EXHIBIT 13
PORTIONS OF 1994 ANNUAL REPORT TO SECURITY HOLDERS
INCORPORATED BY REFERENCE INTO FORM 10-K
From p. 21 of Annual Report
CONSOLIDATED STATEMENTS OF EARNINGS
In thousands, except per share Year Ended May 31 1994 1993 1992
SALES Net sales $1,285,134 $1,113,242 $ 971,346
Cost of goods sold 1,093,350 938,342 820,587
Gross Margin 191,784 174,900 150,759
Selling, general and administrative expense 72,372 68,809 62,402
Operating Income 119,412 106,091 88,357
Other income (expense):
Miscellaneous income 389 598 1,289
Interest expense (3,017) (3,421) (3,986)
Equity in net income of unconsolidated affiliates 18,851 4,587 5,440
Earnings Before Income Taxes and
Equity in Cumulative Effect of Accounting Changes 135,635 107,855 91,100
Income taxes 50,782 39,907 33,069
Earnings Before Equity in Cumulative Effect
of Accounting Changes 84,853 67,948 58,031
Equity in cumulative effect of accounting changes of
unconsolidated affiliate (3,058)
EARNINGS
Net Earnings $ 84,853 $ 67,948 $ 54,973
Average Common Shares Outstanding 90,378 89,699 88,990
EARNINGS Earnings (loss) per share:
PER SHARE Before cumulative effect of accounting changes $.94 $.76 $.65
Equity in cumulative effect of accounting changes of
unconsolidated affiliate (.03)
Net Earnings $.94 $.76 $.62
See notes to consolidated financial statements.
Worthington Industries, Inc. and Subsidiaries
From p. 22 of Annual Report
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Dollars in thousands, except for per share 1994 1993 1992
COMMON Balance at beginning of year $ 601 $ 595 $ 394
SHARES Sale of common shares under stock option plan,
(375,155 in 1994; 909,539 in 1993; 530,603 in 1992) 4 7 4
Par value of shares issued in connection with share split 301 197
Purchase and retirement of common shares,
(1,436 in 1994; 181,200 in 1993; 1,791 in 1992) (1)
Balance at May 31 $ 906 $ 601 $595
ADDITIONAL Balance at beginning of year $ 81,250 $ 71,623 66,410
PAID-IN Sale of common shares under stock option plan,
CAPITAL (375,155 in 1994; 909,539 in 1993; 530,603 in 1992) 3,875 8,596 4,278
Sale of shares under dividend reinvestment plan,
(74,101 in 1994; 76,598 in 1993; 77,927 in 1992) 1,471 1,179 1,059
Par value of shares issued in connection with share split (301) (197)
Transactions of unconsolidated affiliate 10,134 74
Purchase and retirement of common shares,
(1,436 in 1994; 181,200 in 1993; 1,791 in 1992) (2) (148) (1)
Balance at May 31 $ 96,427 $ 81,250 $71,623
MINIMUM
PENSION Balance at beginning of year ($ 230)
LIABILITY Transactions of unconsolidated affiliate (1,444) ($230)
Balance at May 31 ($1,675) ($230) $
RETAINED Balance at beginning of year $356,567 $320,078 $288,194
EARNINGS Restatement - Note J 4,056
Balance at beginning of year - restated 356,567 320,078 292,250
Net earnings 84,853 67,948 54,973
Cash dividends,
(per share: $.367 in 1994; $.327 in 1993; $.305 in 1992) (33,161) (29,329) (27,127)
Purchase and retirement of common shares,
(1,436 in 1994; 181,200 in 1993; 1,791 in 1992) (25) (2,130) (18)
Balance at May 31 $408,234 $356,567 320,078
See notes to consolidated financial statements.
