EX-99.1 3 l03109aexv99w1.txt EXHIBIT 99.1 . . . Exhibit 99.1 NEWS RELEASE CONTACTS: [logo] Cathy Mayne Lyttle Allison McFerren Sanders WORTHINGTON VP, Corporate Communications Director, Investor Relations INDUSTRIES Phone (614) 438-3077 Phone: (614) 840-3133 1205 Dearborn Drive E-mail: cmlyttle@WorthingtonIndustries.com E-mail: asanders@WorthingtonIndustries.com Columbus, Ohio 43085 ----------------------------------------------------------------------------------------------------------------------- www.WorthingtonIndustries.com
FOR IMMEDIATE RELEASE WORTHINGTON INDUSTRIES REPORTS FIRST QUARTER RESULTS COLUMBUS, OHIO, SEPTEMBER 17, 2003 - Worthington Industries, Inc. (NYSE: WOR) today reported results for the three months ended August 31, 2003. HIGHLIGHTS Sales for the first quarter of fiscal 2004 were $498.0 million, a decrease of 5% from last year's record $525.5 million. Earnings were $5.9 million and earnings per diluted share were $0.07 compared to record first quarter earnings of $27.5 million, or $0.32 per diluted share, for the same period last year. First quarter results for fiscal 2003 included just one month of operations for Unimast Incorporated which was acquired on July 31, 2002. Unimast generated $47.6 million of sales and $5.0 million in earnings during June and July 2002, prior to Worthington's ownership. "This was a particularly difficult quarter for our two largest business segments, Processed Steel Products and Metal Framing," said John P. McConnell, Chairman and CEO of Worthington Industries. "Overall volume in Processed Steel Products declined by 13% largely tied to an estimated 14% production decrease among the `Big 3' auto producers. While our direct tons were off only 7%, we saw a 20% decline in our tolling tons." McConnell explained, "Although we believe we maintained our market share during the quarter, weak overall demand, a significant mix change between our direct and tolled tons and rising steel costs, all contributed to weaker earnings in Processed Steel Products." "Our Metal Framing business suffered a modest loss as several adverse factors converged during this quarter," McConnell continued. "The commercial construction market and, in particular, commercial office space construction, continue to be very soft. As a result, competitive pricing pressures have been mounting throughout the past six months at a time when we continued to carry additional expenses associated with the acquisition of Unimast. During the quarter, we also continued to incur the additional costs of our increasingly successful efforts to broaden our base of business into several niche markets ranging from single and multi-family residential, midrise commercial and mixed use facilities to kit packages and emergency shelter designs. Although we expect the commercial construction market to remain soft for some time, other issues that negatively affected this quarter are subsiding, and we expect a better second quarter in Metal Framing," McConnell said. -more- Worthington Industries September 17, 2003 2-2-2 During the quarter, the company generated enough cash to reduce the utilization of its accounts receivable securitization facility by $70 million and fund the quarterly dividend. "I am proud of our unbroken record of profitability and dividend payments," concluded McConnell. SEGMENT RESULTS Within the Processed Steel Products segment, quarterly net sales fell 10%, or $31.7 million, to $287.2 million from $318.9 million in the comparable quarter of fiscal 2003. The decrease in net sales was due to declines in both direct and tolling volumes. Lower volumes and a reduction in the spread between selling prices and material costs resulted in a depressed operating margin. Within the Metal Framing segment, net sales increased 17%, or $20.2 million, to $141.0 million from $120.8 million in the comparable quarter of fiscal 2003 due to the Unimast acquisition. However, weakness in the commercial construction market contributed to a 9% decline in the combined tons shipped during the quarter on a proforma basis. The volume decline, coupled with higher material costs and severe pricing pressure, led to an operating loss. Dietrich Metal Framing initiated product price increases effective September 1, 2003. Within the Pressure Cylinders segment, net sales decreased 19%, or $15.6 million, to $66.5 million from $82.1 million in the comparable quarter of fiscal 2003. Sales of propane cylinders in North America fell from last year's record levels due to the diminishing impact of the April 2002 regulations that require overfill prevention devices on certain propane cylinders. The volume decline resulted in a reduced operating margin. Worthington's joint ventures contributed positively to first quarter results. Equity in net income of six unconsolidated affiliates totaled $7.9 million, in line with the year ago quarter. OUTLOOK Although the economy appears to have reached a bottom and there are indications that the deterioration in demand and end customer pricing have stabilized, there are no indications of meaningful improvement. In fact, conditions in automotive and commercial construction - two of the company's major markets - will continue to be challenging. "Big 3" vehicle production is projected to be down at least 8% for the coming fiscal quarter relative to last year, but up 18% over this quarter. Additionally, the U.S. Census Bureau's index of private construction spending confirms that commercial construction activity remains near five-year lows. OTHER Dividends declared On August 21, 2003, the board of directors declared a quarterly cash dividend of $0.16 per -more- Worthington Industries September 17, 2003 3-3-3 share payable September 29, 2003, to shareholders of record September 15, 2003. Corporate Profile Worthington Industries is a leading diversified metal processing company with annual sales of approximately $2 billion. The Columbus, Ohio, based company is North America's premier value-added steel processor and a leader in