SOURCE: Worthington Industries, Inc.

Worthington Industries, Inc.

December 17, 2014 18:38 ET

Worthington Reports Second Quarter Fiscal 2015 Results

COLUMBUS, OH--(Marketwired - Dec 17, 2014) - Worthington Industries, Inc. (NYSE: WOR) today reported net sales of $871.0 million and net earnings of $29.5 million, or $0.43 per diluted share, for its fiscal 2015 second quarter ended November 30, 2014. In last year's second quarter, the Company reported net sales of $769.9 million and net earnings of $23.0 million, or $0.32 per diluted share. On an adjusted basis, net earnings were $37.9 million, or $0.55 per diluted share, in the current quarter compared to $40.4 million, or $0.56 per diluted share, in the comparable prior year quarter. A reconciliation to the comparable GAAP financial measures is included in the supplemental financial data.

Financial highlights for the current and comparative periods are as follows:

(U.S. dollars in millions, except per share data)

                     
    2Q 2015   1Q 2015   2Q 2014   6M 2015   6M 2014
Net sales   $ 871.0   $ 862.4   $ 769.9   $ 1,733.4   $ 1,462.2
Operating income     33.2     52.2     19.5     85.4     58.1
Equity income     22.3     27.9     21.1     50.2     48.0
Net earnings     29.5     44.2     23.0     73.6     77.5
Earnings per share   $ 0.43   $ 0.63   $ 0.32   $ 1.06   $ 1.08
                               
                               

"Steel Processing had a great quarter with increased volume as they continued to perform well," said John McConnell, Chairman and CEO. "However, while we had strong revenue growth across the Company, we were disappointed we did not meet our own Company-wide expectations for results this quarter. We have a couple areas needing attention, particularly one operation in our oil and gas equipment business and one in Engineered Cabs. Both had elevated manufacturing costs and the oil and gas equipment business facility had a product miss on the commercial side. These are isolated issues and we are taking corrective steps so that we continue our Company's forward momentum."

Consolidated Quarterly Results

Net sales for the second quarter ended November 30, 2014, were $871.0 million, up 13% from the comparable quarter in the prior year, when net sales were $769.9 million. The increase was driven largely by higher volume in Steel Processing and the impact of recent acquisitions in Pressure Cylinders.

Gross margin declined $3.0 million from the prior year quarter to $125.2 million. Higher manufacturing expenses in all three business units combined with the unfavorable impact of inventory holding losses in Steel Processing in the current quarter, compared to inventory holding gains in the prior year quarter, more than offset the impact of higher volume. 

Operating income increased $13.7 million in the current quarter to $33.2 million as impairment charges in the current quarter were down $16.5 million from the prior year. Impairment charges in the current quarter include $6.3 million related to the Company's 60%-owned consolidated joint venture in India, $3.2 million related to the Company's aluminum high-pressure cylinder business in New Albany, Miss., $2.4 million related to the Advanced Component Technologies business in Engineered Cabs, $1.2 million related to the military construction business and $1.1 million related to certain non-core Steel Processing assets. The prior year included a $30.7 million impairment charge related to the write-off of certain trade name assets.

Interest expense was $9.7 million for the current quarter, compared to $6.3 million in the comparable period in the prior year. The increase was due to the impact of higher average debt levels resulting from the issuance of $250.0 million of notes in April 2014. 

Equity in net income from unconsolidated joint ventures increased $1.2 million over the prior year quarter to $22.3 million on net sales of $388.7 million. The overall increase was driven by WAVE and ArtiFlex, where Worthington's portion of equity income increased by $2.2 million and $1.3 million, respectively. However, income from ClarkDietrich decreased $1.9 million on lower volumes.

Income tax expense was $15.6 million in the current quarter compared to $8.5 million in the comparable quarter in the prior year. The increase was due to higher earnings and a higher effective tax rate. Tax expense in the current quarter reflects an estimated annual effective rate of 33.5% compared to 27.8% for the prior year quarter. 

Balance Sheet

At quarter end, total debt was $685.6 million, up $19.0 million from August 31, 2014, as a result of borrowings against a long-term credit facility entered into by the consolidated joint venture in Turkey in September 2014. The Company had $96.5 million of cash at quarter end, which will be used to repay $100.0 million of current notes due in December 2014.

