10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2004

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                 to                     

Commission File Number 1-8399

WORTHINGTON INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Ohio	31-1189815
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
200 Old Wilson Bridge Road, 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 since 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 þ NO o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YES þ NO o

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the Issuer’s classes of common stock, as of the latest practicable date.

As of December 31, 2004, 87,838,166 of the registrant’s common shares, without par value, were outstanding.

TABLE OF CONTENTS

Safe Harbor Statement	ii
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets – November 30, 2004, and May 31, 2004	1
Condensed Consolidated Statements of Earnings – Three and Six Months Ended November 30, 2004 and 2003	2
Condensed Consolidated Statements of Cash Flows – Six Months Ended November 30, 2004 and 2003	3
Notes to Condensed Consolidated Financial Statements	4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3. Quantitative and Qualitative Disclosures About Market Risk	23
Item 4. Controls and Procedures	23
Part II. Other Information
Item 1. Legal Proceedings	24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 6. Exhibits	24
Signatures	25
Index to Exhibits	26
EX-10.1
EX-10.2
EX-31.1
EX-31.2
EX-32.1
EX-32.2

i

SAFE HARBOR STATEMENT

Selected statements contained in this Quarterly Report on Form 10-Q, including, without limitation, in “PART I -Item 2. - Management’s Discussion and Analysis of Financial Condition and Results of Operations”, constitute “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based, in whole or in part, on management’s beliefs, estimates, assumptions and currently available information and can often be identified by the words “will”, “may”, “designed to”, “outlook”, “believes”, “should”, “plans”, “expects”, “intends”, “estimates” and similar expressions. These forward-looking statements include, without limitation, statements relating to:

•   future estimated or expected sales, operating results and earnings per share;

•   projected capacity and working capital needs;

•   pricing trends for raw materials and finished goods;

•   anticipated capital expenditures and asset sales;

•   projected timing, results, costs, charges and expenditures related to asset transfers, facility dispositions, shutdowns and consolidations;

•   new products and markets;

•   expectations for the economy and markets; and

•   other non-historical trends.

Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected. Any number of factors could affect actual results, including, without limitation:

•   product demand and pricing, changes in product mix and market acceptance of products;

•   fluctuations in pricing, quality or availability of raw materials (particularly steel), supplies, utilities and other items required by operations;

•   effects of facility closures and the consolidation of operations;

•   the ability to realize price increases, cost savings and operational efficiencies on a timely basis;

•   the ability to integrate newly acquired businesses and achieve synergies therefrom;

•   capacity levels and efficiencies within our facilities and within the industry as a whole;

•   financial difficulties of customers, suppliers, joint venture partners and others with whom we do business;

•   the effect of national, regional and worldwide economic conditions generally and within our major product markets, including a prolonged or substantial economic downturn;

•   the effect of adverse weather on facility and shipping operations, customers and suppliers;

•   changes in customer spending patterns and supplier choices and risks associated with doing business internationally, including economic, political and social instability and foreign currency exposure;

•   acts of war and terrorist activities;

•   the ability to improve processes and business practices to keep pace with the economic, competitive and technological environment;

•   deviation of actual results from estimates and/or assumptions used by us in the application of our significant accounting policies;

•   level of imports and import prices in our markets;

•   the impact of governmental regulations, both in the United States and abroad; and

•   other risks described from time to time in filings with the United States Securities and Exchange Commission.

Any forward-looking statements in this Quarterly Report on Form 10-Q are based on current information as of the date of this Quarterly Report on Form 10-Q, and we assume no obligation to correct or update any such statements in the future, except as required by applicable law.

ii

PART I. FINANCIAL INFORMATION

Item 1. - Financial Statements

WORTHINGTON INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	November 30,		May 31,
	2004		2004
	(Unaudited)		(Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	11,143	$	1,977
Receivables, net		300,051		348,833
Inventories
Raw materials		263,650		185,426
Work in process		100,403		97,007
Finished products		101,406		80,473
		465,459		362,906
Deferred income taxes		3,589		3,963
Prepaid expenses and other current assets		34,410		115,431
Total current assets		814,652		833,110
Investments in unconsolidated affiliates		136,855		109,040
Goodwill		168,441		117,769
Other assets		31,459		27,826
Property, plant and equipment		1,052,387		1,017,326
Less accumulated depreciation		491,271		461,932
		561,116		555,394
Total assets	$	1,712,523	$	1,643,139
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	305,895	$	313,909
Current maturities of long-term debt		1,104		1,346
Other current liabilities		151,094		159,805
Total current liabilities		458,093		475,060
Other liabilities		99,745		95,067
Long-term debt		287,961		288,422
Deferred income taxes		89,526		104,216
Shareholders’ equity		777,198		680,374
Total liabilities and shareholders’ equity	$	1,712,523	$	1,643,139

See notes to condensed consolidated financial statements.

1

WORTHINGTON INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share)

	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2004			2003			2004			2003
Net sales	$	745,168		$	540,078		$	1,514,508		$	1,038,113
Cost of goods sold		620,650			472,836			1,230,346			921,888
Gross margin		124,518			67,242			284,162			116,225
Selling, general and administrative expense		56,130			45,243			120,961			86,863
Impairment charges and other		—			—			5,608			—
Operating income		68,388			21,999			157,593			29,362
Other income (expense):
Miscellaneous expense		(2,873	)		(114	)		(6,332	)		(503	)
Interest expense		(5,652	)		(5,565	)		(11,374	)		(11,156	)
Equity in net income of unconsolidated affiliates		11,740			8,391			25,036			16,327
Earnings before income taxes		71,603			24,711			164,923			34,030
Income tax expense		23,980			7,828			59,441			11,230
Net earnings	$	47,623		$	16,883		$	105,482		$	22,800
Average common shares outstanding — basic		87,654			86,101			87,420			86,054
Earnings per share — basic	$	0.54		$	0.20		$	1.21		$	0.26
Average common shares outstanding — diluted		88,665			86,503			88,389			86,510
Earnings per share — diluted	$	0.54		$	0.20		$	1.19		$	0.26
Cash dividends declared per share	$	0.16		$	0.16		$	0.32		$	0.32

See notes to condensed consolidated financial statements.

2

WORTHINGTON INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

	Six Months Ended
	November 30,
	2004			2003
Operating activities:
Net earnings	$	105,482		$	22,800
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		28,507			33,706
Impairment charges and other		5,608			—
Other adjustments		(37,001	)		(3,775	)
Changes in assets and liabilities		(71,952	)		(8,823	)
Net cash provided by operating activities		30,644			43,908
Investing activities:
Investment in property, plant and equipment, net		(19,331	)		(14,268	)
Acquisitions, net of cash acquired		(64,889	)		—
Investment in unconsolidated affiliate		(1,500	)		(490	)
Proceeds from sale of assets		83,804			2,937
Net cash used by investing activities		(1,916	)		(11,821	)
Financing activities:
Payments on short-term borrowings		—			(896	)
Principal payments on long-term debt		(2,018	)		(608	)
Dividends paid		(27,901	)		(27,525	)
Other		10,357			(2,189	)
Net cash used by financing activities		(19,562	)		(31,218	)
Increase in cash and cash equivalents		9,166			869
Cash and cash equivalents at beginning of period		1,977			1,139
Cash and cash equivalents at end of period	$	11,143		$	2,008

See notes to condensed consolidated financial statements.

3

WORTHINGTON INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three and Six Month Periods Ended November 30, 2004 and 2003
(Unaudited)

NOTE A — Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements include the accounts of Worthington Industries, Inc., its subsidiaries and certain of its joint ventures (collectively, the “Company”) and have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended November 30, 2004, are not necessarily indicative of the results that may be expected for the fiscal year ending May 31, 2005 (“fiscal 2005”). For further information, refer to the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K of Worthington Industries, Inc. for the fiscal year ended May 31, 2004 (“fiscal 2004”).

NOTE B — Industry Segment Data

     Summarized financial information for the Company’s reportable segments is shown in the following table. The “Other” category includes corporate related items, results of immaterial operations, and income and expense not allocable to the reportable segments.

	Three Months Ended					Six Months Ended
	November 30,					November 30,
In thousands	2004			2003		2004			2003
Net sales
Processed Steel Products	$	454,831		$	321,378	$	908,658		$	608,576
Metal Framing		191,772			142,417		430,163			283,481
Pressure Cylinders		94,482			72,434		167,708			138,969
Other		4,083			3,849		7,979			7,087
	$	745,168		$	540,078	$	1,514,508		$	1,038,113
Operating income
Processed Steel Products	$	34,610		$	13,762	$	70,404		$	21,931
Metal Framing		25,208			871		76,720			(2,783	)
Pressure Cylinders		8,827			6,855		12,017			10,393
Other		(257	)		511		(1,548	)		(179	)
	$	68,388		$	21,999	$	157,593		$	29,362

	November 30,		May 31,
	2004		2004
			(Audited)
Total assets
Processed Steel Products	$	836,264	$	888,661
Metal Framing		474,828		471,972
Pressure Cylinders		253,492		168,496
Other		147,939		114,010
	$	1,712,523	$	1,643,139

4

NOTE C — Comprehensive Income

     The components of other comprehensive income, net of tax, were as follows:

	Three Months Ended					Six Months Ended
	November 30,					November 30,
In thousands	2004		2003			2004		2003
Net earnings	$	47,623	$	16,883		$	105,482	$	22,800
Foreign currency translation		4,274		2,564			4,752		(771	)
Cash flow hedges		2,898		1,540			1,749		1,797
Other		49		(33	)		68		757
Total comprehensive income	$	54,844	$	20,954		$	112,051	$	24,583

NOTE D — Impairment Charges and Other

     Effective August 1, 2004, the Company closed the sale of its Decatur, Alabama, steel-processing facility and its cold-rolling assets to Nucor Corporation (“Nucor”) for $80,392,000 cash. The sale excluded the slitting and cut-to-length assets and net working capital associated with this facility. The Company will remain in a portion of the Decatur facility under a long-term lease with Nucor and will continue to serve customers requiring steel processing services in the Company’s core business of slitting and cutting-to-length. As a result of the sale agreement, the Company recorded a $67,400,000 pre-tax charge during its fourth quarter ended May 31, 2004. The charge included $66,642,000 for the impairment of assets at the Decatur facility and $758,000 for severance and employee related costs. The severance and employee related costs were due to the elimination of 40 administrative, production and other employee positions. The after-tax impact of this charge was $41,788,000 or $0.48 per diluted share. An additional pre-tax charge of $5,608,000, mainly relating to contract termination costs, was recognized during the first quarter of fiscal 2005 ended August 31, 2004. As of November 30, 2004, 35 employees had been terminated, and the Company had paid severance of $421,000.

NOTE E — Stock-Based Compensation

     At November 30, 2004, the Company had stock option plans for employees and non-employee directors. The Company accounts for these plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. No stock-based employee compensation cost is reflected in net earnings since all stock options granted under the plans had an exercise price equal to the market value of the underlying common shares of Worthington Industries, Inc. on the grant date. Pro forma information regarding net earnings and earnings per share is required by Statement of Financial Accounting Standards (“SFAS”) No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure. This information is required to be determined as if the Company had accounted for its stock options granted after December 31, 1994, under the fair value method prescribed by that statement. In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123 Revised, Share-Based Payment. The Statement requires expensing the value of stock options starting with the interim period beginning September 1, 2005. Stock option expense after the adoption of SFAS No. 123 Revised is not expected to be materially different than the expense below; but, this will not be known until a full analysis of the Statement is completed. The Statement contains new assumption and valuation model requirements, which differ from those used to calculate the expense below, and allows three different transition methods.

5

     The following table illustrates the effect on net earnings and earnings per share if the Company had accounted for stock option plans using the fair value method for the periods indicated:

	Three Months Ended				Six Months Ended
	November 30,				November 30,
In thousands, except per share	2004		2003		2004		2003
Net earnings, as reported	$	47,623	$	16,883	$	105,482	$	22,800
Deduct: total stock-based employee compensation expense determined under fair value based method, net of tax		439		380		878		759
Pro forma net earnings	$	47,184	$	16,503	$	104,604	$	22,041
Earnings per share:
Basic, as reported	$	0.54	$	0.20	$	1.21	$	0.26
Basic, pro forma		0.54		0.19		1.20		0.26
Diluted, as reported		0.54		0.20		1.19		0.26
Diluted, pro forma		0.54		0.19		1.19		0.26

NOTE F — Employee Pension Plans

     The following table summarizes the components of net periodic pension cost for the Company’s defined benefit plans for the periods indicated:

	Three Months Ended						Six Months Ended
	November 30,						November 30,
In thousands	2004			2003			2004			2003
Defined benefit plans:
Service cost	$	196		$	176		$	392		$	352
Interest cost		170			150			340			300
Expected return on plan assets		(153	)		(540	)		(305	)		(1,080	)
Net amortization and deferral		89			555			177			1,110
Net pension cost on defined benefit plans	$	302		$	341		$	604		$	682

     The Company funds its pension obligations based upon the annually calculated minimum funding requirements of ERISA. The calculation is zero for fiscal 2005.

NOTE G — Income Taxes

     The Company regularly evaluates its tax risks as required by SFAS No. 5, Accounting for Contingencies. During the second quarter ended November 30, 2004, the Company reduced its estimated tax liabilities by $1,700,000 due to favorable tax audit settlements and related developments.

     On October 22, 2004, the President of the United States signed the American Jobs Creation Act of 2004 (the “Act”). The Act provides an 85% dividends-received-deduction on qualifying dividends from controlled foreign corporations. On December 21, 2004, the FASB issued SFAS No. 109-2, Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004, which provides relief concerning the timing of the SFAS No. 109 requirement to accrue deferred taxes for unremitted earnings of foreign subsidiaries. The FASB determined that the provisions of the Act were sufficiently complex and ambiguous that companies may not be in a position to determine the impact of the Act on their plans for repatriation

6

or reinvestment of foreign earnings or the corresponding deferred tax liability. Accrual of any deferred tax liability is not required until companies have the information necessary to determine the amount of earnings to be repatriated and a reasonable estimate can be made of the deferred tax liability.

