UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

FORM 10–K

(Mark One)

For the fiscal year ended May 31, 20042006

OR

For the transition period from                        to                        

Commission File Number 1-8399

WORTHINGTON INDUSTRIES, INC.

Securities Registered Pursuantregistered pursuant to Section 12(b) of the Act:

Securities Registered Pursuantregistered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES x NO ¨

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

YES ¨ NO x

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YESx NOo¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.                                                                                                                       

o¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filerx                                                     Accelerated filer¨                                                  Non-accelerated filer¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES¨ NOx    NOo

Based upon the closing price of the Common Shares on November 28, 2003, as reported on the New York Stock Exchange composite tape (as reported byThe Wall Street Journal), the aggregate market value of the Common Shares (the only common equity) of the Registrant held by non-affiliates of the Registrant, as of such datebased on the closing price on the New York Stock Exchange on November 30, 2005 was approximately $983,340,000.$1,757,447,872.

The number of Registrant’s Common Shares issued and outstanding as of August 5, 2004,1, 2006, was 87,309,123.88,807,354.

DOCUMENT INCORPORATED BY REFERENCE

Selected portions of the Registrant’s Proxy Statement to be furnished to shareholders of the Registrant in connection with the Annual Meeting of Shareholders to be held on September 30, 2004,27, 2006, are incorporated by reference into Part III of this Form 10-K to the extent provided herein.

TABLE OF CONTENTS

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SAFE HARBOR STATEMENT

Selected statements contained in this Annual Report onForm 10-K,, including, without limitation, in “PART I–Item 1.–Business” and “PART II–Item 7.–Management’s Discussion and Analysis of Financial Condition and Results of Operations”,Operations,” constitute “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based, in whole or in part, on management’s beliefs, estimates, assumptions and currently available information and can often be identified by the words “will”, “may”, “designed to”, “outlook”, “believes”, “should”, “plans”, “expects”, “intends”, “estimates” and similar expressions.1995 (the “Act”). These forward-looking statements include, without limitation, statements relating to:

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:

Any forward-looking statements in this Annual Report on Form 10-K are based on current information as of the date of this Form 10-K, and we assume no obligation to correct or update any such statements in the future, except as required by applicable law.

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PART I

Item 1. –— Business

General Overview

Worthington Industries, Inc., an Ohio corporation (individually, the “Registrant” or “Worthington Industries” or, together with its subsidiaries, “Worthington”), is headquartered in Columbus, Ohio. Founded in 1955, Worthington is primarily a diversified metal processing company, focused on value-added steel processing and manufactured metal products, such as metal framing, pressure cylinders, automotive partpast-model service stampings and, through joint ventures, metal ceiling grid systems and laser weldedlaser-welded blanks.

Worthington currentlywas founded in 1955 and as of August 1, 2006, operates 4446 manufacturing facilities worldwide and holds equity positions in eightseven joint ventures, which operate an additional 1715 manufacturing facilities worldwide.

Worthington is headquartered at 200 Old Wilson Bridge Road, Columbus, Ohio 43085, telephone (614) 438-3210. The common shares of Worthington Industries maintains an Internet website at www.worthingtonindustries.com. (This uniform resource locator, or URL,are traded on the New York Stock Exchange under the symbol WOR.

Worthington made changes during the second quarter of the fiscal year ended May 31, 2006 (“fiscal 2006”) to the internal organizational and reporting structure, affecting the composition of its business segments. The Automotive Body Panels reporting segment, consisting of The Gerstenslager Company, which was previously combined with Steel Processing in the Processed Steel Products reportable segment, was moved to the “Other” category and the Processed Steel Products reportable segment was renamed Steel Processing. Dietrich Construction Group was formed and includes Dietrich Building Systems, which was previously included in the Metal Framing reportable segment, Dietrich Residential Construction, and a research and development project in China. Dietrich Construction Group is an inactive textual reference onlynow included in the Construction Services reporting segment, and is not intendedreported in the “Other” category. All segment financial information for the prior periods has been reclassified to incorporate Worthington Industries’ website intoreflect these changes.

Operations are currently reported in three principal reportable segments: Steel Processing, Metal Framing and Pressure Cylinders. All financial information included in this Annual Report on Form 10-K.) We make available, free10-K for periods prior to the second quarter of charge, on or through our website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendmentsfiscal 2006 has been reclassified to those reports filed or furnished pursuant to Section 13(a) or 15(d)reflect the segment changes discussed in the immediately preceding paragraph. The Steel Processing segment consists of the Securities Exchange Act of 1934 (the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).

     We report our operations in three principal business segments: Processed Steel Products, Metal Framing and Pressure Cylinders. The Processed Steel Products segment includes The Worthington Steel Company business unit (“Worthington Steel”) and The Gerstenslager Company business unit (“Gerstenslager”). The Metal Framing segment is comprisedconsists of the Dietrich Industries, Inc.Metal Framing business unit (“Dietrich”). The Pressure Cylinders segment consists of the Worthington Cylinder Corporation business unit (“Worthington Cylinders”). The “Other” category includes the Automotive Body Panels, Construction Services and Steel Packaging operating segments and also includes income and expense items not allocated to the reportable segments.

Worthington holds equity positions in eightseven joint ventures, further identifieddiscussed below under the subheading “Joint Ventures”. Two of our“Joint Ventures.” One joint venture is consolidated while the remaining six joint ventures are consolidated into our consolidated financial statements which are included in “Item 8. – Financial Statements and Supplementary Data.” unconsolidated.