Worthington Industries, Inc. and Subsidiaries
From p 23 of Annual Report
CONSOLIDATED BALANCE SHEETS
Dollars in thousands May 31 1994 1993
ASSETS Current Assets
Cash and cash equivalents 13,275 $ 16,691
Short-term investments 898
Accounts receivable, less allowances of
$2,535 and $2,351 at May 31, 1994 and 1993 189,741 168,855
Inventories
Raw materials 125,243 100,239
Work in process and finished products 59,639 58,748
184,882 158,987
Prepaid expenses and other current assets 25,218 18,082
TOTAL CURRENT ASSETS 413,116 363,513
Investment in Unconsolidated Affiliates 51,961 17,945
Other Assets 25,935 19,359
Property, Plant and Equipment
Land 9,765 9,765
Buildings 109,724 103,618
Machinery and equipment 390,685 363,573
Construction in progress 21,375 11,965
531,549 88,921
Less accumulated depreciation 223,988 195,529
307,561 293,392
TOTAL ASSETS 798,573 694,209
LIABILITIES Current Liabilities
Accounts payable $ 97,699 $ 90,461
Notes payable 10,000
Accrued compensation, contributions to
employee benefit plans and related taxes 37,578 34,546
Dividends payable 9,056 7,810
Other accrued items 10,089 8,974
Income taxes 14,607 3,996
Current maturities of long-term debt 1,490 1,165
TOTAL CURENT LIABILITIES 180,519 146,952
Accrued Pension Cost 792 507
Long-Term Debt 54,136 5,626
Deferred Income Taxes 59,233 52,936
Contingent Liabilitites -- Note G
EQUITY Shareholders' Equity
Preferred shares, $1.00 par value, authorized-- 1,000,000 shares, issued and outstanding--none
Common shares, $.01 par value, authorized -- 150,000,000 shares, issued and outstanding--
1994 --90,561,082 shares; 1993 --90,113,262 shares 906 601
Additional paid-in capital 96,427 81,250
Minimum pension liability of unconsolidated affiliate (1,674) (230)
Retained earnings 408,234 356,567
503,893 438,188
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $798,573 $694,209
From p 24 of Annual Report
CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands Year Ended May 31 1994 1993 1992
OPERATING Net earnings $84,853 $67,948 $54,973
ACTIVITIES Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation 32,385 29,204 26,887
Gain on sale of short-term investments (911)
Provision for deferred income taxes 7,911 5,995 3,128
Equity in undistributed net income of
unconsolidated affiliates (19,345) (4,587) (5,440)
Equity in cumulative effect of accounting changes of
unconsolidated affiliate 3,058
Changes in assets and liabilities:
Decrease (increase) in:
Short-term investments 129 458
Accounts receivable (20,886) (18,684) (24,070)
Inventories (25,895) (21,326) (13,501)
Prepaid expenses and other current assets (6,460) (563) 824
Other assets (6,576) (14,618) (3,227)
Increase (decrease) in:
Accounts payable and accrued expenses 15,493 23,069 30,238
Accrued pension cost 285 (757) (375)
Long-term deferred income taxes 114 (48)
NET CASH PROVIDED BY OPERATING ACTIVITIES 60,854 65,924 72,905
INVESTING Investment in property, plant and equipment, net (46,554) (29,140) (45,120)
ACTIVITIES Other, net 1,287
NET CASH USED BY INVESTING ACTIVITIES (45,267) (29,140) (45,120)
FINANCING Proceeds from (payments on) short-term borrowings 10,000 (6,500)
ACTIVITIES Proceeds from long-term debt 2,140
Principal payments on long-term debt (1,165) (3,263) (4,092)
Proceeds from issuance of common shares 5,350 9,782 5,341
Repurchase of common shares (27) (2,279) (19)
Dividends paid (33,161) (29,329) (27,127)
NET CASH USED BY FINANCING ACTIVITIES (19,003) (25,089) (30,257)
Increase (decrease) in cash and cash equivalents (3,416) 11,695 (2,472)
Cash and cash equivalents at beginning of year 16,691 4,996 7,468
CASH AND CASH EQUIVALENTS AT END OF YEAR $13,275 $16,691 $4,996
See notes to consolidated financial statements.
