Exhibit 99.1
Worthington Reports Fourth Quarter and Record Fiscal Year Results;
Sets Record for Quarterly and Annual Sales, Annual Earnings
COLUMBUS, Ohio--(BUSINESS WIRE)--June 22, 2005--Worthington
Industries, Inc. (NYSE:WOR) today reported results for the three and
twelve month periods ended May 31, 2005. For the quarter, sales were a
record $817.0 million, surpassing last year's record $782.9 million.
For the year, sales of $3,078.9 million represent a 29% increase from
what was a record $2,379.1 million last year.
Fourth quarter 2005 net earnings were the second best fourth
quarter earnings in the company's history; second only to the year ago
quarter. Fourth quarter 2005 net earnings were $40.8 million and
earnings per diluted share were $0.46. This compares with reported net
earnings of $39.4 million, or $0.45 per diluted share, for the fourth
quarter of fiscal 2004, which included special items that collectively
had a negative impact on diluted earnings per share of $0.39.
Excluding the special items in the prior year period, earnings per
share would have been $0.84. (See attached supplemental schedule for
details)
Net earnings for the year of $179.4 million, or $2.03 per diluted
share, were an all time record and compared to $86.8 million, or $1.00
per diluted share, respectively, for the same period last year.
CEO Comments
"We had a great fourth quarter and year," stated John P.
McConnell, Chairman and CEO of Worthington Industries. "I am very
proud of the efforts of all of our 8,000 Worthington employees in
achieving record annual sales and earnings in our company's 50th year.
Next week, we will pay our 150th consecutive quarterly dividend since
becoming a public company. We remain a strong and financially sound
company as evidenced by our balance sheet.
"In addition to being focused on diversifying our customer base,
we are executing a strategy of providing our processed steel products
downstream to our other business operations and joint ventures. Fiscal
2005 represented another year of strong performances by our joint
ventures, and the Worthington Cylinder business expanded its product
line with the acquisition of the propane and specialty gas cylinder
assets of Western Industries. Dietrich Metal Framing, while still
awaiting a rebound in commercial office construction, is starting to
see more traction in residential steel framing. The formation of two
joint ventures, Dietrich Metal Framing Canada and Dietrich Residential
Construction, opens up new markets in Canada and in residential
construction for the U.S. military," concluded McConnell.
Quarterly Segment Results
In the Processed Steel Products segment, quarterly net sales rose
5%, or $21.9 million, to $460.7 million from what was a record $438.8
million in the comparable quarter of fiscal 2004. The increase in net
sales was due to higher pricing (up 16%). Volumes were down 9% due to
the August 2004 sale of cold rolling assets in Decatur, Alabama.
Excluding the impact of that asset sale, volumes were down 2%.
Operating income, excluding Decatur-related charges taken in the year
ago period, declined due to a narrowing of the spread between selling
prices and material costs but still remains among the best in the
segment's history.
In the Metal Framing segment, net sales decreased 4%, or $8.3
million, to $223.3 million from what was a record $231.5 million in
the comparable quarter of fiscal 2004. With continued weakness in the
commercial office construction market, volumes were down 13% while
pricing was up 11% over the year ago quarter. A narrower spread
between selling prices and material costs was primarily responsible
for the downturn in operating income compared to the prior year period
when operating income was more than quadruple any prior quarterly
record.
In the Pressure Cylinders segment, net sales increased 18%, or
$19.9 million, to $128.2 million from $108.3 million in the comparable
quarter of fiscal 2004. The propane and specialty gas cylinder assets
of Western Industries, acquired on September 17, 2004, contributed
$17.7 million to the sales increase. Excluding sales from the acquired
assets, unit volumes were down 14% as weakness in the 20 lb. propane
cylinder market offset strength in other product lines. Operating
income was unchanged from the prior year.
Worthington's joint ventures contributed positively to fourth
quarter results. Equity in net income of the seven unconsolidated
affiliates totaled $14.1 million for the quarter, compared to the
record $16.4 million of the year ago quarter when four affiliates had
record earnings.
Other
Dividend Declared
On May 21, 2005, the board of directors declared a quarterly cash
dividend of $0.17 per share payable June 29, 2005, to shareholders of
record June 15, 2005.
Share Repurchase Program Announced
On June 13, 2005, Worthington Industries announced that its board
of directors has authorized the repurchase of up to ten million, or
approximately 11%, of its outstanding shares. 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 stock, the nature
of other investment opportunities, cash flows from operations and
general economic conditions.
Corporate Profile
Worthington Industries is a leading diversified metal processing
company with annual sales of approximately $3 billion. The Columbus,
Ohio, based company is North America's premier value-added steel
processor and a leader in manufactured metal products such as metal
framing, pressure cylinders, automotive past model service stampings,
metal ceiling grid systems and laser welded blanks. Worthington
employs more than 8,000 people and operates 66 facilities in 10
countries.
