Worthington Industries (WOR) 8-K Worthington Reports Second Quarter Fiscal 2016 Results

Exhibit 99.1

Worthington Reports Second Quarter Fiscal 2016 Results

COLUMBUS, Ohio, December 16, 2015 – Worthington Industries, Inc. (NYSE: WOR) today reported net sales of $699.8 million and net earnings of $23.2 million, or $0.36 per diluted share, for its fiscal 2016 second quarter ended November 30, 2015, which included pre-tax impairment and restructuring charges totaling $24.5 million, which reduced earnings per diluted share by $0.24.  Impairment and restructuring charges in the current quarter related primarily to the write-down of certain long-lived assets within the Oil & Gas Equipment business. In the second quarter of fiscal 2015, the Company reported net sales of $871.0 million and net earnings of $29.5 million, or $0.43 per diluted share.  Net earnings in the second quarter of the prior year included pre-tax impairment and restructuring charges, which reduced earnings per diluted share by $0.12.

Financial highlights for the current and comparative periods are as follows:

(U.S. dollars in millions, except per share data)

	2Q 2016		1Q 2016		2Q 2015		6M2016		6M2015
Net sales	$	699.8	$	758.1	$	871.0	$	1,457.9	$	1,733.4
Operating income		12.0		31.0		33.2		43.0		85.4
Equity income		29.2		26.6		22.3		55.8		50.2
Net earnings		23.2		31.4		29.5		54.7		73.6
EPS, diluted	$	0.36	$	0.48	$	0.43	$	0.84	$	1.06

"We had a solid performance for the quarter in the face of some market weakness," said John McConnell, Chairman and CEO. "We have responded to the softer markets by lowering manufacturing costs to help improve results in those businesses."  McConnell added, "The majority of our joint ventures delivered good results in the quarter."

Consolidated Quarterly Results

Net sales for the second quarter of fiscal 2016 were $699.8 million, down 19.7% from the comparable quarter in the prior year, when net sales were $871.0 million. The decrease was the result of lower volume in nearly all business segments, combined with lower average selling prices in Steel Processing driven by the market decline in steel prices and in Engineered Cabs due to product mix.

Gross margin declined $16.0 million from the prior year quarter to $109.2 million due to lower volume, partially offset by lower manufacturing expenses and a favorable pricing spread.

Operating income for the current quarter was $12.0 million, a decrease of $21.2 million from the prior year quarter.  In addition to the lower gross margin, operating income in the current quarter was negatively impacted by higher impairment and restructuring charges, totaling $24.5 million, but partially offset by lower SG&A expenses.   The impairment and restructuring charges resulted primarily from the write-down of certain long-lived assets within Pressure Cylinders' Oil & Gas Equipment business and the closure of Steel Processing's stainless steel business.

Interest expense was $7.8 million for the current quarter, compared to $9.7 million in the comparable period of the prior year.  The decrease resulted from lower average debt levels, partially due to the lower market price of steel, which favorably impacts working capital.

The Company's portion of equity income from unconsolidated joint ventures increased $6.9 million from the prior year quarter to $29.2 million.  Joint venture sales totaled $389.2 million for the current quarter.  Higher contributions from the WAVE, ClarkDietrich and ArtiFlex joint ventures were partially offset by lower earnings at Serviacero and WSP.  Equity income from ClarkDietrich was favorably impacted by $4.0 million due to a legal settlement.  The Company received cash distributions of $18.9 million from unconsolidated joint ventures during the quarter.

Income tax expense was $8.8 million in the current quarter compared to $15.6 million in the comparable quarter in the prior year.  The decrease was primarily due to lower net earnings.  The current quarter tax expense reflected an estimated annual effective rate of 31.2% compared to 33.5% for the prior year quarter.

Balance Sheet

At quarter-end, total debt was $629.4 million, down $41.3 million from May 31, 2015, due to lower short-term borrowings.  As of November 30, 2015, $25.2 million was drawn on the Company's $500 million revolving credit facility and $20.0 million was outstanding under the Company's trade accounts receivable securitization facility.  The Company had $27.4 million of cash at quarter-end.

