Worthington Industries, Inc. (NYSE: WOR) today reported net sales
of $1.4 billion and net earnings of $56.3 million, or $1.11 per
diluted share, for its fiscal 2022 third quarter ended
February 28, 2022. In the third quarter of fiscal 2021, the
Company reported net sales of $759.1 million and net earnings of
$67.6 million, or $1.27 per diluted share. Results in both the
current and prior year quarter were impacted by certain unique
items, as summarized in the table below.
(U.S. dollars in millions, except per share amounts)
|
3Q 2022 |
|
|
3Q 2021 |
|
|
After-Tax |
|
Per Share |
|
|
After-Tax |
|
|
Per Share |
|
Net earnings |
$ |
56.3 |
|
$ |
1.11 |
|
|
$ |
67.6 |
|
|
$ |
1.27 |
|
Impairment and restructuring
charges |
|
1.1 |
|
|
0.02 |
|
|
|
8.4 |
|
|
|
0.16 |
|
Gain on investment in Nikola,
net of incremental expenses |
|
- |
|
|
- |
|
|
|
(3.7 |
) |
|
|
(0.07 |
) |
Adjusted net earnings |
$ |
57.5 |
|
$ |
1.13 |
|
|
$ |
72.3 |
|
|
$ |
1.36 |
|
Financial highlights for the current and comparative periods are
as follows:
(U.S. dollars in millions, except per share amounts)
|
3Q 2022 |
|
3Q 2021 |
|
9M 2022 |
|
9M 2021 |
|
Net sales |
$ |
1,378.2 |
|
$ |
759.1 |
|
$ |
3,721.9 |
|
$ |
2,193.1 |
|
Operating income |
|
37.6 |
|
|
49.8 |
|
|
263.9 |
|
|
57.0 |
|
Equity income |
|
47.5 |
|
|
31.7 |
|
|
160.6 |
|
|
80.9 |
|
Net earnings |
|
56.3 |
|
|
67.6 |
|
|
299.1 |
|
|
610.2 |
|
Earnings per diluted
share |
$ |
1.11 |
|
$ |
1.27 |
|
$ |
5.83 |
|
$ |
11.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
“We delivered solid earnings in the quarter,”
said Andy Rose, President and CEO. “Steel Processing faced
headwinds due to continued steel pricing volatility and choppy but
improving automotive demand. Building Products improved across the
board with increased contributions from ClarkDietrich and our
wholly owned businesses, while Consumer Products benefitted from
robust demand and improved margins.”
Consolidated Quarterly Results
Net sales for the third quarter of fiscal 2022
were $1.4 billion compared to $759.1 million, an increase of $619.1
million, or 82%, over the comparable quarter in the prior year. The
increase was driven by higher average selling prices across all of
our businesses and contributions from the acquisitions of Tempel
Steel Company (“Tempel”) and Shiloh Industries’ U.S. BlankLight®
business in the current fiscal year.
Gross margin decreased $21.0 million from the
prior year quarter to $143.1 million, as improvements in both the
Consumer and Building Products businesses were more than offset by
the $56.0 million unfavorable variance caused by inventory holding
gains in the prior year quarter versus inventory holding losses in
the current quarter.
Operating income for the current quarter was
$37.6 million, a decrease of $12.2 million from the prior year
quarter. Excluding impairment, restructuring, and the
Nikola-related expense adjustment from both periods, adjusted
operating income was down $37.0 million from the prior year
quarter. The decrease was driven by lower gross margin and higher
SG&A expense, which was up $16.0 million primarily due to the
impact of acquisitions.
Interest expense was $8.1 million in the current
quarter, up $0.5 million from the prior year quarter due to the
impact of higher average debt levels resulting from borrowings
under the Company’s revolving credit facility.
Equity income from unconsolidated joint ventures
increased $15.8 million over the prior year quarter to $47.5
million, due to higher contributions from ClarkDietrich, where
results benefited from significantly higher average selling prices.
The Company received cash distributions of $28.9 million from
unconsolidated joint ventures during the current quarter.
Income tax expense was $18.7 million in the
current quarter compared to $4.5 million in the prior year
quarter. The change was driven by the impact of a $19.7
million discrete tax benefit realized in connection with the sale
of the oil and gas equipment business in the prior year quarter and
lower core pre-tax earnings in the current quarter. Tax
expense in the current quarter reflected an estimated annual
effective rate of 23.2% compared to 20.1% for the prior year
quarter.
Balance Sheet
At quarter-end, total debt was $812.9 million,
up $102.4 from May 31, 2021, due to borrowings under the Company’s
revolving credit facility to fund the Tempel acquisition. The
Company had $44.3 million of cash at quarter end, a decrease of
$596.0 million from May 31, 2021, primarily due to acquisitions and
an increase in working capital associated with higher average steel
prices.
Quarterly Segment Results
Steel Processing’s net sales totaled $1.1
billion, up $548.1 million over the comparable prior year quarter.
The increase in net sales was driven by higher average selling
prices and, to a lesser extent, the impact of acquisitions
completed in fiscal 2022. Adjusted EBIT was down $54.7 million from
the prior year quarter to $7.1 million due to inventory holding
losses, estimated to be $24.9 million, in the current quarter
compared to inventory holding gains of $31.1 million in the prior
year quarter. Current quarter inventory holding losses included a
pre-tax charge of $15.7 million to write inventory down to net
realizable value. Equity earnings at Serviacero of $4.7 million
were up slightly over the prior year quarter on improved spreads.