     The Company is still evaluating the potential effect this provision will have should it decide to repatriate earnings from foreign operations. Currently, the Company expects this evaluation to be completed in early fiscal 2006. Depending on the outcome of this evaluation, the Company could repatriate up to $56,000,000, representing all of its foreign earnings. The corresponding tax effect of a total repatriation would be $3,000,000.

NOTE H — Acquisitions and Joint Ventures

     On September 17, 2004, the Company purchased substantially all of the net assets of the propane and specialty gas cylinder business of Western Industries, Inc. (“the Western Cylinder Assets”). This business operates two facilities in Wisconsin, which manufacture 14.1 oz. and 16.4 oz. disposable cylinders for products such as hand torches, camping stoves, portable heaters and tabletop grills. The Western Cylinder Assets were purchased for $64,900,000 in cash, subject to an adjustment for working capital as of the closing date of the transaction. The purchase price has been preliminarily allocated to the acquired assets and assumed liabilities based on their estimated fair value at the date of the acquisition with $48,500,000 being recorded to goodwill. The Western Cylinder Assets are included in the Company’s Pressure Cylinders segment as of September 17, 2004, and will be adjusted to their final values based upon an appraisal. Pro forma results, including the acquired business since the beginning of the earliest period presented, would not be materially different than actual results.

     On September 23, 2004, the Company formed a 50%-owned unconsolidated joint venture with Pacific Steel Construction Inc. (“Pacific”) to focus on residential steel framing, particularly for the military. Pacific contributed its existing contracts to the joint venture and the Company made a capital contribution of $1,500,000. The Company will sell steel framing products manufactured in its Metal Framing segment to the joint venture for its projects. The joint venture will focus on the residential construction market, combining the Company’s expertise in residential steel framing with Pacific’s experience in military housing construction.

     On October 13, 2004, the Company purchased for $1,100,000 the 49% interest of the minority partner in the joint venture that operates a pressure cylinder manufacturing facility in Hustopece, Czech Republic.

     On November 5, 2004, the Company formed a 60%-owned consolidated Canadian metal framing joint venture with Encore Coils Holdings Ltd (“Encore”), operating under the name Dietrich Metal Framing Canada. The Company’s initial contribution was $600,000. The flagship facility is nearing completion and will be located in Mississauga, a suburb of Toronto. Manufacturing facilities are also planned for a number of markets throughout Canada. The joint venture will manufacture steel framing products at its Canadian facilities, and will also offer a variety of proprietary products supplied by the Company’s Metal Framing facilities in the U.S. The assets and results of operations of this joint venture will be consolidated in the Company’s Metal Framing segment.

NOTE I — Recently Issued Accounting Standards

     In November 2004, the FASB issued SFAS No. 151, Inventory Costs. SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing to clarify the accounting for abnormal amounts of idle facility expense, freight, handling cost, and wasted material (spoilage). In addition this statement requires that allocation of fixed production overhead to the costs of conversion be based on the normal capacity of the production facilities. SFAS 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The Company does not expect the adoption of this Statement to have a material impact on the Company’s financial position or results of operations.

     In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29 (“SFAS 153”). APB Opinion No. 29 is based on the principle that exchanges of nonmonetary assets should be measured on the fair value of the assets exchanged. The guidance in that Opinion, however, included certain exceptions to that principle. This Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. SFAS 153 is effective for nonmonetary exchanges

7

occurring in fiscal periods beginning after June 15,  2005. The Company does not expect the adoption of this Statement to have a material impact on its financial position or results of operations.

NOTE J — Subsequent Events

     On December 17, 2004, the Company issued $100,000,000 of unsecured Floating Rate Senior Notes due December 17, 2014 (“2014 Notes”) through a private placement. The 2014 Notes bear interest at 80 basis points over a variable six-month LIBOR rate. In anticipation of the issuance, the Company executed an interest rate swap to convert the variable rate obligation to an effective fixed rate of 5.26%. The debt issuance provides favorable long-term financing for the recent acquisition of the Western Cylinder Assets and other strategic initiatives including a new enterprise resource planning system.

8

Item 2. - Management’s Discussion and Analysis of Financial Condition and Results of Operations

     Selected statements contained in this “Item 2. - Management’s Discussion and Analysis of Financial Condition and Results of Operations” constitute “forward-looking statements” as used in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based, in whole or in part, on management’s beliefs, estimates, assumptions and currently available information. For a more detailed discussion of what constitutes a forward-looking statement and of some of the factors that could cause actual results to differ materially from such forward-looking statements, please refer to the “Safe Harbor Statement” in the beginning of this Quarterly Report on Form 10-Q.

Overview

     The following discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements included in “Item 1 - Financial Statements.” Our Annual Report on Form 10-K for the fiscal year ended May 31, 2004, includes additional information about our Company, our operations and our financial position, and should be read in conjunction with this Quarterly Report on Form 10-Q.

     Worthington Industries, Inc., together with its subsidiaries (collectively, “we”, “Worthington” or the “Company”), is a diversified metal processing company that focuses on value-added steel processing and manufactured metal products. As of November 30, 2004, we operated 47 facilities worldwide, principally in three reportable business segments: Processed Steel Products, Metal Framing and Pressure Cylinders. We also held equity positions in nine joint ventures, which operated 16 facilities worldwide as of November 30, 2004.

     We monitor certain national and industry data to better understand the markets in which each of our business segments operates. Relative to last year, this data indicates that conditions have improved across most markets except “Big Three” automotive (collectively, DaimlerChrysler AG, Ford Motor Co., and General Motors Corp.) where production was down about 8.0% during the quarter ended November 30, 2004, compared to the same period last year. Domestic GDP for the quarter ended November 30, 2004, was up slightly over the preceding quarter and up 3.3% over the same quarter of last year. In commercial construction, the U.S. Census Bureau’s Index of Private Construction Spending confirms that commercial construction activity has shown improvement during the last six months.

     The steel industry continues to benefit from higher steel prices caused by solid demand combined with a lower supply of steel. Although industry steel prices have declined from their September 2004 highs due to a decrease in Big Three automotive production and an increase in inventory and supply levels, the November 2004 prices for flat-rolled steel were twice as high as the prices in the autumn of 2003.

     Higher volumes positively impacted our operating income during the first six months of fiscal 2005 but spread, or the difference between the cost of the raw material and the selling price of the finished product, continues to drive the improvement in results compared to the prior year. In a rising steel-price environment it is possible that our operations may be favorably impacted as lower-priced inventory on hand flows through cost of goods sold and our selling prices increase. This was the case during the first four months of fiscal 2005, as we benefited from lower-priced inventory, and as prices peaked in September, the benefit was eliminated for the last two months of the current quarter. To limit the potential negative impact from any future downside to this cycle we intend to manage our inventory levels and sell at prices we believe to be appropriate.

     We have focused over the last several years on improved returns on capital by investing in growth markets and products, consolidating facilities, and divesting non-strategic or other assets that were not delivering appropriate returns. We have also added products and operations, including joint ventures, which we believe complement our existing business and strengths. Because of our success with joint ventures, we continue to look for additional opportunities where we can bring together complementary skill sets, manage our risk and effectively invest our capital. The following are recent examples of this activity:

•   Effective August 1, 2004, we sold our Decatur, Alabama, steel-processing facility and its cold-rolling assets to Nucor Corporation (“Nucor”) for $80.4 million cash. We retained the slitting and cut-to-length assets and net working capital associated with this facility.

9

•   On September 17, 2004, we purchased substantially all of the net assets of the propane and specialty gas cylinder business of Western Industries, Inc. (“the Western Cylinder Assets”) for $64.9 million in cash, subject to an adjustment based on the working capital as of the closing date of the transaction. This business operates two facilities in Wisconsin which manufacture 14.1 oz. and 16.4 oz. disposable cylinders for products such as hand torches, camping stoves, portable heaters and tabletop grills, expanding our product lines. The Western Cylinder Assets and results of operations of this business are included in our Pressure Cylinders segment.

•   On September 23, 2004, we formed a 50%-owned unconsolidated joint venture with Pacific Steel Construction Inc., (“Pacific”) to focus on residential steel framing, particularly for the military. Pacific contributed its existing contracts to the joint venture and we made a $1.5 million capital contribution. Our Metal Framing segment will sell the steel framing products to the joint venture for its projects. This gives us an immediate presence in the growing market for steel framed military housing and an additional base from which to penetrate the overall residential market.

•   On October 13, 2004, we purchased for $1.1 million the 49% interest of our minority partner in the joint venture that operates a pressure cylinder manufacturing facility in Hustopece, Czech Republic.

•   On November 5, 2004, we formed a 60%-owned consolidated Canadian metal framing joint venture with Encore Coils Ltd Holdings (“Encore”), operating under the name Dietrich Metal Framing Canada. The flagship facility is nearing completion and will be located in Mississauga, a suburb of Toronto. Manufacturing facilities are also planned for a number of markets throughout Canada. The joint venture will manufacture steel framing products at its Canadian facilities, and will also offer a variety of proprietary products and systems supplied by our Metal Framing facilities in the U.S. The assets and results of operations of this joint venture will be consolidated in the Company’s Metal Framing segment.

10

Results of Operations

Second Quarter — Fiscal 2005 Compared to Fiscal 2004

  Consolidated Operations

     The following table presents consolidated operating results for the periods indicated:

	Three Months Ended November 30,
	2004									2003
				% of			%							% of
In millions, except per share	Actual			Net Sales			Change			Actual			Net Sales
Net sales	$	745.2			100.0	%		38	%	$	540.1			100.0	%
Cost of goods sold		620.7			83.3	%		31	%		472.9			87.6	%
Gross margin		124.5			16.7	%		85	%		67.2			12.4	%
Selling, general and administrative expense		56.1			7.5	%		24	%		45.2			8.3	%
Operating income		68.4			9.2	%		211	%		22.0			4.1	%
Other income (expense):
Miscellaneous expense		(2.9	)		-0.4	%		—			(0.1	)		—
Interest expense		(5.6	)		-0.7	%		—			(5.6	)		-1.0	%
Equity in net income of unconsolidated affiliates		11.7			1.6	%		40	%		8.4			1.6	%
Earnings before income taxes		71.6			9.6	%		190	%		24.7			4.6	%
Income tax expense		24.0			3.2	%		206	%		7.8			1.5	%
Net earnings	$	47.6			6.4	%		182	%	$	16.9			3.1	%
Average common shares outstanding — diluted		88.7									86.5
Earnings per share — diluted	$	0.54						170	%	$	0.20

     Net earnings increased $30.7 million, to $47.6 million for the second quarter of fiscal 2005, from $16.9 million for the comparable quarter of fiscal 2004. Diluted earnings per share increased $0.34 per share to $0.54 per share from $0.20 per share for the prior year.

     Net sales increased 38%, or $205.1 million, to $745.2 million for the second quarter of fiscal 2005 from $540.1 million for the comparable quarter last fiscal year. The increase was driven by increased average selling prices reflecting the higher steel prices that are prevailing this year versus last year.

     Gross margin increased 85%, or $57.3 million, to $124.5 million for the second quarter of fiscal 2005 from $67.2 million for comparable quarter last fiscal year. Raw material costs increased relative to last year but not as much as selling prices, resulting in widened spreads. Steel prices for the second quarter of fiscal 2005 were significantly higher than the comparable period in fiscal 2004, but declined after peaking in September. The wider spreads increased gross margin by $63.6 million over the comparable quarter of the prior year. The net impact was an increase in gross margin to 16.7% of net sales for the second quarter of fiscal 2005 from 12.4% of net sales for the comparable quarter of fiscal 2004.

     Selling, general and administrative (“SG&A”) expense decreased to 7.5% of net sales for the second quarter of fiscal 2005 compared to 8.3% of net sales for the comparable quarter of the prior year. In total, SG&A expense increased 24%, or $10.9 million, to $56.1 million for the second quarter of fiscal 2005 from $45.2 million for the comparable quarter of fiscal 2004. This increase is primarily due to a $4.4 million increase in profit sharing and bonus expense driven by higher earnings. Professional fees increased by $4.4 million in the second quarter of fiscal 2005 compared to the same quarter in fiscal 2004 due to additional expenses associated with meeting the requirements of the Sarbanes-Oxley Act and the ongoing implementation of our new enterprise resource planning

11

system (“ERP”). The reserve for bad debts increased $3.2 million to reflect the increased collection risk of certain customers.

     Miscellaneous expense increased $2.8 million for the second quarter of fiscal 2005 compared to the same quarter of fiscal 2004. The increase was due to $1.8 million of proceeds received in the prior period as a result of the demutualization of an insurance provider and an additional elimination of $1.0 million for the minority shareholder’s interest in net earnings of Spartan Steel Coating, LLC (“Spartan”) which was significantly more profitable the second quarter of fiscal 2005 compared to the same period of the prior year.

     Equity in net income of unconsolidated affiliates increased 40%, or $3.3 million, to $11.7 million for the second quarter from $8.4 million. Most of our seven unconsolidated joint ventures had strong double-digit-plus increases in earnings. Collectively, the unconsolidated joint ventures generated approximately $185 million in sales during the second quarter of fiscal 2005. Joint venture income continues to be a consistent and significant contributor to our profitability.

     Income tax expense increased due to a higher level of income. Both periods were favorably affected by revisions of estimated tax liabilities as a result of tax audit settlements and related developments. The favorable effect for this quarter was $1.7 million, compared to $1.4 million in the prior year quarter. We estimate that our effective tax rate for fiscal 2005 will be 36.3% versus 31.9% for the prior year.

Segment Operations

     Processed Steel Products

     Total volume declined 6%, due to the sale of certain Decatur assets to Nucor. Excluding Decatur in each period, volumes would have been up 2% for the second quarter of fiscal 2005 compared to the second quarter of fiscal 2004. Big Three automotive production volumes were down about 8% for the second quarter of fiscal 2005 from the same period in fiscal 2004 and North American vehicle production for all manufacturers decreased 3%. However, due to market share gains and exposure to faster growing models, our automotive-related business was up 4%. As mentioned earlier, steel prices were significantly higher for the second quarter of fiscal 2005 than for the comparable period in fiscal 2004.