Worthington Industries, Inc. and Subsidiaries
From Page 25 of Annual Report
INDUSTRY SEGMENT DATA
In thousands May 31 1994 1993 1992
SALES Net Sales
Processed steel products $ 920,199 $ 767,682 $ 668,578
Custom products 249,459 241,916 217,731
Cast products 115,476 103,644 85,037
$1,285,134 $1,113,242 $ 971,346
EARNINGS Operating Income
Processed steel products $ 98,062 $ 79,187 $ 70,317
Custom products 15,334 20,360 13,948
Cast products 6,016 6,544 4,092
119,412 106,091 88,357
Miscellaneous income 389 598 1,289
Interest expense (3,017) (3,421) (3,986)
Equity in net income of unconsolidated affiliates 18,851 4,587 5,440
$ 135,635 $ 107,855 $ 91,100
ASSETS Identifiable Assets
Processed steel products $ 471,458 $ 428,891 $ 410,051
Custom products 138,015 117,856 105,483
Cast products 75,733 69,843 62,350
Corporate 61,406 59,674 41,273
746,612 676,264 619,157
Investment in unconsolidated affiliates 51,961 17,945 8,803
$ 798,573 $ 694,209 $ 627,960
DEPRECIATION Depreciation Expense
Processed steel products $ 19,075 $ 17,745 $ 15,927
Custom products 7,047 5,598 5,233
Cast products 4,095 3,900 3,879
Corporate 2,168 1,961 1,848
$32,385 $ 29,204 $ 26,887
EXPENDITURES Capital Expenditures
Processed steel products $ 14,693 $ 9,876 $ 28,081
Custom products 19,086 12,640 9,345
Cast products 6,787 5,283 1,631
Corporate 5,988 1,341 6,063
$ 46,554 $ 29,140 $ 45,120
( ) Indicates deduction
Corporate expenses are allocated on a consistent basis among industry segments
over the five-year period. Earnings are before income taxes and cumulative
effect of accounting changes. "Capital expenditures" are net of normal
disposals and exclude amounts in connection with acquisitions and divestitures.
See notes to consolidated financial statements.
Worthington Industries, Inc. and Subsidiaries
From p. 26 of Annual Report
Notes To Consolidated Financial Statements
NOTE A - Summary of Significant Accounting Policies
Consolidation: The consolidated financial statements
include the accounts of Worthington Industries, Inc. and
Subsidiaries (the "Company"). Investments in unconsolidated
affiliates are accounted for using the equity method.
Significant intercompany accounts and transactions are
eliminated. Certain reclassifications were made to prior
years' amounts to conform with the 1994 presentation.
Cash and Cash Equivalents: The Company considers all
highly liquid investments purchased with a maturity of three
months or less to be cash equivalents.
Short-Term Investments: Short-term investments consist
principally of common stocks carried at the lower of cost or
market. Cost was $898,000 and market value was $1,516,000
at May 31, 1993.
Inventories: Inventories are valued at the lower of
cost or market. Cost is determined using the specific
identification method for steel processing and the first-in,
first-out method for all other businesses.
Property and Depreciation: Property, plant and
equipment are carried at cost and depreciated using the
straight-line method over the estimated useful lives of the
assets. Accelerated depreciation methods are used for
income tax purposes.
Capitalized Interest: Interest is capitalized in
connection with construction of qualified assets. Under
this policy, interest of $443,000 was capitalized in 1992.
Post Retirement Benefits Other Than Pensions: The
Company adopted Financial Accounting Standards Board issued
Statement No. 106, "Employer's Accounting for Post
Retirement Benefits Other Than Pensions," effective June 1,
1993. The adoption of this Statement did not have a
material impact on the Company's operating results or
financial position. As permitted by Statement 106, the
Company elected not to restate the financial statements of
any prior years.
Statements of Cash Flows: With respect to non-cash
activities in fiscal 1994, the Company recorded its
increased equity from the Rouge Steel Company's initial
public offering as an increase in investments in
unconsolidated affiliates(see Note J). During fiscal 1993,
$6,282,000 of inventory and $3,421,000 of fixed assets were
reclassified to investments in unconsolidated affiliates as
the initial investment in Worthington Armstrong Venture.
