of higher-priced inventory in a falling price environment. The narrower spread was responsible for the downturn in operating income compared to the prior-year quarter when operating income exceeded that of most years.

In the Pressure Cylinders segment, net sales increased 46% ($33.9 million) to $107.1 million. The propane and specialty gas cylinder assets of Western Industries, acquired on September 17, 2004, contributed $19.2 million to the sales increase. A 25% improvement in European revenues contributed an additional $5.7 million to the sales increase. Operating income rose significantly due to both the European results and the acquisition.

Worthington's joint ventures continued to perform well. Equity in net income of the seven unconsolidated affiliates totaled $13.2 million for the quarter and was nearly equal to record first quarter equity income of $13.3 million in the year ago quarter.

Worthington Industries is a leading diversified metal processing company with annual sales of approximately $3 billion. The Columbus, Ohio, based company is a leading North American value-added steel processor and a leader in manufactured metal products such as metal framing, pressure cylinders, automotive past model service stampings, metal ceiling grid systems and laser welded blanks. Worthington employs more than 7,500 people and operates 65 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.