Quarterly Segment Results

Steel Processing's net sales of $467.8 million were down 15%, or $84.9 million, from the comparable prior year quarter as the additional sales from the January 2015 Rome Strip Steel acquisition were more than offset by lower volume and lower average selling prices.  Operating income of $26.6 million was $7.2 million lower than the prior year quarter due primarily to lower volume that was partially offset by lower manufacturing expenses.

Pressure Cylinders' net sales of $201.2 million were down 20%, or $51.6 million, from the comparable prior year quarter driven primarily by a 65% volume decrease in Oil & Gas Equipment business and the May 2015 disposition of our Mississippi facility.  The operating loss of $10.3 million was $19.9 million lower than the prior year operating income of $9.6 million primarily due to higher impairment charges coupled with a decline in the Oil & Gas Equipment business, which were partially offset by improvements in Industrial and Consumer Products.

Engineered Cabs' net sales of $28.7 million were $22.8 million, or 44%, below the prior year quarter due to declines in market demand, the January 2015 sale of the assets of Advanced Component Technologies, Inc., and the September 2015 closure of the Florence, South Carolina facility.  The operating loss in the current quarter decreased $1.3 million to $4.3 million as manufacturing and SG&A expenses were reduced to match the lower demand.

The "Other" category includes the Construction Services and Energy Innovations businesses, as well as non-allocated corporate expenses.  Net sales in the "Other" category were $2.1 million, a decrease of $11.8 million from the prior year quarter as the Construction Services business has been substantially wound down.  The Construction Services business reported a $0.2 million loss for the quarter.

Recent Business Developments

· On December 7, 2015, the Company completed the acquisition of the global CryoScience business of Taylor Wharton, including a manufacturing facility in Theodore, Ala. for $31.4 million. The asset purchase was made pursuant to the Chapter 11 bankruptcy proceedings of Taylor Wharton.

· During the quarter, the Company repurchased a total of 1,500,000 common shares for $43.9 million at an average price of $29.26.

· On December 16, 2015, the Board of Directors declared a quarterly dividend of $0.19 per share payable on March 29, 2016 to shareholders of record on March 15, 2016.

Outlook

"Our legacy businesses are performing well despite some market softness and challenging conditions in steel pricing," McConnell said.  "We remain committed to growing our Company and adding value to our shareholders investment in us."

Conference Call

Worthington will review fiscal 2016 second quarter results during its quarterly conference call on December 17, 2015, at 10:30 a.m., Eastern Time.  Details regarding the conference call can be found on the Company web site at www.WorthingtonIndustries.com.

About Worthington Industries

Worthington Industries is a leading global diversified metals manufacturing company with 2015 fiscal year sales of $3.4 billion.  Headquartered in Columbus, Ohio, Worthington is North America's premier value-added steel processor providing customers with wide ranging capabilities, products and services for a variety of markets including automotive, construction and agriculture; a global leader in manufacturing pressure cylinders for industrial gas and cryogenic applications, CNG and LNG storage, transportation and alternative fuel tanks, oil and gas equipment, and brand consumer products for camping, grilling, hand torch solutions and helium balloon kits; and a manufacturer of operator cabs for heavy mobile industrial equipment; laser welded blanks for light weighting applications; automotive racking solutions; and through joint ventures, complete ceiling grid solutions;  automotive tooling and stampings; and steel framing for commercial construction.  Worthington employs approximately 10,000 people and operates 83 facilities in 11 countries. 

Founded in 1955, the Company operates under a long-standing corporate philosophy rooted in the golden rule. Earning money for its shareholders is the first corporate goal. This philosophy serves as the basis for an unwavering commitment to the customer, supplier, and shareholder, and as the

Company's foundation for one of the strongest employee-employer partnerships in American industry.