During fiscal 2006, the fiscal year ended May 31, 2004 (“fiscal 2004”), our Processed Steel Products,Processing, Metal Framing and Pressure Cylinders segments served over 1,200, 2,400approximately 1,050, 2,075 and 3,4502,325 customers, respectively, located primarily in the United States. Foreign sales account for less than 10% of consolidated net sales and are comprised primarily of sales to customers in Canada and Europe. No single customer accounts for over 10%5% of our consolidated net sales. Our reportable business segments offer different

Worthington Industries maintains an Internet web site at www.worthingtonindustries.com. This uniform resource locator, or URL, is an inactive textual reference only and is not intended to incorporate Worthington Industries’ web site into this Annual Report on Form 10-K. Annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge, on or through the web site, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).

Recent Developments

On June 13, 2005, Worthington Industries announced that its board of directors had authorized the repurchase of up to 10.0 million of the outstanding common shares of Worthington Industries. The purchases may be made from time to time, on the open market or in private transactions, with consideration given to the market price of the common shares, the nature of other investment opportunities, cash flows from operations and general economic conditions. No repurchases of common shares pursuant to this authorization occurred during fiscal 2006.

On September 27, 2005, Dietrich entered into a joint development agreement with NOVA Chemicals Corporation to evaluate and commercialize novel construction products that combine the structural benefits of light-gauge steel framing with the thermal and moisture retardant properties of expandable polystyrene. On July 20, 2006, Worthington announced that Dietrich had formed a 50:50 joint venture with NOVA Chemicals Corporation that is intended to develop and manufacture durable, energy-saving composite construction products and servicessystems. The joint venture’s current focus is on developing cost-effective insulated metal framing panels intended to remove significant obstacles to using steel framing products for exterior walls in areas where interior/exterior temperature variations may cause condensation.

On September 29, 2005, Worthington Industries amended and restated its $435,000,000 long-term unsecured revolving credit facility. The amended and restated facility provides for an extension of the same customer base.revolving credit commitments to September 2010; replaces the leverage ratio (debt-to-EBITDA) financial covenant with an interest coverage ratio (EBITDA-to-interest expense) financial covenant; and reduces the facility fees payable. Borrowings under the amended and restated facility may be used to fund general corporate purposes including working capital, capital expenditures, acquisitions and dividends. The facility was unused at May 31, 2006.

On October 17, 2005, Worthington acquired the remaining 50% interest in Dietrich Residential Construction, LLC from its partner, Pacific Steel Construction, for $3,773,000 cash and debt assumption of $4,153,000. This acquisition provides panelizing capabilities and further opens the door to United States military housing and residential housing markets.

In November 2005, Dietrich launched the “UltraSTEEL™” drywall metal framing line in Florida. As of May 27, 2004, we signed31, 2006, the “UltraSTEEL™” product line had been introduced into markets in the Southeast and Northeast and machinery conversions were underway to make “UltraSTEEL™” products in the Midwest and Southwest. A license from Hadley Industries PLC (“Hadley”) grants Dietrich the exclusive rights to manufacture and sell metal framing using Hadley’s patented “UltraSTEEL™^” technology in North America. In February 2006, Dietrich entered into an agreementexclusive sublicensing arrangement with Clark-Western, which will become the only other producer of “UltraSTEEL™” metal framing products for the North American market.

On November 30, 2005, Worthington acquired the remaining 40% interest in Dietrich Metal Framing Canada, Inc. from the minority shareholder, Encore Coils Holdings Ltd., for $3,003,000 cash.

On April 25, 2006, Worthington Steel sold its 50% equity interest in Acerex, S.A. de C.V., a joint venture operating a steel processing facility in Monterrey, Mexico, to sell our Decatur facility and its cold-rolling assets to Nucor Corporation (“Nucor”)partner Ternium, S.A. for $82.0 million cash while retaining the slitting and cut-to-length assets and net working capital. $44,604,000 cash.

Steel Processing

The transaction closed effective as of August 1, 2004. For further discussion on this matter, see “Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Processed Steel Products

     Our Processed Steel ProductsProcessing reportable segment consists of two business units,the Worthington Steel and Gerstenslager.business unit. For fiscal 2004,2006, the fiscal year ended May 31, 20032005 (“fiscal 2003”2005”), and the fiscal year ended May 31, 20022004 (“fiscal 2002”2004”), the percentage of consolidated net sales generated by our Processedthe Steel ProductsProcessing segment was 57.7%51.3%, 60.5%58.8%, and 64.9%53.2%, respectively.

     Both Worthington Steel and Gerstenslager areis one of America’s largest independent intermediate processors of flat-rolled steel. Worthington SteelIt occupies a niche in the steel industry by focusing on products requiring exact specifications. These products typically cannot be supplied as efficiently by steel mills or steel end-users. We believe that Worthington

The Steel is one of the largest independent flat-rolled steel processors in the United States. Gerstenslager is a leading independent supplier of automotive quality exterior body panels to the North American automotive original equipmentProcessing segment owns and past model service markets. Gerstenslager’s strength is its ability to handle a large number of past model service and current model production automotive and heavy-duty truck body parts.