Supplemental cash flow information for the years ended
May 31, is as follows:
In thousands 1994 1993 1992
Interest paid $ 2,973 $ 3,957 $ 4,129
Income taxes paid 39,957 35,548 29,591
Fair Value of Financial Instruments: The following
methods and assumptions were used by the Company in
estimating the fair value of its financial instruments:
Cash and cash equivalents, other assets, and long-term
debt - The carrying amounts reported in the balance sheets
approximate fair value.
Short-term investments - The fair value for marketable
equity securities are based on quoted market prices.
The concentration of credit risks from financial
instruments, related to the markets discussed in Review of
Operations starting on page 6, are not expected to have a
material effect on the Company's consolidated financial
position, cash flow or future results of operations.
From p. 26 of Annual Report
NOTE B - Shareholders' Equity
On September 16, 1993 and on September 19, 1991, the Company's
Board of Directors authorized three-for-two splits of the common
shares, with distribution of the additional shares on October
22, 1993 and October 25, 1991, to holders of record on October 1,
1993 and October 4, 1991. Also on September 16, 1993, the
shareholders adopted an amendment to the Certificate of
Incorporation of the Company to increase the authorized number of
common shares from 100,000,000 shares to 150,000,000 shares.
References in this annual report to per share amounts and to the
number of common shares have been adjusted, were appropriate, to
give retroactive effect to the share splits. The Board of
Directors is empowered to determine the issue prices, dividend
rates, amounts payable upon liquidation, voting rights and other
terms of the preferred shares when issued.
From pp. 26 & 27 of Annual Report
NOTE C - Debt
Debt at May 31, is summarized as follows:
In thousands May 31 1994 1993
Short-term notes payable to bank - unsecured $10,000 $ -
Industrial development revenue bonds and notes 14,909 15,359
Notes payable to banks - unsecured 40,000 40,000
Other 717 1,432
65,626 56,791
Less current maturities 11,490 1,165
$54,136 $55,626
The Company had short-term notes payable to bank totaling $10,000,000,
at May 31, 1994. The rate for these borrowings, which was 4.8% at
May 31, 1994, is based on the bank's cost of funds plus a fixed percent.
The Company has committed lines of credit permitting unsecured borrowings
totaling $40,000,000, at rates below the prime rate. Of these lines of
credit, $35,000,000 were unused at May 31, 1994, and do not require
compensating balances. The industrial development revenue bonds and
notes (IRBs) represent loans to purchase or obligations to lease
facilities and equipment costing $24,601,000. The leases are accounted
for as lease purchases with ownership passing to the Company at the
expiration dates for nominal amounts. The IRBs mature serially through
2011 and may be retired in whole or in part at any time. During the
year ended May 31, 1994, the Company fixed the interest rate on
$11,265,000 of the IRBs at 5.9%. Of the remaining IRBs, $3,531,000
have a fixed interest rate of 8.0%, and $113,000 carry a variable
interest rate based upon a percentage of the prime rate. At May 31,
1994, this interest rate was 4.7%.During the year ended May 31, 1994,
the Company extended the maturity date of a $13,000,000 unsecured bank
note payable from October 1997 to October 2001. This note carries a
variable interest rate based on the Company's choice of one, two,
three or six month London Interbank Offered Rates plus a fixed percent.
At May 31, 1994, this rate was 5.0%. The Company may elect to convert
to a fixed rate at any time during the term of the loan. The remaining
$27,000,000 note payable is a 15 month evergreen note with a current
maturity date of August 1995. At May 31, 1994, the interest rate on
this note, based on the ninety-day London Interbank Offered Rate plus
a fixed percent, was 4.9%. Various debt agreements place restrictions
on financial conditions and require maintenance of certain ratios.