Quarterly Segment Results

Steel Processing's net sales of $552.8 million were up 12%, or $60.6 million, due to the combined impact of higher volume and higher average selling prices. Operating income decreased slightly from the prior year quarter to $33.9 million due to higher manufacturing expenses and the unfavorable impact of inventory holding losses in the current quarter compared to inventory holding gains in the prior year quarter. The change between the inventory holding gains and losses more than offset the impact of higher volume. 

Pressure Cylinders' net sales of $252.7 million were up 18%, or $38.7 million, from the comparable prior year quarter driven by recent acquisitions. Operating income increased $1.3 million over the prior year quarter to $9.6 million as contributions from recent acquisitions were largely offset by higher manufacturing and SG&A expense.

Engineered Cabs' net sales increased $3.7 million in the current quarter to $51.5 million on higher volume. Operating loss in the current quarter decreased $15.3 million to $5.6 million due to the favorable impact of lower impairment charges, which were down $16.7 million from the prior year quarter. Excluding the impact of the impairment charges, operating income was down $1.4 million largely due to several start-up programs driving an increase in manufacturing expenses.

The "Other" category includes the Construction Services and Energy Innovations operating segments, as well as non-allocated corporate expenses. Operations in the "Other" category reported net sales of $14.0 million, a decrease of $1.9 million from the prior year quarter, mostly due to reductions in the Energy Innovations business. The "Other" category reported an operating loss of $4.7 million driven by losses within Construction Services, which included a $1.2 million impairment charge related to the military construction business. 

Recent Business Developments

  • On October 20, 2014, the Company acquired an 80% interest in dHybrid Systems, LLC, a leader in compressed natural gas fuel systems for large trucks. The remaining 20% was retained by the founding member.

  • On November 13, 2014, the Company's consolidated tailor welded blanking joint venture, TWB, opened a new facility in Cambridge, Ontario. The facility will initially operate one laser welding line with the capacity to produce 2 million tailor welded blanks per year.

  • During the quarter, the Company repurchased a total of 600,000 common shares for $21.5 million at an average price of $35.91.

  • On December 17, 2014, Worthington Industries board of directors declared a quarterly dividend of $0.18 per share payable on March 27, 2015 to shareholders of record on March 13, 2015.

Outlook

"There are solid areas of growth, particularly in automotive, where we are working with our customers on a number of initiatives including light weighting solutions," McConnell said. "We expect Steel Processing to continue to perform well. There are some markets, like agriculture, where we are seeing slower demand. However, the Company is on track to continue to reach our primary goal of year-over-year earnings growth and positive cash flow." 

Conference Call

Worthington will review second quarter results during its quarterly conference call on December 18, 2014, at 10:30 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 is a leading global diversified metals manufacturing company with 2014 fiscal year sales of $3.1 billion. Headquartered in Columbus, Ohio, Worthington is North America's premier value-added steel processor providing customers with wide ranging capabilities, products and services for a variety of markets including automotive, construction and agriculture; a global leader in manufacturing pressure cylinders for industrial gas and cryogenic applications, CNG and LNG storage, transportation and alternative fuel tanks, oil and gas equipment, and brand consumer products for camping, grilling, hand torch solutions, scuba diving and helium balloon kits; and a manufacturer of operator cabs for heavy mobile industrial equipment; laser welded blanks for light weighting applications; automotive racking solutions; and through joint ventures, complete ceiling grid solutions; automotive tooling and stampings; and steel framing for commercial construction. Worthington employs approximately 11,000 people and operates 82 facilities in 10 countries. 

Founded in 1955, the Company operates under a long-standing corporate philosophy rooted in the golden rule. Earning money for its shareholders is the first corporate goal. This philosophy serves as the basis for an unwavering commitment to the customer, supplier, and shareholder, and as the Company's foundation for one of the strongest employee-employer partnerships in American industry.