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     Our Processed Steel Products segment operates 10eight manufacturing facilities, throughout the United Statesone each located in Alabama, Indiana, Kentucky, Maryland and oneMichigan, and three located in Ohio. The consolidated joint venture, Spartan Steel Coating, LLC (“Spartan”). We serve over 1,200, owns and operates a manufacturing facility in Michigan.

Worthington Steel serves approximately 1,050 customers from these facilities, principally in the automotive, construction, lawn and garden, hardware, furniture, office equipment, electrical control, tubing, leisure and recreation, appliance, farm implement,implements, HVAC, container, and aerospace markets. During fiscal 2004, noNo single customer represented greater than 10%8% of net sales for the segment.Steel Processing segment during fiscal 2006.

Worthington Steel buys coils of steel from major integrated steel mills and mini-mills and processes them to the precise type, thickness, length, width, shape, temper and surface quality required by customer specifications. Our computer-aidedComputer-aided processing capabilities include, among others:

	•		pickling, a chemical process using an acidic solution to remove surface oxide which develops on hot-rolled steel;
	•		slitting, which cuts steel to specific widths;
	•		cold reduction, which achieves close tolerances of thickness and temper by rolling;
	•		hot-dipped galvanizing, which coats steel with zinc and zinc alloys through a hot-dipped process;
	•		hydrogen annealing, a thermal process that changes the hardness and certain metallurgical characteristics of steel;
	•		cutting-to-length, which cuts flattened steel to exact lengths;
	•		tension leveling, a method of applying pressure to achieve precise flatness tolerances for steel;
	•		edging, which conditions the edges of the steel by imparting round, smooth or knurled edges;
	•		CleanCoat™, a dry lubrication process; and
	•		configured blanking, by which steel is stamped into specific shapes.

Worthington Steel also “toll processes”toll processes steel for steel mills, large end-users, service centers, and other processors. Toll processing is different from our typical steel processing because the mill, end-user, or end-userother party retains title to the steel and has the responsibility for selling the end product. Toll processing enhances Worthington’sWorthington Steel’s participation in the market for wide sheet steel and large standard orders, which is a market generally served by steel mills rather than by intermediate steel processors.

     Gerstenslager stamps, assembles, primes and packages exterior automotive body parts and panels. We primarily own theThe steel used in our Gerstenslager operations but occasionally process consigned material, similar to toll processing. Gerstenslager processes a large number of past model service and current model production automotive and heavy-duty truck parts, managing over 3,000 finished good part numbers and over 25,000 die/fixture sets.

     The Processed Steel Productsprocessing industry is fragmented and highly competitive. We compete withThere are many competitors, including other independent intermediate processors and, with respect to automotive stamping, captive processors owned by the automotive companies, independent tier-one suppliers of current model components and a number of smaller competitors. We competeprocessors. Competition is primarily on the basis of product quality, our ability to meet delivery requirements, and price. Our technicalTechnical service and support for material testing and customer specificcustomer-specific applications enhance the quality of our products. However, we have not quantified the extent to which our technical service capability has improved our competitive position. Seeproducts (See “Item 1. – Business – Technical Services.” We believe that ourServices”). However, the extent to which technical service capability has improved Worthington Steel’s competitive position has not been quantified. Worthington Steel’s ability to meet tight delivery schedules is, in part, based on the proximity of our facilities to customers, suppliers, and one another. Again, we have not quantified theThe extent to which plant location has impacted ourWorthington Steel’s competitive position. Our processedposition has not been quantified. Processed steel products are priced competitively, primarily based on market factors, including, among other things, the cost and availability of raw materials, transportation and shipping costs, and overall economic conditions in the United States and abroad.

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     On May 27, 2004, we entered into an agreement to sell our Decatur, Alabama, facility and its cold rolling assets to Nucor Corporation. This transaction closed on August 1, 2004. For further discussion on this matter, see “Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operation”.

     We use our “Worthington Steel” and “Gerstenslager” trade names in our Processed Steel Products segment, and we use the unregistered trademark “CleanCoat™” in connection with our dry lubrication process. We intend to continue the use of our intellectual property. The “CleanCoat™” trademark is important to our Processed Steel Products segment, but we do not consider it material.

Metal Framing

     OurThe Metal Framing reportable segment, consistsconsisting of onethe Dietrich Metal Framing business unit, Dietrich, which designs and produces metal framing components and systems and related accessories for the commercial and residential construction markets within the United States.States and Canada. For fiscal 2004,2006, fiscal 20032005, and fiscal 2002,2004, the percentage of consolidated net sales generated by ourthe Metal Framing segment was 27.8%27.5%, 24.3%27.4%, and 17.5%27.4%, respectively.

     Our Metal Framing products include steel studs and track, floor and wall system components, roof trusses and other metal framing accessories. Some of our specific products include “TradeReady®” Floor Systems, “Spazzer®” bars, “Clinch-On®”building product accessories, such as metal corner bead, lath, lath accessories, clips, fasteners and trimvinyl beads and “Ultra Span®trim.

In November 2005, Dietrich successfully launched its “UltraSTEEL™” trusses through our unconsolidated joint venture, Aegis Metal Framing, LLC (“Aegis”).drywall metal framing product line in Florida. The “UltraSTEEL™” product line is being readily accepted by architects, engineers and material specifiers for its performance capabilities and by contractors for its ease of use. As of May 31, 2006, “UltraSTEEL™” had also been introduced into additional markets in the Southeast and Northeast and machinery conversions were underway to make “UltraSTEEL™” products in the Midwest and Southwest for sales in those markets. In February 2006, Dietrich entered into an exclusive sublicensing agreement with Clark-Western, which will become the only other producer of “UltraSTEEL™” metal framing products for the North American market.

