Worthington Industries, Inc. (NYSE: WOR) today reported net sales
of $759.1 million and net earnings of $67.6 million, or $1.27 per
diluted share, for its fiscal 2021 third quarter ended February 28,
2021. In the third quarter of fiscal 2020, the Company reported net
sales of $764.0 million and net earnings of $15.3 million, or $0.27
per diluted share. Results in both the current and prior year
quarter were impacted by several unique items, as summarized in the
table below.
(U.S. dollars in million, except per share
amounts)
|
|
3Q 2021 |
|
|
3Q 2020 |
|
|
|
After-Tax |
|
|
Per Share |
|
|
After-Tax |
|
|
Per Share |
|
Net earnings |
|
$ |
67.6 |
|
|
$ |
1.27 |
|
|
$ |
15.3 |
|
|
$ |
0.27 |
|
Impairment and restructuring charges |
|
|
8.4 |
|
|
|
0.16 |
|
|
|
27.0 |
|
|
|
0.48 |
|
Gain on investment in Nikola, net of incremental expenses |
|
|
(3.7 |
) |
|
|
(0.07 |
) |
|
|
- |
|
|
|
- |
|
Tank replacement program |
|
|
- |
|
|
|
- |
|
|
|
(1.7 |
) |
|
|
(0.03 |
) |
Gain on consolidation of Samuel Steel Pickling |
|
|
- |
|
|
|
- |
|
|
|
(4.6 |
) |
|
|
(0.08 |
) |
Adjusted net earnings |
|
$ |
72.3 |
|
|
$ |
1.36 |
|
|
$ |
36.0 |
|
|
$ |
0.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and restructuring charges in both
periods mostly related to the Company’s oil and gas equipment
business, which was divested on January 29, 2021. See Recent
Developments below for further information related to the
divestiture.
Financial highlights for the current and
comparative periods are as follows:
(U.S. dollars in millions, except per share
amounts)
|
3Q 2021 |
|
|
|
3Q 2020 |
|
|
9M 2021 |
|
|
9M 2020 |
|
Net sales |
$ |
759.1 |
|
|
|
$ |
764.0 |
|
|
$ |
2,193.1 |
|
|
$ |
2,447.5 |
|
Operating income (loss) |
|
49.8 |
|
|
|
|
(1.4 |
) |
|
|
57.0 |
|
|
|
16.1 |
|
Equity income |
|
31.7 |
|
|
|
|
25.5 |
|
|
|
80.9 |
|
|
|
97.6 |
|
Net earnings |
|
67.6 |
|
|
|
|
15.3 |
|
|
|
610.2 |
|
|
|
62.6 |
|
Earnings per diluted share |
$ |
1.27 |
|
|
|
$ |
0.27 |
|
|
$ |
11.28 |
|
|
$ |
1.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"We delivered record earnings per share in our
third quarter thanks to outstanding results in Steel Processing and
solid performances from Pressure Cylinders and our joint ventures,"
said President & CEO Andy Rose. "Healthy demand across nearly
all of our major end markets, combined with inventory holding gains
and lower manufacturing costs drove the record performance."
Consolidated Quarterly Results
Net sales for the third quarter of fiscal 2021 were $759.1 million,
down 1% from the comparable quarter in the prior year, when net
sales were $764.0 million. The decrease was driven by lower sales
in the oil and gas equipment business within Pressure Cylinders,
which was divested in the current quarter, partially offset by
higher average selling prices in Steel Processing and higher volume
in the consumer products business within Pressure Cylinders.
Gross margin
increased $48.6 million over the prior year quarter to $164.1
million primarily due to improved direct spreads in Steel
Processing which benefitted from significant inventory holding
gains, which were estimated to be $31.1 million in the current
quarter compared to an inventory holding loss of $6.0 million in
the prior year quarter.
Operating income for the current quarter was
$49.8 million, an increase of $51.2 million over the operating loss
in the prior year quarter. Excluding impairment and restructuring
charges, and the impact of the reserve decrease for the tank
replacement program in the prior year quarter, adjusted operating
income for the current quarter was $77.2 million, an improvement of
$44.9 million over the prior year quarter, as the impact of higher
gross margin was partially offset by higher SG&A expense, which
was up $6.0 million on increased profit sharing and bonus
expense.
Interest expense was $7.6 million for the
current quarter, compared to $7.4 million in the prior year
quarter. The increase was due primarily to higher average debt
levels.
Equity income from unconsolidated joint ventures
increased $6.2 million over the prior year quarter to $31.7 million
due to higher contributions from all joint ventures except for WAVE
which was down slightly. The Company received cash distributions of
$18.4 million from unconsolidated joint ventures during the current
quarter.
Income tax expense was $4.5 million in the
current quarter compared to $4.8 million in the prior year quarter.
The decrease was driven by a $19.7 million discrete tax benefit
realized in connection with the sale of the oil and gas equipment
business in the current quarter, partially offset by the impact of
higher pre-tax earnings. Tax expense in the current quarter
reflects an estimated annual effective rate of 20.1% compared to
24.6% for the prior year quarter.