     The following table presents a summary of operating results for the Processed Steel Products segment for the periods indicated:

	Three Months Ended August 31,
	2004								2003
			% of			%					% of
Dollars in millions, tons in thousands	Actual		Net Sales			Change			Actual		Net Sales
Net sales	$	454.8		100.0	%		42	%	$	321.4		100.0	%
Cost of goods sold		393.3		86.5	%		37	%		286.4		89.1	%
Gross margin		61.5		13.5	%		76	%		35.0		10.9	%
Selling, general and administrative expense		26.9		5.9	%		27	%		21.2		6.6	%
Operating income	$	34.6		7.6	%		151	%	$	13.8		4.3	%
Tons shipped		911					-6	%		966
Material cost	$	327.9		72.1	%		54	%	$	212.8		66.2	%

     Operating income increased 151%, or $20.8 million, to $34.6 million, or 7.6% of net sales, for the second quarter of fiscal 2005 from $13.8 million, or 4.3% of net sales, for the comparable quarter of fiscal 2004. The increase was due to a larger spread between average selling prices and material costs. The higher spread increased operating income by $29.6 million and contributed to the increase in gross margin to 13.5% of net sales for the second quarter of fiscal 2005 from 10.9% of net sales for the comparable quarter of fiscal 2004. Operating income was also favorably impacted by a $9.9 million decline in operating expenses due to the sale of certain Decatur assets to Nucor. Net sales increased 42%, or $133.4 million, to $454.8 million from $321.4 million because of higher

12

pricing. SG&A expense increased $5.7 million, or 27%, to $26.9 million for the second quarter of fiscal 2005 from $21.2 million for the comparable quarter fiscal 2004. This was due to a $3.4 million increase in bad debt expense to reflect the increased collection risk of certain customers and an increase in professional fees related to expenses associated with the ongoing implementation of our ERP system and meeting the requirements of the Sarbanes-Oxley Act.

     Metal Framing

     The Metal Framing segment’s profitability continued to be driven by wider spreads between average selling prices and material costs even though volumes declined. Distributor customers temporarily curtailed purchasing due to built-up inventory. In addition, sales in the Florida market have been badly disrupted due to the recent hurricanes. Both of these items had a temporary negative impact on volume.

     During the second quarter of fiscal 2005, we entered into joint ventures with Pacific and Encore. The unconsolidated joint venture with Pacific will focus on the military housing construction market. Our Metal Framing segment will sell steel framing products to the joint venture for its projects. The operating results of the joint venture are included in “Equity in net income of unconsolidated affiliates” on the Condensed Consolidated Statement of Earnings. The joint venture with Encore will manufacture steel framing products for the Canadian market and will also offer a variety of proprietary products supplied by our Metal Framing facilities in the U.S. This joint venture is a 60%-owned Canadian limited liability company whose assets and results of operations will be consolidated in our Metal Framing segment. Both of these joint ventures should contribute to the growth of the steel framing market and the use of light gauge steel.

     The following table presents a summary of operating results for the Metal Framing segment for the periods indicated:

	Three Months Ended November 30,
	2004								2003
			% of			%					% of
Dollars in millions, tons in thousands	Actual		Net Sales			Change			Actual		Net Sales
Net sales	$	191.8		100.0	%		35	%	$	142.4		100.0	%
Cost of goods sold		147.0		76.7	%		16	%		126.2		88.6	%
Gross margin		44.8		23.3	%		176	%		16.2		11.4	%
Selling, general and administrative expense		19.6		10.2	%		27	%		15.3		10.8	%
Operating income	$	25.2		13.1	%		2796	%	$	0.9		0.6	%
Tons shipped		145					-24	%		192
Material cost	$	110.4		57.6	%		28	%	$	86.2		60.5	%

     Operating income increased $24.3 million to $25.2 million, or 13.1% of net sales, for the second quarter of fiscal 2005 from $0.9 million, or 0.6% of net sales, for the comparable quarter of fiscal 2004. The main reason for the increase was a $38.0 million expansion in the spread between average selling prices and material costs. Net sales increased 35%, or $49.4 million, to $191.8 million for the second quarter of fiscal 2005 from $142.4 million for the comparable quarter of fiscal 2004. The previously mentioned lower sales volume was more than offset by a 78% increase in average selling prices. Gross margin increased to 23.3% of net sales for the second quarter of fiscal 2005 from 11.4% of net sales for the comparable quarter of fiscal 2004. SG&A expense increased largely because of higher profit sharing and bonus expense.

     Pressure Cylinders

     On September 17, 2004, we purchased the Western Cylinder Assets. This business operates two facilities in Wisconsin, which manufacture 14.1 oz. and 16.4 oz. disposable cylinders for products such as hand torches, camping stoves, portable heaters and tabletop grills. These are new product lines for us, which generated approximately $50.0 million of sales for Western Industries, Inc. in calendar year 2003. Also, on October 13, 2004, we purchased the 49% interest of our minority partner in the joint venture that operates a pressure cylinder manufacturing facility in Hustopece, Czech Republic.

13

     The following table presents a summary of operating results for the Pressure Cylinders segment for the periods indicated:

	Three Months Ended November 30,
	2004								2003
			% of			%					% of
Dollars in millions, units in thousands	Actual		Net Sales			Change			Actual		Net Sales
Net sales	$	94.5		100.0	%		30	%	$	72.4		100.0	%
Cost of goods sold		76.6		81.1	%		34	%		57.0		78.7	%
Gross margin		17.9		18.9	%		16	%		15.4		21.3	%
Selling, general and administrative expense		9.1		9.7	%		7	%		8.5		11.8	%
Operating income	$	8.8		9.3	%		29	%	$	6.9		9.5	%
Units shipped
Without acquisition*		2,970					9	%		2,718
Acquisition*		6,017					—			—
		8,987					231	%		2,718
Material cost	$	44.3		46.9	%		47	%	$	30.1		41.6	%

     *Acquisition of the Western Cylinder Assets effective September 17, 2004

     Operating income increased 29%, or $1.9 million, to $8.8 million, or 9.3% of net sales, for the second quarter of fiscal 2005 from $6.9 million, or 9.5% of net sales, for the comparable quarter of fiscal 2004. Net sales increased 30%, or $22.1 million, to $94.5 million for the second quarter of fiscal 2005 from $72.4 million for the comparable quarter of fiscal 2004. The acquired Western Cylinder Assets added $12.3 million to net sales and European sales rose 20% due to increased air tank volumes in the Czech Republic. Unit volumes were up 9%, excluding units from the acquired assets. Strength in virtually all other product lines offset some weakness in the North American 20-pound propane cylinder line. The strength of foreign currencies against the U.S dollar increased sales by $2.9 million. Gross margin was 18.9% of net sales for the second quarter compared to 21.3% for the comparable quarter of fiscal 2004.

14

Year-to-Date — Fiscal 2005 Compared to Fiscal 2004

   Consolidated Operations

     The following table presents consolidated operating results for the periods indicated:

	Six Months Ended November 30,
	2004									2003
				% of			%						% of
In millions, except per share	Actual			Net Sales			Change			Actual			Net Sales
Net sales	$	1,514.5			100.0	%		46	%	$	1,038.1			100.0	%
Cost of goods sold		1,230.3			81.2	%		33	%		921.9			88.8	%
Gross margin		284.2			18.8	%		144	%		116.2			11.2	%
Selling, general and administrative expense		121.0			8.0	%		39	%		86.8			8.4	%
Impairment charges and other		5.6			0.4	%					—
Operating income		157.6			10.4	%		437	%		29.4			2.8	%
Other income (expense):
Miscellaneous expense		(6.3	)								(0.5	)
Interest expense		(11.4	)		-0.8	%		2	%		(11.2	)		-1.1	%
Equity in net income of unconsolidated affiliates		25.0			1.7	%		53	%		16.3			1.6	%
Earnings before income taxes		164.9			10.9	%		385	%		34.0			3.3	%
Income tax expense		59.4			3.9	%		429	%		11.2			1.1	%
Net earnings	$	105.5			7.0	%		363	%	$	22.8			2.2	%
Average common shares outstanding — diluted		88.4									86.5
Earnings per share — diluted	$	1.19						358	%	$	0.26

     Net earnings increased $82.7 million, to $105.5 million for the first six months of fiscal 2005 from $22.8 million for the comparable period of fiscal 2004. Diluted earnings per share increased $0.93 per share to $1.19 per share from $0.26 per share for the prior year.

     Net sales increased 46%, or $476.4 million, to $1,514.5 million for the first six months of fiscal 2005 from $1,038.1 million for the comparable period last fiscal year. The increase was primarily driven by increased average selling prices reflecting the higher steel prices that are prevailing this year versus last year.

     Gross margin increased 144%, or $168.0 million, to $284.2 million for the first six months of fiscal 2005, from $116.2 million for the comparable period last fiscal year. Raw material costs increased relative to last year but not as much as selling prices, resulting in widened spreads. The wider spreads increased gross margin by $173.5 million over the comparable period of the prior year. The net impact was an increase in gross margin to 18.8% of net sales for the first six months of fiscal 2005 from 11.2% of net sales for the comparable period of fiscal 2004. As prices continued to rise during the summer months, we benefited from lower-priced inventory, but as prices peaked in September, the benefit of having lower-priced inventory in a rising price environment was eliminated.

     SG&A expense decreased to 8.0% of net sales for the first six months of fiscal 2005 compared to 8.4% of net sales for the comparable period of the prior year. In total, SG&A expense increased 39%, or $34.2 million, to $121.0 million for the first six months of fiscal 2005 from $86.8 million for the comparable period of fiscal 2004. This increase is primarily due to a $21.2 million increase in profit sharing and bonus expense driven by higher earnings. Professional fees also increased by $4.8 million due to additional expenses associated with meeting the requirements of the Sarbanes-Oxley Act and the ongoing implementation of our ERP system. Bad debt increased $3.7 million to reflect the increased collection risk of certain customers.

15

     Impairment charges and other for the first six months of fiscal 2005 represents a charge related to the sale of certain assets at Decatur, Alabama. This amount is comprised of contract termination charges that could not be accrued until the sale closed and other adjustments to the charge recorded at May 31, 2004. The after-tax impact of this charge was $3.5 million, or $0.04 per diluted share.

     Miscellaneous expense increased $5.8 million for the first six months of fiscal 2005 largely due to a $3.6 million higher elimination for the minority shareholder’s interest in net earnings of Spartan, which was significantly more profitable during that period, combined with $1.8 million in proceeds received in the prior period as a result of the demutualization of an insurance provider.

     Equity in net income of unconsolidated affiliates increased 53%, or $8.7 million, to $25.0 million for the first six months from $16.3 million. Most of our seven unconsolidated joint ventures had strong double-digit-plus increases in earnings. Collectively, the unconsolidated joint ventures generated approximately $364 million in sales during the first six months of fiscal 2005. Joint venture income continues to be a consistent and significant contributor to our profitability.

     Income tax expense increased due to a higher level of income. Both periods were favorably affected by revisions of estimated tax liabilities as a result of tax audit settlements and related developments. The favorable effect for this fiscal year was $1.7 million compared to $1.4 million in the prior year. We estimate that our effective tax rate for fiscal 2005 will be 36.3% versus 31.9% for the prior year.

Segment Operations

     Processed Steel Products

     Our Processed Steel Products segment represents approximately 60% of consolidated net sales. Its results are significantly impacted by the steel-pricing environment and the automotive industry, which accounts for approximately 50% to 60% of its net sales. After rising steadily for the first four months of fiscal 2005, steel prices declined slightly from their peak in September. Overall, the price of steel in the first six months of fiscal 2005 was significantly higher than the first six months of fiscal 2004, which has led to an improved spread between our average selling prices and material costs. The Processed Steel Products segment’s sales volume to the automotive market for the first six months of fiscal 2005 were 9% higher than the comparable period for fiscal 2004. Big Three automotive production volumes were down about 4% for the same periods, while North American vehicle production for all manufacturers stayed relatively flat.

     Effective August 1, 2004, we sold our Decatur, Alabama, steel-processing facility and its cold-rolling assets to Nucor for $80.4 million cash. The assets sold at Decatur include the land and buildings, the four-stand tandem cold mill, the temper mill, the pickle line and the annealing furnaces. The sale excluded the slitting and cut-to-length assets and net working capital. We continue to serve customers by providing steel-processing services at the Decatur site under a long-term building lease with Nucor.

     As a result of the sale, we recorded a $67.4 million pre-tax charge during our fourth quarter of fiscal 2004, primarily for the impairment of assets at the Decatur, Alabama, facility. All but an estimated $0.8 million of the pre-tax charge was non-cash. An additional pre-tax charge of $5.6 million, mainly relating to contract termination costs, was recognized during the first quarter of fiscal 2005.

16

     The following table presents a summary of operating results for the Processed Steel Products segment for the periods indicated:

	Six Months Ended November 30,
	2004								2003
			% of			%					% of
Dollars in millions, tons in thousands	Actual		Net Sales			Change			Actual		Net Sales
Net sales	$	908.7		100.0	%		49	%	$	608.6		100.0	%
Cost of goods sold		775.8		85.4	%		42	%		547.0		89.9	%
Gross margin		132.9		14.6	%		116	%		61.6		10.1	%
Selling, general and administrative expense		56.9		6.3	%		43	%		39.7		6.5	%
Impairment charges and other		5.6		0.6	%					—
Operating income	$	70.4		7.7	%		221	%	$	21.9		3.6	%
Tons shipped		1,875					3	%		1,816
Material cost	$	637.6		70.2	%		59	%	$	401.8		66.0	%

     Operating income increased 221%, or $48.5 million, to $70.4 million, or 7.7% of net sales, for the first six months of fiscal 2005 from $21.9 million, or 3.6% of net sales, for the comparable period of fiscal 2004. The increase was due to higher volumes as well as a larger spread between average selling prices and material costs. These increases contributed to an increase in gross margin to 14.6% of net sales for the first six months of fiscal 2005 from 10.1% of net sales for the comparable period of fiscal 2004. Net sales increased 49%, or $300.1 million, to $908.7 million from $608.6 million because of higher volumes and increased pricing. SG&A expense for the first six months of fiscal 2005 was $56.9 million, an increase of $17.2 million, compared to $39.7 million for the comparable period in fiscal 2004. The increase was largely due to an increase in bad debt expense of $3.7 million, higher professional fees of $3.9 million and an increase in profit sharing and bonus expense of $3.1 million driven by higher earnings. The increase in bad debt is to reflect the increased collection risk of certain customers. Professional fees have increased due to the ongoing implementation of our ERP system and expenses associated with meeting the requirements of the Sarbanes-Oxley Act.