     OurThe Metal Framing segment has 2723 operating facilities located throughout the United States. We believe that States: one each in Colorado, Georgia, Hawaii, Illinois, Kansas, Maryland, Massachusetts, New Jersey, South Carolina and Washington; two each in Arizona, California, Indiana, Ohio and Texas; and three in Florida. This segment also has three operating facilities in Canada: one each in British Columbia, Ontario and Quebec.

Dietrich is the largest national supplier of metal framing productsmanufacturer in the United States, supplying between 40% and supplies, supplying approximately halfAssumed to be a 1.25-1.3B market.45% of the metal framing products and accessories sold in the United States. We have over 2,400Dietrich is the second largest metal framing manufacturer in Canada with a market share of between 15% and 20%. Dietrich serves approximately 2,075 customers, primarily consisting of wholesale distributors, commercial and residential building contractors, and big box material retailers.mass merchandisers. During fiscal 2004,2006, Dietrich’s two largest customers represented 26%approximately 15% and 12%, respectively, of the net sales for the segment, while no other customer represented more than 4%5% of net sales for the segment.

The light gaugelight-gauge metal framing industry is very competitive. We competeDietrich competes with fiveseven large regional or national competitors and numerous small, more localized competitors. We competecompetitors, primarily on the basis of quality, service and price. Similar to our ProcessedAs is the case in the Steel ProductsProcessing segment, the proximity of our facilities to our customers and their project sites provides us with a service advantage and impacts our freight and shipping costs. OurThe products sold are transported almost exclusively by both common carrier. We have not quantified theand dedicated carriers. The extent to which facility location has impacted ourDietrich’s competitive position.position has not been quantified.

Dietrich uses numerous trademarks and patents in its business. Dietrich licenses from Hadley the registered trademarks “Spazzer®”, “TradeReady®“UltraSTEEL™” trademark and “Clinch-On®.the United States and Canadian patents to manufacture “UltraSTEEL™” metal framing and accessory products. The “Spazzer®” trademark is used in connection with wall component products that are the subject of twofour United States patents, fourone foreign patent, one pending United States patent applicationsapplication, and several pending foreign patent applications. The trademark “TradeReady®” is used in connection with floor systemfloor-system products that are the subject of twofour United States patents, threeseventeen foreign patents, threeone pending United States patent applicationsapplication, and five pending foreign patent applications. The “Clinch-On®” trademark is used east of the Rockies in connection with corner bead and metal trim products for gypsum wallboard that are subjectwallboard. Dietrich licenses the “SLP-TRK®” trademark as well as the patent to manufacture “SLP-TRK®” slotted track in the United States patents.from Brady Construction Innovations, Inc. Aegis Metal Framing, LLC, an unconsolidated joint venture, uses the “Ultra-Span®” registered trademark in connection with certain patents for proprietary roof trusses. We intendDietrich intends to continue to use and renew each of ourthese registered trademarks. Dietrich also has a number of other patents and trade names relating to specialized products. Although trademarks, trade names and patents are important to our Metal Framing segment, none is considered material.

Pressure Cylinders

     OurThe Pressure Cylinders segment consists of onethe Worthington Cylinders business unit, Worthington Cylinders.unit. For fiscal 2004,2006, fiscal 2003,2005, and fiscal 2002,2004, the percentage of consolidated net sales generated by Worthington Cylinders was 13.8%15.9%, 14.5%13.3%, and 16.8%13.8%, respectively.

Worthington Cylinders operates sixeight manufacturing facilities,facilities: three in Ohio, one in Wisconsin, and one each in Austria, Canada, and Portugal. The segment also operates one consolidated joint venture, Worthington Cylinders a.s., in the Czech Republic.Republic, and Portugal.

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     OurThe Pressure Cylinders segment produces a diversified line of pressure cylinders, including low-pressure liquefied petroleum gas (“LPG”) and refrigerant gas cylinders and high-pressure and industrial/specialty gas cylinders. Our LPG cylinders are sold to manufacturers, distributors and/orand mass merchandisers and are used for gas barbecue grills, recreational vehicle equipment, residential heating systems, industrial forklifts, propane-fueled camping equipment, hand torches, and commercial/residential cooking (the latter, generally outside North America).

Refrigerant gas cylinders are sold primarily to major refrigerant gas producers and distributors and are used to hold refrigerant gases for commercial and residential air conditioning and refrigeration systems and for automotive air conditioning systems. High-pressure and industrial/specialty gas cylinders are sold primarily to gas producers and distributors as containers for gases used in: cutting and welding metals; breathing (medical, diving and firefighting); semiconductor production; beverage delivery; and compressed natural gas systems. Worthington Cylinders also produces recovery tanks for refrigerant gases, air reservoirs for truck and trailer original equipment manufacturers, and non-refillable cylinders for “Balloon Time®Time^®” helium kits.kits which include non-refillable cylinders. While a large percentage of our cylinder sales are made to major accounts, Worthington Cylinders has over 3,450approximately 2,325 customers. During fiscal 2004, one2006, no single customer represented more than 9% of net sales for the segment, while no other single customer represented more than 6% of net sales for the segment.