The mix of direct versus toll tons processed was 51% to 49% in the
current quarter, compared to 48% to 52% in the prior year
quarter.
Consumer Products’ net sales totaled $161.7
million, up 41%, or $46.6 million, from the comparable prior year
quarter due to higher average selling prices and, to a lesser
extent, higher volume. Adjusted EBIT was up $12.1 million over the
prior year quarter to $26.7 million on the combined impact of
higher average selling prices and higher volume, which were
partially offset by higher wages.
Building Products’ net sales totaled $132.9
million, up 38%, or $36.6 million, from the comparable prior year
quarter on higher average selling prices. Adjusted EBIT of $49.6
million was $22.3 million more than the prior year quarter, due to
higher equity earnings at ClarkDietrich, up $15.5 million, and an
increase in operating income, up $7.9 million, on the favorable
impact of higher average selling prices, partially offset by higher
wages and freight costs.
Sustainable Energy Solutions’ net sales totaled
$31.0 million, down 3%, or $1.1 million, from the comparable prior
year quarter on lower volume, associated with the May 31, 2021
divestiture of the Liquified Petroleum Gas business in Poland.
Adjusted EBIT was a loss of $2.8 million, compared to a profit of
$0.1 million in the prior year quarter, on the combined impact of
higher production costs and unfavorable mix. Both volume and mix in
the current quarter were negatively impacted by the ongoing
semi-conductor chip shortage. This business continues to evolve as
it transitions to serve the global hydrogen ecosystem and adjacent
sustainable energies.
Recent Developments
- On Dec. 1, 2021, the Company’s
Steel Processing segment completed the acquisition of Tempel for
approximately $272.5 million, plus the assumption of certain
long-term liabilities. Tempel is a global leader in the electrical
steel market, which supplies steel laminations to the manufacturers
of transformers, electric motors and electric vehicle motors,
employing approximately 1,500 people across five manufacturing
facilities located in Chicago, Canada, China, India, and
Mexico.
- During the third quarter of fiscal
2022, the Company repurchased a total of 1,000,000 of its common
shares for $54.2 million, at an average purchase price of
$54.26.
- On March
22, 2022, Worthington’s Board of Directors declared a quarterly
dividend of $0.28 per share payable on June 29, 2022 to
shareholders of record on June 15, 2022.
Outlook
“While steel price volatility is expected to
remain a headwind for the company, overall, our businesses are
performing well, and underlying end market demand remains healthy,”
Rose said. “I am not surprised, but continue to be humbled and
grateful for the way our teams are performing in today’s dynamic
and challenging environment. We remain focused on delivering value
added solutions to our customers and investing in innovative
products that will benefit all of our stakeholders.”
Conference Call
Worthington will review fiscal 2022 third
quarter results during its quarterly conference call on March 23,
2022, at 8:30 a.m., Eastern Time. Details regarding the conference
call can be found on the Company website at
www.WorthingtonIndustries.com.
About Worthington
Industries
Worthington Industries (NYSE:WOR) is a leading
industrial manufacturing company pursuing its vision to be the
transformative partner to its customers, a positive force for its
communities and earn exceptional returns for its shareholders. For
over six decades, the Company has been delivering innovative
solutions to customers spanning industries such as automotive,
energy, retail and construction. Worthington is North America’s
premier value-added steel processor and producer of laser welded
solutions and electrical steel laminations that provide
lightweighting, safety critical and emission reducing components to
the mobility market. Through on-board fueling systems and gas
containment solutions, Worthington serves the growing global
hydrogen ecosystem. The Company’s focus on innovation and
manufacturing expertise extends to market-leading consumer products
in tools, outdoor living and celebrations categories, sold under
brand names, Coleman®, Bernzomatic®, Balloon Time®, Mag Torch®,
Well-X-Trol®, General®, Garden-Weasel®, Pactool
International® and Hawkeye™; as well as market leading
building products, including water systems, heating & cooling
solutions, architectural and acoustical grid ceilings and metal
framing and accessories.Headquartered in Columbus, Ohio,
Worthington operates 58 facilities in 16 states and nine countries,
sells into over 90 countries and employs approximately 9,500
people. Founded in 1955, the Company follows a people-first
philosophy with earning money for its shareholders as its first
corporate goal. Relentlessly finding new ways to drive progress and
transform, Worthington is committed to providing better solutions
for customers and bettering the communities where it operates by
reducing waste, supporting community-based non-profits and
developing the next generations of makers.