Balance Sheet
At quarter-end, total debt of $708.9 million was
relatively consistent with debt at November 30, 2020, and the
Company had $649.5 million of cash.
Quarterly Segment Results
Steel Processing’s net sales totaled $504.5
million, up 3%, or $13.3 million, over the comparable prior year
quarter driven by higher average selling prices, which were
partially offset by lower toll volume. Operating income of $62.9
million was $43.9 million higher than the prior year quarter on
improved direct spreads primarily driven by estimated inventory
holding gains of $31.1 million in the current quarter compared to
an inventory holding loss of $6.0 million in the prior year
quarter. The mix of direct versus toll tons processed was 48% to
52% in the current quarter, compared to 44% to 56% in the prior
year quarter.
Pressure Cylinders’ net sales totaled $254.6
million, down 6%, or $16.4 million, from the comparable prior year
quarter. The decrease was driven by a $24.3 million decline in the
recently divested oil and gas equipment business, partially offset
by higher volume in the consumer products business. Operating loss
of $15.6 million was an improvement of $4.2 million over the prior
year quarter. Excluding impairment and restructuring charges, and
the impact of the reserve decrease for the tank replacement program
in the prior year quarter, adjusted operating income was up
slightly to $12.8 million, as declines in the oil and gas equipment
business were more than offset by improvements in the consumer and
industrial products businesses.
Recent Developments
- On Jan. 4, 2021, the Company
acquired PTEC Pressure Technology GmbH, a leading independent
designer and manufacturer of valves and components for
high-pressure hydrogen and compressed natural gas storage,
transport and onboard fueling systems. The total purchase price was
approximately $10.8 million.
- On Jan. 13, 2021, the Company sold
its remaining 7,048,020 shares of Nikola common stock for net
proceeds of $146.6 million, resulting in a pre-tax gain of $2.7
million.
- On Jan. 29, 2021, the Company sold
its oil and gas equipment business to an affiliate of Ten Oaks
Group. The Company retained the real estate associated with the
business and received nominal consideration at closing, resulting
in a pre-tax loss of $27.7 million within restructuring and other
expense.
- On Jan. 29, 2021, the Company
acquired General Tools & Instruments Company LLC, a provider of
feature-rich, specialized tools in various categories including
environmental health & safety, precision measurement &
layout, home repair & remodel, lawn & garden and specific
purpose tools. The total purchase price was approximately $120.6
million, subject to closing adjustments.
- On Mar. 12, 2021, the Company sold
its Structural Composites Industries facility located in Pomona,
CA, to Luxfer Holdings PLC for approximately $20.0 million, subject
to closing adjustments. The Company expects to record a loss of
approximately $7.0 million in the fourth quarter of fiscal 2021
related primarily to the allocation of goodwill associated with the
divestiture.
- During the third quarter of fiscal
2021, the Company repurchased a total of 1,000,000 of its common
shares for $52.4 million, at an average purchase price of
$52.37.
Outlook
“Our businesses are performing well and with the
strategic acquisitions and divestitures we completed recently we
are well positioned moving forward,” Rose said. “As strong as our
record Q3 was, it could have been better. We faced challenges, some
of which will persist, including a tight steel market,
semi-conductor shortages that impacted our automotive customers,
extreme weather, and continuing COVID related production issues.
Our teams are exceptional, and they will continue to navigate these
challenges, working safely to drive our business to new
heights.”
Conference Call
Worthington will review fiscal 2021 third
quarter results during its quarterly conference call on March 24,
2021, at 2:00 p.m., Eastern Time. Details regarding the conference
call can be found on the Company website at
www.WorthingtonIndustries.com.
About Worthington
Industries
Worthington Industries (NYSE:WOR) is a leading
industrial manufacturing company delivering innovative solutions to
customers that span many industries including transportation,
construction, industrial, agriculture, retail and energy.
Worthington is North America’s premier value-added steel processor
and producer of laser welded products; and a leading global
supplier of pressure cylinders and accessories for applications
such as fuel storage, water systems, outdoor living, tools and
celebrations. The Company’s brands, primarily sold in retail
stores, include Coleman®, Bernzomatic®, Balloon Time®, Mag Torch®,
Well-X-Trol®, General®, Garden-Weasel®, Pactool International® and
Hawkeye™. Worthington’s WAVE joint venture with Armstrong is the
North American leader in innovative ceiling solutions.
Headquartered in Columbus, Ohio, Worthington operates 50 facilities
in 15 states and seven countries, sells into over 90 countries and
employs approximately 8,000 people. Founded in 1955, the Company
follows a people-first philosophy with earning money for its
shareholders as its first corporate goal. Relentlessly finding new
ways to drive progress and practicing a shared commitment to
transformation, Worthington makes better solutions possible for
customers, employees, shareholders and communities.