Worthington Cylinders’ primaryCylinders produces low-pressure cylinder products are steel cylinders with refrigerant gas capacities of 15 to 1,000 lbs. and steel and aluminum cylinders with LPG capacities of 4-1/414.1 oz. to 420 lbs. In the United States and Canada, our high-pressure and low-pressure cylinders are manufactured in accordance with U.S. Department of Transportation and Transport Canada safety requirements, respectively. Outside the United States and Canada, we manufacture cylinders according to European Union specifications, as well as various other international requirements and standards. Low-pressure cylinders are produced by precision stamping, drawing, and welding and/or brazing component parts to customer specifications. They are then tested, painted and packaged, as required. Our high-pressureHigh-pressure steel cylinders are manufactured by several processes, including deep drawing, tube spinning and billet piercing. In the United States and Canada, high-pressure and low-pressure cylinders are primarily manufactured in accordance with U.S. Department of Transportation and Transport Canada specifications. Outside the United States and Canada, cylinders are manufactured according to European norm specifications, as well as various other international standards.

In the United States and Canada, Worthington Cylinders has one principal domestic competitor in the low-pressure non-refillable refrigerant market, one principal domestic competitor in the low-pressure LPG cylinder market, and two principal domestic competitors andin the high-pressure cylinder market. There are also several smaller foreign competitors in its major low-pressure cylinder markets; however we believethese markets. Worthington Cylinders believes that we haveit has the largest domestic market share.share in both low-pressure cylinder markets. In ourthe European high-pressure cylinder market, we compete against two principal domestic competitorsthere are several competitors. Worthington Cylinders believes that it is a leading producer in both the high-pressure cylinder and nine European competitors. We believe that we have the leading market share of the European industrial gaslow-pressure non-refillable cylinder market and the European non-refillable refrigerant cylinder market.markets in Europe. As with ourWorthington’s other segments, we competecompetition is on the basis of service, price and quality.

     OurThe Pressure Cylinders segment uses the trade name “Worthington Cylinders” to conduct business and the registered trademark “Balloon Time®Time^®” to market our low-pressure helium balloon kits. We intendkits and intends to continue to use and renew ourthis registered trademark. We also hold domestic and foreign patents applicable to the non-refillable valve used for our refrigerant cylinders. This intellectual property is important to ourthe Pressure Cylinders segment but is not considered material.

Other

The “Other” category consists of reporting segments that do not meet the materiality tests for purposes of separate disclosure and other corporate related entities. These reporting segments are Automotive Body Panels, Construction Services and Steel Packaging, which includes the Worthington Steelpac business unit (“Steelpac”).

The Automotive Body Panels reporting segment, consisting of the Gerstenslager business unit, provides stamping, blanking, assembly, painting, packaging, die management, warehousing, distribution management and other services to customers, primarily in the automotive industry. Gerstenslager is a major supplier to the automotive past-model market and manages more than 3,000 finished good part numbers and more than 11,000 stamping dies/fixture sets for the past- and current-model year automotive and truck manufacturers, both domestic and transplant.

The Construction Services reporting segment consists of Dietrich Building Systems, which designs and builds mid-rise light-gauge steel framed commercial structures and multi-family housing units; Dietrich Residential Construction, which is involved in the supply and construction of metal framing products for, and in the framing of, single family housing, with a focus on military; and a mid-rise light-gauge steel framed construction project in China entered into primarily for research and development purposes.

Steel Packaging consists of Steelpac, which is an ISO-9001: 2000 certified manufacturer of engineered, recyclable steel shipping solutions, designs and manufactures reusable custom crates, racks, and pallets made of steel for supporting, protecting and handling products throughout the shipping process for industries such as automotive, lawn and garden and recreational vehicles.

Segment Financial Data

Financial information for ourthe reportable segments is provided in “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note H – Industry Segment Data.”

Financial Information About Geographic Areas

Foreign operations and exports represent less than 10% of our production and consolidated net sales. Summary information about our foreign operations is set forth in “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note A – Summary of Significant Accounting Policies – Risks and Uncertainties.” For fiscal 20042006 and fiscal 2003, we2005, Worthington had operations in North America and Europe, andwhile prior years also included operations in South America. Net sales by geographic region are provided in “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note H – Industry Segment Data.”

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Suppliers

In fiscal 2004, we2006, Worthington purchased over 3.5approximately four million tons of steel for use as raw material for our Processedon a consolidated basis. Steel Products, Pressure Cylinders and Metal Framing segments. We purchase steelis purchased in large quantities at regular intervals from major primary producers, both domestic and foreign. In our Processedthe Steel ProductsProcessing segment, westeel is primarily purchasepurchased and process steelprocessed based on specific customer orders and do not typically purchase steel for inventory. Ourorders. The Metal Framing and Pressure Cylinders segments purchase steel to meet our production schedules. Our rawRaw materials are generally purchased in the open market on a negotiated spot marketspot-market basis at prevailing market prices, weprices. Supply contracts are also enterentered into, long-term contracts, some of which have fixed pricing. During fiscal 2004, our2006, major suppliers of steel were, in alphabetical order: Gallatin Steel Company; International Steel Group; Ispat Inland, Inc.;Mittal Steel; North Star BlueScope Steel LLC; Nucor Corporation; SeverstalSeverStal North America, Inc.; US Steel Corporation; and WCI Steel, Inc. Alcoa, Inc. was ourthe primary aluminum supplier for ourthe Pressure Cylinders segment in fiscal 2004. We believe that our2006. Worthington believes its supplier relationships are good.