manufactured metal products such as automotive aftermarket stampings, pressure cylinders, metal framing, metal ceiling grid systems and laser welded blanks. Worthington employs more than 7,500 people and operates 62 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 will review its first quarter results during its quarterly conference call today, September 17, 2003, 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 and operating results; projected capacity levels; anticipated capital expenditures; projected timing, results, costs, charges and expenditures related to plant closures and consolidations; and other non-historical information 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, changes in product mix and market acceptance of products; changes in pricing or availability of raw materials, particularly steel; effects of plant closures and the consolidation of operations; capacity restraints and efficiencies; conditions in major product markets; delays in construction or equipment supply; financial difficulties of customers, suppliers and others with whom we do business; the effect of national, regional and worldwide economic conditions; 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; the business environment and impact of governmental regulations, both in the United States and abroad; and other risks described from time to time in filings with the SEC. ### Worthington Industries September 17, 2003 4-4-4 WORTHINGTON INDUSTRIES, INC. EARNINGS HIGHLIGHTS (In Thousands, Except Per Share)
Three Months Ended August 31, --------------------------- 2003 2002 --------- --------- (Unaudited) (Unaudited) Net sales: Processed Steel Products $ 287,198 $ 318,921 Metal Framing 141,064 120,838 Pressure Cylinders 66,535 82,136 Other 3,238 3,569 --------- --------- Total net sales 498,035 525,464 Cost of goods sold 449,052 436,040 --------- --------- Gross margin 48,983 89,424 Selling, general & administrative expense 41,620 47,103 --------- --------- Operating income: Processed Steel Products 8,169 22,317 Metal Framing (3,654) 16,364 Pressure Cylinders 3,538 7,194 Other (690) (3,554) --------- --------- Total operating income 7,363 42,321 Other income (expense): Miscellaneous expense (389) (1,341) Interest expense (5,591) (6,103) Equity in net income of unconsolidated affiliates 7,936 8,415 --------- --------- Earnings before taxes 9,319 43,292 Income tax expense 3,402 15,802 --------- --------- Net earnings $ 5,917 $ 27,490 ========= ========= Average common shares outstanding - diluted 86,517 86,499 --------- --------- Earnings per share - diluted $ 0.07 $ 0.32 ========= ========= Common shares outstanding at end of period 86,054 85,624 Cash dividends declared per common share $ 0.16 $ 0.16
Worthington Industries September 17, 2003 5-5-5 WORTHINGTON INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands)
August 31, May 31, 2003 2003 ---------- ---------- (Unaudited) (Audited) ASSETS Current assets Cash and cash equivalents $ 598 $ 1,139 Accounts receivable, net 172,934 169,967 Inventories 256,217 268,983 Income taxes receivable -- 11,304 Deferred income taxes 20,714 20,783 Other current assets 32,678 34,070 ---------- ---------- Total current assets 483,141 506,246 Investments in unconsolidated affiliates 83,256 81,221 Goodwill 115,433 116,781 Other assets 30,591 30,777 Property, plant and equipment, net 728,802 743,044 ---------- ---------- Total assets $1,441,223 $1,478,069 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 207,963 $ 222,987 Notes payable 68 1,145 Current maturities of long-term debt 1,113 1,194 Other current liabilities 83,996 92,845 ---------- ---------- Total current liabilities 293,140 318,171 Other liabilities 91,497 90,471 Long-term debt 288,978 289,689 Deferred income taxes 140,251 143,444 Shareholders' equity 627,357 636,294 ---------- ---------- Total liabilities and shareholders' equity $1,441,223 $1,478,069 ========== ==========
Worthington Industries September 17, 2003 6-6-6 WORTHINGTON INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands)
Three Months Ended August 31, --------------------------- 2003 2002 --------- --------- (Unaudited) (Unaudited) OPERATING ACTIVITIES Net earnings $ 5,917 $ 27,490 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 16,952 17,510 Other adjustments (4,485) 9,626 Changes in current assets and liabilities (1,348) 75,785 --------- --------- Net cash provided by operating activities 17,036 130,411 INVESTING ACTIVITIES Investment in property, plant and equipment, net (5,816) (6,421) Acquisitions, net of cash acquired -- (113,740) Investment in unconsolidated affiliate (490) -- Proceeds from sale of assets 2,880 175 --------- --------- Net cash used by investing activities (3,426) (119,986) FINANCING ACTIVITIES Proceeds from (payments on) short-term borrowings (1,077) 5,667 Principal payments on long-term debt (556) (241) Dividends paid (13,754) (13,683) Other 1,236 (209) --------- --------- Net cash used by financing activities (14,151) (8,466) --------- --------- Increase (decrease) in cash and cash equivalents (541) 1,959 Cash and cash equivalents at beginning of period 1,139 496 --------- --------- Cash and cash equivalents at end of period $ 598 $ 2,455 ========= =========
Worthington Industries September 17, 2003 7-7-7 WORTHINGTON INDUSTRIES, INC. SUPPLEMENTAL DATA (In Thousands) The information in the table is being provided to assist in the analysis of the results of operations and is based on the best information available to management.
Three Months Ended August 31, ---------------------------- 2003 2002 -------- -------- (Unaudited) (Unaudited) Processed Steel Products Tons shipped Direct 518 558 Toll 332 415 Net sales Direct $271,892 $298,885 Toll $ 15,306 $ 20,036 Material cost Direct $188,985 $194,482 Toll n/a n/a Metal Framing Tons shipped 198 158 Net sales $141,064 $120,838 Material cost $ 92,954 $ 60,272 Pressure Cylinders Units shipped 3,123 4,033 Net sales $ 66,535 $ 82,136 Material cost $ 29,020 $ 37,502
n/a - not applicable