Exhibit 99.1
Worthington Reports Fourth
Quarter and Fiscal Year Results
COLUMBUS, Ohio--(BUSINESS WIRE)--June 28, 2007--Worthington
Industries, Inc. (NYSE:WOR) today reported results for the three- and
twelve-month periods ended May 31, 2007.
(U.S. dollars in millions, except per share data)
4Q2007 3Q2007 4Q2006 12M2007 12M2006
-------- -------- ------- --------- ---------
Net sales $786.6 $677.3 $822.0 $2,971.8 $2,897.2
Operating income 41.7 2.2 54.8 129.1 157.6
Equity income 16.7 13.5 20.8 63.2 56.3
Net earnings 38.2 5.5 59.4 113.9 146.0
Earnings per share $0.45 $0.06 $0.67 $1.31 $1.64
EBITDA(a) $71.4 $30.0 $115.7 $249.4 $298.1
(a)Earnings before interest, taxes, depreciation and amortization.
See reconciliation on consolidated statement of earnings.
Fourth Quarter and Year-End Highlights
-- Annual earnings were the third best in the company's history,
after fiscal 2005 and fiscal 2006.
-- Quarterly net sales, operating income and units shipped for
the Pressure Cylinders segment were a record $169.3 million,
$26.1 million, and 13.6 million, respectively. Annual net
sales and operating income for the Pressure Cylinders segment
were also records in fiscal 2007.
-- Equity income, from six unconsolidated joint ventures, totaled
$16.7 million for the quarter and $63.2 million for the year.
Worthington Armstrong Venture (WAVE) had record sales and
earnings for the year.
-- Cash dividends received from joint ventures totaled $44.8
million for the quarter and $131.7 million for the year. WAVE
contributed $40.5 million and $121.5 million of the cash
dividends received for those periods.
-- Cash provided by operating activities was $180.4 million for
fiscal 2007 compared to $227.1 million for fiscal 2006 while
capital expenditures were $57.7 million and $60.1 million for
the same periods.
-- During the fourth quarter, $14.4 million was paid to
shareholders in a regular quarterly dividend. For the year,
dividends paid to shareholders totaled $59.0 million. At year
end, the dividend yielded a 3.2% annualized return.
-- During fiscal 2007, the company repurchased 4,449,594 common
shares, reducing total outstanding shares to 84.9 million at
year end. Over five million shares remain on the existing
share repurchase authorization.
Consolidated Results
For the fourth quarter, net sales were $786.6 million, compared to
$822.0 million for the fourth quarter of fiscal 2006, a decline of 4%.
For the full year, net sales of $2,971.8 million rose 3% from $2,897.2
million last year.
Fourth quarter 2007 net earnings of $38.2 million, or $0.45 per
diluted share, fell 36% from fourth quarter 2006 net earnings of $59.4
million, or $0.67 per diluted share. Earnings in 2006 were aided by a
$26.6 million pre-tax gain, or $0.14 per share, on the April 2006 sale
of a 50% interest in a Mexican steel processing joint venture.
Excluding the gain in the prior year period, fiscal 2007 fourth
quarter earnings per share fell 15%.
Net earnings for the full year of $113.9 million, or $1.31 per
diluted share, were down 22% from $146.0 million, or $1.64 per diluted
share, for the same period last year. Excluding the 2006 gain
mentioned above, earnings per share declined 13% from fiscal 2006, the
second best year in the company's history.
"The fourth quarter was significant in that it represented an
impressive turnaround from the third quarter and helped make fiscal
2007 our third best year," said John McConnell, Chairman and CEO of
Worthington Industries. "Our Pressure Cylinders segment and WAVE joint
venture were major contributors with their record results. In
addition, results in our Steel Processing segment were better than
expected given the weak conditions in its two major end markets,
automotive and construction. Lastly, our Metal Framing segment was
significantly improved," concluded McConnell.
