Steel Processing Fuels Worthington Earnings
Worthington Industries Inc., Columbus, Ohio, reported net sales of $602.4 million and net earnings of $25.7 million during the company’s fiscal first quarter, which ended Aug. 31. Company sales were down 2.3 percent from the previous year’s first quarter, though earnings were up 14.7 percent.
“We had a good first quarter in Steel Processing and excellent results from our ceiling grid system joint venture WAVE,” said John P. McConnell, chairman and CEO, during the company’s quarterly conference call. “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.”
The Steel Processing and Pressure Cylinders segments reported 15 percent and 24 percent increases in sales, respectively, aided by the MISA Metals and Bernz acquisitions. These increases were more than offset, however, by the impact of the deconsolidation of the former metal framing and automotive body panels operations, company officials said.
Excluding the deconsolidated operations, Worthington’s net sales rose 18 percent from the prior-year quarter, primarily due to the acquisitions and higher average selling prices as the cost of steel increased 16 percent.
Steel Processing’s net sales of $408.2 million were up 15 percent, or $53.3 million, over first-quarter 2010. Higher average selling prices increased net revenues by $45.9 million.
The mix of direct vs. toll tons processed was 51 percent to 49 percent during the quarter, compared with 58 percent to 42 percent in the comparable quarter last year.
Metal Framing’s net sales totaled $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 in March, 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.
“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,” McConnell said.