Worthington’s Sales, Profits Decline
By Metal Center News Staff
on Mar 27, 2020
Worthington Industries Inc., Columbus, Ohio, reported net sales of $764 million in its third quarter, a decline of 12.6 percent from the same quarter last year. Net earnings in the quarter declined from $26.8 million to $15.3 million.
The sales decline was driven primarily by lower average selling prices in Steel Processing and lower volume in Pressure Cylinders, partially offset by higher volumes in Steel Processing.
Gross margin increased $25.5 million over the prior year quarter to $115.5 million. The increase was driven primarily by higher direct spreads and higher toll volume in Steel Processing combined with a higher contribution from Pressure Cylinders in the current quarter, compared to the prior year quarter that included the unfavorable impact of the tank replacement program.
“While I’m pleased with our results in the third quarter, today, our top priority is keeping our people safe and managing our businesses through this difficult crisis,” said John McConnell, chairman and CEO. “I am extremely proud of how our employees have come together, collectively navigating the unprecedented challenges facing our company and our country.”
Steel Processing’s net sales totaled $491.1 million, down 12 percent from the comparable prior-year quarter driven primarily by lower average selling prices, partially offset by higher volume. Operating income was $19 million, up $8.9 million from the prior-year quarter on higher direct spreads and the impact of higher toll volume.
The mix of direct versus toll tons processed was 44 to 56 percent in the quarter, compared to 57 percent to 43 percent in the prior-year quarter. The change in mix was driven primarily by the consolidation of the toll processing joint venture, Samuel Steel Pickling, during the current quarter.
On Dec. 31, the company contributed the recently acquired assets of Heidtman Steel to the Samuel Steel Pickling joint venture, increasing the company’s total ownership interest in the joint venture to 63 percent.
“There are still many unknowns regarding the spread of COVID-19 and how the measures to control it will impact the economy and our company,” McConnell said. “Many of our facilities are considered ‘essential businesses’ under the various state and federal guidelines and will continue to operate based on customer demand. I am especially grateful to our production workforce who are leading our effort to serve our customers and our country by continuing to make products.”