     Metal Framing

     During the fourth quarter of fiscal 2004, we began to realize synergies from the Unimast Incorporated acquisition and, aided by an improving economy, spreads widened and volumes improved. During the first six months of fiscal 2005, spread continued to drive profitability but volumes slowed. Even though volumes declined for the first six months of fiscal 2005 compared to the same period in fiscal 2004, there are signs that the commercial construction market is beginning to improve and that distributor customers who had temporarily curtailed purchasing may begin to replenish inventory. Certain commercial construction indices, although down a bit from last quarter, have generally trended higher in fiscal 2005 compared to the same period in fiscal 2004. In addition, historically between 10%-15% of our Metal Framing segment’s sales have been in the Florida market, which was badly disrupted as a result of the recent hurricanes. We see the first signs of an increase in the Florida market as the hurricane rebuilding effort gets underway. In general, commercial construction activity has been depressed for over three years and any increase in demand should be beneficial to this business segment. The segment also added new joint ventures with Pacific and Encore, which will facilitate our entry into new markets such as military housing, and Canada.

17

     The following table presents a summary of operating results for the Metal Framing segment for the periods indicated:

	Six Months Ended November 30,
	2004								2003
			% of			%						% of
Dollars in millions, tons in thousands	Actual		Net Sales			Change			Actual			Net Sales
Net sales	$	430.2		100.0	%		52	%	$	283.5			100.0	%
Cost of goods sold		309.5		71.9	%		21	%		255.9			90.3	%
Gross margin		120.7		28.1	%		338	%		27.6			9.7	%
Selling, general and administrative expense		44.0		10.2	%		44	%		30.4			10.7	%
Operating income (loss)	$	76.7		17.8	%		2856	%	$	(2.8	)		-1.0	%
Tons shipped		324					-17	%		390
Material cost	$	228.5		53.1	%		28	%	$	179.2			63.2	%

     Operating income of $76.7 million for the first six months of fiscal 2005 represented a $79.5 million increase from a $2.8 million operating loss for the comparable period of fiscal 2004. The primary driver for the increase was a $111.7 million expansion in the spread between average selling prices and material costs. Net sales increased 52%, or $146.7 million, to $430.2 million for the first six months of fiscal 2005 from $283.5 million for the comparable period of fiscal 2004. The previously mentioned lower sales volume was more than offset by higher pricing as average-selling prices increased 82.7%. Gross margin increased to 28.1% of net sales for the first six months of fiscal 2005 from 9.7% of net sales for the comparable period of fiscal 2004. SG&A expense increased $13.6 million primarily due to an increase in profit sharing and bonus expense driven by higher earnings.

     Pressure Cylinders

     During the first six months of 2005, we improved our domestic market position through the acquisition of the Western Cylinder Assets. In Europe, we have been successful with high-pressure and refrigerant cylinders, but have struggled with the liquefied petroleum gas (“LPG”) cylinders due to market overcapacity and declining demand. As a result, an impairment charge on certain of our Portugal LPG assets was recorded in the fourth quarter of fiscal 2004 and production of the LPG cylinders at the Portugal facility ceased during the first quarter of fiscal 2005. Despite this challenge, this segment has consistently provided solid profitability, cash flow and returns on capital.

18

     The following table presents a summary of operating results for the Pressure Cylinders segment for the periods indicated:

	Six Months Ended November 30,
	2004								2003
			% of			%						% of
Dollars in millions, units in thousands	Actual		Net Sales			Change			Actual		Net Sales
Net sales	$	167.7		100.0	%		21	%	$	139.0		100.0	%
Cost of goods sold		137.8		82.2	%		22	%		112.6		81.0	%
Gross margin		29.9		17.8	%		13	%		26.4		19.0	%
Selling, general and administrative expense		17.9		10.6	%		12	%		16.0		11.5	%
Operating income	$	12.0		7.2	%		16	%	$	10.4		7.5	%
Units shipped
Without acquisition*		6,161					5	%		5,841
Acquisition*		6,017								—
		12,178					108	%		5,841
Material cost	$	77.3		46.1	%		31	%	$	59.1		42.5	%

*Acquisition of the Western Cylinder Assets effective September 17, 2004

     Operating income increased 16%, or $1.6 million, to $12.0 million, or 7.2% of net sales, for the first six months of fiscal 2005 from $10.4 million, or 7.5% of net sales, for the comparable period of fiscal 2004. The increase was due to higher sales volumes of $8.9 million, partially offset by a decline in the spread between average selling prices and material costs of $5.0 million. Net sales increased 21%, or $28.7 million, to $167.7 million due to higher sales volumes, with $12.3 million of this increase attributable to the purchase of the Western Cylinder Assets. The strength of foreign currencies against the U.S. dollar also contributed $4.6 million to sales. Gross margin increased $3.5 million to $29.9 million for the first six months of fiscal 2005 from $26.4 million for the comparable period of fiscal 2004. SG&A expense increased $1.9 million primarily due to an increase in profit sharing and bonus expense driven by higher earnings.

Liquidity and Capital Resources

     In the first six months of fiscal 2005, we generated $30.6 million in cash from operating activities primarily due to higher earnings and the collection of receivables, offset by an increase in inventory and a reduction in accounts payable.

     Consolidated net working capital of $356.6 million at November 30, 2004, was comparable to net working capital of $358.1 million at May 31, 2004. While inventory increased by $102.6 million, accounts receivable decreased $48.8 million. Additionally, other current assets decreased due to the collection of $80.4 million in proceeds from the sale of the Decatur assets, which had been classified as assets held for sale at May 31, 2004. Accounts payable and taxes payable decreased by $8.0 million and $18.9 million, respectively.

     Our primary investing and financing activities included spending $64.9 million for the acquisition of the Western Cylinder Assets, distributing $27.9 million in dividends to shareholders and spending $19.3 million on capital projects, which included $8.5 million for our ERP system. We generated $83.8 million in cash through the sale of assets, including the previously mentioned $80.4 million proceeds for Decatur. We also generated $13.2 million in cash from the issuance of stock, mainly through option exercises. We anticipate that our fiscal 2005 capital spending, barring further acquisitions, will remain at or below our annual depreciation expense.

     A $435.0 million long-term revolving credit facility that matures in May 2007, $60.0 million in short-term uncommitted credit lines and the $190.0 million trade receivables securitization facility (“TARS”) primarily serve our short-term liquidity needs. The uncommitted credit lines and the revolving credit facility were unused as of November 30, 2004.

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Our usage of the TARS facility increased $6.0 million to $66.0 million at November 30, 2004, compared to $60.0 million at May 31, 2004. During September 2004, we utilized this facility to fund the $64.9 million acquisition of the Western Cylinder Asset purchase.

     During the first six months of fiscal 2005, we increased our available short-term uncommitted lines of credit from $45.0 million with three banks to $60.0 million with four banks. The uncommitted lines of credit are extended to us on a discretionary basis. Because the outstanding principal amounts can be reset and adjusted daily, these lines typically provide us with the greatest amount of funding flexibility compared to our other sources of short-term capital. These lines supplement our short-term liquidity and allow us to reduce short-term borrowing costs.

     Our $435.0 million long-term revolving credit facility, provided by a group of 15 banks, matures in May 2007. In July 2004, we amended this facility to increase the borrowing limit and eliminate certain covenants. As a result of the restructuring, the facility size was increased from $235.0 million to $435.0 million with the same group of 15 banks.

     On December 17, 2004, we issued $100.0 million of unsecured Floating Rate Senior Notes due December 17, 2014 (“2014 Notes”) through a private placement. Through an interest rate swap executed in anticipation of the debt issuance, we achieved an effective fixed rate of 5.26% for the ten-year duration of the 2014 Notes. The proceeds from the 2014 Notes were used to reduce the TARS facility to zero and to fund our current working capital needs. In the future, we intend to reduce the size of the TARS facility to $100.0 million and use it only as a backup to our uncommitted lines and revolving credit facility. This will significantly reduce the fees charged for the unused portion of the TARS facility but keep it available should we have a need for it in the future.

     At November 30, 2004, our total debt was $289.0 million compared to $289.8 million at the end of fiscal 2004. Our debt to total capitalization ratio was 27.1% at November 30, 2004, down from 29.9% at the end of fiscal 2004. If the 2014 Notes had been outstanding at November 30, 2004, this ratio would have been 33.4%. The larger revolving credit facility and the issuance of the 2014 Notes significantly enhances our flexibility related to the $142.4 million maturity of our 7.125% notes due on May 15, 2006.

     We assess acquisition opportunities as they arise. Additional financing may be required if we decide to make additional acquisitions. There can be no assurance, however, that any such opportunities will arise, that any such acquisitions will be consummated, or that any needed additional financing will be available on satisfactory terms when required. Absent any other acquisitions, we anticipate that cash flows from operations and unused borrowing capacity should be sufficient to fund expected normal operating costs, dividends, working capital, and capital expenditures for our existing businesses.

Dividend Policy

     Dividends are declared at the discretion of the Board of Directors. We paid a quarterly dividend of $0.16 per share during the second quarter of fiscal 2005. In addition, a quarterly dividend of $0.16 per share was declared during the second quarter of fiscal 2005 and paid in December 2004. Our Board of Directors reviews the dividend quarterly and establishes the dividend rate based upon our financial condition, results of operations, capital requirements, current and projected cash flows, business prospects and other factors which are deemed relevant. While we have paid a dividend every quarter since becoming a public company in 1968, there is no guarantee that this will continue in the future.

Contractual Cash Obligations and Other Commercial Commitments

     Contractual cash obligations have not changed significantly from those disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2004, except the subsequent issuance of the 2014 Notes. The following table summarizes our other commercial commitments as of November 30, 2004. These commercial commitments are disclosed as future obligations under accounting principles generally accepted in the United States.

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	Commitment Expiration per Period
			Less Than		1 - 3		4 - 5		After
In millions	Total		1 Year		Years		Years		5 Years
Lines of credit	$	435.0	$	—	$	435.0	$	—	$	—
Standby letters of credit		10.6		10.6		—		—		—
Guarantees		5.0		5.0		—		—		—
Standby repurchase obligations		—		—		—		—		—
Other commercial commitments		—		—		—		—		—
Total commercial commitments	$	450.6	$	15.6	$	435.0	$	—	$	—

Critical Accounting Policies

     The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We continually evaluate our estimates, including those related to our allowance for doubtful accounts, intangible assets, accrued liabilities, income and other tax accruals, and contingencies and litigation. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. These results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Critical accounting policies are defined as those that reflect our significant judgments and uncertainties that could potentially result in materially different results under different assumptions and conditions. Although actual results historically have not deviated significantly from those determined using our estimates, as discussed below, our financial position or results of operations could be materially different if we were to report under different conditions or to use different assumptions in the application of such policies. We believe the following accounting policies are the most critical to us since these are the primary areas where financial information is subject to our estimates, assumptions and judgment in the preparation of our consolidated financial statements.

     Revenue Recognition: We recognize revenue upon transfer of title and risk of loss provided evidence of an arrangement exists, pricing is fixed and determinable, and collectibility is probable. In circumstances where the collection of payment is highly questionable at the time of shipment, we defer recognition of revenue until payment is collected. We provide for expected returns based on experience and current customer activities.

     During December 2003, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition, which supercedes SAB No. 101, Revenue Recognition in Financial Statements. This Bulletin’s primary purpose is to rescind accounting guidance contained in SAB No. 101 related to multiple element revenue arrangements, superceded as a result of the issuance of EITF 00-21, Accounting for Revenue Arrangements with Multiple Deliverables. While the wording of SAB No. 104 has changed to reflect the issuance of EITF 00-21, the revenue recognition principles of SAB No. 101 remain largely unchanged by the issuance of SAB No. 104. The issuance of this Bulletin did not impact our accounting policy for revenue recognition.

     Receivables: We review our receivables on a monthly basis to ensure they are properly valued and collectible. This is accomplished through two contra-receivable accounts: returns and allowances and allowance for doubtful accounts. Returns and allowances are used to record estimates of returns or other allowances resulting from quality, delivery, discounts or other issues affecting the value of receivables. This account is estimated based on historical trends and current market conditions, with the offset recorded to net sales.

     The allowance for doubtful accounts is used to record the estimated risk of loss related to the customers’ ability to pay, including the risk associated with our retained interest in the pool of receivables sold through our TARS facility. This allowance is maintained at a level that we consider appropriate based on factors that affect collectibility, such as the financial health of the customer, historical trends of charge-offs and recoveries and current

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and projected economic and market conditions. As we monitor our receivables, we identify customers that may have a problem paying, and we adjust the allowance accordingly, with the offset to SG&A expense.

     The recent rise in steel prices has increased the risk of collectibility. We have evaluated this risk and have made appropriate adjustments to these two allowance accounts. While we believe these allowances are adequate, deterioration in economic conditions could adversely impact our future earnings.

     Impairment of Long-Lived Assets: We review the carrying value of our long-lived assets, including intangible assets, whenever events or changes in circumstances indicate that the carrying value of an asset or a group of assets may not be realizable. Accounting standards require an impairment charge to be recognized in the financial statements if the carrying amount exceeds the undiscounted cash flows that asset or group of assets would generate. The loss recognized would be the difference between the fair value and the carrying amount of the asset or group of assets.