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 outlook, strategy or business plans; the ability to correct performance issues at operations; future or expected growth, forward momentum, performance, sales, volumes, cash flows, earnings, balance sheet strengths, debt, financial condition or other financial measures; projected profitability potential, capacity, and working capital needs; demand trends for the Company or its markets; additions to product lines and opportunities to participate in new markets; pricing trends for raw materials and finished goods and the impact of pricing changes; anticipated capital expenditures and asset sales; anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing and the supply chain and the results thereof; the ability to make acquisitions and the projected timing, results, benefits, costs, charges and expenditures related to acquisitions, newly-created joint ventures, headcount reductions and facility dispositions, shutdowns and consolidations; the alignment of operations with demand; the ability to operate profitably and generate cash in down markets; the ability to maintain margins and 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; expected benefits from transformation plans, cost reduction efforts and other new initiatives; expectations for increasing volatility or improving and sustaining 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 effect of national, regional and worldwide economic conditions generally and within major product markets, including a recurrent slowing economy; the effect of conditions in national and worldwide financial markets; 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; effects of facility closures and the consolidation of operations; the effect of financial difficulties, consolidation and other changes within the steel, automotive, 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 other 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 industry 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, acts of war or 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, foreign currency exposure and the acceptance of our products in these markets; the ability to improve and maintain processes and business practices to keep pace with the economic, competitive and technological environment; the outcome of adverse claims experience with respect to workers' compensation, product recalls or product 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, including those adopted by the United States Securities and Exchange Commission and other governmental agencies as contemplated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the effect of changes to healthcare laws in the United States which may increase our healthcare and other costs and negatively impact our operations and financial results; and other risks described from time to time in the Company's filings with the United States Securities and Exchange Commission, including those described in "Part I - Item 1A. - Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended May 31, 2014.

   
WORTHINGTON INDUSTRIES, INC.  
CONSOLIDATED STATEMENTS OF EARNINGS  
(In thousands, except per share amounts)  
   
   
    Three Months Ended     Six Months Ended  
    November 30,     November 30,  
    2014     2013     2014     2013  
Net sales   $ 871,012     $ 769,900     $ 1,733,426     $ 1,462,191  
Cost of goods sold     745,789       641,668       1,478,696       1,222,995  
  Gross margin     125,223       128,232       254,730       239,196  
Selling, general and administrative expense     77,308       78,395       152,563       149,935  
Impairment of long-lived assets     14,235       30,734       16,185       35,375  
Restructuring and other expense (income)     405       (1,182 )     398       (5,179 )
Joint venture transactions     83       786       190       928  
  Operating income     33,192       19,499       85,394       58,137  
Other income (expense):                                
  Miscellaneous income     1,220       2,472       1,543       13,409  
  Interest expense     (9,676 )     (6,258 )     (19,192 )     (12,498 )
  Equity in net income of unconsolidated affiliates     22,319       21,086       50,243       48,037  
  Earnings before income taxes     47,055       36,799       117,988       107,085  
Income tax expense     15,600       8,459       37,713       22,392  
Net earnings     31,455       28,340       80,275       84,693  
Net earnings attributable to noncontrolling interest     1,993       5,363       6,645       7,159  
Net earnings attributable to controlling interest   $ 29,462     $ 22,977     $ 73,630     $ 77,534  
                                 
Basic                                
Average common shares outstanding     67,105       69,304       67,337       69,454  
Earnings per share attributable to controlling interest   $ 0.44     $ 0.33     $ 1.09     $ 1.12  
                                 
Diluted                                
Average common shares outstanding     69,181       71,826       69,780       72,089  
Earnings per share attributable to controlling interest   $ 0.43     $ 0.32     $ 1.06     $ 1.08  
                                 
                                 
Common shares outstanding at end of period     66,912       69,138       66,912       69,138  
                                 
Cash dividends declared per share   $ 0.18     $ 0.15     $ 0.36     $ 0.30  
                                 
                                 
 
WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
 
         
    November 30,   May 31,
    2014   2014
Assets            
Current assets:            
  Cash and cash equivalents   $ 96,537   $ 190,079
  Receivables, less allowances of $2,997 and $3,043 at November 30, 2014 and May 31, 2014, respectively     491,687     493,127
  Inventories:            
    Raw materials     236,126     213,173
    Work in process     118,796     105,872
    Finished products     99,853     90,957
      Total inventories     454,775     410,002
  Income taxes receivable     13,757     5,438
  Assets held for sale     28,264     32,235
  Deferred income taxes     23,064     24,272
  Prepaid expenses and other current assets     46,310     43,769
    Total current assets     1,154,394     1,198,922
             
Investments in unconsolidated affiliates     194,686     179,113
Goodwill     283,418     251,093
Other intangible assets, net of accumulated amortization of $45,500 and $35,506 at November 30, 2014 and May 31, 2014, respectively     150,534     145,993
Other assets     22,450     22,399
Property, plant & equipment:            
  Land     15,238     15,260
  Buildings and improvements     218,801     213,848
  Machinery and equipment     853,219     848,889
  Construction in progress     43,115     32,135
    Total property, plant & equipment     1,130,373     1,110,132
    Less: accumulated depreciation     628,464     611,271
Property, plant and equipment, net     501,909     498,861
Total assets   $ 2,307,391   $ 2,296,381
             