One of these restrictions limits cash dividends and certain other
payments to $3,000,000 plus 75% of net earnings, as defined,
subsequent to May 31, 1976. Retained earnings of $269,395,000 were
unrestricted at May 31, 1994. Principal payments on long-term debt,
including lease purchase obligations, in the next five fiscal years
are as follows: 1995 -- $1,490,000; 1996 -- $27,660,000; 1997 --
$660,000; 1998 -- $4,191,000; 1999 -- $660,000; and thereafter --
$20,965,000. The Company is guarantor on bank loans for three
separate joint ventures. The guarantees totaled $37,200,000
at May 31, 1994 and relate to debt with varying maturities.
The Company believes the guarantees will not significantly
affect the consolidated financial position or future results of
operations.
From p. 27 of Annual Report
NOTE D - Income Taxes
Income taxes for the years ended May 31, were as follows:
In thousands 1994 1993 1992
Current: Federal $36,907 $29,329 $26,230
State and local 5,964 4,583 3,711
Deferred: Federal 7,627 5,145 2,769
State 284 850 359
$50,782 $39,907 $33,069
The Company adopted Financial Accounting Standards Board Statement No.
109, "Accounting for Income Taxes," effective June 1, 1993. This
change had no material effect on the Company's financial position nor
its results of operations. As permitted by Statement 109, the Company has
elected not to restate the financial statements of any prior years.
Under Statement 109, the liability method is used in accounting for income
taxes. Under this method, deferred tax assets and liabilities are determined
based on differences between financial reporting and tax bases of assets and
liabilities and are measured using enacted tax rates and laws that will be
in effect when the differences are expected to reverse. Prior to the
adoption of Statement 109, income tax expense was determined using the
deferred method. Deferred tax expense was based on items of income and
expense that were reported in different years in the financial statements
and tax returns and measured at the tax rate in effect in the year the
difference originated. Deferred income taxes reflect the net tax effects
of temporary differences between the carrying amounts of assets and
liabilities for financial reporting and the amounts used for income tax
purposes. Significant components of the Company's deferred tax liabilities
and assets as of May 31, 1994 are as follows:
In thousands
Deferred tax assets:
Allowance for doubtful accounts $1,332
Inventory 939
Accrued expenses 4,393
Income taxes 1,665
Other 360
8,689
Deferred tax liabilities:
Property, plant and equipment 42,680
Undistributed earnings of unconsolidated affiliates 16,553
59,233
Net deferred tax liability $50,544
The components of deferred income tax expense resulted from the use of
the following:
In thousands 1993 1992
Accelerated depreciation $4,379 $2,665
Undistributed earnings of unconsolidated affiliates 1,026 1,422
Other items (590) (959)
$5,995 $3,128
The reasons for the difference between the effective income
tax rate and the statutory federal income tax rate were as follows:
1994 1993 1992
Federal statutory rate 35.0% 34.0% 34.0%
State and local income taxes, net
of federal tax benefit 3.0 3.3 2.9
Other (.6) (0.3) (0.6)
37.4% 37.0% 36.3%
From pp. 27 & 28 of Annual Report
NOTE E - Employee Benefit Plans
Nonunion employees of the Company participate in a current cash profit
sharing plan and a deferred profit sharing plan. Contributions to and costs
of these plans are determined as a percentage of the Company's operating
income.
Certain operations have non-contributory defined benefit pension plans
covering a majority of their employees qualified by age and service. Company
contributions to these plans comply with ERISA's minimum funding requirements.
A summary of the components of net periodic pension cost for the defined
benefit plans in 1994, 1993 and 1992, and the contributions charged to pension
expense for the defined contribution plans follows:
In thousands 1994 1993 1992
Defined benefit plans:
Service cost (benefits earned
during the period) $1,089 $1,115 $1,087
Interest cost on projected
benefit obligation 2,875 2,806 2,680
Actual return on plan assets (1,222) (5,666) (4,713)
Net amortization and deferral (2,544) 1,990 1,646
Net pension cost on defined
benefit plans 198 245 700
Defined contribution plans 3,935 3,387 2,791
Total pension expense $4,133 $3,632 $3,491
Pension expense was calculated assuming a weighted average discount rate
and an expected long-term rate of return on plan assets of 8%. Plan assets
consist principally of listed equity securities and fixed income instruments.