Safe Harbor Statement
The Company wishes to take advantage of the Safe
Harbor provisions included in the Private Securities Litigation
Reform Act of 1995 (the “Act”). Statements by the Company relating
to the ever-changing effects of the novel coronavirus (“COVID-19”)
pandemic – the duration, extent and severity of which are
impossible to predict, including the possibility of further
resurgence in the spread of COVID-19 – on economies (local,
national and international) and markets, and on our customers,
counterparties, employees and third-party service providers, as
well as the effects of various responses of governmental and
nongovernmental authorities to the COVID-19 pandemic (such as
quarantines, shut downs and other restrictions on travel and
commercial, social or other activities), the development,
availability and effectiveness of vaccines, and the implementation
of fiscal stimulus packages; future or expected cash positions,
liquidity and ability to access financial markets and capital;
outlook, strategy or business plans; future or expected growth,
growth potential, forward momentum, performance, competitive
position, sales, volumes, cash flows, earnings, margins, balance
sheet strengths, debt, financial condition or other financial
measures; pricing trends for raw materials and finished goods and
the impact of pricing changes; the ability to improve or maintain
margins; expected demand or demand trends for the Company or its
markets; additions to product lines and opportunities to
participate in new markets; expected benefits from Transformation
and innovation efforts; the ability to improve performance and
competitive position at the Company’s operations; anticipated
working capital needs, capital expenditures and asset sales;
anticipated improvements and efficiencies in costs, operations,
sales, inventory management, sourcing and the supply chain and the
results thereof; projected profitability potential; the ability to
make acquisitions and the projected timing, results, benefits,
costs, charges and expenditures related to acquisitions, joint
ventures, headcount reductions and facility dispositions, shutdowns
and consolidations; projected capacity and the alignment of
operations with demand; the ability to operate profitably and
generate cash in down markets; the ability to capture and maintain
market share and to develop or take advantage of future
opportunities, customer initiatives, new businesses, new products
and new markets; expectations for Company and customer inventories,
jobs and orders; expectations for the economy and markets or
improvements therein; expectations for generating improving and
sustainable earnings, earnings potential, margins or shareholder
value; effects of judicial rulings; uncertainty regarding the
impact of changes to the U.S. presidential administration and
Congress on the regulatory landscape, capital markets, and the
response to and management of the COVID-19 pandemic; and other
non-historical matters constitute “forward-looking statements”
within the meaning of the Act. Because they are based on beliefs,
estimates and assumptions, forward-looking statements are
inherently subject to risks and uncertainties that could cause
actual results to differ materially from those projected. Any
number of factors could affect actual results, including, without
limitation, the risks, uncertainties and impacts related to
COVID-19 and other actual or potential public health emergencies
and actions taken by governmental authorities or others in
connection therewith, their potential impacts related to the
ability and costs to continue to operate facilities and their
potential to exacerbate other risks; the effect of national,
regional and global economic conditions generally and within major
product markets, including significant economic disruptions from
COVID-19 and the actions taken therewith; the effect of conditions
in national and worldwide financial markets and with respect to the
ability of financial institutions to provide capital; the impact of
tariffs, the adoption of trade restrictions affecting the Company’s
products or suppliers, a United States withdrawal from or
significant renegotiation of trade agreements, the occurrence of
trade wars, the closing of border crossings, and other changes in
trade regulations or relationships; lower oil prices as a factor in
demand for products; product demand and pricing; changes in product
mix, product substitution and market acceptance of the Company’s
products; fluctuations in the pricing, quality or availability of
raw materials (particularly steel), supplies, transportation,
utilities and other items required by operations; the outcome of
adverse claims experience with respect to workers’ compensation,
product recalls or product liability, casualty events or other
matters; effects of facility closures and the consolidation of
operations; the effect of financial difficulties, consolidation and
other changes within the steel, automotive, construction, oil and
gas, and other industries in which the Company participates;
failure to maintain appropriate levels of inventories; financial
difficulties (including bankruptcy filings) of original equipment
manufacturers, end-users and customers, suppliers, joint venture
partners and others with whom the Company does business; the
ability to realize targeted expense reductions from headcount
reductions, facility closures and other cost reduction efforts; the
ability to realize cost savings and operational, sales and sourcing
improvements and efficiencies, and other expected benefits from
Transformation initiatives, on a timely basis; the overall success
of, and the ability to integrate, newly-acquired businesses and
joint ventures, maintain and develop their customers, and achieve
synergies and other expected benefits and cost savings therefrom;
capacity levels and efficiencies, within facilities, within major
product markets and within the industries in which the Company
participates as a whole; the effect of disruption in the business
of suppliers, customers, facilities and shipping operations due to
adverse weather, casualty events, equipment breakdowns,
interruption in utility services, civil unrest, international
conflicts, terrorist activities or other causes; changes in
customer demand, inventories, spending patterns, product choices,
and supplier choices; risks associated with doing business
internationally, including economic, political and social
instability, foreign currency exchange rate exposure and the
acceptance of the Company’s products in global markets; the ability
to improve and maintain processes and business practices to keep
pace with the economic, competitive and technological environment;
deviation of actual results from estimates and/or assumptions used
by the Company in the application of its significant accounting
policies; the level of imports and import prices in the Company’s
markets; the impact of judicial rulings and governmental
regulations, both in the United States and abroad, including those
adopted by the United States governmental agencies as contemplated
by the Coronavirus Aid, Relief and Economic Security (CARES) Act,
the Consolidated Appropriations Act, 2021 and the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010; the effect of
healthcare laws in the United States and potential changes for such
laws especially in light of the COVID-19 pandemic, which may
increase the Company’s healthcare and other costs and negatively
impact the Company’s operations and financial results; cyber
security risks; the effects of privacy and information security
laws and standards; and other risks described from time to time in
the Company’s filings with the United States Securities and
Exchange Commission, including those described in “Part I – Item
1A. – Risk Factors” of the Company’s Annual Report on Form 10-K for
the fiscal year ended May 31, 2020.
