Oct. 1, 2014
Worthington Reports Profitable Quarter
Worthington Industries Inc., Columbus, Ohio, reported net earnings of $44.2 million during its fiscal first quarter, a 19.0 percent decline from the same quarter the previous year. Net sales of $862.4 million were up 24.5 percent.
"Our company reported very good results for our first quarter as we work to deliver consistent earnings growth," Chairman and CEO John McConnell told investors and analysts during the company's quarterly conference call. "Our Steel Processing business led the way with strong volumes from the automotive market.
Gross margin for the quarter totaled $129.5 million, an increase of $18.5 million over the prior-year quarter. Gross margin benefited from a higher spread between average selling prices and material cost due in part to a more favorable product mix in Pressure Cylinders and higher inventory holding gains in Steel Processing, the company said.
Steel Processing's net sales of $552.3 million were up 37 percent from the prior year due to the consolidation of TWB and increased sales in the automotive market. The company’s shipments increased considerably compared to 2013, with tolling shipments up 21 percent and direct shipments up 13 percent.
"Our numbers again outpaced the market, compared to MSCI data, which showed lateral shipments up 7 percent in the comparable period, evidence that we continue to gain market share," said Mark Russell, president and CEO.
Looking at the quarter by market, automotive continues to be the company’s strongest segment. Other markets showed smaller but still significant increases, including construction and heavy truck. The only negative was in agriculture where the market continues its correction, he said.
The company's Steel Processing segment has been feeling a freight pinch in recent months, the result of a driver shortage that has idled trucks and raised prices. "Of all our businesses, steel is the most impacted by the recent run-up in freight costs. We see this as mostly the unintended consequence of recent and cumulative regulatory changes that have created transportation headwind for the entire economy. We're working aggressively to address these costs across all of our businesses," Russell said.
"We anticipate continued steady volumes from the automotive markets, as light vehicle sales have increased due to some strengthening in parts of the economy and improving consumer confidence," McConnell said. "In Pressure Cylinders, we believe there are excellent growth opportunities across many of the energy-related markets, which we will continue to pursue organically and through acquisitions."