Worthington’s Sales up 7 Percent as Company’s Transformation Continues > Metal Center News

Worthington’s Sales up 7 Percent as Company’s Transformation Continues

April 5, 2012

Worthington Industries Inc., Columbus, Ohio, reported net sales of $611 million and net earnings of $25.9 million during the company’s third quarter, which ended in February. Sales were up 7.3 percent, but earnings declined 1.5 percent, from the same quarter the previous year.

Steel volumes increased 21 percent during the quarter, led by a strong year-over-year increase in the automotive market. Gross margin for the current quarter was $83.3 million, compared to $88.3 million in the prior-year quarter.

“We performed well in our third quarter,” said John P. McConnell, chairman and CEO during the company’s quarterly conference call with investors and analysts. “Most importantly, our team is doing an excellent job of managing the reshaping of our company. Although the additions and subtractions have been numerous and make year-over-year comparisons more difficult in the short term, we are confident our decisions and direction have produced a better platform for future success.”

Worthington made two significant transactions during the quarter. In early December, it acquired the propane fuel cylinders business of the Coleman Company. Later that month, it acquired Angus Industries, a manufacturer of OEM cabs for heavy mobile equipment.

In the company’s Steel Processing segment, net sales of $367.3 million were up 22 percent compared to the third quarter the previous year. Volumes increased 21 percent, favorably impacting net sales by $37.4 million, while higher average selling prices increased net sales by $28.1 million.

The mix of direct vs. toll tons processed was split evenly during the quarter, compared with a 54 to 46 percent mix in the comparable quarter of the prior year. Operating income increased $1.2 million as increased volumes more than offset the impact of higher expenses.

Pressure Cylinders’ net sales of $187.7 million were up 38 percent from the comparable prior-year quarter aided by the BernzOmatic, STAKO and Coleman fuel cylinders acquisitions and higher average selling prices. Pressure Cylinders’ operating income was $10.9 million, essentially flat from the prior year.

Looking ahead, McConnell is confident the company will continue to see improved results. “We look for fourth-quarter volumes to reflect a continued, modest improvement in the general economy. While automotive volumes in Steel Processing and related JVs appear to be gaining momentum, other end markets for Pressure Cylinders and Engineered Cabs are also showing some improvement and growth,” he said.