WORTHINGTON INDUSTRIES,
INC.CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
Net sales |
$ |
759,109 |
|
|
$ |
763,996 |
|
|
$ |
2,193,110 |
|
|
$ |
2,447,492 |
|
Cost of goods sold |
|
595,011 |
|
|
|
648,451 |
|
|
|
1,780,180 |
|
|
|
2,094,045 |
|
Gross margin |
|
164,098 |
|
|
|
115,545 |
|
|
|
412,930 |
|
|
|
353,447 |
|
Selling, general and
administrative expense |
|
86,895 |
|
|
|
80,928 |
|
|
|
251,220 |
|
|
|
260,294 |
|
Impairment of goodwill and
long-lived assets |
|
- |
|
|
|
34,627 |
|
|
|
13,739 |
|
|
|
75,228 |
|
Restructuring and other
expense, net |
|
28,212 |
|
|
|
1,376 |
|
|
|
37,656 |
|
|
|
1,781 |
|
Incremental expenses related
to Nikola gains |
|
(781 |
) |
|
|
- |
|
|
|
53,300 |
|
|
|
- |
|
Operating income (loss) |
|
49,772 |
|
|
|
(1,386 |
) |
|
|
57,015 |
|
|
|
16,144 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous income, net |
|
539 |
|
|
|
6,985 |
|
|
|
1,366 |
|
|
|
8,316 |
|
Interest expense |
|
(7,558 |
) |
|
|
(7,362 |
) |
|
|
(22,696 |
) |
|
|
(24,157 |
) |
Equity in net income of unconsolidated affiliates |
|
31,674 |
|
|
|
25,479 |
|
|
|
80,939 |
|
|
|
97,592 |
|
Gains on investment in Nikola |
|
2,740 |
|
|
|
- |
|
|
|
655,102 |
|
|
|
- |
|
Loss on extinguishment of debt |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(4,034 |
) |
Earnings before income taxes |
|
77,167 |
|
|
|
23,716 |
|
|
|
771,726 |
|
|
|
93,861 |
|
Income tax expense |
|
4,485 |
|
|
|
4,828 |
|
|
|
148,818 |
|
|
|
20,506 |
|
Net earnings |
|
72,682 |
|
|
|
18,888 |
|
|
|
622,908 |
|
|
|
73,355 |
|
Net earnings attributable to
noncontrolling interests |
|
5,073 |
|
|
|
3,577 |
|
|
|
12,668 |
|
|
|
10,734 |
|
Net earnings
attributable to controlling interest |
$ |
67,609 |
|
|
$ |
15,311 |
|
|
$ |
610,240 |
|
|
$ |
62,621 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares
outstanding |
|
52,149 |
|
|
|
54,930 |
|
|
|
53,076 |
|
|
|
55,078 |
|
Earnings per share
attributable to controlling interest |
$ |
1.30 |
|
|
$ |
0.28 |
|
|
$ |
11.50 |
|
|
$ |
1.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares
outstanding |
|
53,217 |
|
|
|
55,898 |
|
|
|
54,077 |
|
|
|
56,164 |
|
Earnings per share
attributable to controlling interest |
$ |
1.27 |
|
|
$ |
0.27 |
|
|
$ |
11.28 |
|
|
$ |
1.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding at
end of period |
|
51,813 |
|
|
|
54,598 |
|
|
|
51,813 |
|
|
|
54,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per
share |
$ |
0.25 |
|
|
$ |
0.24 |
|
|
$ |
0.75 |
|
|
$ |
0.72 |
|
WORTHINGTON INDUSTRIES,
INC.CONSOLIDATED BALANCE
SHEETS(In thousands)
|
February 28, 2021 |
|
|
May 31, 2020 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
649,505 |
|
|
$ |
147,198 |
|
Receivables, less allowances of $1,051 and $1,521 at February 28,
2021 |
|
|
|
|
|
|
|
and May 31, 2020, respectively |
|
525,768 |
|
|
|
341,038 |
|
Inventories: |
|
|
|
|
|
|
|
Raw materials |
|
172,735 |
|
|
|
234,629 |
|
Work in process |
|
135,233 |
|
|
|
76,497 |
|
Finished products |
|
105,213 |
|
|
|
93,975 |
|
Total inventories |
|
413,181 |
|
|
|
405,101 |
|
Income taxes receivable |
|
3,351 |
|
|
|
8,376 |
|
Assets held for sale |
|
21,202 |
|
|
|
12,928 |
|
Prepaid expenses and other current assets |
|
73,909 |
|
|
|
68,538 |
|
Total current assets |
|
1,686,916 |
|
|
|
983,179 |
|
Investments in unconsolidated
affiliates |
|
220,415 |
|
|
|
203,329 |
|
Operating lease assets |
|
33,245 |
|
|
|
31,557 |
|
Goodwill |
|
358,543 |
|
|
|
321,434 |
|
Other intangible assets, net
of accumulated amortization of $87,052 and |
|
|
|
|
|
|
|
$92,774 at February 28, 2021 and May 31, 2020, respectively |
|
245,543 |
|
|
|
184,416 |
|
Other assets |
|
32,986 |