     Annually, we review goodwill for impairment using the present value technique to determine the estimated fair value of goodwill associated with each reporting entity. There are three significant sets of values used to determine the fair value: estimated future discounted cash flows, capitalization rate and tax rates. The estimated future discounted cash flows used in the model are based on planned growth with an assumed perpetual growth rate. The capitalization rate is based on our current cost of debt and equity capital. Tax rates are maintained at current levels.

     Accounting for Derivatives and Other Contracts at Fair Value: We use derivatives in the normal course of business to manage our exposure to fluctuations in commodity prices, foreign currency and interest rates. These derivatives are based on quoted market values. These estimates are based upon valuation methodologies deemed appropriate in the circumstances; however, the use of different assumptions could affect the estimated fair values.

     Income Taxes: In accordance with the provisions of SFAS No. 109, Accounting for Income Taxes, we account for income taxes using the asset and liability method. The asset and liability method requires the recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between the tax bases and financial reporting bases of our assets and liabilities. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some or a portion of the deferred tax assets will not be realized. We provide a valuation allowance for deferred income tax assets when, in our judgment, based upon currently available information and other factors, it is more likely than not that a portion of such deferred income tax assets will not be realized. The determination of the need for a valuation allowance is based on an on-going evaluation of current information including, among other things, estimates of future earnings in different tax jurisdictions and the expected timing of deferred income tax asset reversals. We believe that the determination to record a valuation allowance to reduce deferred income tax assets is a critical accounting estimate because it is based on an estimate of future taxable income in the United States, which is susceptible to change and may or may not occur, and because the impact of adjusting a valuation allowance may be material.

     We have a reserve for taxes and associated interest that may become payable in future years as a result of audits by taxing authorities. While we believe the positions taken on previously filed tax returns are appropriate, we have established the tax and interest reserves in recognition that various taxing authorities may challenge our positions. The tax reserves are analyzed periodically, and adjustments are made as events occur to warrant adjustment to the reserve, such as lapsing of applicable statues of limitations, conclusion of tax audits, additional exposure based on current calculations, identification of new issues, release of administrative guidance or court decisions affecting a particular tax issue.

     The critical accounting policies discussed herein are not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for our judgment in their application. There are also areas in which our judgment in selecting an available alternative would not produce a materially different result. Other accounting policies also have a significant effect on our consolidated financial statements, and some of these policies require the use of estimates and assumptions. See “Item 8. - Financial Statements and Supplementary Data - Note A - Summary of Significant Accounting Policies” of our Annual Report on Form 10-K for the fiscal year ended May 31, 2004.

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Item 3. - Quantitative and Qualitative Disclosures About Market Risk

     The Company entered into an interest rate swap effective December 17, 2004, for a notional amount of $100 million to hedge changes in fair value attributable to changes in the LIBOR rate associated with the December 17, 2004, issuance of the 2014 Notes (see Note J of the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q). The critical terms of the derivative correspond with the critical terms of the underlying exposure, therefore we expect no ineffectiveness. The interest rate swap is with a highly rated counterparty. We pay a fixed rate of 4.46% and receive a variable rate based on six-month LIBOR plus 80 basis points.

     In September 2004, the Company entered into additional commodity derivative contracts to further hedge its exposure to natural gas prices. We increased the notional amount of our natural gas hedge position by $10.4 million to $13.9 million.

     Notional transaction amounts and fair values for our outstanding derivative positions as of November 30, 2004, and May 31, 2004, are summarized below. Fair values of the derivatives do not consider the offsetting underlying hedged item.

	November 30,				May 31,
	2004				2004				Change
	Notional		Fair		Notional		Fair		In
In millions	Amount		Value		Amount		Value		Fair Value
Zinc	$	17.9	$	4.6	$	21.2	$	5.0	$	(0.4	)
Natural gas		12.6		2.4		4.1		1.4		1.0
Interest rate		100.0		2.0		—		—		2.0

     A sensitivity analysis of changes in the price of hedged commodities indicates that a 10% decline in zinc prices would reduce the fair value of our hedge position by $2.2 million. A similar 10% decline in natural gas prices would reduce the fair value of our natural gas hedge position by $1.5 million. A sensitivity analysis of changes in the interest rate yield curve associated with our interest rate swap indicates that a 10% decline in the yield curve would reduce the fair value of our interest rate swap by $3.8 million. Any resulting changes in fair value would be recorded as adjustments to other comprehensive income.

     Other market risks have not changed significantly from those disclosed in “Item 7A - Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the fiscal year ended May 31, 2004.

Item 4. - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

     The management of Worthington Industries, Inc. (the “Registrant”), with the participation of the Registrant’s principal executive officer and principal financial officer, performed an evaluation of the effectiveness of the Registrant’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the quarterly period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Registrant’s principal executive officer and principal financial officer have concluded that such disclosure controls and procedures were effective as of the end of the quarterly period covered by this Quarterly Report on Form 10-Q to ensure that material information relating to the Registrant and its consolidated subsidiaries is made known to them, particularly during the period for which periodic reports of the Registrant, including this Quarterly Report on Form 10-Q, are being prepared.

Changes in Internal Control Over Financial Reporting

     There were no changes which occurred during the Registrant’s second fiscal quarter ended November 30, 2004, in the Registrant’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. - Legal Proceedings

     Various legal actions, which generally have arisen in the ordinary course of business, are pending against the Registrant. None of this pending litigation, individually or collectively, is expected to have a material adverse effect on the Registrant.

Item 2. - Unregistered Sales of Equity Securities and Use of Proceeds

     The following table provides information about purchases the Registrant made of its common shares during each month of the fiscal quarter ended November 30, 2004:

						Total Number of Shares		Maximum Number of
	Total Number			Average Price		Purchased as Part of		Shares that May Yet Be
	of Shares			Paid per		Publicly Announced		Purchased Under the
Period	Purchased			Share		Plans or Programs		Plans or Programs
September 1-30, 2004		15,695	(1)	$	21.17		—		—
October 1-31, 2004		—			—		—		—
November 1-30, 2004		—			—		—		—
Total		15,695		$	21.17		—		—

     ⁽¹⁾Reflects common shares owned and tendered by an employee to pay the exercise price for an option exercise.

Item 6. - Exhibits

Exhibits

10.1	Worthington Industries, Inc. 2005 Non-Qualified Deferred Compensation Plan
10.2	Worthington Industries, Inc. 2005 Non-Qualified Deferred Compensation Plan for Directors
31.1	Rule 13a - 14(a) / 15d - 14(a) Certification (Principal Executive Officer)
31.2	Rule 13a - 14(a) / 15d - 14(a) Certification (Principal Financial Officer)
32.1	Section 1350 Certification of Principal Executive Officer
32.2	Section 1350 Certification of Principal Financial Officer

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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 10, 2005	By:	/s/ John S. Christie
		John S. Christie, President and Chief Financial Officer (On behalf of the Registrant and as Principal     Financial Officer)

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INDEX TO EXHIBITS

Exhibit	Description	Location
10.1	Worthington Industries, Inc. 2005 Non-Qualified Deferred Compensation Plan	Filed herewith.
10.2	Worthington Industries, Inc. 2005 Non-Qualified Deferred Compensation Plan for Directors	Filed herewith.
31.1	Rule 13a - 14(a) / 15d - 14(a) Certification (Principal Executive Officer)	Filed herewith.
31.2	Rule 13a - 14(a) / 15d - 14(a) Certification (Principal Financial Officer)	Filed herewith.
32.1	Section 1350 Certification of Principal Executive Officer	Filed herewith.
32.2	Section 1350 Certification of Principal Financial Officer	Filed herewith.

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EX-10.1

Exhibit 10.1

WORTHINGTON INDUSTRIES, INC.

2005 NON-QUALIFIED

DEFERRED COMPENSATION PLAN

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ARTICLE I - INTRODUCTION

1.1	Name and Adoption of Plan.
	Worthington Industries, Inc. (the “Company”) hereby adopts this Worthington Industries 2005 Non-Qualified Deferred Compensation Plan (the “Plan”). The Company also extends the Plan to any Company Subsidiary that adopts the Plan, subject to the terms described in Section 1.7.
1.2	Purposes of Plan.
	The purpose of the Plan is to provide deferred compensation for a select group of management or highly compensated employees of the Employers.
1.3	“Top Hat” Pension Benefit Plan.
	The Plan is an “employee pension benefit plan” within the meaning of ERISA Section 3(2). The Plan is maintained, however, for a select group of management or highly compensated employees and, therefore, is exempt from Parts 2, 3 and 4 of Title 1 of ERISA. The Plan is not intended to qualify under Code Section 401(a).
1.4	Plan Unfunded.
	The Plan is unfunded. All benefits will be paid from Employers’ general assets, which will continue to be subject to the claims of Employers’ creditors as described in Section 11.6.
1.5	Effective Date.
	The effective date of this Plan is January 1, 2005, with initial deferral elections made in December 2004. Bonus Deferrals may be made for Fiscal Quarters beginning on or after March 1, 2005. Base Salary Deferrals may be made for pay periods beginning on or after January 1, 2005. Election to make Deferrals under the Plan may initially be made in December 2004.
1.6	Administration.
	The Plan shall be administered by the Committee.
1.7.	Participating Employers.
	Any Company Subsidiary may become an Employer in the Plan upon mutual agreement between the Company and the Company Subsidiary.

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As a condition to becoming an Employer, each Company Subsidiary must (a) designate the Committee as the entity responsible for Plan administration, (b) delegate to the Company, the Committee and the Executive Committee all power and authority to interpret, amend or terminate the Plan, as described in this document, and to discharge the duties and responsibilities described in Article VIII and (c) subject to Section 11.6, agree to make the payment of any Plan benefits accrued by its Employees under the Plan. An entity that ceases to be an Employer will nevertheless remain responsible for any liabilities arising from or attributable to periods during which it was an Employer.

ARTICLE II - DEFINITIONS AND CONSTRUCTION

2.1	Definitions.
	For purposes of the Plan, the following words and phrases shall have the respective meanings set forth below, unless their context clearly requires a different meaning:
	“Account” means the bookkeeping account maintained by the Committee on behalf of each Participant pursuant to Article VI.
	“Base Salary” means the base rate of cash compensation paid by the Employers to or for the benefit of a Participant for services rendered or labor performed on or after the Effective Date including base pay a Participant could have received in cash in lieu of deferrals pursuant to Section 4.1 and contributions made on his behalf to any qualified retirement or cafeteria plan maintained by the Employers for that Participant.
	“Base Salary Deferral” means the amount of a Participant’s Base Salary which the Participant elects to have withheld on a pre-tax basis from his Base Salary and credited to his Account pursuant to Section 4.1. However, no Participant may defer any portion of this Base Salary that is earned before the later of the Effective Date or the first day of the Plan Year following the date that he files a properly completed Election Form with the Committee.
	“Beneficiary” means the person or persons designated by the Participant in accordance with Section 7.2.
	“Bonus Compensation” means (a) sales commissions and (b) the amount awarded to a Participant for a Fiscal Quarter under the Employer’s Executive Bonus Plan, Cash Profit Sharing Plan or a similar plan, including any amount the Participant could have received under such plan in cash in lieu of deferrals pursuant to Section 4.1

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and contributions made on his behalf to any qualified retirement or cafeteria plan maintained by the Employer for the Participant.

“Bonus Deferral” means the amount of a Participant’s Bonus Compensation which the Participant elects to have withheld on a pre-tax basis from his Bonus Compensation and credited to his account pursuant to Section 4.1. However, no Participant may defer any portion of his Bonus Compensation for any Fiscal Quarter that begins prior to the Plan Year for which he has filed an Election Form.

“Code” means the Internal Revenue Code of 1986, as amended, or any successor thereto, together with the rules, regulations and interpretations promulgated thereunder.

“Committee” means the committee appointed to administer the Plan in accordance with Article VIII.

“Company” means Worthington Industries, Inc. and any successor thereto.

“Company Subsidiary” means any entity which is (i) at least 100% owned, directly or indirectly, by the Company, and (ii) any other entity which is at least 40% owned, directly or indirectly, by the Company and which is designated as a Company Subsidiary for purposes of this Plan by the Committee. Indirect ownership will be determined by applying rules issued under Treas. Reg. §1.414(c)(4).

“Deferral Date” means (a) with respect to amounts attributable to Base Salary and Bonus Deferrals, the earlier of (i) the Deferral Date selected by the Participant in the Election Form, which date must be at least one year after the end of the Fiscal Quarter or pay period with respect to which the payment would otherwise be made, or (ii) the date of the Participant’s death, and (b) unless the Employer selects a different Deferral Date with respect to amounts attributable to Employer Contributions at the time such contributions are made, the later of (i) the date of the Participant’s Separation From Service reaches age 62 or (ii) the date of the Participant’s Employee Separation From Service.

“Deferrals” means Base Salary Deferrals, Bonus Deferrals and Employer Contributors.

“Directors” means the Board of Directors of the Company.

“Effective Date” means January 1, 2005.

“Election Form” means the written agreement(s) or other form(s) or method(s) adopted from time to time for the Plan pursuant to which the Participant designates his Beneficiary; elects the amount of his Base

30

Salary and/or his Bonus Compensation to be deferred into the Plan, the Deferral Date, the deemed investment and/or the form of payment for such amounts. The form of the Election Forms may be established and changed by the Committee at any time.

“Employee” means any common-law employee of an Employer.

“Employer” means the Company or a Company Subsidiary which has become a participating Employer in the Plan. A Company Subsidiary shall cease to be an Employer at such time as agreed between the Company and the Company Subsidiary or, if earlier, the date an Employer ceases to be a Company Subsidiary.

“Employer Contribution” means the amount, as determined by each Employer, credited by the Committee to the Account of a Participant as an Employer Contribution. Such amounts may vary by individual Participant at the sole discretion of the Employer.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Executive Committee” means the Executive Committee of the Directors.

“Fiscal Quarter” means any fiscal quarter of the Company (currently the three month periods ending on the last day of August, November, February, and May).

“401(k) Plan” means the Worthington Industries Deferred Profit Sharing Plan, as in effect from time to time.

“Highest Paid Employees” means those employees as defined in Section 4.16(i) of the Internal Revenue Code, without regard to paragraph 5 thereof (generally being the ten highest paid employees of the Company and the Company’s Subsidiaries considered on a consolidated basis and any officers of the Company earning in excess of $130,000 in annual compensation).