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 the ever-changing effects of the novel coronavirus (“COVID-19”)
pandemic and the various responses of governmental and
nongovernmental authorities thereto (such as fiscal stimulus
packages, quarantines, shut downs and other restrictions on travel
and commercial, social or other activities) on economies (local,
national and international) and markets, and on our customers,
counterparties, employees and third-party service providers; future
or expected cash positions, liquidity and ability to access
financial markets and capital; outlook, strategy or business plans;
future or expected growth, growth potential, forward momentum,
performance, competitive position, sales, volumes, cash flows,
earnings, margins, balance sheet strengths, debt, financial
condition or other financial measures; pricing trends for raw
materials and finished goods and the impact of pricing changes; the
ability to improve or maintain margins; expected demand or demand
trends for the Company or its markets; additions to product lines
and opportunities to participate in new markets; expected benefits
from Transformation and innovation efforts; the ability to improve
performance and competitive position at the Company’s operations;
anticipated working capital needs, capital expenditures and asset
sales; anticipated improvements and efficiencies in costs,
operations, sales, inventory management, sourcing and the supply
chain and the results thereof; projected profitability potential;
the ability to make acquisitions and the projected timing, results,
benefits, costs, charges and expenditures related to acquisitions,
joint ventures, headcount reductions and facility dispositions,
shutdowns and consolidations; projected capacity and the alignment
of operations with demand; the ability to operate profitably and
generate cash in down markets; the ability to 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; expectations for generating 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 risks,
uncertainties and impacts related to the COVID-19 pandemic – the
duration, extent and severity of which is impossible to predict,
including the possibility of future resurgence in the spread of
COVID-19 or variants thereof – and the availability, effectiveness
and acceptance of vaccines, and other actual or potential public
health emergencies and actions taken by governmental authorities or
others in connection therewith; the effect of national, regional
and global economic conditions generally and within major product
markets, including significant economic disruptions from COVID-19,
the actions taken in connection therewith and the implementation of
related fiscal stimulus packages; the effect of conditions in
national and worldwide financial markets, including inflation and
increases in interest rates, and with respect to the ability of
financial institutions to provide capital; the impact of tariffs,
the adoption of trade restrictions affecting the Company’s products
or suppliers, a United States withdrawal from or significant
renegotiation of trade agreements, the occurrence of trade wars,
the closing of border crossings, and other changes in trade
regulations or relationships; changing oil prices; 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; the outcome of adverse claims experience
with respect to workers’ compensation, product recalls or product
liability, casualty events or other matters; effects of facility
closures and the consolidation of operations; the effect of
financial difficulties, consolidation and other changes within the
steel, automotive (especially in light of the semi-conductor
shortages), construction 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 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
industries in which the Company participates 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, labor shortages (especially in light of the
COVID-19 pandemic), interruption in utility services, civil unrest,
international conflicts, 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 (especially in light of Russia’s invasion of Ukraine),
foreign currency exchange rate exposure and the acceptance of the
Company’s products in global markets; the ability to improve and
maintain processes and business practices to keep pace with the
economic, competitive and technological environment; the effect of
inflation and interest rate increases, which may negatively impact
the Company’s operations and financial results; deviation of actual
results from estimates and/or assumptions used by the Company in
the application of its significant accounting policies; the level
of imports and import prices in the Company’s markets; the impact
of environmental laws and regulations or the actions of the United
States Environmental Protection Agency or similar regulators which
increase costs or limit the Company’s ability to sell certain
products; 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 Coronavirus Aid,
Relief and Economic Security (CARES) Act, the Consolidated
Appropriations Act, 2021, the American Rescue Act of 2021, and the
Dodd-Frank Wall Street Reform and the Consumer Protection Act of
