April 1, 2015
Worthington Reports 3Q Loss, Closes Engineered Cabs Facility
Worthington Industries, Inc., Columbus, Ohio, reported a net loss of $25.7 million on sales of $804.8 million for its fiscal third quarter. The company attributed much of the loss to charges related to the reorganization of its Engineered Cabs business and workforce reductions in its Oil & Gas Equipment business, which reduced earnings by $52.9 million. In last year's third quarter, the company reported earnings of $40.6 million on sales of $773.2 million.
“Despite a challenging quarter, the overall health of the company is good,” said John McConnell, Worthington chairman and CEO. “We had solid volumes in Steel Processing, but the dramatic fall in steel prices throughout the quarter negatively impacted results.”
McConnell reported that the automotive and heavy truck markets continue to be strong, along with most other markets, though there is continued weakness in the agriculture market. “Pressure Cylinders is right-sizing its Oil & Gas Equipment operations as the softness in that market was starting to be reflected in our customer orders." McConnell added, "We are also reorganizing the Engineered Cabs business with the announced closure of the Florence, S.C., facility and the consolidation of the business."
Net sales by Worthington’s Steel Processing operation totaled $500.7 million in the quarter, up 5 percent due to increased volume and the January acquisition of Rome Strip Steel. Operating income of $16.4 million was $11.9 million lower than the prior-year quarter due to inventory holding losses from falling steel prices and higher manufacturing costs. Rome Strip Steel’s cold-rolling operation in Rome, N.Y., will be integrated into the Steel Processing business segment, adding a third high-value-add cold-rolling and annealing facility to the company.
Also in January, Worthington sold the assets of Advanced Component Technologies, Inc., located in Northwood, Iowa. ACT was a facility within the Engineered Cabs segment.
"We remain focused on our goal to grow our earnings and improve our operations," McConnell said. “However, we will continue to take action when fundamental market conditions change or when a credible plan is not attainable to meet our targets for a particular business. We anticipate lower steel pricing will continue to be a headwind in the upcoming quarter, but we expect automotive and heavy truck volumes to remain strong.”