Worthington Industries, Inc. reported net earnings of $57.9 million on sales of $769.3 million for the first quarter of fiscal 2005 ended August 31, 2004.

Net earnings of $57.9 million ($0.66 per diluted share) compare to first quarter net earnings of $5.9 million ($0.07 per diluted share) for the same period last year. Sales, $769.3 million, represent an increase of 54% from last year's $498.0 million.

Earnings for the current quarter were reduced by a $5.6 million pre-tax charge related to the sale of the Decatur, Ala., cold mill and related assets. This charge is mainly due to contract termination costs that could not be accrued until the sale closed, which occurred on August 1, 2004, and other adjustments to the charge recorded at May 31, 2004. The after-tax impact of this charge was a reduction in net earnings of $3.5 million ($0.04 per diluted share).

Comments—"I am pleased to report our second consecutive quarter of record results," said John McConnell, Chairman and CEO of Worthington Industries. "We achieved these results even though two of our key market segments, automotive and commercial construction, were not at their peak. While we did experience some benefit from selling lower priced inventory in a higher price environment, that impact has lessened considerably, and this quarter's results would have been record-breaking regardless. I look forward to what our Metal Framing segment can accomplish as commercial construction — particularly office construction — continues to pick up from what has been a multi-year low," concluded McConnell.

Segment Results—In the Processed Steel Products segment, quarterly net sales rose 58%, or $166.6 million, to $453.8 million from $287.2 million in the comparable quarter of fiscal 2004. The increase in net sales was due to higher volumes (up 14%) and pricing (up 39%). Excluding the impact of the $5.6 million charge related to the Decatur asset sale, operating income was significantly improved due to higher volumes and a wider spread between selling prices and material costs.

In the Metal Framing segment, net sales increased 69%, or $97.3 million, to $238.4 million from $141.1 million in the comparable quarter of fiscal 2004. The increase was the result of higher pricing as volumes were down 10% from the year ago quarter largely due to weather related and other project delays. The wider spread between selling prices and material costs was responsible for a significant improvement in operating income.

In the Pressure Cylinders segment, net sales increased 10%, or $6.7 million, to $73.2 million from $66.5 million in the comparable quarter of fiscal 2004. Unit volumes were up 2% overall as strength in the European market was partially offset by softer domestic propane cylinder demand. A portion of the increase in European revenues was the result of a weakened U.S. dollar which boosted reported revenues in dollars by $1.6 million. Operating income fell due to costs related to the partial closure of the Portugal facility.

Worthington's joint ventures continued to perform well. Equity in net income of the six unconsolidated affiliates totaled $13.3 million for the quarter, up 68% from $7.9 million in the year ago quarter. Results at all six joint ventures were up significantly from the prior year.

Outlook—Relative to last year, economic and industry conditions have improved across all customer segments except Big 3 automotive, Processed Steel's largest customer segment. Big 3 vehicle production is projected to be down 7% for the coming fiscal quarter compared to the same quarter last year but up 12% from this quarter. In commercial construction, Metal Framing's primary market, the U.S. Census Bureau's Index of Private Construction Spending confirms that commercial construction activity has shown year-over-year improvement during the last six months. This index serves as a leading indicator for the Metal Framing business segment as metal framing products are generally used in the latter stages of commercial construction projects.

Columbus, Ohio, based Worthington Industries is a leading diversified metal processing company with annual sales of more than $2 billion. Worthington employs more than 8,000 people and operates 61 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.