Liabilities and equity            
Current liabilities:            
  Accounts payable   $ 324,886   $ 333,744
  Short-term borrowings     10,769     10,362
  Accrued compensation, contributions to employee benefit plans and related taxes     62,985     78,514
  Dividends payable     13,010     11,044
  Other accrued items     60,961     49,873
  Income taxes payable     4,396     4,953
  Current maturities of long-term debt     101,140     101,173
    Total current liabilities     578,147     589,663
             
Other liabilities     62,297     76,426
Distributions in excess of investment in unconsolidated affiliate     59,576     59,287
Long-term debt     573,734     554,790
Deferred income taxes     62,629     71,333
    Total liabilities     1,336,383     1,351,499
             
Shareholders' equity - controlling interest     872,502     850,812
Noncontrolling interest     98,506     94,070
    Total equity     971,008     944,882
Total liabilities and equity   $ 2,307,391   $ 2,296,381
             
             
                         
WORTHINGTON INDUSTRIES, INC.  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
(In thousands)  
   
               
    Three Months Ended     Six Months Ended  
    November 30,     November 30,  
    2014     2013     2014     2013  
Operating activities                                
Net earnings   $ 31,455     $ 28,340     $ 80,275     $ 84,693  
Adjustments to reconcile net earnings to net cash provided by operating activities:                                
  Depreciation and amortization     21,200       20,095       41,567       39,555  
  Impairment of long-lived assets     14,235       30,734       16,185       35,375  
  Provision for deferred income taxes     (5,492 )     (13,110 )     (6,027 )     (21,534 )
  Bad debt expense (income)     143       185       (60 )     (296 )
  Equity in net income of unconsolidated affiliates, net of distributions     (813 )     (3,506 )     (7,803 )     (9,421 )
  Net loss (gain) on sale of assets     3,264       (7,188 )     434       (11,850 )
  Stock-based compensation     4,498       4,722       8,853       8,502  
  Excess tax benefits - stock-based compensation     (621 )     (1,534 )     (5,753 )     (5,832 )
  Gain on previously held equity interest in TWB     -       -       -       (11,000 )
Changes in assets and liabilities, net of impact of acquisitions:                                
  Receivables     (6,916 )     7,574       5,836       15,229  
  Inventories     16,087       (21,838 )     (35,130 )     (21,323 )
  Prepaid expenses and other current assets     (5,232 )     4,072       (8,104 )     1,707  
  Other assets     3,095       139       3,216       575  
  Accounts payable and accrued expenses     (72,095 )     (23,922 )     (30,205 )     16,700  
  Other liabilities     (505 )     4,556       (6,496 )     2,703  
Net cash provided by operating activities     2,303       29,319       56,788       123,783  
                                 
Investing activities                                
  Investment in property, plant and equipment     (23,273 )     (17,060 )     (47,146 )     (30,414 )
  Investment in notes receivable     (2,300 )     -       (7,300 )     -  
  Acquisitions, net of cash acquired     (14,543 )     276       (51,093 )     53,233  
  Distributions from (investments in) unconsolidated affiliates     129       3,668       (3,671 )     9,223  
  Proceeds from sale of assets and insurance     27       16,086       292       23,733  
Net cash provided (used) by investing activities     (39,960 )     2,970       (108,918 )     55,775  
                                 
Financing activities                                
  Net proceeds from (repayments of) short-term borrowings     (196 )     (18,736 )     359       (70,277 )
  Proceeds from long-term debt     20,480       -       20,480       -  
  Principal payments on long-term debt     (511 )     (285 )     (813 )     (569 )
  Proceeds from (payments for) issuance of common shares     566       4,286       (454 )     6,487  
  Excess tax benefits - stock-based compensation     621       1,534       5,753       5,832  
  Payments to noncontrolling interest     -       (875 )     (2,867 )     (2,638 )
  Repurchase of common shares     (21,549 )     (19,800 )     (41,620 )     (50,316 )
  Dividends paid     (12,138 )     (10,407 )     (22,250 )     (10,407 )
Net cash used by financing activities     (12,727 )     (44,283 )     (41,412 )     (121,888 )
                                 
Increase (decrease) in cash and cash equivalents     (50,384 )     (11,994 )     (93,542 )     57,670  
Cash and cash equivalents at beginning of period     146,921       121,049       190,079       51,385  
Cash and cash equivalents at end of period   $ 96,537     $ 109,055     $ 96,537     $ 109,055  
                                 
                                 
   
WORTHINGTON INDUSTRIES, INC.  
SUPPLEMENTAL DATA  
(In thousands, except Pressure Cylinders units)  
                         
This supplemental information is provided to assist in the analysis of the results of operations.  
   
