Worthington Reports First Quarter Fiscal 2012 ResultsCOLUMBUS, Ohio, September 28, 2011 – Worthington Industries, Inc. (NYSE: WOR) today reported net sales of $602.4 million and net earnings of $25.7 million, or $0.35 per share, for its fiscal 2012 first quarter ended August 31, 2011. In last year’s first quarter, the Company reported net sales of $616.8 million and net earnings of $22.4 million, or $0.29 per share.
“We had a good first quarter in Steel Processing and excellent results from our ceiling grid system joint venture WAVE,” John P. McConnell, Chairman and CEO, said. “The year-over-year comparisons show strength in the areas where we have focused to improve our performance and lessen the volatility of earnings, particularly in Steel Processing. We expect to continue to perform well, barring further economic deterioration.” McConnell added, “The acquisition of the BernzOmatic product lines in Pressure Cylinders is positively contributing to that segment’s results as this business integrated quickly. We expect the Cylinders segment to stay focused on growing their market presence through new customers and additional acquisitions. We feel good about how Worthington Industries is positioned with our strong balance sheet and improved operations. However, the stalled economy, and the uncertainty surrounding it, has hindered a quicker and more robust recovery which has an impact on our customers.”
The comparison of the current quarter’s consolidated results to previous quarters is impacted by the following transactions: • Effective March 1, 2011, the Metal Framing business, including all of the related working capital and six of the 13 facilities, was contributed to a joint venture with ClarkWestern Building Systems. In exchange for the contributed assets, Worthington Industries received a 25% interest in the new joint venture, ClarkDietrich Building Systems (ClarkDietrich), as well as the assets of certain MISA Metals, Inc. (MMI) steel processing locations. Since that date, Worthington’s 25% portion of the results of ClarkDietrich are included in the equity in net income of unconsolidated affiliates line in the consolidated statement of earnings and the results of operations from the MMI assets have been included in Steel Processing.
Net sales for the first quarter ended August 31, 2011, were $602.4 million, down 2% from the comparable quarter in the prior year, when net sales were $616.8 million. The Steel Processing and Pressure Cylinders segments reported a 15% and a 24% increase in sales, respectively, aided by the MMI and Bernz acquisitions. These increases, however, were more than offset by the impact of the deconsolidation of the Company’s former metal framing and automotive body panels operations. Excluding the deconsolidated operations, net sales rose 18% from the prior year quarter primarily due to the acquisitions and higher average selling prices as the average cost of steel increased 16% over the comparable prior year quarter.
Operating income for the current quarter was $21.2 million, essentially flat versus the comparable quarter in the prior year. Operating income for the current quarter was adversely affected by restructuring and joint venture transaction expenses. During the current quarter, the transformation team began the diagnostic phase in the Pressure Cylinders segment, incurring $1.7 million of outside consulting expenses, which are included in the restructuring and other expenses line. The $3.2 million in the joint venture transactions line relates exclusively to the wind down of the retained metal framing facilities, which continued to operate in support of the new ClarkDietrich joint venture. As of the end of the first quarter, all of these retained facilities had been closed.
Metal Framing’s net sales were $3.1 million during the quarter. The sales relate to the vinyl operation and metal framing facilities that were not contributed to the new ClarkDietrich joint venture on March 1, 2011, but continued to produce product to assist the joint venture during the transition period. As of the end of the quarter, all of the retained facilities had been closed, except for the vinyl operation. All of the retained facilities are expected to be sold within the next 12 months.