2010; the effect of healthcare laws in the United States and
potential changes for such laws, especially in light of the
COVID-19 pandemic which may increase the Company’s healthcare and
other costs and negatively impact the Company’s operations and
financial results; cyber security risks; the effects of privacy and
information security laws and standards; and other risks described
from time to time in the filings of Worthington Industries, Inc.
with the United States Securities and Exchange Commission,
including those described in “Part I – Item 1A. – Risk Factors” of
the Annual Report on Form 10-K of Worthington Industries, Inc. for
the fiscal year ended May 31, 2021.
WORTHINGTON INDUSTRIES,
INC.CONSOLIDATED STATEMENTS OF
EARNINGS(In thousands, except per share
amounts)
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
February 28, |
|
|
February 28, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net sales |
$ |
1,378,235 |
|
|
$ |
759,109 |
|
|
$ |
3,721,914 |
|
|
$ |
2,193,110 |
|
Cost of goods sold |
|
1,235,107 |
|
|
|
595,011 |
|
|
|
3,174,821 |
|
|
|
1,780,180 |
|
Gross margin |
|
143,128 |
|
|
|
164,098 |
|
|
|
547,093 |
|
|
|
412,930 |
|
Selling, general and
administrative expense |
|
102,945 |
|
|
|
86,895 |
|
|
|
294,926 |
|
|
|
251,220 |
|
Impairment of long-lived
assets |
|
3,076 |
|
|
|
- |
|
|
|
3,076 |
|
|
|
13,739 |
|
Restructuring and other
(income) expense, net |
|
(504 |
) |
|
|
28,212 |
|
|
|
(14,782 |
) |
|
|
37,656 |
|
Incremental expenses related
to Nikola gains |
|
- |
|
|
|
(781 |
) |
|
|
- |
|
|
|
53,300 |
|
Operating income |
|
37,611 |
|
|
|
49,772 |
|
|
|
263,873 |
|
|
|
57,015 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous income, net |
|
393 |
|
|
|
539 |
|
|
|
2,063 |
|
|
|
1,366 |
|
Interest expense |
|
(8,140 |
) |
|
|
(7,558 |
) |
|
|
(23,170 |
) |
|
|
(22,696 |
) |
Equity in net income of unconsolidated affiliates |
|
47,466 |
|
|
|
31,674 |
|
|
|
160,600 |
|
|
|
80,939 |
|
Gains on investment in Nikola |
|
- |
|
|
|
2,740 |
|
|
|
- |
|
|
|
655,102 |
|
Earnings before income taxes |
|
77,330 |
|
|
|
77,167 |
|
|
|
403,366 |
|
|
|
771,726 |
|
Income tax expense |
|
18,683 |
|
|
|
4,485 |
|
|
|
90,059 |
|
|
|
148,818 |
|
Net earnings |
|
58,647 |
|
|
|
72,682 |
|
|
|
313,307 |
|
|
|
622,908 |
|
Net earnings attributable to
noncontrolling interests |
|
2,305 |
|
|
|
5,073 |
|
|
|
14,173 |
|
|
|
12,668 |
|
Net earnings
attributable to controlling interest |
$ |
56,342 |
|
|
$ |
67,609 |
|
|
$ |
299,134 |
|
|
$ |
610,240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
49,749 |
|
|
|
52,149 |
|
|
|
50,331 |
|
|
|
53,076 |
|
Earnings per share
attributable to controlling interest |
$ |
1.13 |
|
|
$ |
1.30 |
|
|
$ |
5.94 |
|
|
$ |
11.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
50,641 |
|
|
|
53,217 |
|
|
|
51,275 |
|
|
|
54,077 |
|
Earnings per share
attributable to controlling interest |
$ |
1.11 |
|
|
$ |
1.27 |
|
|
$ |
5.83 |
|
|
$ |
11.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding at
end of period |
|
49,364 |
|
|
|
51,813 |
|
|
|
49,364 |
|
|
|
51,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per
share |
$ |
0.28 |
|
|
$ |
0.25 |
|
|
$ |
0.84 |
|
|
$ |
0.75 |
|
CONSOLIDATED BALANCE
SHEETSWORTHINGTON INDUSTRIES,
INC.(In thousands)
|
February 28, |
|
|
May 31, |
|
|
2022 |
|
|
2021 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
44,324 |
|
|
$ |
640,311 |
|
Receivables, less allowances of $1,447 and $608 at
February 28, 2022 |
|
|
|
|
|
|
|
and May 31, 2021, respectively |
|
856,656 |
|
|
|
639,964 |
|
Inventories: |
|
|
|
|
|
|
|
Raw materials |
|
372,074 |
|
|
|
266,208 |
|
Work in process |
|
284,817 |
|
|
|
183,413 |
|
Finished products |
|
212,307 |
|
|
|
115,133 |
|
Total inventories |
|
869,198 |
|
|
|
564,754 |
|
Income taxes receivable |
|
2,755 |
|
|
|
1,958 |
|
Assets held for sale |
|
33,533 |
|
|
|
51,956 |
|
Prepaid expenses and other current assets |
|
90,513 |
|
|
|
69,049 |
|
Total current assets |
|
1,896,979 |
|
|
|
1,967,992 |
|
Investments in unconsolidated
affiliates |
|
303,422 |
|
|
|
233,126 |
|
Operating lease assets |
|
98,034 |
|
|
|
35,101 |
|
Goodwill |
|
407,318 |
|
|
|
351,056 |
|
Other intangible assets, net
of accumulated amortization of $90,433 and |
|
|
|
|
|
|
|
$80,513 at February 28, 2022 and May 31, 2021,
respectively |
|
304,187 |
|
|
|
240,387 |
|
Other assets |
|
33,723 |
|
|
|
30,566 |
|
Property, plant and
equipment: |
|
|
|
|
|
|
|
Land |
|
51,081 |
|
|
|
21,744 |
|
Buildings and improvements |
|
297,266 |
|
|
|
271,196 |
|
Machinery and equipment |
|
1,179,426 |
|
|
|
1,046,065 |
|
Construction in progress |
|
76,825 |
|
|
|
53,903 |
|
Total property, plant and equipment |
|
1,604,598 |
|
|
|
1,392,908 |
|
Less: accumulated depreciation |
|
910,101 |
|
|
|
877,891 |
|
Total property, plant and equipment, net |
|
694,497 |
|
|
|
515,017 |
|
Total
assets |
$ |
3,738,160 |
|
|
$ |
3,373,245 |
|
|
|
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
722,284 |
|
|
$ |
567,392 |
|
Short-term borrowings |
|
111,909 |
|
|
|
- |
|
Accrued compensation, contributions to employee benefit plans
and |
|
|
|
|
|
|
|
related taxes |
|
94,355 |
|
|
|
137,698 |
|
Dividends payable |
|
16,003 |
|
|
|
