Worthington Industries, Inc. reported net earnings of $39.4 million on record sales of $782.9 million and net earnings of $86.8 million on record sales of $2,379.1 million for the three and twelve month periods ended May 31, 2004, respectively.

Fourth Quarter Results—Net earnings of $39.4 million and earnings per diluted share of $0.45 compare to net earnings of $15.6 million ($0.18 per diluted share) for the same period last year. Net earnings for the fourth quarter of fiscal 2004 included four special items which collectively had a negative impact on diluted earnings per share of $0.39, but still set a company record. Excluding the special items, earnings per share would have been $0.84, more than double the prior record for earnings.

Sales, a record $782.9 million, surpassed last year's record $589.9 million by 33%.

Full Year Earnings Highlights—Net earnings, including special items, of $86.8 million and earnings per diluted share of $1.00 compare to $75.2 million and $0.87, respectively, for the same period last year.

For the year, record sales of $2,379.1 million represent a 7% increase from $2,219.9 million last year.

Last year's results were impacted by nearly offsetting special items recorded in the second quarter of fiscal 2003. Together, these charges had an immaterial impact on reported earnings per share. Excluding the impact of special items in both fiscal years, net earnings were $119.8 million and earnings per diluted share were $1.38 for fiscal 2004 (see chart for reconciliation), compared to $75.0 million and $0.87, respectively, for fiscal 2003. On this basis, fiscal 2004 results were an all-time record.

Management Comments—"I am proud of the accomplishments of the entire Worthington team which resulted in record sales and earnings," said John McConnell, Chairman and CEO of Worthington Industries. "We have done much over the last several years to improve returns on capital and, ultimately, shareholder returns by investing in growth markets and products, consolidating facilities, and divesting non-strategic assets. These efforts, combined with an improving economy and heightened productivity, accounted for roughly half of this quarter's results, excluding special items, and produced a record performance on their own. Rapidly rising steel prices and lower priced inventory accounted for the remainder of this quarter's excellent results," McConnell continued. "While future earnings could be impacted by a reversal of steel pricing trends, we have yet to realize the full benefit of our acquisition of Unimast or a recovery in the commercial construction market," concluded McConnell.

Quarterly Segment Results—Within the Processed Steel Products segment, quarterly net sales rose 25% ($88.9 million) to $438.8 million from $349.9 million in the comparable quarter of fiscal 2003. The increase in net sales was due to both increased volumes (6%) and pricing (18%). Excluding the impact of the $67.4 million impairment charge taken this quarter for the Decatur assets, operating income was much improved due to higher volumes and a wider spread between selling prices and material costs.

Within the Metal Framing segment, net sales increased 66% ($92.0 million) to $231.5 million from $139.5 million in the comparable quarter of fiscal 2003. Despite continued weakness in the commercial construction market, volumes were up 11% and pricing was up 49% over the year ago quarter. The wider spread between selling prices and material costs was primarily responsible for the significant improvement in operating income.

Within the Pressure Cylinders segment, net sales increased 12% ($11.8 million) to $108.3 million from $96.5 million in the comparable quarter of fiscal 2003. Unit volumes were up 7% overall as strength in the domestic market was partially offset by weaker European demand. European revenues rose despite much lower volumes as the weakened dollar boosted reported revenues in dollars by $2.3 million. Excluding the impact of the $2.0 million charge taken this quarter for the impairment of certain European assets, operating income increased as a result of stronger domestic volumes and a shift in mix to higher margin products.

Worthington's joint ventures contributed positively to fourth quarter results. Equity in net income of the six unconsolidated affiliates totaled $16.5 million for the quarter, up 120% from $7.5 million in the year ago quarter. All six affiliates had stronger earnings including records at Worthington Armstrong Venture (WAVE), TWB Co., Acerex and Aegis Metal Framing.

Outlook—The first quarter is typically weaker than Worthington's fourth, which represents a seasonal peak for the company. Economic and industry conditions appear to be improving across all customer segments. In automotive, Processed Steel's largest customer segment, "Big 3" vehicle production is projected to be up 1% for the coming fiscal quarter relative to last year but down 19% 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 remains near five-year lows, but office construction showed some year-over-year improvement during Worthington's fourth quarter.

Worthington Industries is a leading diversified metal processing company with annual sales of more than $2 billion. The Columbus, Ohio, based company is a premier North American value-added steel processor and a leader in manufactured metal products such as automotive past model service stampings, pressure cylinders, metal framing, metal ceiling grid systems and laser welded blanks. 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.