The following table sets forth the funded status and amounts recognized in the
Company's consolidated balance sheets for defined benefit pension plans at May 31:
Plans Whose Plans Whose
Assets Exceed Accumulated
Accumulated Benefits
Benefits Exceed Assets
In thousands 1994 1993 1994 1993
Actuarial present value of benefit obligations:
Vested $34,640 $31,651 $5,260 $4,967
Accumulated $35,327 $32,134 $5,497 $5,038
Projected benefit obligation $35,327 $32,134 $5,497 $5,239
Plan assets at fair value 40,935 40,289 4,607 4,644
Projected benefit obligation less than
(in excess of) plan assets $ 5,608 $ 8,155 ($890) ($ 595)
Comprised of:
Accrued pension cost $ - $ - $ (718) $(395)
Prepaid pension cost 1,334 376 - -
Unrecognized:
Net gain 9,575 11,180 (31) 208
Prior service cost (7,568) (5,943) (631) (677)
Unrecorded net asset (obligation)
at transition,
net of amortization 2,267 2,542 (41) (37)
Adjustment to recognize minimum
liability - - 531 306
$ 5,608 $ 8,155 $ (890) $(595)
From p. 28 of Annual Report
NOTE F -- Stock Options
Under its employee stock option plans, the Company may grant employees incentive
stock options to purchase shares at not less than 100% of market value at date of
grant or non-qualified stock options at a price determined by the Stock Option
Committee. Generally, options are exercisable at the rate of 20% a year
beginning one year from date of grant and expire ten years thereafter. Common
shares under option:
In thousands, Price Range Number of Options
except per share Per Share 1994 1993 1992
Exercised $2.62- $9.50 375 909 531
At May 31,
Outstanding $2.62- $9.50 1,164 1,541 2,483
Exercisable 933 1,143 1,499
Available for grants 4,500 4,500 4,500
The options outstanding at May 31, 1994, were held by 190 persons, had an
average exercise price of $9.00 per share and had expiration dates ranging
from May 1997 to February 2000.
From p. 28 of Annual Report
NOTE G -- Contingent Liabilities
The Company is a defendant in certain legal actions. In the opinion
of management, the outcome of these actions, which is not clearly determinable
at the present time, would not significantly affect the Company's consolidated
financial position or future results of operations.
From p. 28 of Annual Report
NOTE H - Industry Segment Data
Industry segment descriptions on the inside front cover, Company
locations on page 34, and segment data on page 25 of the annual report are
an integral part of these financial statements.
Sales for processed steel products and custom products include $161,602,000
in 1994, $130,483,000 in 1993 and $125,723,000 in 1992 to a major automobile
manufacturer purchasing through decentralized divisions and subsidiaries in
different geographical areas.
From p. 28 of Annual Report
NOTE I -- Related Party Transactions
The Company engages in purchases and sales of certain raw materials and
services to/from affiliated companies at prevailing market prices. Sales for
fiscal 1994 and 1993 totaled $62 million and $55 million, respectively.
Accounts receivable related to these transactions were $9 million and $5
million at May 31, 1994 and 1993, respectively. Purchases for fiscal 1994,
1993 and 1992, totaled $168 million, $157 million, and $139 million,
respectively. Accounts payable related to these transactions included
$22 million and $21 million at May 31, 1994 and 1993, respectively.
From pp. 28 & 29 of Annual Report
NOTE J - Investment in Unconsolidated Affiliates
The Company's investments in affiliated companies which are not majority owned
or controlled are accounted for using the equity method. Investments carried
at equity and the percentage interest owned consist of Worthington Specialty
Processing (50%), London Industries, Inc. (60%), Worthington Armstrong
Venture (50%), TWB Company (50%) and Rouge Steel Company (28%).