16,536 |
|
Other accrued items |
|
64,384 |
|
|
|
52,250 |
|
Current operating lease liabilities |
|
12,630 |
|
|
|
9,947 |
|
Income taxes payable |
|
4,854 |
|
|
|
3,620 |
|
Current maturities of long-term debt |
|
277 |
|
|
|
458 |
|
Total current liabilities |
|
1,026,696 |
|
|
|
787,901 |
|
Other liabilities |
|
128,256 |
|
|
|
82,824 |
|
Distributions in excess of
investment in unconsolidated affiliate |
|
87,413 |
|
|
|
99,669 |
|
Long-term debt |
|
700,739 |
|
|
|
710,031 |
|
Noncurrent operating lease
liabilities |
|
86,565 |
|
|
|
27,374 |
|
Deferred income taxes,
net |
|
104,886 |
|
|
|
113,751 |
|
Total liabilities |
|
2,134,555 |
|
|
|
1,821,550 |
|
Shareholders’ equity -
controlling interest |
|
1,451,366 |
|
|
|
1,398,193 |
|
Noncontrolling interests |
|
152,239 |
|
|
|
153,502 |
|
Total equity |
|
1,603,605 |
|
|
|
1,551,695 |
|
Total liabilities and
equity |
$ |
3,738,160 |
|
|
$ |
3,373,245 |
|
WORTHINGTON INDUSTRIES,
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands)
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
February 28, |
|
|
February 28, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
58,647 |
|
|
$ |
72,682 |
|
|
$ |
313,307 |
|
|
$ |
622,908 |
|
Adjustments to reconcile net
earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
27,425 |
|
|
|
21,893 |
|
|
|
70,579 |
|
|
|
65,664 |
|
Impairment of long-lived assets |
|
3,076 |
|
|
|
- |
|
|
|
3,076 |
|
|
|
13,739 |
|
Provision for (benefit from) deferred income taxes |
|
10,661 |
|
|
|
(30,129 |
) |
|
|
13,336 |
|
|
|
9,126 |
|
Bad debt expense (income) |
|
382 |
|
|
|
(95 |
) |
|
|
896 |
|
|
|
(160 |
) |
Equity in net income of unconsolidated affiliates, net of
distributions |
|
(18,604 |
) |
|
|
(13,288 |
) |
|
|
(83,096 |
) |
|
|
(15,437 |
) |
Net (gain) loss on sale of assets |
|
(628 |
) |
|
|
27,641 |
|
|
|
(13,830 |
) |
|
|
35,314 |
|
Stock-based compensation |
|
4,408 |
|
|
|
4,727 |
|
|
|
11,959 |
|
|
|
14,437 |
|
Gains on investment in Nikola |
|
- |
|
|
|
(2,740 |
) |
|
|
- |
|
|
|
(655,102 |
) |
Charitable contribution of Nikola shares |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
20,653 |
|
Changes in assets and
liabilities, net of impact of acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables |
|
(33,766 |
) |
|
|
(32,105 |
) |
|
|
(155,451 |
) |
|
|
(110,719 |
) |
Inventories |
|
31,051 |
|
|
|
(96,836 |
) |
|
|
(229,813 |
) |
|
|
(6,591 |
) |
Accounts payable |
|
51,893 |
|
|
|
62,299 |
|
|
|
50,967 |
|
|
|
157,629 |
|
Accrued compensation and employee benefits |
|
(21,105 |
) |
|
|
10,779 |
|
|
|
(52,924 |
) |
|
|
48,591 |
|
Income taxes payable |
|
(14,422 |
) |
|
|
(2,474 |
) |
|
|
(1,487 |
) |
|
|
36,567 |
|
Other operating items, net |
|
(24,828 |
) |
|
|
(13,098 |
) |
|
|
(22,245 |
) |
|
|
(2,547 |
) |
Net cash provided
(used) by operating activities |
|
74,190 |
|
|
|
9,256 |
|
|
|
(94,726 |
) |
|
|
234,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in property, plant and equipment |
|
(23,645 |
) |
|
|
(16,377 |
) |
|
|
(71,804 |
) |
|
|
(65,321 |
) |
Acquisitions, net of cash acquired |
|
(269,511 |
) |
|
|
(129,743 |
) |
|
|
(377,261 |
) |
|
|
(129,818 |
) |
Proceeds from sale of assets |
|
4,083 |
|
|
|
(985 |
) |
|
|
35,904 |
|
|
|
20,595 |
|
Proceeds from sale of Nikola shares |
|
- |
|
|
|
146,590 |
|
|
|
- |
|
|
|
634,449 |
|
Net cash (used)
provided by investing activities |
|
(289,073 |
) |
|
|
(515 |
) |
|
|
(413,161 |
) |
|
|
459,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from short-term borrowings, net of issuance costs |
|
105,638 |
|
|
|
- |
|
|
|
105,638 |
|
|
|
- |
|
Principal payments on long-term obligations |
|
(152 |
) |
|
|
(99 |
) |
|
|
(554 |
) |
|
|
(292 |
) |
Proceeds from issuance of common shares, net of tax
withholdings |
|
269 |
|
|
|
565 |
|
|
|
(6,516 |
) |
|
|
1,709 |
|
Payments to noncontrolling interests |
|
(3,360 |
) |
|
|
(7,250 |
) |
|
|
(15,436 |
) |
|
|
(7,810 |
) |
Repurchase of common shares |
|
(54,255 |
) |
|
|
(52,367 |
) |
|
|
(127,842 |
) |
|
|
(145,250 |
) |
Dividends paid |
|
(14,127 |
) |
|
|
(13,215 |
) |
|
|
(43,390 |
) |
|
|
(40,027 |
) |
Net cash provided
(used) by financing activities |
|
34,013 |
|
|
|
(72,366 |
) |
|
|
(88,100 |
) |
|
|
(191,670 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash
and cash equivalents |
|
(180,870 |
) |
|
|
(63,625 |
) |
|
|
(595,987 |
) |
|
|
502,307 |
|
Cash and cash equivalents at
beginning of period |
|
225,194 |
|
|
|
713,130 |
|
|
|
640,311 |
|
|
|
147,198 |
|
Cash and cash
equivalents at end of period |
$ |
44,324 |
|
|
$ |
649,505 |
|
|
$ |
44,324 |
|
|
$ |
649,505 |
|
WORTHINGTON INDUSTRIES,
INC.NON-GAAP FINANCIAL MEASURES / SUPPLEMENTAL
DATA(In thousands, except volume and per share
amounts)
The Company reports its financial results in
accordance with accounting principles generally accepted in the
United States (GAAP). The Company also presents adjusted operating
income and adjusted net earnings per diluted share attributable to
controlling interest, which generally exclude impairment and
restructuring charges as well as other items that management
believes are not reflective of, and thus should not be included
when evaluating the performance of its ongoing operations.