    Three Months Ended     Six Months Ended  
    November 30,     November 30,  
    2014     2013     2014     2013  
Volume:                                
  Steel Processing (tons)     899       817       1,804       1,536  
  Pressure Cylinders (units)     19,454,423       17,693,730       40,208,384       38,540,607  
                                 
Net sales:                                
  Steel Processing   $ 552,756     $ 492,134     $ 1,105,087     $ 894,575  
  Pressure Cylinders     252,744       214,022       501,703       430,922  
  Engineered Cabs     51,540       47,868       101,094       96,329  
  Other     13,972       15,876       25,542       40,365  
    Total net sales   $ 871,012     $ 769,900     $ 1,733,426     $ 1,462,191  
                                 
Material cost:                                
  Steel Processing   $ 400,677     $ 349,860     $ 795,569     $ 637,572  
  Pressure Cylinders     115,832       95,234       234,269       196,814  
  Engineered Cabs     23,674       21,522       45,696       43,629  
                                 
Selling, general and administrative expense:                                
  Steel Processing   $ 30,253     $ 34,638     $ 62,153     $ 63,457  
  Pressure Cylinders     35,941       32,630       70,954       63,267  
  Engineered Cabs     7,086       8,105       13,910       14,997  
  Other     4,028       3,022       5,546       8,214  
    Total selling, general and administrative expense   $ 77,308     $ 78,395     $ 152,563     $ 149,935  
                                 
Operating income (loss):                                
  Steel Processing   $ 33,877     $ 34,786     $ 69,746     $ 57,449  
  Pressure Cylinders     9,580       8,275       29,186       27,729  
  Engineered Cabs     (5,609 )     (20,892 )     (7,754 )     (21,196 )
  Other     (4,656 )     (2,670 )     (5,784 )     (5,845 )
    Total operating income   $ 33,192     $ 19,499     $ 85,394     $ 58,137  
                                 
                                 
The following provides detail of Pressure Cylinders net sales and volume by principal class of products.  
   
    Three Months Ended     Six Months Ended  
    November 30,     November 30,  
    2014     2013     2014     2013  
Volume (units):                                
  Consumer Products     13,492,863       11,304,860       28,088,649       25,752,635  
  Industrial Products     5,869,129       6,298,973       11,937,000       12,614,131  
  Alternative Fuels     88,510       87,242       172,819       168,463  
  Oil and Gas Equipment     3,646       2,655       7,583       5,378  
  Cryogenics     275       -       2,333       -  
    Total Pressure Cylinders     19,454,423       17,693,730       40,208,384       38,540,607  
                                 
Net sales:                                
  Consumer Products   $ 62,213     $ 52,639     $ 129,745     $ 115,541  
  Industrial Products     103,921       109,999       210,137       213,748  
  Alternative Fuels     17,045       16,333       32,603       33,554  
  Oil and Gas Equipment     63,170       35,051       117,679       68,079  
  Cryogenics     6,395       -       11,539       -  
    Total Pressure Cylinders   $ 252,744     $ 214,022     $ 501,703     $ 430,922  
                                 
                                 
   
WORTHINGTON INDUSTRIES, INC.  
SUPPLEMENTAL DATA  
(In thousands)  
                       
The following provides detail of impairment of long-lived assets, restructuring and other expense (income), and joint venture transactions included in operating income (loss) by segment presented above.  
                       