During 1994, the Company increased its voting ownership in Rouge, an
integrated steel mill located in Detroit, Michigan. Accordingly, the Company
changed its method of carrying the investment from cost to equity as required
by generally accepted accounting principles. The financial statements of
prior years have been restated back to fiscal 1990, the year of the original
investment in Rouge. The effect of the restatement was to increase 1993 net
income by $1,745,000 or $.02 per share and to decrease 1992 net income by
$562,000 or $.01 per share. Included in the 1992 restatement was equity in
Rouge's cumulative effect of adopting FASB Statements 106 and 109, which
decreased net income by $3,058,000 or $.03 per share. Certain
reclassifications were made to prior year's amounts to conform with
the 1994 presentation.
The Company's equity interest in Rouge for the restatement periods is shown
at 25%. After Rouge's initial public offering (IPO), completed in April 1994,
the Company's interest is 28%. Rouge sold 5,601,800 shares in the IPO for
$123,000,000. The Company recorded its increased equity in Rouge from the IPO
($10,046,000), which is net of deferred taxes ($5,405,000), as additional
paid-in capital. The market value of the Company's investment in Rouge at
May 31 1994, was approximately $156 million.
At May 31, 1994, the Company's share of the underlying net assets of Rouge
exceeded the investment by $10,667,000. The excess is being amortized into
income by increasing equity in net income of unconsolidated affiliates using
the straight-line method over 14 years.
Financial information for affiliated companies accounted for by the equity
method is as follows:
In thousands 1994 1993 1992
Current assets $ 514,407 $ 363,745
Noncurrent assets 153,937 123,550
Current liabilities 267,372 168,741
Noncurrent liabilities 166,862 256,923
Minority interests 21,199 9,857
Net sales 1,189,470 1,070,560 $984,572
Gross margin 106,309 58,700 48,491
Income before accounting changes 64,152 15,887 17,783
Net income $ 64,152 $ 15,887 $ (1,470)
The Company's share of undistributed earnings of unconsolidated affiliates
included in consolidated retained earnings was $24,571,000 at May 31, 1994.
From p. 29 of Annual Report
NOTE K - Quarterly Results of Operations (Unaudited)
The following is a summary of the unaudited quarterly results of operations for
the years ended May 31, 1994 and 1993:
In thousands, Three Months Ended
except per share Aug. Nov. Feb. May
1994
Net sales $ 289,890 $ 295,894 $ 323,130 $ 376,220
Gross margin 44,064 43,056 48,179 56,485
Net earnings 19,898 19,412 19,740 25,803
Earnings per share $ 0.22 $ 0.21 $ 0.22 $ 0.29
1993
Net sales $ 250,061 $ 261,295 $ 275,821 $ 326,065
Gross margin 36,504 39,698 43,274 55,424
Net earnings 14,316 15,114 15,032 23,486
Earnings per share $ 0.16 $ 0.17 $ 0.17 $ 0.26
As more fully described in Note J, the Company changed its method of carrying
the investment in Rouge Steel Company from cost to equity effective for the
quarter ended February 1994. The effect of the change was to increase
previously
reported net earnings for certain prior quarters. For quarters ended August
1992, August 1993, and November 1993 income increased by $1,448,000 ($.02 per
share), $3,541,000 ($.04 per share), and $3,548,000 ($.03 per share),
respectively. The effect on all other quarters was not significant.
From page 29 of Annual Report
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Worthington Industries, Inc.
We have audited the accompanying consolidated balance sheets of Worthington
Industries, Inc. and Subsidiaries as of May 31, 1994 and 1993, and the related
consolidated statements of earnings, shareholders' equity and cash flows for
each of the three years in the period ended May 31, 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Worthington Industries, Inc. and Subsidiaries at May 31, 1994 and 1993,
and the consolidated results of their operations and their cash flows for
each of the three years in the period ended May 31, 1994, in conformity
with generally accepted accounting principles.
As discussed in Note J to the consolidated financial statements, the
Company's 1993 and 1992 financial statements have been restated to
retroactively adopt the equity method of accounting for an investment in an
affiliated company previously carried at cost.