Additionally, the Company presents adjusted earnings before
interest and taxes attributable to controlling interest (“adjusted
EBIT”) for purposes of evaluating segment performance. These
represent non-GAAP financial measures and are used by management to
evaluate the Company’s performance, engage in financial and
operational planning and determine incentive compensation because
it believes that these measures provide additional perspective and,
in some circumstances are more closely correlated to, the
performance of the Company’s ongoing operations.
The following provides a reconciliation to
adjusted operating income and adjusted earnings per diluted share
from the most comparable GAAP measures for the three months ended
February 28, 2022 and 2021.
|
|
Three Months Ended February 28, 2022 |
|
|
|
OperatingIncome |
|
|
EarningsBeforeIncomeTaxes |
|
|
Income TaxExpense(Benefit) |
|
|
Net EarningsAttributable toControlling Interest(1) |
|
|
Earnings perDilutedShare |
|
GAAP |
|
$ |
37,611 |
|
|
$ |
77,330 |
|
|
$ |
18,683 |
|
|
$ |
56,342 |
|
|
$ |
1.11 |
|
Impairment of long-lived
assets |
|
|
3,076 |
|
|
|
3,076 |
|
|
|
(449 |
) |
|
|
1,489 |
|
|
|
0.03 |
|
Restructuring and other
income, net |
|
|
(504 |
) |
|
|
(504 |
) |
|
|
136 |
|
|
|
(368 |
) |
|
|
(0.01 |
) |
Non-GAAP |
|
$ |
40,183 |
|
|
$ |
79,902 |
|
|
$ |
18,996 |
|
|
$ |
57,463 |
|
|
$ |
1.13 |
|
|
|
Three Months Ended February 28, 2021 |
|
|
|
OperatingIncome |
|
|
EarningsBeforeIncomeTaxes |
|
|
Income TaxExpense(Benefit) |
|
|
Net EarningsAttributable toControlling Interest(1) |
|
|
Earnings perDilutedShare |
|
GAAP |
|
$ |
49,772 |
|
|
$ |
77,167 |
|
|
$ |
4,485 |
|
|
$ |
67,609 |
|
|
$ |
1.27 |
|
Restructuring and other
expense, net |
|
|
28,212 |
|
|
|
28,212 |
|
|
|
(19,843 |
) |
|
|
8,372 |
|
|
|
0.16 |
|
Incremental expenses related
to Nikola gains |
|
|
(781 |
) |
|
|
(781 |
) |
|
|
(755 |
) |
|
|
(1,536 |
) |
|
|
(0.03 |
) |
Gain on investment in
Nikola |
|
|
- |
|
|
|
(2,740 |
) |
|
|
575 |
|
|
|
(2,165 |
) |
|
|
(0.04 |
) |
Non-GAAP |
|
$ |
77,203 |
|
|
$ |
101,858 |
|
|
$ |
24,508 |
|
|
$ |
72,280 |
|
|
$ |
1.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change |
|
$ |
(37,020 |
) |
|
$ |
(21,956 |
) |
|
$ |
(5,512 |
) |
|
$ |
(14,817 |
) |
|
$ |
(0.23 |
) |
The following provides a reconciliation to
adjusted operating income and adjusted earnings per diluted share
from the most comparable GAAP measures for the nine months ended
February 28, 2022 and 2021.
|
|
Nine Months Ended February 28, 2022 |
|
|
|
OperatingIncome |
|
|
EarningsBeforeIncomeTaxes |
|
|
Income TaxExpense(Benefit) |
|
|
Net EarningsAttributable toControlling Interest(1) |
|
|
Earnings perDilutedShare |
|
GAAP |
|
$ |
263,873 |
|
|
$ |
403,366 |
|
|
$ |
90,059 |
|
|
$ |
299,134 |
|
|
$ |
5.83 |
|
Impairment of long-lived
assets |
|
|
3,076 |
|
|
|
3,076 |
|
|
|
(449 |
) |
|
|
1,489 |
|
|
|
0.03 |
|
Restructuring and other
income, net |
|
|
(14,782 |
) |
|
|
(14,782 |
) |
|
|
2,027 |
|
|
|
(6,728 |
) |
|
|
(0.13 |
) |
Non-GAAP |
|
$ |
252,167 |
|
|
$ |
391,660 |
|
|
$ |
88,481 |
|
|
$ |
293,895 |
|
|
$ |
5.73 |
|
WORTHINGTON INDUSTRIES,
INC.NON-GAAP FINANCIAL MEASURES / SUPPLEMENTAL
DATA(In thousands, except volume and per share
amounts)(Continued)
|
|
Nine Months Ended February 28, 2021 |
|
|
|
OperatingIncome |
|
|
EarningsBeforeIncomeTaxes |
|
|
Income TaxExpense(Benefit) |
|
|
Net EarningsAttributable toControlling Interest(1) |
|
|
Earnings perDilutedShare |
|
GAAP |
|
$ |
57,015 |
|
|
$ |
771,726 |
|
|
$ |
148,818 |
|
|
$ |
610,240 |
|
|
$ |
11.28 |
|
Impairment of long-lived
assets |
|
|
13,739 |
|
|
|
13,739 |
|
|
|
(3,200 |
) |
|
|
10,539 |
|
|
|
0.19 |
|
Restructuring and other
expense, net |
|
|
37,656 |
|
|
|
37,656 |
|
|
|
(21,977 |
) |
|
|
15,423 |
|
|
|
0.29 |
|
Incremental expenses related
to Nikola gains |
|
|
53,300 |
|
|
|
53,300 |
|
|
|
(11,785 |
) |
|
|
41,515 |
|
|
|
0.77 |
|
Gains on investment in
Nikola |
|
|
- |
|
|
|
(655,102 |
) |
|
|