“IRS Regulations” means the laws and regulations adopted by Congress or issued by the Internal Revenue Services as applicable to non-qualified deferred compensation plans or arrangements.

“Participant” means each Employee who has been selected for participation the Plan and who has become a Participant pursuant to Article III.

“Plan” means this Worthington Industries 2005 Non-Qualified Deferred Compensation Plan, as amended from time to time.

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	“Plan Year” means the twelve consecutive month period commencing January 1 of each year-end ending on December 31. The first Plan Year shall begin on the Effective Date and end the following December 31.
	“Separations From Service” means the date a Participant is no longer an employee of either the Company or any Company Subsidiary, such determination to be made consistent with IRS Regulations.
	“Valuation Date” means the date the Accounts in the Plan are adjusted to reflect earnings and losses in accordance with the hypothetical investment directions, as set from time to time by the Committee.
2.2	Number and Gender.
	Wherever appropriate herein, words used in the singular shall be considered to include the plural and words used in the plural shall be considered to include the singular. The masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender.
2.3	Headings.
	The headings of Articles and Sections herein are included solely for convenience, and if there is any conflict between such headings and the rest of the Plan, the text shall control.

ARTICLE III - PARTICIPATION AND ELIGIBILITY

3.1	Participation.
	Participants in the Plan are those Employees who are both (a) members of a select group of highly compensated or management Employees of their Employer, as determined by the Committee, and (b) selected by the Committee, in its sole discretion, to be Participants. The Committee shall notify each Participant of his selection as a Participant and the time his participation may start which shall be effective for the Plan Year following his selection for Base Salary and Bonus Deferrals. A Participant shall remain eligible to continue participation in the Plan until his participation ceases as set forth below in Section 3.3.
3.2	Commencement of Participation.
	An Employee may commence participation in the Plan on the later of (i) the date the Committee approves his participation or (ii) with respect to Base Salary and Bonus Deferrals as of the beginning of the Plan Year immediately following the date he returns to the Committee a properly completed Election Form. However, neither the Company, the Employer, the Committee, the Plan nor any other person shall be liable to any

32

	person if the Committee inadvertently fails to notify him of his eligibility to be a Participant.
3.3	Cessation of Participation.
	Notwithstanding any provision herein to the contrary, an individual who has become a Participant in the Plan shall cease to be a Participant hereunder effective as of the earlier of the date (a) he dies, (b) he otherwise ceases to be an Employee of at least one of the Employers, (c) he ceases to be a member of his Employer’s select group of highly compensated or management employees but remains an Employee of any Employer, (d) designated by the Committee or (e) his Employer ceases to be a Company Subsidiary or an Employer (but only if he is then an Employee of the affected Employer); provided, however, that any deferral elections effective for the Plan Year in which participation ceases shall remain effective to the extent required by IRS Regulations. The Committee or the Company will notify a Participant who is still an employee if he is no longer eligible to be a Participant. A person who has ceased to actively participate in the Plan as described in this Section but who also remains an Employee, will continue to be entitled to all rights and benefits (and subject to all limitations) described in the Plan other than the right to make additional Base Salary or Bonus Deferrals or to receive additional Employer Contributions.

ARTICLE IV - DEFERRALS

4.1	Deferrals by Participant.
	Any Participant who desires to defer any portion of his Bonus Compensation and/or his Base Salary must complete and deliver an Election Form in such form as may then be prescribed. The Election Form to defer Bonus Compensation must be filed prior to the beginning of the Plan Year containing the first day of the applicable Fiscal Quarter for which the Bonus Compensation would otherwise be paid, and shall be irrevocable once such Plan Year begins. The Election Form to defer Base Salary must be filed prior to the beginning of the Plan Year in which the Base Salary is earned (i.e. the related services are performed), and shall be irrevocable once such Plan Year begins. Under no circumstances may a Participant’s Deferral Election with respect to any amounts earned in a Plan Year be made after the beginning of that Plan Year.
	The Committee, in its discretion, may set limits on the amount of Base Salary and/or Bonus Compensation that may be deferred under the Plan; provided that any changes in such limits may not apply to any Plan Year for which deferral elections have become irrevocable.

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4.2	Time of Credit of Deferrals.
	Bonus Deferrals and Base Salary Deferrals shall be credited to the Account of each Participant at the same time as the Base Salary or Bonus Compensation would have otherwise been paid.
4.3	Employer Contributions.
	The Employer may determine, in its sole discretion, to make Employer Contributions for any Participant or Participants as it elects. The amount of any Employer Contribution to be made for any Participant shall be determined in such manner as his Employer shall, in its sole discretion, deems appropriate and may be a different amount (or no amount) for each Plan Year and for each Participant. Employer Contributions shall be in the form of a credit to the Participant’s Account.
4.4	Timing of Employer Contributions.
	Employer Contributions will be credited to the Participant’s Account as of the date specified by the Employer or, if no date is specified, as soon as administratively practical after they are declared.
	A Participant shall be notified within a reasonable time of any Employer Contribution to be made on his behalf under the Plan.
4.5	Vesting.
	A Participant shall be fully vested in his Account at all times except to the extent that the Employer establishes a deferred vesting schedule to apply to Employer Contributions made on or after the time the deferred vesting schedule is established.

ARTICLE V - EARNINGS

5.1

Earnings and Investment.

Amounts credited to a Participant’s Account shall be credited with earnings and losses based on hypothetical investment directions made (or deemed to be made) by the Participant in accordance with investment options and procedures adopted and amended by the Committee from time to time. Any amounts credited to a Participant’s Account to which a Participant does not provide investment direction (or as to which no direction is permitted) shall be credited with earnings as if the Participant shall have elected the investment option provided for in the Plan or determined from time to time by the Committee for cases where no investment option is made. A Participant’s Account shall be adjusted as of each Valuation Date to reflect investment gains and losses. The

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	Committee retains the right to change, amend or eliminate investment options and procedures as it shall deem appropriate in its sole discretion.
5.2	Earnings after Cessation of Participation.
	If the amount in a Participant’s Account is to be paid in installments, the amount remaining in the Account shall continue to be credited with gains and losses based upon the Participant’s hypothetical investment elections, but the Committee may, in its sole discretion, limit the investment options that are available for such Accounts.
	If a former Participant who is no longer an Employee (or is employed by an entity that ceases to be an Employer or a Company Subsidiary) still has an Account in the Plan, the amount in the Account shall be continue to be credited with gains and losses based upon the Participant’s hypothetical investment elections, but the Committee may, in its sole discretion, limit the investment options that are available for such Accounts.

ARTICLE VI - ACCOUNTS

6.1	Establishment of Accounts.
	The Committee will establish a separate bookkeeping account for each Participant. Such account shall be credited with the Base Salary Deferrals and Bonus Deferrals made by the Participant pursuant to Section 4.1, and Employer Contributions made by the Employer pursuant to Section 4.3 and credited or charged, as the case may be with the hypothetical investment results determined pursuant to Article V and taxes described in Section 6.4.
6.2	Subaccounts.
	Within each Participant’s bookkeeping account, separate subaccounts shall be maintained to the extent necessary for the administration of the Plan. For example, it may be necessary to maintain separate subaccounts where the Participant has specified different Deferral Dates, methods of payment or investment directions. Also, the Committee will separately account for amounts credited for each Participant while the Participant was an Employee of each Employer and will use this subaccount to account for Base Salary and Bonus Deferrals and Employer Contributions (and attributable earnings, losses and taxes described in Section 6.4) attributable to the Participant’s employment with each Employer.

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6.3	Hypothetical Nature of Accounts.
	The Accounts (or subaccounts) established under this Article VI shall be hypothetical in nature and shall be maintained for bookkeeping purposes only, so that earnings and losses on the Base Salary Deferrals, Bonus Deferrals and Employer Contributions made to the Plan can be credited (or charged, as the case may be). Neither the Plan nor any of the Accounts (or subaccounts) established hereunder shall hold any actual funds or assets. The right of any person to receive one or more payments under the Plan shall be an unsecured claim against the general assets of the Employer for whom the Participant was an Employee when the Deferral (including attributable earnings and losses) was credited. Any liability of the Company, any Employer, the Committee or any other person to any Participant, former Participant, or Beneficiary with respect to a right to payment shall be based solely upon contractual obligations created by the Plan. Neither the Employers, their directors, officers or employees, nor any other person shall be deemed to be a trustee of or fiduciary with respect to any amounts to be paid under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between any Employer and a Participant, former Participant, Beneficiary, or any other Person.
6.4	Reduction for Taxes
	Any employment or other taxes (such as wage taxes) that are imposed on Base Salary or Bonus Deferrals or Employer Contributions when those amounts are credited to a Participant’s Account will be assessed against the affected Participant’s other compensation or deducted from the Participant’s Account to the extent his other compensation is not sufficient to pay those taxes.

ARTICLE VII - PAYMENT OF ACCOUNT

7.1   Distribution After Deferral Date

(a)   Time of Distribution.

Distribution of that portion of a Participant’s Account which is not previously distributed under the terms of the Plan shall be made as soon as practicable following the Deferral Date for such amounts, and in any event no later than January 31 of the year following the Deferral Date.

The distribution to any person who qualifies as a Highest Paid Employee, which is triggered due to a Separation From Service, shall not begin earlier than the date which is six months after the date of the Separation From Service (or, if earlier, the death of such person).

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(b)   Form of Payment or Payments.

A Participant’s Account balance shall be distributed in accordance with the form of payment elected by the Participant on the Election Form to which such amounts relate. The form of payment with respect to amounts and the earnings credited thereon may be in any of the following forms:

(i) A lump sum; or

(ii) Other methods that the Committee, in its sole discretion, may allow.

Installment payments, if permitted, shall be paid annually during January of each Plan Year. Each installment payment shall be determined by multiplying the Account balance by a fraction, the numerator of which is one and the denominator of which is the number of remaining installment payments to be made to the Participant. Anything contained herein to the contrary notwithstanding, total distribution of a Participant’s account must be made by the date such Participant attains age 85.

(c)   Changes to Deferral Date or Form of Payment.

A Participant may change (i) the form of payment of his Account or (ii) his Deferral Date by filing an amended Election Form; provided that any such changes to an existing election (a) will only become effective 12 months after such amended Election Form is filed; (b) must be made at least 12 months before the affected distribution otherwise would be made; and (c) must provide for a deferral of at least five years (as explained by IRS Regulations).

7.2   Distributions upon Death

(a) Distribution on Death. Upon the Participant’s death, the Participant’s Account shall be distributed to the Participant’s Beneficiary in the form specified by the Participant from among those available under Section 7.1(b).

(b) Designation of Beneficiaries.

Each Participant shall have the right to designate the beneficiary or beneficiaries to receive payment of his benefit in the event of his death. A beneficiary designation shall be made by executing the beneficiary designation portion of the Election Form and filing the same with the Committee. Any such designation may be changed at any time by execution of a new beneficiary designation portion of the Election Form in accordance with this Section. If no such designation is on file with the Committee at the time of death of the Participant or such designation is not effective for any reason as determined by the Committee, then the

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designated beneficiary or beneficiaries to receive such benefit shall be the Participant’s surviving spouse, if any, or if none, the executor, personal representative, or administrator of the Participant’s probate estate, or his heirs-at-law, if there is no administration of such Participant’s probate estate.

7.3	Unclaimed Benefits
	In the case of a benefit payable on behalf of such Participant, if the Committee is unable to locate the Participant or beneficiary to whom such benefit is payable, such benefit may be forfeited to the Employer or Employers for whom the Participant was an Employee when the forfeited Deferral was credited to his Account, upon the Committee’s determination. Notwithstanding the foregoing, if subsequent to any such forfeiture the Participant or Beneficiary to whom such benefit is payable makes a valid claim for such benefit, such forfeited benefit shall be paid by the Employer or Employers (or restored to the Plan by the Employer (without interest from the date it would have otherwise been paid) to whom the Account was initially forfeited. However, neither the Company any Employer, the Committee nor any other person is liable to restore any benefit forfeited under this Section to any other Employer.
7.4	Hardship Withdrawals.
	A Participant may apply in writing to the Committee for, and the Committee may permit, a hardship withdrawal of all or any part of a Participant’s Account if the Committee, in its sole discretion, determines that the Participant has incurred a severe financial hardship resulting from a sudden and unexpected illness or accident of the Participant or of a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, as determined by the Committee, in its sole and absolute discretion. The amount that may be withdrawn shall be limited to the smaller of (i) the amount reasonably necessary to relieve the hardship or financial emergency upon which the request is based (after applying other available resources as required by IRS Regulations), plus the federal and state taxes due on the withdrawal, as determined by the Committee or (ii) the affected Participant’s Account balance as of the most recent Valuation Date. The Committee may require a Participant who requests a hardship withdrawal to submit such evidence as the Committee, in its sole discretion, deems necessary or appropriate to substantiate the circumstances upon which the request is based. If a condition qualifies as a hardship under this Section and under the 401(k) Plan, a Participant must first withdraw all funds from this Plan before he may file a hardship withdrawal application under the 401(k) Plan; provided, however, that this provision sentence shall not apply to the

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extent it is inconsistent with IRS Regulations. The above notwithstanding, no hardship withdrawal shall be permitted unless it meets the requirements for hardship withdrawals as established by the IRS Regulations.