|
|
|
34,956 |
|
Property, plant and
equipment: |
|
|
|
|
|
|
|
Land |
|
23,159 |
|
|
|
24,197 |
|
Buildings and improvements |
|
288,009 |
|
|
|
302,796 |
|
Machinery and equipment |
|
1,105,686 |
|
|
|
1,055,139 |
|
Construction in progress |
|
48,972 |
|
|
|
52,231 |
|
Total property, plant and equipment |
|
1,465,826 |
|
|
|
1,434,363 |
|
Less: accumulated depreciation |
|
905,601 |
|
|
|
861,719 |
|
Total property, plant and equipment, net |
|
560,225 |
|
|
|
572,644 |
|
Total
assets |
$ |
3,137,873 |
|
|
$ |
2,331,515 |
|
|
|
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
412,793 |
|
|
$ |
247,017 |
|
Accrued compensation, contributions to employee benefit plans
and |
|
|
|
|
|
|
|
related taxes |
|
112,781 |
|
|
|
64,650 |
|
Dividends payable |
|
14,847 |
|
|
|
14,648 |
|
Other accrued items |
|
48,475 |
|
|
|
49,974 |
|
Current operating lease liabilities |
|
10,396 |
|
|
|
10,851 |
|
Income taxes payable |
|
37,516 |
|
|
|
949 |
|
Current maturities of long-term debt |
|
453 |
|
|
|
149 |
|
Total current liabilities |
|
637,261 |
|
|
|
388,238 |
|
Other liabilities |
|
87,419 |
|
|
|
75,786 |
|
Distributions in excess of
investment in unconsolidated affiliate |
|
104,391 |
|
|
|
103,837 |
|
Long-term debt |
|
708,511 |
|
|
|
699,516 |
|
Noncurrent operating lease
liabilities |
|
26,440 |
|
|
|
25,763 |
|
Deferred income taxes,
net |
|
110,666 |
|
|
|
71,942 |
|
Total liabilities |
|
1,674,688 |
|
|
|
1,365,082 |
|
Shareholders' equity -
controlling interest |
|
1,311,790 |
|
|
|
820,821 |
|
Noncontrolling interests |
|
151,395 |
|
|
|
145,612 |
|
Total equity |
|
1,463,185 |
|
|
|
966,433 |
|
Total liabilities and
equity |
$ |
3,137,873 |
|
|
$ |
2,331,515 |
|
|
|
|
|
|
|
|
|
WORTHINGTON INDUSTRIES,
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands)
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
72,682 |
|
|
$ |
18,888 |
|
|
$ |
622,908 |
|
|
$ |
73,355 |
|
Adjustments to reconcile net
earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
21,893 |
|
|
|
22,780 |
|
|
|
65,664 |
|
|
|
69,553 |
|
Impairment of goodwill and long-lived assets |
|
- |
|
|
|
34,627 |
|
|
|
13,739 |
|
|
|
75,228 |
|
Provision for (benefit from) deferred income taxes |
|
(30,129 |
) |
|
|
(5,006 |
) |
|
|
9,126 |
|
|
|
(1,661 |
) |
Bad debt (income) expense |
|
(95 |
) |
|
|
273 |
|
|
|
(160 |
) |
|
|
584 |
|
Equity in net income of unconsolidated affiliates, net of
distributions |
|
(13,288 |
) |
|
|
(4,474 |
) |
|
|
(15,437 |
) |
|
|
(19,271 |
) |
Net (gain) loss on sale of assets |
|
27,641 |
|
|
|
(5,838 |
) |
|
|
35,314 |
|
|
|
(5,237 |
) |
Stock-based compensation |
|
4,727 |
|
|
|
2,725 |
|
|
|
14,437 |
|
|
|
10,000 |
|
Gains on investment in Nikola |
|
(2,740 |
) |
|
|
- |
|
|
|
(655,102 |
) |
|
|
- |
|
Charitable contribution of Nikola shares |
|
- |
|
|
|
- |
|
|
|
20,653 |
|
|
|
- |
|
Loss on extinguishment of debt |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,034 |
|
Changes in assets and
liabilities, net of impact of acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables |
|
(32,105 |
) |
|
|
5,992 |
|
|
|
(110,719 |
) |
|
|
15,517 |
|
Inventories |
|
(96,836 |
) |
|
|
3,024 |
|
|
|
(6,591 |
) |
|
|
90,907 |
|
Accounts payable |
|
62,299 |
|
|
|
29,630 |
|
|
|
157,629 |
|
|
|
(28,347 |
) |
Accrued compensation and employee benefits |
|
10,779 |
|
|
|
(9,144 |
) |
|
|
48,591 |
|
|
|
(22,740 |
) |
Income taxes payable |
|
(2,474 |
) |
|
|
390 |
|
|
|
36,567 |
|
|
|
(742 |
) |
Other operating items, net |
|
(13,098 |
) |
|
|
(6,546 |
) |
|
|
(2,547 |
) |
|
|
(5,330 |
) |
Net cash provided by
operating activities |
|
9,256 |
|
|
|
87,321 |
|
|
|
234,072 |
|
|
|
