Worthington Reports Third Quarter Results
03/24/2008 - Worthington Industries reports net earnings of $18.3 million on net sales of $725.7 million for the third quarter, and net earnings of $53.2 million on net sales of $2,198.3 million for the nine months ended February 29, 2008.
Worthington Industries, Inc. reported net earnings of $18.3 million on net sales $725.7 million for the third quarter, and net earnings of $53.2 million on net sales of $2,198.3 million for the nine months ended February 29, 2008.
Third Quarter Results—Net earnings of $18.3 million ($0.23 per diluted share) compare to net earnings of $5.5 million ($0.06 per diluted share) for the same period last year. Net sales were $725.7 million, an increase of 7% from $677.3 million last year.
Results included $2.6 million in pre-tax restructuring charges, $1.4 million of which was non-cash, primarily related to previously announced plant closures in the Metal Framing segment. These charges had a negative impact of $0.02 on reported earnings per share.
Nine-Month Results—Net earnings were $53.2 million ($0.65 per diluted share) compares to net income $75.7 million ($0.87 per diluted share) for the same period last year. Net sales of $2,198.3 million, were 1% higher than $2,185.2 million for the same period last year.
Year-to-date results were negatively impacted by $9.9 million in pre-tax restructuring charges ($0.08 per share) related to early retirement, severance, and plant closures.
Management Comments—“Our performance this quarter showed significant improvement,” said Chairman and CEO, John McConnell. “Pressure Cylinders and our WAVE joint venture, which posted a record third quarter, continued producing excellent results. Metal Framing made great strides as efforts to reduce cost and improve customer service are beginning to net results.” McConnell added, “The entire team has pulled together to help this segment successfully implement its turnaround plan. Steel Processing has also done an excellent job of increasing volumes and market share to help offset the weakness in the automotive sector.”
“Our employees are doing a very good job of eliminating or changing the way we work, resulting in permanent reductions in cost and improved efficiencies. We have removed $12 million in costs so far this year. Once the plant closings in Metal Framing are completed and other identified cost reductions are fully implemented, we expect our total cost savings to reach a $39 million annual run rate in 2010.”
Steel Processing Segment Results—Quarterly net sales for Worthington’s Steel Processing segment rose $26.1 million (8%) to $350.4 million from $324.3 million in the comparable quarter of fiscal 2007. Segment volumes rose 9%, partially offset by lower average pricing (down 1%), as the segment benefited from a concerted sales effort focused on generating new business.
Segment results were negatively impacted by an unplanned furnace outage at Severstal, the primary supplier to, and minority partner in, the company’s Spartan Steel Coating joint venture, which is consolidated in this segment. Operating income increased in spite of the business interruption because of higher volumes and a wider spread between average selling prices and material costs compared to the depressed spreads of a year ago.
Worthington Industries is a leading diversified metal processing company with annual sales of approximately $3 billion. The Columbus, Ohio, based company is a premier 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 8,000 people and operates 69 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.