Founded in 1955, the company operates under a long-standing
corporate philosophy rooted in the golden rule, with earning money for
its shareholders as the first corporate goal. This philosophy, an
unwavering commitment to the customer, and one of the strongest
employee/employer partnerships in American industry serve as the
company's foundation.
Conference Call
Worthington Industries will review its fourth quarter results
during its quarterly conference call today, June 22, 2005, at 1:30
p.m. Eastern Daylight Time. Details on the conference call can be
found on the company's Web site at www.WorthingtonIndustries.com.
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 future sales, operating
results and earnings per share; projected capacity and working capital
needs; pricing trends for raw materials and finished goods;
anticipated capital expenditures and asset sales; projected timing,
results, costs, charges and expenditures related to facility
dispositions, shutdowns and consolidations; new products and markets;
expectations for customer inventories, jobs and orders; expectations
for the economy and markets; expected benefits from new initiatives,
such as the ERP system; the 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, product demand and
pricing, changes in product mix and market acceptance of products;
fluctuations in pricing, quality or availability of raw materials
(particularly steel), supplies, utilities and other items required by
operations; effects of facility closures and the consolidation of
operations; the ability to realize cost savings and operational
efficiencies on a timely basis; the ability to integrate newly
acquired businesses and achieve synergies therefrom; capacity levels
and efficiencies within facilities and within the industry as a whole;
financial difficulties of customers, suppliers, joint venture partners
and others with whom the company does business; the effect of
national, regional and worldwide economic conditions generally and
within major product markets, including a prolonged or substantial
economic downturn; the effect of adverse weather on customers,
markets, facilities and shipping operations; changes in customer
inventories, spending patterns and supplier choices and risks
associated with doing business internationally, including economic,
political and social instability and foreign currency exposure; acts
of war and terrorist activities; the ability to improve processes and
business practices to keep pace with the economic, competitive and
technological environment; deviation of actual results from estimates
and/or assumptions used by the company in the application of its
significant accounting policies; 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; and other risks
described from time to time in filings with the United States
Securities and Exchange Commission.
WORTHINGTON INDUSTRIES, INC.
EARNINGS HIGHLIGHTS
(In Thousands, Except Per Share)
Three Months Ended Twelve Months Ended
May 31, May 31,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Audited)
Net sales $ 816,962 $ 782,924 $3,078,884 $2,379,104
Cost of goods sold 711,403 610,312 2,580,011 2,003,734
----------- ----------- ----------- -----------
Gross margin 105,559 172,612 498,873 375,370
Selling, general &
administrative
expense 50,794 59,876 225,915 195,785
Impairment charges and
other - 69,398 5,608 69,398
----------- ----------- ----------- -----------
Operating income 54,765 43,338 267,350 110,187
Other income
(expense):
Miscellaneous
income (expense) (847) 172 (7,991) (1,589)
Interest expense (6,638) (5,461) (24,761) (22,198)
Equity in net
income of
unconsolidated
affiliates 14,063 16,449 53,871 41,064
----------- ----------- ----------- -----------
Earnings before
income taxes 61,343 54,498 288,469 127,464
Income tax expense 20,535 15,075 109,057 40,712
----------- ----------- ----------- -----------
Net earnings $ 40,808 $ 39,423 $ 179,412 $ 86,752
=========== =========== =========== ===========
Average common shares
outstanding - diluted 88,535 87,587 88,503 86,950
----------- ----------- ----------- -----------
Earnings per
share - diluted $ 0.46 $ 0.45 $ 2.03 $ 1.00
=========== =========== =========== ===========
Common shares
outstanding at end of
period 87,933 86,856 87,933 86,856
Cash dividends
declared per common
share $ 0.17 $ 0.16 $ 0.66 $ 0.64
WORTHINGTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
May 31, May 31,
2005 2004
----------- -----------
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 57,249 $ 1,977
Receivables, net 404,506 348,833
Inventories 425,723 362,906
Deferred income taxes 19,490 3,963
Other current assets 31,365 115,431
----------- -----------
Total current assets 938,333 833,110
Investments in unconsolidated affiliates 136,856 109,040
Goodwill 168,267 117,769
Other assets 33,593 27,826
Property, plant and equipment, net 552,956 555,394
----------- -----------
Total assets $1,830,005 $1,643,139
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 280,181 $ 313,909
Current maturities of long-term debt 143,432 1,346