ARTICLE VIII - ADMINISTRATION

8.1	Committee.
	The Plan shall be administered by a Committee appointed by the Executive Committee or the Directors. If no other Committee is so appointed, the Committee shall be the Compensation Committee of the Directors. The Committee shall be responsible for approving an Employer’s designation of an Employee to be a Participant and for the general operation and administration of the Plan and for carrying out the provisions thereof. The Committee may delegate to others certain aspects of the management and operational responsibilities of the Plan including the employment of advisors and the delegation of ministerial duties to qualified individuals.
8.2	General Powers of Administration.
	The Committee shall have all powers necessary or appropriate to enable it to carry out its administrative duties. Not in limitation, but in application of the foregoing, the Committee shall have the duty and power to interpret the Plan and determine all questions that may arise hereunder as to the status and rights of Employees, Participants, and Beneficiaries. The Committee may exercise the powers hereby granted in its sole and absolute discretion. No member of the Committee shall be personally liable for any actions taken by the Committee unless the member’s action involves gross negligence or willful misconduct.
8.3	Indemnification of Committee.
	The Company and all Employers shall indemnify the members of the Committee against any and all claims, losses, damages, expenses, including attorney’s fees, incurred by them, and any liability, including any amounts paid in settlement with their approval, arising from their action or failure to act, except when the same is judicially determined to be attributable to their gross negligence or willful misconduct.
8.4	Costs of Administration.
	The costs of administering the Plan shall be borne by each Employer (in proportion to number of their Employees who are Participants) unless and until a Participant receives written notice of the imposition of administrative costs, with such costs to begin with the next Plan Year.

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Such costs may only be imposed prospectively and not retroactively for prior Plan Years. Such costs, if imposed, shall be charged against a Participant’s Account and shall be uniform for all Plan Participants. Such costs shall not exceed standard fees for similarly designed non-qualified plans under administration by high quality third party administrators.

ARTICLE IX - DETERMINATION OF BENEFITS, CLAIMS

PROCEDURE AND ADMINISTRATION

9.1	Claims
	A person who believes that he is being denied a benefit to which he is entitled under the Plan (hereinafter referred to as a “Claimant”) may file a written request for such benefit with the Committee, setting forth his claim. The request must be addressed to the Committee at the Company’s then principal place of business.
9.2	Claim Decision.
	Upon receipt of a claim, the Committee shall advise the Claimant that a reply will be forthcoming within ninety (90) days and shall, in fact, deliver such reply within such period. The Committee may, however, extend the reply period for an additional ninety (90) days for reasonable cause.
	If the claim is denied in whole or in part, the Committee shall adopt a written opinion, using language calculated to be understood by the Claimant, setting forth:

(1)	The specific reason or reasons for such denial;
(2)	The specific reference to pertinent provisions of the Plan on which such denial is based;
(3)	A description of any additional material or information necessary for the Claimant to perfect his claim and an explanation why such material or such information is necessary.
(4)	Appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; and
(5)	The time limits for requesting a review under Section 9.3 and for review under Section 9.4 hereof.

9.3	Request for Review.
	Within sixty (60) days after receipt by the Claimant of the written opinion described above, the Claimant may request in writing that the Executive

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	Committee review the determination of the Committee. Such request must be addressed to the Executive Committee, at the Company’s then principal place of business. The Claimant or his duly authorized representative may, but need not, review the pertinent documents and submit issues and comments in writing for consideration by the Executive Committee. If the Claimant does not request a review of the Committee’s determination by the Executive Committee within such sixty (60) day period, he shall be barred and estopped from challenging the Committee’s determination.
9.4	Review of Decision
	Within sixty (60) days after the receipt of a request for review, the Executive Committee will review the determination rendered by the Committee. After considering all materials presented by the Claimant, the Executive Committee will render a written opinion, written in a manner calculated to be understood by the Claimant, setting forth the specific reasons for the decision and containing specific references to the pertinent provisions of this Plan on which the decision is based. If special circumstances require that the sixty (60) day time period be extended, the Executive Committee will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty (120) days after receipt of the request for review.

ARTICLE X - CHANGE IN CONTROL

10.1   Effect of Change in Control.

(a) Notwithstanding any provision to the contrary contained herein, but subject to the following sentence, in the event of a Change of Control that affects an Employer, the Plan shall be terminated as to such Employer and the Employees thereof and the Accounts of such Employees shall be paid out as of the date of such Change of Control, but only to the extent of the portion of the Account attributable to Deferrals made while an Employee of that Employer. The provisions of this Section 10.1 shall not apply to any Change in Control when expressly provided otherwise by a three-fourths vote of the Whole Board of the affected Employer, but only if a majority of the members of the Board of Directors then in office and acting upon such matters shall be Continuing Directors.

(b) The liability to pay any benefit that is not distributed in connection with a Change in Control (or to pay other costs and expenses reference in Section 1.7) will remain the liability of the Employer incurring the Change in Control.

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10.2 Definitions: For purposes of this Article X, the following terms shall have the meanings set forth below:

(a) A “Change in Control” with respect to the Company means when either (i) a Person or Group (other than an Excluded Person) acquires ownership of stock of the Company that, together with stock held by such Person or Group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; or (ii) any Person or Group (other than an Excluded Person) acquires ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company; or (iii) a majority of the members of the Board of Directors of the Company is replaced during any twelve-month period by Directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors prior to the date that such appointments or elections are made; or (iv) any Person or Group (other than an Excluded Person) acquires (or has acquired) during the twelve-month period ending on the date of the most recent acquisition by such Person or Group, assets from the Company that have a total Gross Market Value equal to or more than 40% of the total Gross Market Value of all of the assets of the Company immediately prior to such acquisition or acquisitions. A “Change in Control” with respect to an Employer means (i) a Change of Control with respect to the Company or (ii) such Employer (other than the Company) is no longer a Company Subsidiary.

The above notwithstanding, no event shall be considered a Change of Control if it would not be a Change of Control Event as defined in IRS Regulations.

(b) “Continuing Director” means any person who was a member of the Board of Directors on the Effective Date of the Plan or thereafter elected by the shareholders or appointed by the Company’s Board of Directors prior to the date as of which the Acquiring Person became a Substantial Shareholder (as such term is defined in Article Seventh of the Company’s Amended Articles of Incorporation) or, a person designated (before his initial election or employment as a director) as a Continuing Director by three-fourths of the Employer’s Whole Board, but only if a majority of the Whole Board shall then consist of Continuing Directors.

(c) “Excluded Person” means (i) the Company or any wholly-owned Company Subsidiary, (ii) any employee benefit plan of the Company or a wholly-owned Company Subsidiary or any trustee of or fiduciary with respect to any such plan when acting in such capacity, or (ii) any Person who, on the Effective Date of the Plan, is an Affiliate of the Company and beneficially owning in excess of ten percent (10%) of the outstanding shares of the Company and the respective successors, executors, legal representatives, heirs and legal assigns of such person).

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(d) “Gross Market Value” means the value of the assets of the Company or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

(e) “Group” shall mean more than one Person acting as a “group” as interpreted in accordance with IRS Regulation.

(f) “Person” means any individual, firm, corporation, or other entity.

(g) “Whole Board” means the total number of directors which the Company would have if there were no vacancies.

10.3 Consistency with IRS Regulations: In all cases, the provisions of and definitions used in this Section 10 shall be interpreted in accordance with the provisions of the IRS Regulations.

ARTICLE XI - MISCELLANEOUS

11.1	Plan Not a Contract of Employment.
	The adoption and maintenance of the Plan shall not be deemed to be a contract of employment between any Employer and any person or to be a commitment for the employment of any person. Nothing herein contained shall be deemed to give any person the right to be retained in the employ of any Employer or to restrict the right of any Employer to discharge any person at any time; nor shall the Plan be deemed to give any Employer the right to require any person to remain in the employ of any Employer or to restrict any person’s right to terminate his employment at any time.
11.2	Non-Assignability of Benefits.
	No Participant, Beneficiary or distributee of benefits under the Plan shall have any power or right to transfer, assign, anticipate, hypothecate or otherwise encumber any part or all of the amounts payable hereunder, which are expressly declared to be unassignable and non-transferable. Any such attempted assignment or transfer shall be void. No amount payable hereunder shall, prior to actual payment hereof, be subject to seizure by any creditor of any such Participant, Beneficiary or other distributee for the payment of any debt, judgment, or other obligation, by a proceeding at law or in equity, nor transferable by operation of law in the event of the bankruptcy, insolvency or death of such Participant, Beneficiary or other distributee hereunder. Except as otherwise required by law, no accelerated distribution will be made with respect to a divorce, dissolution or other division of property rights.

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11.3	Withholding.
	All deferrals and payments provided for hereunder shall be subject to applicable withholding and other deductions as shall be required of the Employers under any applicable local, state or federal law.
11.4	Amendment and Termination.
	The Directors may from time to time, in its discretion, amend, in whole or in part, any or all of the provisions of the Plan; provided, however, that no amendment may be made which would impair the rights of a Participant with respect to amounts already allocated to his Account (unless the affected Participant consents in writing to the application of that amendment), but this provision shall not be read to restrict the authority of the Directors or the Executive Committee or the Committee to change or limit investment options. The Directors or the Executive Committee may terminate the Plan at any time, provided, however, that no termination shall in and of itself cause an acceleration of the distribution of Accounts under the Plan, except as may otherwise be provided specifically in the action terminating the Plan, which action shall take into consideration IRS Regulations. Any such amendment to or termination of the Plan shall be in writing and signed by a member of the Executive Committee or an Officer of the Company and will bind each Employer without separate action.
11.5	No Trust Created.
	Nothing contained in this Plan, and no action taken pursuant to its provisions by either party hereto, shall create, nor be construed to create, a trust of any kind or a fiduciary relationship between the Company or any Employer and the Participant, his Beneficiary, or any other person. The Company may establish a “grantor trust” (so-called “Rabbi Trust”) which is within the jurisdiction of the courts of the United States, and is permitted by IRS Regulation, to aid in meeting the obligations created under this Plan, but the Company intends that the assets of any such trust will at all times remain subject to the claims of the Employers’ general creditors (to the extent of the amounts credited for a Participant while he was an Employee of that Employer), and that the existence of any such trust will not alter the characterization of the Plan as “unfunded” for purposes of ERISA, and will not be construed to provide income to any Participant prior to actual payment under this Plan.
11.6	Unsecured General Creditor Status of Employee.
	The payments to Participant, his Beneficiary or any other distributee hereunder shall be made from assets which shall continue, for all purposes, to be a part of the general, unrestricted assets of the Employer

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	for whom the Participant was an Employee when the Deferral to which the claim relates was credited to the claiming Participant’s Account; no person shall have or acquire any interest in any such assets by virtue of the provisions of this Plan. The obligation hereunder shall be an unfunded and unsecured promise to pay money in the future. To the extent that the Participant, a Beneficiary, or other distributee acquires a right to receive payments from the Plan under the provisions hereof, such right shall be no greater than the right of any unsecured general creditor of the Employer for whom the Participant was an Employee when the Deferral to which the claim relates was credited to the claiming Participant’s Account; no such person shall have nor require any legal or equitable right, interest or claim in or to any property or assets of any Employer.
	In the event that, in its discretion, the Employer purchases an insurance policy or policies insuring the life of the Participant (or any other property) to allow the Employer to recover the cost of providing the benefits, in whole, or in part, hereunder, neither the Participant, his Beneficiary or other distributee shall have nor acquire any rights whatsoever therein or in the proceeds therefrom. The Employer shall be the sole owner and beneficiary of any such policy or policies and, as such, shall possess and may exercise all incidents of ownership therein. Except to the extent the Company may establish a Rabbi Trust as described in Section 11.5, no such policy, policies or other property shall be held in any trust for a Participant, Beneficiary or other distributee or held as collateral security for any obligation hereunder. The existence of any such Rabbi Trust does not give a Participant, Beneficiary or other distributee, any interest, direct or beneficial, in any policy, policies or other property held in such a trust. A Participant’s participation in the underwriting or other steps necessary to acquire such policy or policies may be required by the Committee and, if required, shall not be a suggestion of any beneficial interest in such policy or policies to a Participant.
11.7	Severability.
	If any provision of this Plan shall be held illegal for any reason, said illegality or invalidity shall not affect the remaining provisions hereof; instead, each provision shall be fully severable and the Plan shall be constructed and enforced as if said illegal or invalid provision had never been included herein.
11.8	Binding Effect.
	This Plan shall be binding on each Participant and his heirs and legal representatives and on the Company and each Employer and its successors and assigns.

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11.9	Governing Laws.
	All provisions of the Plan shall be construed in accordance with the laws of Ohio, except to the extent preempted by federal law.
11.10	Entire Agreement.
	This document and any amendments contain all the terms and provisions of the Plan and shall constitute the entire Plan, any other alleged terms or provisions being of no effect.

WORTHINGTON INDUSTRIES, INC.

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EX-10.2

Exhibit 10.2

WORTHINGTON INDUSTRIES, INC.

2005 DEFERRED COMPENSATION PLAN FOR DIRECTORS

Section 1. Purpose

Worthington Industries, Inc. has established this deferred compensation plan to provide the Directors of Worthington Industries, Inc. with the option to defer the payment of their Directors’ Fees. The Plan shall become effective as to Directors’ Fees which are paid with respect to fees earned on or after January 1, 2005.

Section 2. Definitions.

2.1. “Beneficiary” shall mean the person designated by a Participant in accordance with the Plan to receive payment of any remaining balance in his Account in the event of the Participant’s death.

2.2. “Board of Directors” shall mean the Board of Directors of the Company.

2.3. “Committee” shall mean the committee appointed by the Board of Directors of the Company to administer the Plan. If no committee is specifically named by the Board of Directors to administer the Plan, the “Committee” shall mean the Compensation Committee of the Board of Directors of the Company.

2.4. “Company” shall mean Worthington Industries, Inc., an Ohio corporation, its corporate successors and the surviving corporation resulting from any merger or acquisition of Worthington Industries, Inc. with or by any corporation or corporations.

2.5. “Date of Deferral” shall mean the date to which payment of the Participant’s Directors Fees is deferred in accordance with this Plan. Subject to the terms of the following sentence, the Date of Deferral shall be the earlier of (i) the date selected by the Participant in the Election Form, which date must be at least one year after the end of the Year with respect to which the payment would otherwise be made, or (ii) the date of the Participant’s death. In no event shall a Participant’s Date of Deferral extend beyond the later of his 70th birthday or the date he ceases to be a Director. Unless the Participant elects a different Date of Deferral, his Date of Deferral shall be the date he ceases to be a Director.

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2.6. “Account” shall mean the bookkeeping account on which the amount of Directors Fees that is deferred by a Participant shall be recorded and credited with investment gains or losses in accordance with the Plan.