/s/Ernst & Young
ERNST & YOUNG
Columbus, Ohio
June 13, 1994
From pp 30-31 of Annual Report
ELEVEN YEAR SELECTED FINANCIAL DATA
In thousands, except per share May 31 1994 1993 1992 1991 1990
FINANCIAL Net Sales $1,285,134 $1,113,242 $ 971,346 $ 871,528 $914,339
RESULTS Cost of Goods Sold 1,093,350 938,342 820,587 742,601 768,961
Gross Margin 191,784 174,900 150,759 128,927 145,378
Selling, General & Administrative Expense 72,372 68,809 62,402 57,507 55,093
Operating Income 119,412 106,091 88,357 71,420 90,285
Miscellaneous Income 389 598 1,289 1,039 1,200
Interest Expense (3,017) (3,421) (3,986) (4,807) (4,245)
Equity in Net Income of Unconsolidated Affiliates 18,851 4,587 5,440 7,416 1,655
Earnings From Continuing Operations Before Taxes
and Accounting Changes 135,635 107,855 91,100 75,068 88,895
Income Taxes 50,782 39,907 33,069 27,264 32,891
Earnings From Continuing Operations Before
Accounting Changes 84,853 67,948 58,031 47,804 56,004
Per Share 0.94 0.76 0.65 0.54 0.62
Depreciation 32,385 29,204 26,887 23,843 20,790
Cash Provided By Operating Activities 60,854 65,924 72,905 35,039 69,698
Cash Dividends 33,161 29,329 27,127 24,054 22,856
Per Share 0.3669 0.3270 0.3048 0.2706 0.2537
Capital Expenditures $46,554 $29,140 $45,120 $63,319 $54,558
Average Shares Outstanding 90,378 89,699 88,990 88,877 90,102
FINANCIAL Current Assets $413,116 $363,513 $311,247 $275,724 $312,943
POSITION Current Liabilities 180,519 146,952 130,855 107,382 133,253
Working Capital 232,597 216,561 180,392 168,342 179,690
Net Fixed Assets 307,561 293,392 293,456 275,223 235,747
Total Assets 798,573 694,209 627,960 570,225 561,897
Long-Term Debt 54,136 55,626 57,345 59,032 42,468
Shareholders' Equity 503,893 438,188 392,295 359,053 345,243
Per Share 5.56 4.86 4.39 4.05 3.85
Total Capital $558,029 $493,814 $449,640 $418,085 $387,711
Shares Outstanding 90,561 90,113 89,308 88,702 89,652
From p 32 of Annual Report
SHAREHOLDER INFORMATION
Quarterly Volume, Price and Dividend Information
NASDAQ
Fiscal 1993 Shares Average Price Earnings Prices Cash
Quarter Ended Traded Daily Volume Ratio Range Low High Dividends
August 31 8,428,975 129,677 23-26 $ 14.33 $ 16.50 $ 0.080
November 30 14,706,504 233,437 20-25 $ 12.42 $ 15.75 $ 0.080
February 28 13,732,252 225,119 22-29 $ 14.33 $ 18.50 $ 0.080
May 31 8,993,043 140,516 24-29 $ 16.50 $ 19.83 $ 0.087
Fiscal 1994
Quarter Ended
August 31 12,384,658 190,533 25-29 $ 18.50 $ 21.67 $ 0.087
November 30 19,720,615 313,026 21-27 $ 16.75 $ 21.00 $ 0.090
February 28 10,159,228 163,859 22-27 $ 17.25 $ 21.00 $ 0.090
May 31 8,686,601 137,883 22-24 $ 18.25 $ 20.50 $ 0.100
At May 31, 1994 (9,789 Shareholders)
From p. 33 of Annual Report
Share Trading
Shares of Worthington Industries common stock are traded in the over-the-
counter market as part of the NASDAQ National Market System. The Company is
identified by the NASDAQ symbol "WTHG" and in most newspaper listings as
"WorthtnInd."