255,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in property, plant and equipment |
|
(16,377 |
) |
|
|
(21,219 |
) |
|
|
(65,321 |
) |
|
|
(71,774 |
) |
Proceeds from sale of Nikola shares |
|
146,590 |
|
|
|
- |
|
|
|
634,449 |
|
|
|
- |
|
Acquisitions, net of cash acquired |
|
(129,743 |
) |
|
|
(500 |
) |
|
|
(129,818 |
) |
|
|
(29,783 |
) |
Proceeds from sale of assets |
|
(985 |
) |
|
|
119 |
|
|
|
20,595 |
|
|
|
9,318 |
|
Net cash provided
(used) by investing activities |
|
(515 |
) |
|
|
(21,600 |
) |
|
|
459,905 |
|
|
|
(92,239 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt, net of issuance costs |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
101,464 |
|
Principal payments on long-term obligations and debt redemption
costs |
|
(99 |
) |
|
|
(344 |
) |
|
|
(292 |
) |
|
|
(154,811 |
) |
Proceeds from issuance of common shares, net of tax
withholdings |
|
565 |
|
|
|
429 |
|
|
|
1,709 |
|
|
|
(6,595 |
) |
Payments to noncontrolling interests |
|
(7,250 |
) |
|
|
- |
|
|
|
(7,810 |
) |
|
|
(1,453 |
) |
Repurchase of common shares |
|
(52,367 |
) |
|
|
(21,373 |
) |
|
|
(145,250 |
) |
|
|
(50,972 |
) |
Dividends paid |
|
(13,215 |
) |
|
|
(13,263 |
) |
|
|
(40,027 |
) |
|
|
(40,177 |
) |
Net cash used by
financing activities |
|
(72,366 |
) |
|
|
(34,551 |
) |
|
|
(191,670 |
) |
|
|
(152,544 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash
and cash equivalents |
|
(63,625 |
) |
|
|
31,170 |
|
|
|
502,307 |
|
|
|
11,067 |
|
Cash and cash equivalents at
beginning of period |
|
713,130 |
|
|
|
72,260 |
|
|
|
147,198 |
|
|
|
92,363 |
|
Cash and cash
equivalents at end of period |
$ |
649,505 |
|
|
$ |
103,430 |
|
|
$ |
649,505 |
|
|
$ |
103,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WORTHINGTON INDUSTRIES,
INC.SUPPLEMENTAL DATA(In
thousands, except volume)
This
supplemental information is provided to assist in the analysis of
the results of
operations. |
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
February 28, 2021 |
|
|
|
February 29, 2020 |
|
|
|
February 28, 2021 |
|
|
|
February 29, 2020 |
|
Volume: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel Processing (tons) |
|
1,014,873 |
|
|
|
1,139,280 |
|
|
|
2,967,296 |
|
|
|
3,035,514 |
|
Pressure Cylinders (units) |
|
20,683,470 |
|
|
|
17,381,319 |
|
|
|
61,607,281 |
|
|
|
59,173,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel Processing |
$ |
504,477 |
|
|
$ |
491,136 |
|
|
$ |
1,404,220 |
|
|
$ |
1,531,448 |
|
Pressure Cylinders |
|
254,643 |
|
|
|
270,995 |
|
|
|
787,831 |
|
|
|
865,527 |
|
Other |
|
(11 |
) |
|
|
1,865 |
|
|
|
1,059 |
|
|
|
50,517 |
|
Total net sales |
$ |
759,109 |
|
|
$ |
763,996 |
|
|
$ |
2,193,110 |
|
|
$ |
2,447,492 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Material cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel Processing |
$ |
314,124 |
|
|
$ |
342,620 |
|
|
$ |
933,041 |
|
|
$ |
1,109,822 |
|
Pressure Cylinders |
|
103,140 |
|
|
|
119,285 |
|
|
|
327,787 |
|
|
|
373,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel Processing |
$ |
42,333 |
|
|
$ |
36,001 |
|
|
$ |
116,700 |
|
|
$ |
109,000 |
|
Pressure Cylinders |
|
46,169 |
|
|
|
45,417 |
|
|
|
134,303 |
|
|
|
140,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel Processing |
$ |
62,874 |
|
|
$ |
19,021 |
|
|
$ |
114,315 |
|
|
$ |
42,361 |
|
Pressure Cylinders |
|
(15,641 |
) |
|
|
(19,865 |
) |
|
|
(3,694 |
) |
|
|
25,405 |
|
Other |
|
111 |
|
|
|
(1,785 |
) |
|
|
(970 |
) |
|
|
(48,835 |
) |
Segment operating income (loss) |
|
47,344 |
|
|
|
(2,629 |
) |
|
|
109,651 |
|
|
|
18,931 |
|
Unallocated corporate and other |
|
1,647 |
|
|
|
1,243 |
|
|
|
664 |
|
|
|
(2,787 |
) |