Quarterly Segment Results
In the Steel Processing segment, quarterly net sales fell 14%, or
$57.6 million, to $360.5 million from $418.1 million in the comparable
quarter of fiscal 2006. The decrease in net sales was the result of
lower volumes (down 14%) relative to the prior year, as average
selling prices were flat. The average spread between selling prices
and material costs improved 11%, due primarily to the new stainless
processing business, but significantly lower volume with automotive
and construction-related customers resulted in a decline in operating
income this quarter compared to the prior year period.
In the Metal Framing segment, net sales decreased 11%, or $23.5
million, to $195.6 million from $219.1 million in the comparable
quarter of fiscal 2006. Relative to the prior year, the decrease in
net sales was the result of lower volumes (down 8%) and lower pricing
(down 3%). Although Metal Framing had a small operating loss, the
results represented a significant turnaround from the third quarter of
fiscal 2007. Compared to the prior quarter, volumes rose 14% and the
spread between selling prices and material costs rose 37%, approaching
more normal levels, as higher priced inventory was depleted.
In the Pressure Cylinders segment, net sales increased 23%, or
$31.6 million, to a record $169.3 million from $137.7 million in the
comparable quarter of fiscal 2006. The increase in net sales was due
to higher volumes (up 10%) and higher average selling prices (up 12%).
Average selling prices improved as a result of price increases in
certain product lines and product mix. Strong performance in Europe
and North America was the culmination of several multi-year
initiatives to reduce costs, exit unprofitable product lines,
introduce new product lines, consolidate facilities and grow
profitable lines through capacity and geographic expansion. These
actions, along with a strong overall sales effort, led to a 29%
improvement in operating income for the quarter. Operating income set
a record for both the quarter and the year.
Worthington's joint ventures added significantly to fourth quarter
results. Equity in the net income of six unconsolidated affiliates
totaled $16.7 million for the quarter, compared to a record $20.8
million in the year ago quarter. Fiscal 2007 was the best year in the
history of the WAVE joint venture for both sales and earnings.
Cost Reduction Initiatives
As part of its continuing efforts to improve the profitability of
the company, management has undertaken a review of each of its
businesses and established clear profitability goals and objectives
for each of them. In addition, management has targeted $35 million to
$40 million of incremental reductions to its cost structure through a
combination of facility closures, productivity improvements and
headcount reductions to be implemented during fiscal 2008. Updates on
the progress of this initiative, including its impact on fiscal 2008
results, will be reported in subsequent earnings calls.
Other
Dividend Declared
On May 15, 2007, the board of directors declared a quarterly cash
dividend of $0.17 per share payable June 29, 2007, to shareholders of
record on June 15, 2007.
Conference Call
Worthington will review fourth quarter results during its
quarterly conference call today, June 28, 2007, at 1:30 p.m. Eastern
Daylight Time. Details on the conference call can be found on the
company web site at www.WorthingtonIndustries.com
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 64 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.
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 or expected
performance, 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 acquisitions or to facility dispositions,
shutdowns and consolidations; targeted savings through head count
reductions, facility closures and other expense reductions; new
products and markets; expectations for company and customer
inventories, jobs and orders; expectations for the economy and
markets; expected benefits from new initiatives; 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, product
substitution and market acceptance of the company's products;
fluctuations in 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 consolidation and other
changes within the steel, automotive, construction and related
industries; failure to maintain appropriate levels of inventories; the
ability to realize targeted expense reductions such as head count
reductions, facility closures and other expense reductions; the
ability to realize other cost savings and operational efficiencies on
a timely basis; the overall success of, and 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 (including bankruptcy filings) 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
disruption in 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 inventories, spending patterns, product choices,
and supplier choices; risks associated with doing business
internationally, including economic, political and social instability,
and foreign currency exposure; the ability to improve and maintain
processes and business practices to keep pace with the economic,
competitive and technological environment; adverse claims experience
with respect to workers compensation, product recalls or 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; and
other risks described from time to time in the company's filings with
the United States Securities and Exchange Commission.
WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share)
Three Months Ended Twelve Months Ended
May 31, May 31,
-------------------- -----------------------
2007 2006 2007 2006
--------- ---------- ----------- -----------
Net sales $786,576 $821,968 $2,971,808 $2,897,179
Cost of goods sold 686,712 707,996 2,610,176 2,525,545
--------- ---------- ----------- -----------
Gross margin 99,864 113,972 361,632 371,634
Selling, general and
administrative expense 58,171 59,131 232,487 214,030
--------- ---------- ----------- -----------
Operating income 41,693 54,841 129,145 157,604
Other income (expense):
Miscellaneous expense (2,530) (1,464) (4,446) (1,524)
Gain on sale of Acerex - 26,609 - 26,609
Interest expense (4,892) (6,122) (21,895) (26,279)
Equity in net income of
unconsolidated
affiliates 16,669 20,774 63,213 56,339
--------- ---------- ----------- -----------
Earnings before income
taxes 50,940 94,638 166,017 212,749
Income tax expense 12,717 35,240 52,112 66,759
--------- ---------- ----------- -----------
Net earnings $38,223 $59,398 $113,905 $145,990
========= ========== =========== ===========
Average common shares
outstanding - basic 84,662 88,627 86,351 88,288
--------- ---------- ----------- -----------
Earnings per share - basic $0.45 $0.67 $1.32 $1.65
========= ========== =========== ===========
Average common shares
outstanding - diluted 85,672 89,292 87,002 88,976
--------- ---------- ----------- -----------
Earnings per share -
diluted $0.45 $0.67 $1.31 $1.64
========= ========== =========== ===========
Common shares outstanding
at end of period 84,908 88,691 84,908 88,691
Cash dividends declared
per share $0.17 $0.17 $0.68 $0.68
- --------------------------
Reconciliation of net
earnings to EBITDA
Net earnings $38,223 $59,398 $113,905 $145,990
Interest expense 4,892 6,122 21,895 26,279
Income taxes 12,717 35,240 52,112 66,759
Depreciation &
amortization 15,597 14,983 61,469 59,116
--------- ---------- ----------- -----------
EBITDA $71,429 $115,743 $249,381 $298,144
========= ====================== ===========
WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
May 31, May 31,
2007 2006
----------- -----------
Assets
Current assets:
Cash and cash equivalents $38,277 $56,216
Short-term investments 25,562 2,173
Receivables, less allowances of $3,641 and
$4,964 at May 31, 2007 and May 31, 2006 400,916 404,553
Inventories:
Raw materials 261,849 266,818
Work in process 97,633 104,244
Finished products 88,382 88,295
----------- -----------
Total inventories 447,864 459,357
----------- -----------
Assets held for sale 4,600 23,535
Deferred income taxes 13,067 15,854
Prepaid expenses and other current assets 39,097 34,553
----------- -----------
Total current assets 969,383 996,241
Investments in unconsolidated affiliates 57,540 123,748
Goodwill 179,441 177,771
Other assets 43,553 55,733
Property, plant & equipment, net 564,265 546,904
----------- -----------
Total assets $1,814,182 $1,900,397
=========== ===========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $263,665 $362,883
Notes payable 31,650 7,684
Accrued compensation, contributions to
employee benefit plans and related taxes 46,237 49,784
Dividends payable 14,440 15,078
Other accrued items 45,519 36,483
Income taxes payable 18,983 18,874
----------- -----------
Total current liabilities 420,494 490,786
Other liabilities 57,383 55,249
Long-term debt 245,000 245,000
Deferred income taxes 105,983 114,610
----------- -----------
Total liabilities 828,860 905,645
Minority interest 49,321 49,446
Shareholders' equity 936,001 945,306
----------- -----------
Total liabilities and shareholders' equity $1,814,182 $1,900,397
=========== ===========
WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended Twelve Months Ended
May 31, May 31,
------------------ -------------------
2007 2006 2007 2006
-------- --------- --------- ---------
Operating activities
Net earnings $38,223 $59,398 $113,905 $145,990