Technical Services

     We employWorthington employs a staff of engineers and other technical personnel and maintain fully equippedmaintains fully-equipped modern laboratories to support our operations. These facilities enable us to verify, analyzeverification, analysis and documentdocumentation of the physical, chemical, metallurgical, and mechanical properties of our raw materials and products. Technical service personnel also work in conjunction with ourthe sales force to determine the types of flat-rolled steel required for our customers’ particularcustomer needs. Additionally, technical service personnel design and engineer metal framing structures and provide sealed shop drawings to the building construction markets. To provide these services, we maintainWorthington maintains a continuing program of developmental engineering with respect to theproduct characteristics and performance of our products under varying conditions. Laboratory facilities also perform metallurgical and chemical testing as dictated by the regulations of the U.S. Department of Transportation, Transport Canada, and other associated agencies, along with International Organization for Standardization (ISO), and customer requirements. All design work complies with current local and national building code requirements. Our ICBOIAS (International Conference of Building Officials)Accreditations Service, Incorporated) accredited product-testing laboratory supports these design efforts.

Seasonality

Our financial results are generally lower in the third quarter of our fiscal year, primarily due to reduced activity in the building and construction industry as a result of the weather, as well as customer plant shutdowns in the automotive industry due to holidays.

Employees

As of May 31, 2004, we2006, Worthington employed approximately 6,7008,200 employees in ourits operations, excluding the unconsolidated joint ventures, approximately 11% of whom were covered by collective bargaining agreements. We believe that we haveagreements, including those at the Hammond facility as discussed below. Worthington believes it has good relationships with our employees.its employees in general, including those covered by collective bargaining agreements. However, the union employees at the Dietrich facility in Hammond, Indiana have been on strike since May 5, 2006, as the parties have not reached

agreement on a new contract covering the facility. The Hammond facility has continued to operate during this time period at approximately 90% of pre-strike production levels.

Joint Ventures

As part of oura strategy to selectively develop new products, markets, and technological capabilities and to expand ouran international presence, while mitigating the risks and costs associated with those activities, we participateWorthington participates in twoone consolidated and six unconsolidated joint ventures.

Consolidated

Unconsolidated

 Unconsolidated

See “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note J – Investments in Unconsolidated Affiliates” for further information about Worthington’s participation in unconsolidated joint ventures.

Environmental Regulation

     OurWorthington’s manufacturing facilities, generally in common with those of similar industries making similar products, are subject to many federal, state and local requirements relating to the protection of the environment. WeWorthington continually examineexamines ways to reduce emissions and waste and to decrease costs related to environmental compliance. We do not anticipate thatThe cost of compliance or capital expenditures for environmental control facilities required to meet environmental requirements willare not anticipated to be material when compared with our overall costs and capital expenditures and, accordingly, willare not anticipated to have a material effect on our financial position, results of operations or cash flows, or the competitive position of the Company.

Item 1A. — Risk Factors

Future results and the market price for Worthington Industries’ common shares are subject to numerous risks, many of which are driven by factors that cannot be controlled or predicted. The following discussion, as well as other sections of this Annual Report on Form 10-K, including “Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations,” describe certain business risks. Consideration should be given to the risk factors described below as well as those in the Safe Harbor Statement at the beginning of this Form 10-K, in conjunction with reviewing the forward-looking statements and other information contained in this Form 10-K.

Raw Material Prices

Our future operating results may be affected by fluctuations in raw material prices.Our principal raw material is flat-rolled steel, which we purchase from multiple primary steel producers. The steel industry as a whole is very cyclical, and at times availability and pricing can be volatile due to a number of factors beyond our control. These factors include general economic conditions, domestic and worldwide demand, curtailed production at major mills due to factors such as equipment breakdowns, repairs or catastrophic events, labor costs or problems, competition, import duties, tariffs, energy costs, availability and cost of steel inputs (e.g. ore, scrap, coke, energy, etc.), currency exchange rates and those other factors described under “Raw Material Availability.” This volatility can significantly affect our steel costs. In an environment of increasing prices for steel and other raw materials, competitive conditions may impact how much of the price increases we can pass on to our customers and to the extent we are unable to pass on future price increases in our raw materials to our customers, our financial results could be adversely affected. Also, if steel prices in general decrease, competitive conditions may impact how quickly we must reduce our prices to our customers and we could be forced to use higher-priced raw materials to complete orders for which the sales prices have decreased.

Raw Material Availability

The costs of manufacturing our products and the ability to supply our customers could be negatively impacted if we experience interruptions in deliveries of needed raw materials or supplies.If for any reason our supply of flat-rolled steel or other key raw materials, such as aluminum and zinc, is curtailed or we are otherwise unable to obtain the quantities we need at competitive prices, our business could suffer and our financial results could be adversely affected. Such interruptions might result from a number of factors including events such as a shortage of capacity in the supplier base or of the raw materials, energy or the inputs needed to make steel or other supplies, financial difficulties of suppliers, significant events affecting their facilities, significant weather events, those factors listed under “Raw Material Prices” or other factors beyond our control. Further, the number of suppliers has decreased in recent years due to industry consolidation and the financial difficulties of certain suppliers, and consolidation may continue. Accordingly, if delivery from a major supplier is disrupted, it may be more difficult to obtain an alternative supply than in the past.

