-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, No7aPpRPJFl4j7HqdiLj/lm5N2/gOufkwzFk4BoQzSpjrE52XkOGjP+QWMWfpdh9 Zkp2QbIScC1pp4m4N3bY6Q== 0000896463-96-000004.txt : 19960116 0000896463-96-000004.hdr.sgml : 19960116 ACCESSION NUMBER: 0000896463-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951130 FILED AS OF DATE: 19960112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WORTHINGTON INDUSTRIES INC CENTRAL INDEX KEY: 0000108516 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES & ROLLING & FINISHING MILLS [3310] IRS NUMBER: 311189815 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-04016 FILM NUMBER: 96503006 BUSINESS ADDRESS: STREET 1: 1205 DEARBORN DR CITY: COLUMBUS STATE: OH ZIP: 43085 BUSINESS PHONE: 6144383210 MAIL ADDRESS: STREET 1: 1205 DEARBORN DR CITY: COLUMBUS STATE: OH ZIP: 43085 FORMER COMPANY: FORMER CONFORMED NAME: WORTHINGTON STEEL CO DATE OF NAME CHANGE: 19720123 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10 - Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended: November 30, 1995 Commission File No. 0-4016 WORTHINGTON INDUSTRIES, INC. -------------------------------------------------------------- (Exact name of Registrant as specified in its Charter) DELAWARE 31-1189815 --------------------------------- ------------------------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 1205 DEARBORN DRIVE, COLUMBUS, OHIO 43085 ---------------------------------------- --------------------- (Address of Principal Executive Offices) (Zip Code) (614) 438-3210 ---------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Not Applicable ---------------------------------------------------------------- (Former Name, Former Address and Former Fiscal Year, If Changed From Last Report) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES __X__ NO Indicate the number of shares outstanding of each of the Issuer's classes of common stock, as of the latest practicable date. Common Stock, $.01 par value 90,779,668 -------------------------------------- ----------------------------- Class Outstanding December 31, 1995 WORTHINGTON INDUSTRIES, INC. INDEX PAGE PART I. FINANCIAL INFORMATION Consolidated Condensed Balance Sheets - November 30, 1995 and May 31, 1995.................................3 Consolidated Condensed Statements of Earnings - Three and Six Months Ended November 30, 1995 and 1994 .............4 Consolidated Condensed Statements of Cash Flows - Six Months Ended November 30, 1995 and 1994........................5 Notes to Consolidated Condensed Financial Statements...............6 Management's Discussion and Analysis of Results of Operations and Financial Condition......................7 PART II. OTHER INFORMATION.................................................10 PART I. FINANCIAL INFORMATION WORTHINGTON INDUSTRIES, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (In Thousands, Except Per Share) November 30 May 31 1995 1995 ------------- --------- ASSETS (Unaudited) (Audited) CURRENT ASSETS Cash and cash equivalents ...................... $ 14,856 $ 2,003 Accounts receivable - net ...................... 185,223 216,443 Raw materials ................................. 117,230 142,738 Work in process and finished products ......... 57,589 58,140 --------- --------- Inventories .................................... 174,819 200,878 Prepaid expenses and other current assets ...... 37,183 32,578 --------- --------- TOTAL CURRENT ASSETS .......................... 412,081 451,902 Investment in Unconsolidated Affiliates .......... 131,966 104,764 Other Assets ..................................... 24,017 25,381 Property, plant and equipment .................... 633,140 589,286 Less accumulated depreciation .................... 271,428 254,369 --------- --------- Property, Plant and Equipment - net ........... 361,712 334,917 --------- --------- TOTAL ASSETS .................................. $ 929,776 $ 916,964 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable ............................... $ 81,617 $ 87,329 Notes payable .................................. 38,200 Accrued compensation, contributions to employee benefit plans and related taxes ...... 26,440 31,741 Dividends payable .............................. 9,980 9,992 Other accrued items ............................ 7,688 8,597 Income taxes ................................... 6,159 2,709 Current maturities of long-term debt ........... 660 660 --------- --------- TOTAL CURRENT LIABILITIES ..................... 