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 15,597 14,983 61,469 59,116
Provision for deferred income
taxes (2,242) (4,459) (3,068) (12,645)
Equity in net income of
unconsolidated affiliates,
net of distributions 28,089 7,098 68,510 702
Minority interest in net
income of consolidated
subsidiaries 1,848 1,909 5,409 6,088
Gain on sale of Acerex - (26,609) - (26,609)
Other adjustments 40 3,485 1,936 6,079
Changes in assets and
liabilities:
Accounts receivable (28,404) (34,871) 8,312 11,616
Inventories 35,362 (13,718) 19,588 (33,788)
Prepaid expenses and other
current assets 1,892 41 (2,078) (9,186)
Other assets 1,578 (171) 4,898 (563)
Accounts payable and accrued
expenses 40,339 57,103 (99,283) 79,114
Other liabilities (290) 961 833 1,152
-------- --------- --------- ---------
Net cash provided by operating
activities 132,032 65,150 180,431 227,066
-------- --------- --------- ---------
Investing activities
Investment in property, plant
and equipment, net (13,557) (17,027) (57,691) (60,128)
Investment in aircraft - (185) - (16,435)
Acquisitions, net of cash
acquired - - (31,727) (6,776)
Investment in unconsolidated
affiliate - - (1,000) -
Proceeds from sale of assets 146 171 18,237 3,225
Proceeds from sale of Acerex - 44,604 - 44,604
Purchases of short-term
investments (25,562) (50,115) (25,562) (493,860)
Sales of short-term
investments - 90,013 2,173 491,687
-------- --------- --------- ---------
Net cash provided (used) by
investing activities (38,973) 67,461 (95,570) (37,683)
-------- --------- --------- ---------
Financing activities
Proceeds from (payments on)
short-term borrowings (87,914) 7,684 23,966 7,684
Principal payments on long-
term debt - (142,405) (7) (143,416)
Proceeds from issuance of
common shares 7,308 2,006 9,866 9,138
Excess tax benefits - stock-
based compensation 2,170 - 2,370 -
Payments to minority interest (960) - (3,360) (3,840)
Repurchase of common shares - - (76,617) -
Dividends paid (14,354) (15,050) (59,018) (59,982)
-------- --------- --------- ---------
Net cash used by financing
activities (93,750) (147,765) (102,800) (190,416)
-------- --------- --------- ---------
Decrease in cash and cash
equivalents (691) (15,154) (17,939) (1,033)
Cash and cash equivalents at
beginning of period 38,968 71,370 56,216 57,249
-------- --------- --------- ---------
Cash and cash equivalents at end
of period $38,277 $56,216 $38,277 $56,216
======== ========= ========= =========
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,
------------------- -----------------------
2007 2006 2007 2006
--------- --------- ----------- -----------
Volume:
Steel Processing (tons) 851 994 3,282 3,611
Metal Framing (tons) 171 186 644 704
Pressure Cylinders
(units) 13,601 12,392 44,891 48,621
Net sales:
Steel
Processing $360,486 $418,147 $1,460,665 $1,486,165
Metal Framing 195,633 219,094 771,406 796,272
Pressure Cylinders 169,301 137,730 544,826 461,875
Other 61,156 46,997 194,911 152,867
--------- --------- ----------- -----------
Total net
sales $786,576 $821,968 $2,971,808 $2,897,179
========= ========= =========== ===========
Material cost:
Steel
Processing $268,764 $321,780 $1,106,471 $1,139,025
Metal Framing 140,415 138,030 547,583 508,588
Pressure Cylinders 80,022 64,584 251,052 221,756
Operating income (loss):
Steel Processing $14,732 $18,118 $55,382 $61,765
Metal Framing (540) 16,715 (9,159) 46,735
Pressure Cylinders 26,053 20,226 84,649 49,275
Other 1,448 (218) (1,727) (171)
--------- --------- ----------- -----------
Total
operating
income $41,693 $54,841 $129,145 $157,604
========= ========= =========== ===========
CONTACT: Worthington Industries, Columbus
Media Contact:
Cathy M. Lyttle, 614-438-3077
VP, Corporate Communications
E-mail: cmlyttle@WorthingtonIndustries.com
or
Investor Contact:
Allison M. Sanders, 614-840-3133
Director, Investor Relations
E-mail: asanders@WorthingtonIndustries.com
or
www.WorthingtonIndustries.com