Inventories

Our business could be harmed if we fail to maintain proper inventory levels.We are required to maintain substantial inventories to accommodate the needs of our customers, including in many cases, short lead times and just-in-time delivery requirements. Although we typically have customer orders in hand prior to placement of our raw material orders for Steel Processing, we anticipate and forecast customer demand for all business segments. We purchase raw materials on a regular basis in an effort to maintain our inventory at levels that we believe are sufficient to satisfy the anticipated needs of our customers based upon orders, customers volume expectations, historic buying practices and market conditions. Inventory levels in excess of customer demand may result in the use of higher-priced inventory to fill orders reflecting lower sales prices, if steel prices have significantly decreased. These events could adversely affect our financial results. Conversely, if we underestimate demand for our products or if our suppliers fail to supply quality products in a timely manner, we may experience inventory shortages. Inventory shortages might result in unfilled orders, negatively impact customer relationships, and result in lost revenues, any of which could harm our business and adversely affect our financial results.

Economic or Industry Downturns

Downturns or weakness in the economy in general or in key industries, such as commercial construction or automotive, may adversely affect our customers, which may cause the demand for our products and services to decline and adversely affect our financial results.Many of our customers are in industries and businesses that are cyclical in nature and affected by changes in general economic conditions or conditions specific to their respective markets, such as the commercial construction and automotive industries. Product demand in our customer’s end markets is based on numerous factors such as interest rates, general economic conditions, consumer confidence, and other factors beyond our control. Downturns in demand from the commercial construction industry, the automotive industry or any of the other industries we serve, or a decrease in the margins that we can realize from sales of our products to customers in any of these industries, could adversely affect our financial results.

Reduced commercial construction activity, especially office building, could negatively impact our financial results. The commercial construction market is a key end market with approximately 41% of our net sales going to that market in fiscal 2006. If commercial construction activity in the United States, in general, or by one or more of our major customers, in particular, were to be reduced significantly, it could negatively affect our sales and financial results.

Reduced automotive/truck production and the financial difficulties of customers in this market could negatively impact our financial results. The automotive and truck market remains a key customer group with approximately 33% of our net sales derived from that market in fiscal 2006. Total domestic automotive production in fiscal 2006 was at a relatively high level on an historical basis. If domestic automotive production, in general, or by one or more of our major domestic customers, in particular, were to be reduced significantly, it could negatively affect our sales and financial results.

The financial difficulties and internal strategies of customers could adversely affect us.A portion of our business is highly dependent on automotive manufacturers, many of which have publicly announced plans to reduce production levels and eliminate excess manufacturing capacity including plans to eliminate jobs and reduce costs. The financial difficulties of certain customers and the efforts under way by our customers to improve their overall financial condition could result in numerous changes that are beyond our control, including additional unannounced customer plant closings, decreased production, changes in product mix or distribution patterns, volume reductions, labor disruptions, changes or disruptions in our accounts receivable, mandatory reductions or other unfavorable changes in our pricing, terms or service conditions or market share losses, as well as other changes we may not accurately anticipate. These events could adversely impact our financial results.

The loss of significant volume from key customers could adversely affect us.In fiscal 2006, our largest customer accounted for approximately 5% of our gross sales, and our ten largest customers accounted for approximately 25% of our gross sales. A significant loss of or decrease in business from customers could have an adverse effect on our sales and financial results if we cannot obtain replacement business. Also, due to consolidation in the industries we serve, including the commercial construction, automotive and retail industries, our gross sales may be increasingly sensitive to deterioration in the financial condition of, or other adverse developments with respect to, one or more of our top customers.

Competition

Our business is highly competitive, and increased competition could negatively impact our financial results. Generally, the markets in which we conduct business are highly competitive. Competition for most of our products is primarily on the basis of product quality, ability to meet delivery requirements, and price. Increased competition could cause us to lose market share, increase expenditures, lower our margins or offer additional services at a higher cost to us, which could adversely impact our financial results.

Material Substitution

In certain applications, steel competes with other materials, such as aluminum (particularly in the automobile industry), cement and wood (particularly in the construction industry), composites, glass and plastic.Prices of all of these materials fluctuate widely and differences between them and steel prices may adversely affect

demand for our products and/or encourage substitution, which could adversely affect prices and demand for steel products.

Freight and Energy

The availability and cost of freight and energy, such as electricity, natural gas, and diesel fuel, is important in the manufacture and transport of our products.Our operating costs increase when energy costs rise. During periods of increasing freight and energy costs, we might not be able to fully recover our operating cost increases through price increases without reducing demand for our products. Our financial results could be adversely affected if we are unable to pass all of the increases on to our customers or if we are unable to obtain the necessary freight and energy.

Information Systems

We are subject to information system security risks and systems integration issues that could disrupt our internal operations.We are dependent upon information technology for the distribution of information internally and also to our customers and suppliers. This information technology is subject to damage or interruption from a variety of sources, including but not limited to computer viruses, security breaches and defects in design. There also could be system or network disruptions if new or upgraded business management systems are defective or are not installed properly. We are currently in the process of implementing a new software-based enterprise resource planning system (“ERP”). For more information related to the new ERP, see “Part II – Item 9A. – Controls and Procedures – New ERP System.” Various measures have been implemented to manage our risks related to information system and network disruptions, but a system failure or failure to implement new systems properly could negatively impact our operations and financial results.