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 outlook, strategy or business plans;  the ability to correct performance issues at operations;  future or expected growth, forward momentum,  performance, sales, volumes, cash flows, earnings, balance sheet strengths, debt, financial condition or other financial measures; projected profitability potential, capacity, and working capital needs; demand trends for the Company or its markets; additions to product lines and opportunities to participate in new markets; pricing trends for raw materials and finished goods and the impact of pricing changes; anticipated capital expenditures and asset sales; anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing and the supply chain and the results thereof; the ability to make acquisitions and the projected timing, results, benefits, costs, charges and expenditures related to acquisitions, newly-created joint ventures, headcount reductions and facility dispositions, shutdowns and consolidations; the alignment of operations with demand; the ability to operate profitably and generate cash in down markets; the ability to maintain margins and 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; expected benefits from transformation plans, cost reduction efforts and other new initiatives; expectations for increasing volatility or improving and sustainable earnings, earnings potential, margins or shareholder value; effects of judicial rulings 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 effect of national, regional and worldwide economic conditions generally and within major product markets, including a recurrent slowing economy; the effect of conditions in national and worldwide financial markets; 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; 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 other 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 industry 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, acts of war or 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 exposure and the acceptance of our products in these markets; the ability to improve and maintain processes and business practices to keep pace with the economic, competitive and technological environment; the outcome of adverse claims experience with respect to workers' compensation, product recalls or product liability, casualty events or other matters; deviation of actual results from estimates and/or assumptions used by the Company in the application of its significant accounting policies; 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 Securities and Exchange Commission and other governmental agencies as contemplated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the effect of changes to healthcare laws in the United States which may increase our healthcare and other costs and negatively impact our operations and financial results; 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 our Annual Report on Form 10-K for the fiscal year ended May 31, 2015.

###

WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2015			2014			2015			2014
Net sales	$	699,816		$	871,012		$	1,457,963		$	1,733,426
Cost of goods sold		590,637			745,789			1,235,768			1,478,696
Gross margin		109,179			125,223			222,195			254,730
Selling, general and administrative expense		72,722			77,308			148,673			152,563
Impairment of long-lived assets		22,962			14,235			25,962			16,185
Restructuring and other expense		1,523			488			4,592			588
Operating income		11,972			33,192			42,968			85,394
Other income (expense):
Miscellaneous income		996			1,220			418			1,543
Interest expense		(7,799	)		(9,676	)		(15,653	)		(19,192	)
Equity in net income of unconsolidated affiliates		29,247			22,319			55,828			50,243
Earnings before income taxes		34,416			47,055			83,561			117,988
Income tax expense		8,800			15,600			23,508			37,713
Net earnings		25,616			31,455			60,053			80,275
Net earnings attributable to noncontrolling interests		2,375			1,993			5,402			6,645
Net earnings attributable to controlling interest	$	23,241		$	29,462		$	54,651		$	73,630
Basic
Average common shares outstanding		62,676			67,105			63,338			67,337
Earnings per share attributable to controlling interest	$	0.37		$	0.44			0.86		$	1.09
Diluted
Average common shares outstanding		64,527			69,181			65,015			69,780
Earnings per share attributable to controlling interest	$	0.36		$	0.43		$	0.84		$	1.06
Common shares outstanding at end of period		62,101			66,912			62,101			66,912
Cash dividends declared per share	$	0.19		$	0.18		$	0.38		$	0.36

WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
	November 30,		May 31,
	2015		2015
Assets
Current assets:
Cash and cash equivalents	$	27,354	$	31,067
Receivables, less allowances of$3,163and $3,085 at November 30, 2015
and May 31, 2015, respectively		407,371		474,292
Inventories:
Raw materials		177,044		181,975
Work in process		89,877		107,069
Finished products		84,232		85,931
Total inventories		351,153		374,975
Income taxes receivable		3,491		12,119
Assets held for sale		12,646		23,412
Deferred income taxes		21,356		22,034
Prepaid expenses and other current assets		48,525		54,294
Total current assets		871,896		992,193
Investments in unconsolidated affiliates		210,116		196,776
Goodwill		237,110		238,999
Other intangible assets, net of accumulated amortization of $42,744 and
$47,547 at November 30, 2015 and May 31, 2015, respectively		90,070		119,117
Other assets		25,676		24,867
Property, plant & equipment:
Land		14,367		16,017
Buildings and improvements		224,104		218,182
Machinery and equipment		900,433		872,986
Construction in progress		52,174		40,753
Total property, plant & equipment		1,191,078		1,147,938
Less: accumulated depreciation		664,941		634,748
Property, plant and equipment, net		526,137		513,190
Total assets	$	1,961,005	$	2,085,142
Liabilities and equity
Current liabilities:
Accounts payable	$	265,984	$	294,129
Short-term borrowings		49,538		90,550
Accrued compensation, contributions to employee benefit plans
and related taxes		59,016		66,252
Dividends payable		13,293		12,862
Other accrued items		61,039		56,913
Income taxes payable		2,049		2,845
Current maturities of long-term debt		851		841
Total current liabilities		451,770		524,392
Other liabilities		63,429		58,269
Distributions in excess of investment in unconsolidated affiliate		58,214		61,585
Long-term debt		579,016		579,352
Deferred income taxes		4,802		21,495
Total liabilities		1,157,231		1,245,093
Shareholders' equity - controlling interest		713,006		749,112
Noncontrolling interests		90,768		90,937
Total equity		803,774		840,049
Total liabilities and equity	$	1,961,005	$	2,085,142