Incremental expenses related to Nikola gains |
|
781 |
|
|
|
- |
|
|
|
(53,300 |
) |
|
|
- |
|
Total operating income (loss) |
$ |
49,772 |
|
|
$ |
(1,386 |
) |
|
$ |
57,015 |
|
|
$ |
16,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity income (loss) by
unconsolidated affiliate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WAVE |
$ |
19,473 |
|
|
$ |
20,074 |
|
|
$ |
54,409 |
|
|
$ |
85,729 |
|
ClarkDietrich |
|
5,906 |
|
|
|
4,909 |
|
|
|
16,213 |
|
|
|
13,916 |
|
Serviacero Worthington |
|
4,223 |
|
|
|
797 |
|
|
|
7,393 |
|
|
|
2,354 |
|
ArtiFlex |
|
1,734 |
|
|
|
1,688 |
|
|
|
2,879 |
|
|
|
3,028 |
|
Other |
|
338 |
|
|
|
(1,989 |
) |
|
|
45 |
|
|
|
(7,435 |
) |
Total equity income |
$ |
31,674 |
|
|
$ |
25,479 |
|
|
$ |
80,939 |
|
|
$ |
97,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WORTHINGTON INDUSTRIES,
INC.SUPPLEMENTAL DATA(In
thousands, except volume)
The following
provides detail of Pressure Cylinders volume and net sales by
principal class of products. |
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
Volume (units): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer products |
|
16,980,470 |
|
|
|
14,096,440 |
|
|
|
50,753,077 |
|
|
|
49,669,887 |
|
Industrial products |
|
3,702,888 |
|
|
|
3,284,605 |
|
|
|
10,853,769 |
|
|
|
9,501,983 |
|
Oil & gas equipment |
|
112 |
|
|
|
274 |
|
|
|
435 |
|
|
|
1,493 |
|
Total Pressure Cylinders |
|
20,683,470 |
|
|
|
17,381,319 |
|
|
|
61,607,281 |
|
|
|
59,173,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer products |
$ |
120,808 |
|
|
$ |
113,258 |
|
|
$ |
375,208 |
|
|
$ |
360,803 |
|
Industrial products |
|
129,428 |
|
|
|
129,042 |
|
|
|
391,673 |
|
|
|
411,994 |
|
Oil & gas equipment |
|
4,407 |
|
|
|
28,695 |
|
|
|
20,950 |
|
|
|
92,730 |
|
Total Pressure Cylinders |
$ |
254,643 |
|
|
$ |
270,995 |
|
|
$ |
787,831 |
|
|
$ |
865,527 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
provides detail of impairment of goodwill and long-lived assets and
restructuring and other expense, net included in operating income
by segment. |
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
Impairment of goodwill and
long-lived assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel Processing |
$ |
- |
|
|
$ |
1,274 |
|
|
$ |
- |
|
|
$ |
1,274 |
|
Pressure Cylinders |
|
- |
|
|
|
33,353 |
|
|
|
13,739 |
|
|
|
33,353 |
|
Other |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
40,601 |
|
Total impairment of goodwill and long-lived assets |
$ |
- |
|
|
$ |
34,627 |
|
|
$ |
13,739 |
|
|
$ |
75,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other
expense (income), net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel Processing |
$ |
(42 |
) |
|
$ |
728 |
|
|
$ |
1,804 |
|
|
$ |
702 |
|
Pressure Cylinders |
|
28,435 |
|
|
|
747 |
|
|
|
36,006 |
|
|
|
747 |
|
Other |
|
(181 |
) |
|
|
(99 |
) |
|
|
(154 |
) |
|
|
332 |
|
Total restructuring and other expense, net |
$ |
28,212 |
|
|
$ |
1,376 |
|
|
$ |
37,656 |
|
|
$ |
1,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WORTHINGTON INDUSTRIES,
INC.NON-GAAP FINANCIAL
MEASURES(In thousands, except per share
amounts)
The Company reports its financial results in
accordance with accounting principles generally accepted in the
United States (GAAP). The Company also presents adjusted earnings
per diluted share and adjusted operating income to assist in the
understanding of its results of operations. These represent
non-GAAP financial measures and are used by management as measures
of operating performance. In general, these measures exclude
impairment and restructuring charges, but may also exclude other
items that management does not believe reflect the Company’s core
operations.