Business Disruptions

Disruptions to our business or the business of our customers or suppliers, could adversely impact our operations and financial results.Business disruptions, including increased costs for or interruptions in the supply of energy or raw materials, resulting from severe weather events such as hurricanes, floods, blizzards, from casualty events, such as fires or material equipment breakdown, from acts of terrorism, or from other events such as required maintenance shutdowns, can cause interruptions to our businesses as well as the operations of our customers and suppliers. Such interruptions can have an adverse effect on our operations and financial results.

Foreign

Economic, political and other risks associated with foreign operations could adversely affect our international financial results.Although the majority of our business activity takes place in the United States, we derive a portion of our revenues and earnings from operations in foreign countries, and are subject to risks associated with doing business internationally. Our sales originating outside the United States represented approximately 10% of our consolidated net sales in fiscal 2006. We have wholly-owned facilities in Austria, Canada, the Czech Republic, and Portugal and joint venture facilities in China, France, Mexico, Spain and the United Kingdom. The risks of doing business in foreign countries include the potential for adverse changes in the local political climate, in diplomatic relations between foreign countries and the United States or competitive position.

maintains a warehouse in Columbus, Ohio. ThisIn addition, the segment also includes Spartan, oura consolidated joint venture which owns and operates a manufacturing facility in Michigan.

Metal Framing

The Metal Framing segment operates 27 facilities. These26 manufacturing facilities: 23 in the United States and three in Canada. In the United States, these facilities are located in Arizona (2), California (2), Colorado, Florida (4)(3), Georgia, (2), Hawaii, Illinois, Indiana (3)(2), Kansas, Maryland, Massachusetts, New Jersey, Ohio (3)(2), South Carolina, Texas (2), and Washington. The facilities in Canada are located in British Columbia, Ontario and Quebec. Of these facilities, 1312 are leased and 14 are owned. This segment also leases administrative offices in Pittsburgh and Blairsville, Pennsylvania.

Pressure Cylinders

The Pressure Cylinders segment operates six fully-owned,eight manufacturing facilities. TheseThe manufacturing facilities are located in Ohio (3), Austria, Canada, and Portugal. This segment alsothe Czech Republic are all owned, and the manufacturing facilities located in Wisconsin and Portugal are leased.

Other

Steelpac operates an owned,one leased manufacturing facility located in Pennsylvania. Gerstenslager owns and operates two manufacturing facilities, both located in Ohio. Construction Services has administrative offices in Ohio, Tennessee and China.

Joint Ventures

The Spartan consolidated joint venture facility in the Czech Republicowns and leases aoperates one manufacturing facility in Portugal.

Joint Ventures

     OurMichigan which is included in the Steel Processing segment. The unconsolidated joint ventures operate 1714 manufacturing facilities, including those mentioned above. These facilities are located in Ohio, Indiana, Maryland, Michigan (4)(3), Missouri, Nevada and PennsylvaniaOhio, domestically, and in China, the Czech Republic, France, Mexico (2), Spain, and the United Kingdom. Ten of these facilities are leased, and seven are owned, three of which are subject to mortgages in favor of the joint venture’s lender. See “Item 1. – Business – Joint Ventures.”

Item 3. –— Legal Proceedings

Various legal actions, which generally have arisen in the ordinary course of business, are pending against Worthington. None of this pending litigation, individually or collectively, is expected to have a material adverse effect on Worthington.

Item 4.– — Submission of Matters to a Vote of Security Holders

     None.None

7

Supplemental Item. –— Executive Officers of the RegistrantRegistrant.

The following table lists the names, positions held and ages of the Registrant’s executive officers as of May 31, 2004:

     Richard G. Welch has served as Controller of Worthington Industries since March 2000 and as its Assistant Controller from September 1999 to March 2000. Before joining Worthington Industries, Mr. Welch served in various accounting and financial reporting capacities with Time Warner Cable, a distributor of cable programming, including Assistant Controller from March 1999 through September 1999.

     Randal I. Rombeiro has served as Treasurer of Worthington Industries since November 2002 and as Assistant Treasurer from 1999 through November 2002. Before joining Worthington Industries, Mr. Rombeiro served as Assistant Treasurer with Mettler-Toledo International, Inc., a global supplier of precision instruments and services, from 1998 to 1999.

Executive officers serve at the pleasure of the directors.directors of the Registrant. There are no family relationships among any of the Registrant’s executive officers or directors. No arrangements or understandings exist pursuant to which any individual has been, or is to be, selected as an executive officer.

PART II

Item 5. — –Market for Registrant’s Common Equity, Related ShareholderStockholder Matters, and Issuer Purchases of Equity Securities

The common shares of Worthington Industries, Inc. (“Worthington Industries”) trade on the New York Stock Exchange (“NYSE”) under the symbol “WOR” and are listed in most newspapers as “WorthgtnInd.” As of June 30, 2004,August 1, 2006, Worthington Industries had 8,718approximately 8,200 registered shareholders. The following table sets forth (i) the low and high and closing prices and the closing price for Worthington Industries’ common shares for each quarter of fiscal 20032005 and fiscal 2004,2006, and (ii) the cash dividends per share paiddeclared on Worthington Industries’ common shares during each quarter of fiscal 20032005 and fiscal 2004.

Dividend Policy2006.

Item 6. - Selected Financial Data