136,035 |
|
|
|
(519,067 |
) |
|
|
(9.59 |
) |
Non-GAAP |
|
$ |
161,710 |
|
|
$ |
221,319 |
|
|
$ |
49,745 |
|
|
$ |
158,650 |
|
|
$ |
2.94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change |
|
$ |
90,457 |
|
|
$ |
170,341 |
|
|
$ |
38,736 |
|
|
$ |
135,245 |
|
|
$ |
2.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Excludes the
impact of the noncontrolling interest. |
|
To further assist in the analysis of segment
results for the periods presented, the following volume and sales
information for the three and nine months ended February 28,
2022 and 2021 has been provided along with a reconciliation of
adjusted EBIT to the most comparable GAAP measure, which is
operating income for purposes of measuring segment profit:
|
Three Months Ended February 28, 2022 |
|
|
SteelProcessing |
|
|
ConsumerProducts |
|
|
BuildingProducts |
|
|
SustainableEnergySolutions |
|
|
Other |
|
|
Consolidated |
|
Volume (tons/units) |
|
998,590 |
|
|
|
20,297,372 |
|
|
|
2,786,560 |
|
|
|
144,108 |
|
|
|
- |
|
|
n/a |
|
Sales |
$ |
1,052,562 |
|
|
$ |
161,692 |
|
|
$ |
132,944 |
|
|
$ |
31,037 |
|
|
$ |
- |
|
|
$ |
1,378,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
$ |
2,690 |
|
|
$ |
26,713 |
|
|
$ |
9,631 |
|
|
$ |
(2,763 |
) |
|
$ |
1,340 |
|
|
$ |
37,611 |
|
Impairment of long-lived
assets |
|
3,076 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,076 |
|
Restructuring and other
income, net |
|
114 |
|
|
|
- |
|
|
|
(35 |
) |
|
|
- |
|
|
|
(583 |
) |
|
|
(504 |
) |
Adjusted operating income (loss) |
|
5,880 |
|
|
|
26,713 |
|
|
|
9,596 |
|
|
|
(2,763 |
) |
|
|
757 |
|
|
|
40,183 |
|
Miscellaneous income, net |
|
(12 |
) |
|
|
(39 |
) |
|
|
(3 |
) |
|
|
(38 |
) |
|
|
485 |
|
|
|
393 |
|
Equity in net income of
unconsolidated affiliates (1) |
|
4,692 |
|
|
|
- |
|
|
|
39,978 |
|
|
|
- |
|
|
|
2,796 |
|
|
|
47,466 |
|
Less: Net earnings
attributable to noncontrolling interests (2) |
|
3,444 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,444 |
|
Adjusted earnings before interest and taxes |
$ |
7,116 |
|
|
$ |
26,674 |
|
|
$ |
49,571 |
|
|
$ |
(2,801 |
) |
|
$ |
4,038 |
|
|
$ |
84,598 |
|
|
Three Months Ended February 28, 2021 |
|
|
SteelProcessing |
|
|
ConsumerProducts |
|
|
BuildingProducts |
|
|
SustainableEnergySolutions |
|
|
Other |
|
|
Consolidated |
|
Volume (tons/units) |
|
1,014,873 |
|
|
|
17,659,834 |
|
|
|
2,805,408 |
|
|
|
207,698 |
|
|
|
10,530 |
|
|
n/a |
|
Sales |
$ |
504,477 |
|
|
$ |
115,071 |
|
|
$ |
96,256 |
|
|
$ |
32,103 |
|
|
$ |
11,202 |
|
|
$ |
759,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
$ |
62,874 |
|
|
$ |
14,726 |
|
|
$ |
1,780 |
|
|
$ |
89 |
|
|
$ |
(29,697 |
) |
|
$ |
49,772 |
|
Restructuring and other
expense, net |
|
(42 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
28,254 |
|
|
|
28,212 |
|
Incremental expenses related
to Nikola gains |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(781 |
) |
|
|
(781 |
) |
Adjusted operating income (loss) |
|
62,832 |
|
|
|
14,726 |
|
|
|
1,780 |
|
|
|
89 |
|
|
|
(2,224 |
) |
|
|
77,203 |
|
Miscellaneous income, net |
|
(196 |
) |
|
|
(132 |
) |
|
|
181 |
|
|
|
42 |
|
|
|
644 |
|
|
|
539 |
|
Equity in net income of
unconsolidated affiliates (1) |
|
4,223 |
|
|
|
- |
|
|
|
25,379 |
|
|
|
- |
|
|
|
2,072 |
|
|
|
31,674 |
|
Less: Net earnings
attributable to noncontrolling interests (2) |
|
5,070 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5,070 |
|
Adjusted earnings (loss) before interest and taxes |
$ |
61,789 |
|
|
$ |
14,594 |
|
|
$ |
27,340 |
|
|
$ |
131 |
|
|
$ |
492 |
|
|
$ |
104,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
supplemental break-out of equity income by unconsolidated affiliate
in the table below. |
|
(2) Excludes the
noncontrolling interest portion of impairment and restructuring
(charges) gains of $(1,139) and $3 for the three months ended
February 28, 2022 and 2021, respectively. |
|
|
Nine Months Ended February 28, 2022 |
|
|
SteelProcessing |
|
|
ConsumerProducts |