Other current liabilities 121,830 159,805
----------- -----------
Total current liabilities 545,443 475,060
Other liabilities 99,264 95,067
Long-term debt 245,000 288,422
Deferred income taxes 119,462 104,216
Shareholders' equity 820,836 680,374
----------- -----------
Total liabilities and shareholders'
equity $1,830,005 $1,643,139
=========== ===========
WORTHINGTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Three Months Ended Twelve Months Ended
May 31, May 31,
----------------------- ---------------------
2005 2004 2005 2004
----------- ----------- ----------- ---------
(Unaudited) (Unaudited) (Unaudited) (Audited)
Operating activities
Net earnings $ 40,808 $ 39,423 $ 179,412 $ 86,752
Adjustments to
reconcile net earnings
to net cash
provided by operating
activities:
Depreciation and
amortization 15,295 16,921 57,874 67,302
Impairment charges
and other - 69,398 5,608 69,398
Other adjustments 13,225 (41,801) (17,597) (49,945)
Changes in current
assets and
liabilities (3,779) (66,826) (193,026) (94,140)
----------- ----------- ----------- ---------
Net cash provided
by operating
activities 65,549 17,115 32,271 79,367
Investing activities
Investment in property,
plant and equipment,
net (15,439) (6,035) (46,318) (29,599)
Acquisitions, net of
cash acquired (149) - (65,119) -
Investment in
unconsolidated
affiliate - - (1,500) (490)
Proceeds from sale of
assets 5,512 685 89,488 5,662
Purchases of short-term
investments - - (72,875) -
Sales of short-term
investments 9,400 - 72,875 -
----------- ----------- ----------- ---------
Net cash used by
investing
activities (676) (5,350) (23,449) (24,427)
Financing activities
Payments on short-term
borrowings - (4,146) - (1,145)
Proceeds from long-term
debt (71) - 99,409 -
Principal payments on
long-term debt 179 31 (2,381) (1,234)
Dividends paid (14,938) (13,845) (56,891) (55,167)
Other 1,069 1,006 6,313 3,444
----------- ----------- ----------- ---------
Net cash provided
(used) by
financing
activities (13,761) (16,954) 46,450 (54,102)
----------- ----------- ----------- ---------
Increase (decrease) in
cash and cash
equivalents 51,112 (5,189) 55,272 838
Cash and cash
equivalents at
beginning of period 6,137 7,166 1,977 1,139
----------- ----------- ----------- ---------
Cash and cash
equivalents at end of
period $ 57,249 $ 1,977 $ 57,249 $ 1,977
=========== =========== =========== =========
WORTHINGTON INDUSTRIES, INC.
SUPPLEMENTAL DATA
(In Thousands)
This supplemental information is provided to assist in the analysis of
the results of operations.
Three Months Ended Twelve Months Ended
May 31, May 31,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Processed Steel
Products
Volume (tons) 935 1,030 3,685 3,806
Net sales $ 460,661 $ 438,801 $1,805,023 $1,373,145
Material cost $ 349,217 $ 281,857 $1,305,039 $ 893,743
Operating income $ 24,648 $ (21,757) $ 125,964 $ 18,036
Metal Framing
Volume (tons) 180 208 657 781
Net sales $ 223,256 $ 231,519 $ 848,029 $ 661,999
Material cost $ 148,305 $ 105,121 $ 499,872 $ 364,643
Operating income $ 17,709 $ 53,605 $ 108,517 $ 63,778
Pressure Cylinders
Volume (units)
Without
acquisition 4,523 5,257 14,569 14,670
Acquisition (a) 8,599 - 22,135 -
----------- ----------- ----------- -----------
13,122 5,257 36,704 14,670
Net sales
Without
acquisition $ 110,493 $ 108,279 $ 362,506 $ 328,692
Acquisition (a) 17,723 - 45,765 -
----------- ----------- ----------- -----------
$ 128,216 $ 108,279 $ 408,271 $ 328,692
Material cost $ 66,133 $ 49,173 $ 197,516 $ 142,601
Operating income $ 11,108 $ 11,019 $ 33,575 $ 29,376
(a) Acquisition of propane and specialty cylinder assets from
Western Industries effective September 17, 2004
The following provides detail of special pre-tax items by segment and
other special items that impact net income for the periods indicated:
Three Months Ended Twelve Months Ended
May 31, May 31,
----------------------- -----------------------
Increase (Decrease) 2005 2004 2005 2004
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Processed Steel
Products
Pre-tax impairment
charges and other $ - $ (67,400) $ (5,608) $ (67,400)
Metal Framing
Gain on sale of
assets - - - 3,920
Pressure Cylinders
Pre-tax impairment
charges and other - (1,998) - (1,998)
----------- ----------- ----------- -----------
Total special operating
income adjustments,
pre-tax - (69,398) (5,608) (65,478)
Gain on Enron
settlement - 3,640 - 3,640
----------- ----------- ----------- -----------
Total special
adjustments - (65,758) (5,608) (61,838)
Tax impact of special
adjustments - 24,988 2,070 23,498
Special tax
adjustments - 6,363 (2,555) 7,723
----------- ----------- ----------- -----------
Total special
adjustments, after
tax $ - $ (34,407) $ (6,093) $ (30,616)
=========== =========== =========== ===========
EPS impact of special
adjustments, diluted $ - $ (0.39) $ (0.07) $ (0.35)
=========== =========== =========== ===========
CONTACT: Worthington Industries, Inc.
Corporate Communications:
Cathy Mayne Lyttle, 614-438-3077
cmlyttle@WorthingtonIndustries.com
or
Investor Relations:
Allison McFerren Sanders, 614-840-3133
asanders@WorthingtonIndustries.com