	WORTHINGTON INDUSTRIES, INC.
	CONSOLIDATED STATEMENTS OF CASH FLOWS
	(In thousands)
		Three Months Ended						Six Months Ended
		November 30,						November 30,
		2015			2014			2015			2014
Operating activities
	Net earnings		25,616		$	31,455		$	60,053		$	80,275
	Adjustments to reconcile net earnings to net cash provided by operating activities:
	Depreciation and amortization		20,547			21,200			41,987			41,567
	Impairment of long-lived assets		22,962			14,235			25,962			16,185
	Provision for deferred income taxes		(9,851	)		(5,492	)		(15,391	)		(6,027	)
	Bad debt expense (income)		(2	)		143			8			(60	)
	Equity in net income of unconsolidated affiliates, net of distributions		(10,389	)		(813	)		(15,902	)		(7,803	)
	Net loss (gain) on sale of assets		(5,854	)		2,370			(4,248	)		(460	)
	Stock-based compensation		3,880			4,498			7,657			8,853
	Excess tax benefits - stock-based compensation		(434	)		(621	)		(1,258	)		(5,753	)
	Changes in assets and liabilities, net of impact of acquisitions:
	Receivables		23,474			(6,916	)		66,103			5,836
	Inventories		31,645			16,087			23,821			(35,130	)
	Prepaid expenses and other current assets		17,467			(5,232	)		28,633			(8,104	)
	Other assets		(3,245	)		3,095			(2,803	)		3,216
	Accounts payable and accrued expenses		(72,711	)		(72,095	)		(30,527	)		(30,205	)
	Other liabilities		7,487			(505	)		4,300			(6,496	)
Net cash provided by operating activities			50,592			1,409			188,395			55,894
Investing activities
	Investment in property, plant and equipment		(21,995	)		(23,273	)		(60,492	)		(47,146	)
	Investment in notes receivable		-			(2,300	)		-			(7,300	)
	Acquisitions, net of cash acquired		(2,950	)		(14,543	)		(2,950	)		(51,093	)
	Investments in unconsolidated affiliates		(226	)		129			(1,913	)		(3,671	)
	Proceeds from sale of assets and insurance		9,325			921			9,456			1,186
Net cash used by investing activities			(15,846	)		(39,066	)		(55,899	)		(108,024	)
Financing activities
	Net proceeds from (repayments of) short-term borrowings		27,499			(196	)		(41,012	)		359
	Proceeds from long-term debt		-			20,480			921			20,480
	Principal payments on long-term debt		(220	)		(511	)		(428	)		(813	)
	Payments for issuance of common shares		3,666			566			3,064			(454	)
	Excess tax benefits - stock-based compensation		434			621			1,258			5,753
	Payments to noncontrolling interests		(1,564	)		-			(4,900	)		(2,867	)
	Repurchase of common shares		(43,914	)		(21,549	)		(71,496	)		(41,620	)
	Dividends paid		(12,065	)		(12,138	)		(23,616	)		(22,250	)
Net cash used by financing activities			(26,164	)		(12,727	)		(136,209	)		(41,412	)
Increase (decrease) in cash and cash equivalents			8,582			(50,384	)		(3,713	)		(93,542	)
Cash and cash equivalents at beginning of period			18,772			146,921			31,067			190,079
Cash and cash equivalents at end of period		$	27,354		$	96,537		$	27,354		$	96,537