|
|
BuildingProducts |
|
|
SustainableEnergySolutions |
|
|
Other |
|
|
Consolidated |
|
Volume (tons/units) |
|
3,128,466 |
|
|
|
60,384,101 |
|
|
|
8,237,296 |
|
|
|
429,785 |
|
|
|
- |
|
|
n/a |
|
Sales |
$ |
2,813,214 |
|
|
$ |
450,268 |
|
|
$ |
368,813 |
|
|
$ |
89,619 |
|
|
$ |
- |
|
|
$ |
3,721,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
$ |
182,243 |
|
|
$ |
64,644 |
|
|
$ |
20,071 |
|
|
$ |
(4,402 |
) |
|
$ |
1,317 |
|
|
$ |
263,873 |
|
Impairment of long-lived
assets |
|
3,076 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,076 |
|
Restructuring and other
income, net |
|
(12,199 |
) |
|
|
- |
|
|
|
(35 |
) |
|
|
(143 |
) |
|
|
(2,405 |
) |
|
|
(14,782 |
) |
Adjusted operating income (loss) |
|
173,120 |
|
|
|
64,644 |
|
|
|
20,036 |
|
|
|
(4,545 |
) |
|
|
(1,088 |
) |
|
|
252,167 |
|
Miscellaneous income, net |
|
35 |
|
|
|
169 |
|
|
|
141 |
|
|
|
(16 |
) |
|
|
1,734 |
|
|
|
2,063 |
|
Equity in net income of
unconsolidated affiliates (3) |
|
22,864 |
|
|
|
- |
|
|
|
132,865 |
|
|
|
- |
|
|
|
4,871 |
|
|
|
160,600 |
|
Less: Net earnings
attributable to noncontrolling interests (4) |
|
9,285 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
9,285 |
|
Adjusted earnings (loss) before interest and taxes |
$ |
186,734 |
|
|
$ |
64,813 |
|
|
$ |
153,042 |
|
|
$ |
(4,561 |
) |
|
$ |
5,517 |
|
|
$ |
405,545 |
|
|
Nine Months Ended February 28, 2021 |
|
|
Steel Processing |
|
|
Consumer Products |
|
|
Building Products |
|
|
Sustainable Energy Solutions |
|
|
Other |
|
|
Consolidated |
|
Volume (tons/units) |
|
2,967,296 |
|
|
|
53,138,211 |
|
|
|
7,792,019 |
|
|
|
644,895 |
|
|
|
32,157 |
|
|
n/a |
|
Sales |
$ |
1,404,220 |
|
|
$ |
366,205 |
|
|
$ |
278,349 |
|
|
$ |
93,982 |
|
|
$ |
50,354 |
|
|
$ |
2,193,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
$ |
114,315 |
|
|
$ |
55,557 |
|
|
$ |
4,541 |
|
|
$ |
912 |
|
|
$ |
(118,310 |
) |
|
$ |
57,015 |
|
Impairment of long-lived
assets |
|
- |
|
|
|
506 |
|
|
|
1,423 |
|
|
|
- |
|
|
|
11,810 |
|
|
|
13,739 |
|
Restructuring and other
income, net |
|
1,804 |
|
|
|
120 |
|
|
|
- |
|
|
|
- |
|
|
|
35,732 |
|
|
|
37,656 |
|
Incremental expenses related
to Nikola gains |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
53,300 |
|
|
|
53,300 |
|
Adjusted operating income (loss) |
|
116,119 |
|
|
|
56,183 |
|
|
|
5,964 |
|
|
|
912 |
|
|
|
(17,468 |
) |
|
|
161,710 |
|
Miscellaneous income, net |
|
(244 |
) |
|
|
(249 |
) |
|
|
89 |
|
|
|
194 |
|
|
|
1,576 |
|
|
|
1,366 |
|
Equity in net income of
unconsolidated affiliates (3) |
|
7,393 |
|
|
|
- |
|
|
|
70,622 |
|
|
|
- |
|
|
|
2,924 |
|
|
|
80,939 |
|
Less: Net earnings
attributable to noncontrolling interests (4) |
|
12,923 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
12,923 |
|
Adjusted earnings (loss) before interest and taxes |
$ |
110,345 |
|
|
$ |
55,934 |
|
|
$ |
76,675 |
|
|
$ |
1,106 |
|
|
$ |
(12,968 |
) |
|
$ |
231,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) See
supplemental break-out of equity income by unconsolidated affiliate
in the table below |
|
(4) Excludes the
noncontrolling interest portion of impairment and restructuring
(charges) gains of $4,888 and $(255) for the nine months ended
February 28, 2022 and 2021, respectively. |
|
The following tables outlines our equity income (loss) by
unconsolidated affiliate for the periods presented:
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
February 28, |
|
|
February 28, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
WAVE |
$ |
18,586 |
|
|
$ |
19,473 |
|
|
$ |
66,672 |
|
|
$ |
54,409 |
|
ClarkDietrich |
|
21,392 |
|
|
|
5,906 |
|
|
|
66,193 |
|
|
|
16,213 |
|
Serviacero Worthington |
|
4,692 |
|
|
|
4,223 |
|
|
|
22,864 |
|
|
|
7,393 |
|
ArtiFlex |
|
1,761 |
|
|
|
1,734 |
|
|
|
4,784 |
|
|
|
2,879 |
|
Cabs |
|
1,035 |
|
|
|
338 |
|
|
|
87 |
|
|
|
45 |
|
Total equity income |
$ |
47,466 |
|
|
$ |
31,674 |
|
|
$ |
160,600 |
|
|
$ |
80,939 |
|
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