132,544 179,228 Other Liabilities ................................ 17,471 18,055 Long-Term Debt ................................... 83,146 53,476 Deferred Income Taxes ............................ 81,636 75,873 Shareholders' Equity Common shares, $.01 par value .................. 908 908 Additional paid-in capital ..................... 104,280 102,733 Min. pension liability/ foreign currency translation ................ (1,841) (1,017) Retained earnings ............................. 511,632 487,708 --------- --------- Total Shareholders' Equity .................... 614,979 590,332 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .... $ 929,776 $ 916,964 ========= ========= See notes to consolidated condensed financial statements. WORTHINGTON INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (In Thousands Except Per Share) (Unaudited) Three Months Ended Six Months Ended November 30 November 30 ------------------ -------------------- 1995 1994 1995 1994 ---- ---- ---- ---- Net sales ................... $ 354,544 $ 363,276 $ 680,280 $ 709,533 Cost of goods sold .......... 301,533 305,268 580,264 599,393 --------- --------- --------- --------- GROSS MARGIN ............... 53,011 58,008 100,016 110,140 Selling, general & administrative expense .... 21,499 20,536 41,368 40,027 --------- --------- --------- --------- OPERATING INCOME ........... 31,512 37,472 58,648 70,113 Other income (expense): Miscellaneous income (expense) ............... 139 (138) 386 129 Interest expense ......... (1,234) (1,580) (2,641) (2,774) Equity in net income of unconsolidated affiliates ............ 11,442 9,469 19,878 18,472 --------- --------- --------- --------- EARNINGS BEFORE INCOME TAXES 41,859 45,223 76,271 85,940 Income taxes ................ 15,671 16,959 28,575 32,228 --------- --------- --------- --------- NET EARNINGS ............... $ 26,188 $ 28,264 $ 47,696 $ 53,712 ========= ========= ========= ========= AVERAGE COMMON SHARES OUTSTANDING .............. 90,748 90,709 90,817 90,665 EARNINGS PER COMMON SHARE ... $ .29 $ .31 $ .53 $ .59 --------- --------- --------- --------- CASH DIVIDENDS DECLARED PER COMMON SHARE ....... $ .11 $ .10 $ .22 $ .20 --------- --------- --------- ---------
See notes to consolidated condensed financial statements. WORTHINGTON INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In Thousands, Unaudited) Six Months Ended November 30 ---------------- 1995 1994 ---- ---- OPERATING ACTIVITIES Net earnings ......................................... $ 47,696 $ 53,712 Adjustments to reconcile net earnings to net cash provided (used) by operating activities: Depreciation ....................................... 18,482 17,259 Provision for deferred income taxes ................ 5,763 6,621 Equity in undistributed net income of unconsolidated affiliates ........................ (19,576) (18,232) Changes in assets and liabilities: Accounts receivable ............................ 31,220 (1,035) Inventories .................................... 26,059 (28,230) Prepaid expenses and other current assets ...... (4,604) (1,691) Other assets ................................... 1,364 280 Accounts payable and accrued expenses .......... (8,472) (103) Other liabilities .............................. (584) (238) -------- -------- Net Cash Provided (Used) By Operating Activities ... 97,348 28,343 INVESTING ACTIVITIES Investment in property, plant and equipment, net ..... (45,277) (36,397) Investment in unconsolidated affiliates .............. (8,290) -- -------- -------- Net Cash Used By Investing Activities .............. (53,567) (36,397) FINANCING ACTIVITIES Proceeds from (payments on) short-term borrowings .... (38,200) 16,000 Proceeds from long-term debt ......................... 43,000 -- Principal payments on long-term debt ................. (13,330) (591) Proceeds from issuance of common shares .............. 1,618 2,013 Repurchase of common shares .......................... (4,024) -- Dividends paid ....................................... (19,992) (18,123) -------- -------- Net Cash Provided (Used) By Financing Activities ... (30,928) (701) -------- -------- Increase (decrease) in cash and cash equivalents ....... 12,853 (8,755) Cash and cash equivalents at beginning of period ....... 