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						Six Months Ended
	November 30,						November 30,
	2015			2014			2015			2014
Volume:
Steel Processing (tons)		828,208			898,505			1,694,584			1,803,966
Pressure Cylinders (units)		16,558,823			19,090,046			35,778,233			39,460,432
Net sales:
Steel Processing	$	467,812		$	552,756		$	958,612		$	1,105,087
Pressure Cylinders		201,173			252,744			425,567			501,703
Engineered Cabs		28,699			51,540			67,316			101,094
Other		2,132			13,972			6,468			25,542
Total net sales	$	699,816		$	871,012		$	1,457,963		$	1,733,426
Material cost:
Steel Processing	$	322,507		$	400,677		$	670,752		$	795,569
Pressure Cylinders		85,498			115,832			184,562			234,269
Engineered Cabs		13,437			23,674			31,418			45,696
Selling, general and administrative expense:
Steel Processing	$	32,925		$	30,253		$	65,840		$	62,153
Pressure Cylinders		33,915			35,941			70,789			70,954
Engineered Cabs		4,800			7,086			10,208			13,910
Other		1,082			4,028			1,836			5,546
Total selling, general and administrative expense	$	72,722		$	77,308		$	148,673		$	152,563
Operating income (loss):
Steel Processing	$	26,642		$	33,877		$	50,280		$	69,746
Pressure Cylinders		(10,309	)		9,580			6,510			29,186
Engineered Cabs		(4,290	)		(5,609	)		(13,581	)		(7,754	)
Other		(71	)		(4,656	)		(241	)		(5,784	)
Total operating income	$	11,972		$	33,192		$	42,968		$	85,394

The following provides detail of Pressure Cylinders volume and net sales by principal class of products.
	Three Months Ended				Six Months Ended
	November 30,				November 30,
	2015		2014		2015		2014
Volume (units):
Consumer Products		10,523,692		11,240,094		22,501,637		23,586,725
Industrial Products*		5,926,739		6,161,759		13,074,691		12,668,561
Mississippi*		-		1,577,717		-		2,987,407
Alternative Fuels		107,121		107,300		199,077		211,389
Oil and Gas Equipment		1,044		2,994		2,364		5,981
Cryogenics		227		182		464		369
Total Pressure Cylinders		16,558,823		19,090,046		35,778,233		39,460,432
Net sales:
Consumer Products	$	49,484	$	51,317	$	104,442	$	106,916
Industrial Products*		97,601		99,146		202,707		201,363
Mississippi*		-		6,331		-		13,205
Alternative Fuels		23,954		22,822		48,772		44,602
Oil and Gas Equipment		25,041		66,886		57,925		124,222
Cryogenics		5,093		6,242		11,721		11,395
Total Pressure Cylinders	$	201,173	$	252,744	$	425,567	$	501,703
* Mississippi, an industrial gas facility, was sold in May 2015. It has been broken out so as not to distort the Industrial Products comparisons.

WORTHINGTON INDUSTRIES, INC.
SUPPLEMENTAL DATA
(In thousands)
The following provides detail of impairment of long-lived assets and restructuring and other expense included in operating income by segment.
	Three Months Ended					Six Months Ended
	November 30,					November 30,
		2015			2014		2015			2014
Impairment of long-lived assets:
Steel Processing	$	-		$	1,100	$	-		$	3,050
Pressure Cylinders		22,962			9,567		22,962			9,567
Engineered Cabs		-			2,389		3,000			2,389
Other		-			1,179		-			1,179
Total impairment of long-lived assets	$	22,962		$	14,235	$	25,962		$	16,185
Restructuring and other expense (income):
Steel Processing	$	2,258		$	-	$	2,720		$	(30	)
Pressure Cylinders		(16	)		405		715			428
Engineered Cabs		765			-		2,643			-
Other		(1,484	)		83		(1,486	)		190
Total restructuring and other expense	$	1,523		$	488	$	4,592		$	588