The following provides a reconciliation of
adjusted operating income and adjusted earnings per diluted share
to the most comparable GAAP measures for the periods presented.
|
Three Months Ended February 28, 2021 |
|
|
Operating Income |
|
|
Earnings Before Income Taxes |
|
|
Income Tax Expense (Benefit) |
|
|
Net Earnings Attributable to Controlling
Interest |
|
|
Earnings per Diluted Share |
|
GAAP |
$ |
49,772 |
|
|
$ |
77,167 |
|
|
$ |
4,485 |
|
|
$ |
67,609 |
|
|
$ |
1.27 |
|
Restructuring and other
expense, net |
|
28,212 |
|
|
|
28,212 |
|
|
|
(19,843 |
) |
|
|
8,372 |
|
|
|
0.16 |
|
Incremental expenses related
to Nikola gains |
|
(781 |
) |
|
|
(781 |
) |
|
|
(755 |
) |
|
|
(1,536 |
) |
|
|
(0.03 |
) |
Gain on investment in
Nikola |
|
- |
|
|
|
(2,740 |
) |
|
|
575 |
|
|
|
(2,165 |
) |
|
|
(0.04 |
) |
Non-GAAP |
$ |
77,203 |
|
|
$ |
101,858 |
|
|
$ |
24,508 |
|
|
$ |
72,280 |
|
|
$ |
1.36 |
|
|
Three Months Ended February 29, 2020 |
|
|
Operating Income (Loss) |
|
|
Earnings Before Income Taxes |
|
|
Income Tax Expense (Benefit) |
|
|
Net Earnings Attributable to Controlling
Interest |
|
|
Earnings per Diluted Share |
|
GAAP |
$ |
(1,386 |
) |
|
$ |
23,716 |
|
|
$ |
4,828 |
|
|
$ |
15,311 |
|
|
$ |
0.27 |
|
Impairment of goodwill and
long-lived assets |
|
34,627 |
|
|
|
34,627 |
|
|
|
(7,988 |
) |
|
|
26,611 |
|
|
|
0.48 |
|
Restructuring and other
expense, net |
|
1,376 |
|
|
|
1,376 |
|
|
|
(111 |
) |
|
|
344 |
|
|
|
- |
|
Tank replacement program |
|
(2,265 |
) |
|
|
(2,265 |
) |
|
|
555 |
|
|
|
(1,710 |
) |
|
|
(0.03 |
) |
Gain on consolidation of
Samuel Steel Pickling |
|
- |
|
|
|
(6,055 |
) |
|
|
1,483 |
|
|
|
(4,572 |
) |
|
|
(0.08 |
) |
Non-GAAP |
$ |
32,352 |
|
|
$ |
51,399 |
|
|
$ |
10,889 |
|
|
$ |
35,984 |
|
|
$ |
0.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change |
$ |
44,851 |
|
|
$ |
50,459 |
|
|
$ |
13,619 |
|
|
$ |
36,296 |
|
|
$ |
0.72 |
|
The following provides a reconciliation of
adjusted operating income to the most comparable GAAP measure for
the Company’s Pressure Cylinders segment for the periods
presented.
|
Three Months Ended |
|
|
February 28, 2021 |
|
|
February 29, 2020 |
|
Operating loss |
$ |
(15,641 |
) |
|
$ |
(19,865 |
) |
Impairment of goodwill and
long-lived assets |
|
- |
|
|
|
33,353 |
|
Restructuring and other
expense, net |
|
28,435 |
|
|
|
747 |
|
Tank replacement program |
|
- |
|
|
|
(2,265 |
) |
Adjusted operating
income |
$ |
12,794 |
|
|
$ |
11,970 |
|
|
|
|
|
|
|
|
|
Contacts:SONYA L. HIGGINBOTHAMVP, CORPORATE COMMUNICATIONS AND
BRAND MANAGEMENT614.438.7391 |
sonya.higginbotham@worthingtonindustries.com
MARCUS A. ROGIERTREASURER AND INVESTOR RELATIONS
OFFICER614.840.4663 |
marcus.rogier@worthingtonindustries.com
200 Old Wilson Bridge Rd. | Columbus, Ohio
43085WorthingtonIndustries.com
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