    Three Months Ended     Six Months Ended  
    November 30,     November 30,  
    2014   2013     2014     2013  
Impairment of long-lived assets:                              
  Steel Processing   $ 1,100   $ -     $ 3,050     $ 4,641  
  Pressure Cylinders     9,567     11,634       9,567       11,634  
  Engineered Cabs     2,389     19,100       2,389       19,100  
  Other     1,179     -       1,179       -  
    Total impairment of long-lived assets   $ 14,235   $ 30,734     $ 16,185     $ 35,375  
                               
Restructuring and other expense (income):                              
  Steel Processing   $ -   $ -     $ (30 )   $ (4,762 )
  Pressure Cylinders     405     (1,849 )     428       (1,447 )
  Engineered Cabs     -     -       -       -  
  Other     -     667       -       1,030  
    Total restructuring and other expense (income)   $ 405   $ (1,182 )   $ 398     $ (5,179 )
                               
Joint venture transactions:                              
  Steel Processing   $ -   $ -     $ -     $ -  
  Pressure Cylinders     -     -       -       -  
  Engineered Cabs     -     -       -       -  
  Other     83     786       190       928  
    Total joint venture transactions   $ 83   $ 786     $ 190     $ 928  
                               
                               
   
WORTHINGTON INDUSTRIES, INC.  
GAAP / NON-GAAP RECONCILIATION  
(In thousands, except per share amounts)  
   
Adjusted net earnings and adjusted earnings per diluted share are non-GAAP financial measures. In general, the measures exclude impairment and restructuring charges and other nonrecurring items that management does not believe reflect the Company's core businesses. Management uses these non-GAAP financial measures internally to evaluate the Company's operating performance; however, these measures should not be considered a substitute for financial measures calculated in accordance with GAAP. The following provides a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures.  
                           
    Three Months Ended November 30, 2014   Three Months Ended November 30, 2013  
                           
        Non-GAAP           Non-GAAP      
    GAAP   Adjustments   Non-GAAP   GAAP   Adjustments   Non-GAAP  
Net sales   $ 871,012   $ -   $ 871,012   $ 769,900   $ -   $ 769,900  
Cost of goods sold     745,789     -     745,789     641,668     -     641,668  
  Gross margin     125,223     -     125,223     128,232     -     128,232  
Selling, general and administrative expense     77,308     -     77,308     78,395     -     78,395  
Impairment of long-lived assets(a)     14,235     (14,235 )   -     30,734     (30,734 )   -  
Restructuring and other expense (income)     405     (405 )   -     (1,182 )   1,182     -  
Joint venture transactions     83     (83 )   -     786     (786 )   -  
  Operating income     33,192     14,723     47,915     19,499     30,338     49,837  
Other income (expense):                                      
  Miscellaneous income(b)     1,220     (846 )   374     2,472     (2,410 )   62  
  Interest expense     (9,676 )   -     (9,676 )   (6,258 )   -     (6,258 )
  Equity in net income of unconsolidated affiliates     22,319     -     22,319     21,086     -     21,086  
  Earnings before income taxes     47,055     13,877     60,932     36,799     27,928     64,727  
Income tax expense     15,600     2,887     18,487     8,459     10,521     18,980  
Net earnings     31,455     10,990     42,445     28,340     17,407     45,747  
Net earnings attributable to noncontrolling interest     1,993     2,538     4,531     5,363     -     5,363  
Net earnings attributable to controlling interest   $ 29,462   $ 8,452   $ 37,914   $ 22,977   $ 17,407   $ 40,384  
                                       
Earnings per diluted share attributable to controlling interest   $ 0.43   $ 0.12   $ 0.55   $ 0.32   $ 0.24   $ 0.56  
                                       
 
(a) Includes $6,346 related to the Company's 60%-owned consolidated joint venture in India, $3,221 related to the Company's aluminum high-pressure cylinders business in New Albany, Mississippi, $2,389 related to the Avanced Component Technologies business within Engineered Cabs, $1,179 related to the military contsruction business and $1,100 related to certain non-core Steel Processing assets for the three months ended November 30, 2014, and $30,734 related to the write-off of certain trade name intangible assets in connection with a re-branding initiative for the three months ended November 30, 2013.
 
(b) Includes income from insurance proceeds of $846 for the three months ended November 30, 2014, and $2,410 for the three months ended November 30, 2013.
 
The sum of the components may not equal the total due to rounding.
 
We apply varying tax rates depending on the item's nature and the tax jurisdiction where it is incurred.

Contact Information

  • CONTACTS:
    Cathy M. Lyttle
    VP, Corporate Communications and Investor Relations
    Phone: (614) 438-3077
    E-mail: Email Contact

    Sonya L. Higginbotham
    Director, Corporate Communications
    Phone: (614) 438-7391
    E-mail: Email Contact

    200 Old Wilson Bridge Rd.
    Columbus, Ohio 43085
    WorthingtonIndustries.com