Jan. 3, 2018

Worthington Reports Profitable Second Quarter

Worthington Industries Inc., Columbus, Ohio, reported net sales of $871.3 million during its first quarter, which ended Nov. 30. Net sales increased 19.7 percent from the same quarter in 2017 and were up 2.7 percent from the prior quarter.

Net earnings for the service center company totaled $39.4 million during the quarter, a decline of 15.4 percent from second-quarter 2016 and 13.4 percent from the previous quarter.

“We had the second-best, second-quarter results in our history,” said John McConnell, chairman and CEO of Worthington Industries. “We saw improvement in our pressure cylinders segment. Lower toll volumes in steel processing and lower equity income from our joint ventures led to a decline from the year-ago quarter. All in all, most of the markets we serve were steady.”

Steel Processing’s net sales totaled $538.4 million, up 6 percent over the same month in 2016 driven by higher average direct selling prices, partially offset by lower tolling volume due primarily to declines at certain consolidated joint ventures. Operating income of $41.1 million was $5.7 million higher than the prior-year quarter driven by a net gain of $10.6 million related to the sale of the legacy real estate of the company’s former stainless steel business, PSM. That was partially offset by lower direct spreads and lower tolling volume.

Inventory holding gains were negligible in both the current and prior-year quarters. The mix of direct versus toll tons processed was 57-43 percent in the current quarter, compared with a 49-51 percent mix in the prior-year quarter.

Also during the quarter, the company announced that its WAVE joint venture had agreed to sell its business and operations in Europe, the Middle East, Africa and Asia, to Knauf Group – a family-owned manufacturer of building materials headquartered in Germany. Worthington expects to realize proceeds of approximately $45 million for its 50 percent share of the WAVE operations being sold. The transaction is subject to regulatory approvals and other customary closing conditions and is anticipated to close in the middle of calendar 2018.

“The company is performing well with strong volumes from the heavy truck and agriculture markets, and improvements in pressure cylinders, where we are seeing strong consumer product volumes and increasing demand in the oil and gas business,” McConnell said. “The repositioning of engineered cabs to attract new customers is resulting in increasing sales and we anticipate WAVE to continue to deliver excellent results as it focuses on its North America growth strategy with the pending sale of the international business.”


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Wednesday, January 17, 2018