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Worthington Reports Third Quarter Fiscal 2011 Results
04/01/2011 - Worthington Industries, Inc. reported net earnings of $26.3 million on net sales of $569.4 million for its fiscal 2011 third quarter ended February 28, 2011.
Worthington Industries, Inc. reported net earnings of $26.3 million on net sales of $569.4 million for its fiscal 2011 third quarter ended February 28, 2011.
The $26.3 million ($0.35 per share) net earnings compare to a net loss of $17.7 million ($0.22 per share) in the year-ago third quarter, which included $0.28 per share in impairment and restructuring charges. Net sales of $569.4 million compare to net sales of $451.1 million in the year-ago third quarter.
“We are very pleased with the excellent results this quarter and continue to see positive signs of recovery in many of our markets,” said John McConnell, Chairman and CEO. “Our businesses have continued to perform well as we have remained focused on enhancing our earnings potential, improving our operating efficiencies, and investing in businesses that will help us achieve our goals.”
Net sales, at $569.4 million, represent a 26% increase over the comparable quarter last year. An overall increase in volumes had a $79.1-million positive impact on net sales as both Steel Processing and Pressure Cylinders segments showed improvements.
Gross margin for the current quarter was $88.3 million (16% of net sales), which compares to $57.7 million (13% of net sales) for the prior-year quarter. According to the company, the $30.6-million increase is primarily due to increased volumes in both Steel Processing and Pressure Cylinders. Inventory holding gains helped margins in both the current quarter and prior year quarter.
SG&A expenses were $2.3 million higher than the prior-year quarter primarily due to increased profit sharing, bonus and wage expenses offset by lower legal and bad-debt expense. The prior year quarter included $4.9 million in litigation related expenses.
Operating income was $28.0 million, up $63.3 million versus last year’s operating loss. The company attributed the gain to increased volumes and better spreads between average selling prices and the cost of steel. The prior-year quarter included $35.5 million of pre-tax impairment and restructuring charges primarily related to the former Construction Services businesses.
Interest expense was $4.5 million in the quarter, up from $1.9 million in the prior year mainly due to the higher interest rate on the $150.0-million, 6.5% unsecured notes, issued in April 2010 to lock in long-term financing.
Equity in net income from unconsolidated joint ventures was $17.0 million, an increase of $2.4 million from the comparable year-ago quarter, on sales of $201.7 million. WAVE represented the majority of equity earnings contributing $14.1 million of earnings in the current quarter. TWB and Serviacero contributed equity income of $1.3 million and $1.0 million, respectively.
Cash provided by operating activities was $65.1 million, compared to cash provided by operating activities of $59.5 million from the previous quarter, and cash used by operations of $14.1 million in the year-ago quarter.
During the current quarter, the company invested $5.1 million in property, plant and equipment and paid $19.5 million, net of cash acquired, for a 60% ownership interest in Nitin Cylinders Limited.
Outlook — “We remain optimistic about the current business environment,” commented McConnell. “While the potential remains for some uneven results, we are confident that the overall trend will continue to be positive year over year gains in our current businesses.
“We will also continue to build our international presence and explore opportunities to augment our current platform with acquisitions that meet our criteria of increasing our margins and decreasing the volatility of our earnings,” added McConnell.
Worthington Industries is a leading diversified metals manufacturing company with 2010 fiscal year sales of approximately $1.9 billion. The Columbus, Ohio, based company is a leading North American value-added steel processor and a leader in manufactured pressure cylinders; framing systems and stairs for mid-rise buildings; current and past model automotive service stampings; steel pallets and racks; and through joint ventures, suspension grid systems for concealed and lay-in panel ceilings, laser welded blanks, compressed natural gas storage cylinders, and light gauge steel framing for commercial and residential construction. Worthington employs approximately 7,000 people and operates 74 facilities in 11 countries.
Founded in 1955, the company operates under a long-standing corporate philosophy rooted in the golden rule. Earning money for its shareholders is the first corporate goal. This philosophy serves as an unwavering commitment to the customer, supplier, and shareholder, and it serves as the company’s foundation for one of the strongest employee-employer partnerships in American industry.