2,003 13,275 -------- -------- Cash and cash equivalents at end of period ............. $ 14,856 $ 4,520 ======== ======== See notes to consolidated condensed financial statements. WORTHINGTON INDUSTRIES, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) NOTE A - MANAGEMENT'S OPINION In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of a normal recurring nature) necessary to present fairly the financial position of Worthington Industries, Inc. and Subsidiaries (the Company) as of November 30, 1995 and May 31, 1995; the results of operations for the three and six months ended November 30, 1995 and 1994; and the cash flows for the six months then ended. The accounting policies followed by the Company are set forth in Note A to the consolidated financial statements in the 1995 Worthington Industries, Inc. Annual Report to Shareholders which is incorporated by reference in the Company's 1995 Form 10-K. NOTE B - INCOME TAXES The income tax rate is based on statutory federal and state rates, and an estimate of annual earnings adjusted for the permanent differences between reported earnings and taxable income. NOTE C - EARNINGS PER SHARE Earnings per common share for the three and six months ended November 30, 1995 and 1994 are based on the weighted average common shares outstanding during each of the respective periods. NOTE D - RESULTS OF OPERATIONS The results of operations for the three and six months ended November 30, 1995 and 1994 are not necessarily indicative of the results to be expected for the full year. WORTHINGTON INDUSTRIES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS For the three months ended November 30, 1995, net sales of $354.5 million were 2% lower and net earnings of $26.2 million and earnings per share of $.29 were 7% and 6%, respectively, lower than the results from last year's second quarter. For the first six months of fiscal 1996, net sales were $680.3 million, 4% below those of the same period last year. Net earnings of $47.7 million and earnings per share of $.53 were off 11% and 10%, respectively, from the first half of last year. Demand in most of the Company's markets softened this year from a strong fiscal 1995. The Company started to see improved market demand for its products in the second quarter, but results still reflect lower volume and prices from last year. Results for the second quarter and first six months of fiscal 1995 were driven principally by volume and selling price increases. Gross margin was down 9% for both the quarter and the six months. This was greater than the sales shortfall, primarily due to the soft selling price environment and the working down of more expensive inventory. Last year's gross margin outpaced the growth in sales due to higher operating efficiencies and selling price increases. Gross margin as a percentage of sales for the quarter was 15.0% compared to 16.0% last year and for the six months, 14.7% compared to 15.5%. Selling, general and administrative expense increased 5% for the quarter and 3% for the six months due to the inclusion of expenses for new operations offset by lower profit-sharing. Last year's expense was driven by higher profit sharing. As a percent of sales, this expense for the quarter was 6.1% compared to 5.7% last year and for the six months was 6.1% compared to 5.6%. Operating income was 16% lower for the quarter and six month periods. As a percentage of sales, operating income decreased to 8.9% from 10.3% for the quarter and to 8.6% from 9.9% for the six months. Interest expense decreased 22% for the three months and 5% for the six months. The average interest rate rose to 6.7% from 5.6% and average debt outstanding increased offset by $1,010,000 of capitalized interest for the six months. Average debt rose because of increased borrowings to support capital expenditures. Equity in net income of unconsolidated affiliates was up 21% for the quarter. Equity from Rouge Steel was up as a one time gain more than offset decreased operating earnings caused by lower industry demand and selling prices. Equity from Worthington Armstrong Venture was up significantly on increased volume in both the U.S. and Europe. This venture's French facility is expanding to meet demand and the new Las Vegas plant is in startup. The Acerex joint venture in Mexico started production in October and is shipping within Mexico and into the southwest U.S. Income taxes decreased in line with pre-tax earnings for both the three and six month periods as the effective tax rate for both years was 37.5%. The processed steel products segment saw decreases in sales and earnings for the second quarter and the first six months. Steel processing shipments, although improved from the first quarter, were below those of last year mainly due to lower automotive demand. Operating margins also remain lower due to the reduced volume and lower selling prices. Pressure cylinder's sales for the quarter were up, but results for the six months were below last year as increased demand for heating tanks did not fully offset lower shipments of refrigerant cylinders. Pressure cylinders had realized growth in most product lines in the prior year. Sales for the custom products segment were up for both the second quarter and six months; however, earnings were lower for both periods. The plastics operation increased sales and earnings as it continued to perform well despite overall lower industry automotive demand due to new automotive and appliance contracts. Volume from new jobs increased sales for precision metals above last year for both periods, but profits are lower due to inefficiencies caused by startups and specification changes on certain parts. The cast products segment results were down slightly for the quarter as demand has leveled somewhat from last year. This segment continues to perform well as sales and earnings remain above last year's strong six month numbers. Last year's results benefited from very strong railcar demand and high production levels. LIQUIDITY AND CAPITAL RESOURCES At November 30, 1995, the Company's current ratio was 3.1:1, up from 2.5:1 at May 31, 1995, as $30 million of short-term debt was replaced with long-term debt. Long-term debt increased to 10.7% from 7.4% of total capital (defined as long-term debt, deferred taxes and shareholders' equity.) Working capital was $279.5 million, 45% of the Company's total net worth, down from 46% at May 31, 1995. During the six months, the Company's cash position increased by $12.9 million. Cash provided by operating activities was $97.3 million, aided by a $26.1 million decrease in inventories and a $31.2 million decrease in accounts receivable, which occurred in part because of lower raw material costs and lower sales volume and prices. Days sales in accounts receivable was down 3 days from fiscal year-end and days of inventory was down modestly. Capital expenditures and investments in affiliates totaled $53.6 million and dividends paid were $20 million. The Company expects its operating results to improve during the year; however, borrowings may be needed to support anticipated capital expenditures. The Company has a $150 million committed, revolving credit agreement, of which $80 million was unused at November 30, 1995. Immediate borrowing capacity plus cash generated from operations should be more than sufficient to fund expected normal operating cash needs, dividends, debt payments and capital expenditures for existing businesses. PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Registrant's Annual Meeting of Shareholders was held on September 21, 1995. In connection with the meeting, proxies were solicited. Following are the voting results on proposals considered and voted upon. 1. All nominees for Class of Directors whose term expires in 1998 were elected by the stockholders who were present or represented by proxy. Votes for Votes the Election Withholding Shares of Director Authority to Vote Not Voted ____________ _________________ _________ Robert J. Klein 76,152,495 65,984 -0- Katherine LeVeque 76,092,427 126,052 -0- John P. McConnell 76,155,495 62,984 -0- Robert B. McCurry 76,114,912 103,567 -0- Gerald B. Mitchell 76,133,988 84,491 -0- 2. The appointment of Ernst & Young LLP as the Registrant's independent auditors for the year ending May 31, 1996 was ratified by a majority of the votes entitled to be cast by the stockholders who were present or represented by proxy. FOR: 75,978,256 AGAINST: 65,520 ABSTAIN: 174,703 NOT VOTED: -0- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. A. Exhibits - Exhibit 27 Financial Data Schedule B. Reports on Form 8-K. There were no reports on Form 8-K during the three months ended November 30, 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WORTHINGTON INDUSTRIES, INC. Date: January 12, 1996 By: /S/DONALD G. BARGER, JR. ______________________________ Donald G. Barger, Jr. Vice President-Chief Financial Officer EX-27 2
5 1000 U.S. DOLLARS 6-MOS MAY-31-1996 JUN-01-1995 NOV-30-1995 1 14,856 0 187,927 2,704 174,819 412,081 633,140 271,428 929,776 132,544 83,146 908 0 0 614,071 929,776 680,280 680,280 580,264 580,264 0 0 2,641 76,271 28,575 47,696 0 0 0 47,696 .53 .53
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