2.7. “Director” shall mean any member of the Board of Directors of the Company who is not an Employee of the Company.

2.8. “Directors Fees” shall mean fees owed to the Directors by the Company for their services as Directors including retainers, board meeting fees, committee meeting fees and other similar fees, if any.

2.9. “Effective Date” means January 1, 2005.

2.10. “Election Form” means the written form or other method pursuant to which the Participant elects the amount of his Directors Fees to be deferred into the Plan, the Date of Deferral, the deemed investment and/or the form of payment for such amounts.

2.11. “401(k) Plan” shall mean the Worthington Industries Deferred Profit Sharing Plan, as in effect from time to time.

2.12. “IRS Regulations” shall mean the laws and regulations adopted by Congress or issued by the Internal Revenue Services as applicable to non-qualified deferred compensation plans or arrangements

2.13. “Participant” shall mean any Director who has elected to defer payment of all or any portion of his Directors Fees in accordance with the Plan and who still has an Account under the Plan.

2.14. “Plan” shall mean the “Worthington Industries, Inc. 2005 Deferred Compensation Plan for Directors” as set forth herein, as the same may be amended from time to time.

2.15. “Plan Year” shall mean the calendar year.

2.16. “Quarter” shall mean any fiscal quarter of the Company, currently the three month periods ending the last day of August, November, February, and May.

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2.17. “Valuation Date” shall mean the date the Accounts in the Plan are adjusted to reflect earnings and losses in accordance with the hypothetical investment directions, as set from time to time by the Committee

Section 3. Administration

3.1. Power of the Committee.

The Plan shall be administered by the Committee. The Committee shall have full power to construe and interpret the Plan, to establish and amend rules and regulations for administration of the Plan, and to take any and all actions necessary or desirable to effectuate or carry out the Plan.

The Committee may exercise the powers hereby granted in its sole and absolute discretion. No member of the Committee shall be personally liable for any actions taken by the Committee unless the member’s action involves willful misconduct. The Committee may delegate to others certain aspects of the management and operational responsibilities of the Plan including the employment of advisors and the delegation of ministerial duties to qualified individuals.

3.2. Actions Final.

All actions taken by the Committee under or with respect to the Plan shall be final and binding on all persons. No member of the Committee shall be liable for any action taken or determination made in good faith.

3.3. Books and Records

The books and records to be maintained for the purpose of the Plan shall be maintained by the officers and employees of the Company at the Company’s expense and subject to the supervision and control of the Committee. The Company may hire a third party to maintain all or a part of the Plan’s books and records.

3.4. Action by the Committee

The Committee shall act by a majority of its members at the time in office, and such action may be taken either by vote at a meeting or in writing. If a Participant is serving as a member of the Committee, he shall not be entitled to vote on matters specifically relating to his rights under the

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Plan; provided, however, that this provision shall not prevent such person from voting on matters which, although they may affect his rights, relate to Participants in general.

3.5 Indemnification of Committee

The Company shall indemnify the members of the Committee against any and all claims, losses, damages, expenses, including attorney’s fees, incurred by them, and any liability, including any amounts paid in settlement with their approval, arising from their action or failure to act, except when the same is judicially determined to be attributable to their or willful misconduct.

Section 4. Eligibility and Participation

4.1 Eligibility

Each Director is eligible to become a Participant in the Plan. Participants are those Directors who elect to defer Directors Fees under the Plan. A Director’s eligibility shall cease when he dies or otherwise ceases to be a Director of the Company.

4.2 Election to Defer

Any Director who desires to defer the payment of any portion of his Fees must complete and deliver an Election Form (in substantially the form approved by the Committee from time to time) prior to the first day of the Plan Year in which the applicable fee is earned. (Retainers shall be earned commencing the first day of the fiscal year, the fiscal quarter, or other period as to which they relate. Meeting fees shall be earned by attendance at the meeting.) Each Election to defer Directors Fees is irrevocable on or after the beginning of the Plan Year to which it relates (i.e. the Plan Year in which it is commenced to be earned), but may be revoked or changed prior to the beginning of each subsequent Plan Year.

4.3 The Election Form

A Participant shall designate on an Election Form (i) the portion of his Directors Fees he desires to defer, (ii) the Date of Deferral, and (iii) the method of payment of his Account. Payment of the Account shall be made in accordance with Section 6. The Participant shall also designate the Investment Option selected for his Account on an Election Form.

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4.4 Sub-Accounts

In the event a Participant makes different elections as to the method of payment or as to the time for commencement of payments with respect to Directors Fees deferred for different fees, for purposes of determining the amounts to be paid under each election, the Participant shall be treated as if he had a separate Sub-Account for Directors Fees deferred pursuant to the differing elections.

Section 5. Deferred Compensation Account

5.1 Crediting Fees.

The Directors Fees which a Participant elects to defer shall be treated as if they were set-aside in an Account on the date the Directors Fees would otherwise have been paid to the Participant.

5.2 Investment Options – General.

Until changed by amendment, the investment options available under the Plan shall be those available under the 401(k) Plan as in effect from time to time

5.3 Selection of Investment Option.

The Participant shall select the Investment Option for his Account in an Election Form. The Participant may change the investment option for his Account as of the time permitted under the 401(k) Plan for the same investment option.

Section 6 Payment of Deferred Compensation.

6.1 General.

Subject to the provisions of paragraph (b) of this Section, the amount of the Participant’s Deferred Compensation Account shall be paid to the Participant, within a reasonable time after the Participant’s Date of Deferral, in a lump sum or in a number of approximately equal annual installments (not more than 12), as designated by the Participant in his Election Form. A participant may, subject to approval by the Committee, change the designation of the method of payment or his Date of Deferral by filing an amended Election Form; provided that any such changes to an existing election (a) will only become effective 12 months after such Election Form is filed; (b) must be made at least 12 months before the affected distribution would

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otherwise have been made; and (c) must provide for a deferral of at least five years (as explained by IRS Regulations). The above notwithstanding, the Committee may place such other restrictions on changes to a Participant’s method of payment and Date of Deferral as it deems appropriate.

6.2 Death.

(a) In the event of the death of a Participant, the amount of the Account shall be paid to his Beneficiary, within a reasonable time after the Participant’s death.

(b) Each Participant may name one or more Beneficiaries and may also name one or more contingent Beneficiaries by making a written designation in form acceptable to the Committee. A Participant’s Beneficiary designation may be changed at any time prior to his death by execution and delivery of a new Beneficiary designation form. The Beneficiary designation on file with the Company at the time of the Participant’s death which bears the latest date shall govern.

(c) Payments to a Beneficiary shall be made in a lump sum or in a number of approximately equal annual installments (not more than 12) as designated by the Participant in his Election Agreement. In the case of the Beneficiary of a Participant who is receiving installment payments at the time of his death, the number of annual installments may not exceed the annual installments remaining to be paid to the Participant.

(d) If no Beneficiary has been designated or if no Beneficiary survives the Participant, the amount in the Deferred Compensation Account shall be paid in a lump sum to the Participant’s estate.

(e) If the Beneficiary dies after the death of the Participant, any amount otherwise payable to the Beneficiary shall be paid in a lump sum to the Beneficiary’s estate.

6.3 Hardship.

Upon the application of a Participant in the event of financial hardship resulting from a need to make extraordinary or emergency expenditures (all to be interpreted in accordance with IRS

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Regulations), the Committee may, in its sole discretion, cause the distribution to such Participant of an amount not exceeding the requirements of such Participant for such extraordinary or emergency expenditures (after applying other available resources as required by IRS Regulations). The Committee shall require such proper proof of financial hardship and such evidence of the requirements of a Participant for extraordinary or emergency expenditures as it may deem appropriate and the Committee’s determination of financial hardship and of the requirements of a Participant for extraordinary or emergency expenditures shall be conclusive.

6.4 Effect of Change in Control.

(a) Notwithstanding any provision to the contrary contained herein, but subject to the following sentence, in the event of a Change of Control, the Plan shall be terminated and each Participant’s Account shall be paid out as of such date in a lump sum. The provisions of this Section 6.4 shall not apply to any Change in Control when expressly provided otherwise by a three-fourths vote of the Whole Board, but only if a majority of the members of the Board of Directors then in office and acting upon such matter shall be Continuing Directors.

(b) For purposes of this Section 6.4, the following terms shall have the meanings set forth below:

i.   A “Change in Control” means with respect to the Company when either (a) a Person or Group (other than an Excluded Person) acquires ownership of stock of the Company that, together with stock held by such Person or Group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; or (b) any Person or Group (other than an Excluded Person) acquires ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company; or (c) a majority of the members of the Board of

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	Directors of the Company is replaced during any twelve-month period by Directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors prior to the date that such appointments or elections are made; or (d) any Person or Group (other than an Excluded Person) acquires (or has acquired) during the twelve-month period ending on the date of the most recent acquisition by such Person or Group, assets from the Company that have a total Gross Market Value equal to or more than 40% of the total Gross Market Value of all of the assets of the Company immediately prior to such acquisition or acquisitions.
	The above notwithstanding, no event shall be considered a Change of Control if it would not be a Change of Control Event as defined in IRS Regulations.
ii.	“Continuing Director” means any person who was a member of the Board of Directors on the Effective Date of the Plan or thereafter elected by the shareholders or appointed by the Company’s Board of Directors prior to the date as of which the Acquiring Person became a Substantial Shareholder (as such term is defined in Article Seventh of the Company’s Amended Articles of Incorporation) or, a person designated (before his initial election or employment as a director) as a Continuing Director by three-fourths of the Whole Board, but only if a majority of the Whole Board shall then consist of Continuing Directors.
iii.	“Excluded Person” means (a) the Company or any wholly-owned Company Subsidiary, (b) any employee benefit plan of the Company or a wholly-owned Company Subsidiary or any trustee of or fiduciary with respect to any such plan when acting in such capacity, or (c) any Person who, on the Effective Date of the Plan,

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	is an Affiliate of the Company and beneficially owning in excess of ten percent (10%) of the outstanding shares of the Company and the respective successors, executors, legal representatives, heirs and legal assigns of such person).
iv.	“Gross Market Value” means the value of the assets of the Company or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
v.	“Group” shall mean more than one Person acting as a “group” as interpreted in accordance with IRS Regulation.
vi.	“Person” means any individual, firm, corporation, or other entity.
vii.	“Whole Board” means the total number of directors which the Company would have if there were no vacancies.

(c) In all cases, the provisions of and definitions used in this Section 6.4 shall be interpreted in accordance with the provisions of the IRS Regulations.

Section 7. Amendments.

The Board of Directors of the Company may from time to time amend, suspend or terminate any or all of the provisions of this Plan; provided that no such amendment, suspension, or termination shall adversely affect in any material respect any right of any Participant to receive any amount payable pursuant to the Plan (unless the affected Participant consents in writing to the application of that amendment) but this provision shall not restrict the authority of the Board of Directors to change or limit investment options. The Board of Directors may terminate the Plan at any time, provided, however, that no termination shall in and of itself cause an acceleration of the distribution of Accounts under the Plan, except as may otherwise be provided specifically in the action terminating the Plan, which action shall take into consideration IRS Regulations. Any such amendment to or termination of the Plan shall be in writing.

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Section 8. Miscellaneous Provisions

8.1 Non-Assignability of Benefits.

No Participant, Beneficiary or distributee of benefits under the Plan shall have any power or right to transfer, assign, anticipate, hypothecate or otherwise encumber any part or all of the amounts payable hereunder, which are expressly declared to be unassignable and non-transferable. Any such attempted assignment or transfer shall be void. No amount payable hereunder shall, prior to actual payment hereof, be subject to seizure by any creditor of any such Participant, Beneficiary or other distributee for the payment of any debt, judgment, or other obligation, by a proceeding at law or in equity, nor transferable by operation of law in the event of the bankruptcy, insolvency or death of such Participant, Beneficiary or other distributee hereunder.

8.2 Withholding.

All deferrals and payments provided for hereunder shall be subject to applicable withholding and other deductions as shall be required of the Company under any applicable local, state or federal law.

8.3 No Trust Created.

Nothing contained in this Plan, and no action taken pursuant to its provisions by either party hereto, shall create, nor be construed to create, a trust of any kind or a fiduciary relationship between the Company and the Participant, his Beneficiary, or any other person. The Company may establish a “grantor trust” (so-called “Rabbi Trust”) which is within the jurisdiction of the courts of the United States and is permitted by IRS Regulation to aid in meeting the obligations created under this Plan, but the Company intends that the assets of any such trust will at all times remain subject to the claims of the Employers’ general creditors (to the extent of the amounts credited for a Participant while he was an Employee of that Employer), and that the existence of any such trust will not alter the characterization of the Plan as “unfunded” for purposes of ERISA, and will not be construed to provide income to any Participant prior to actual payment under this Plan.

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8.4 Unsecured General Creditor Status of Employee.

The payments to Participant, his Beneficiary or any other distributee hereunder shall be made from assets which shall continue, for all purposes, to be a part of the general, unrestricted assets of the Company; no person shall have or acquire any interest in any such assets by virtue of the provisions of this Plan. The obligation hereunder shall be an unfunded and unsecured promise to pay money in the future. To the extent that the Participant, a Beneficiary, or other distributee acquires a right to receive payments from the Plan under the provisions hereof, such right shall be no greater than the right of any unsecured general creditor of the Company. No such person shall have nor require any legal or equitable right, interest or claim in or to any property or assets of any Company.

In the event that, in its discretion, the Company purchases an insurance policy or policies insuring the life of the Participant(or any other property) to allow the Company to recover the cost of providing the benefits, in whole, or in part, hereunder, neither the Participant, his Beneficiary or other distributee shall have nor acquire any rights whatsoever therein or in the proceeds therefrom. The Company shall be the sole owner and beneficiary of any such policy or policies and, as such, shall possess and may exercise all incidents of ownership therein. Except to the extent the Company may establish a Rabbi Trust as described in Section 8.3, no such policy, policies or other property shall be held in any trust for a Participant, Beneficiary or other distributee or held as collateral security for any obligation hereunder. The existence of any such Rabbi Trust does not give a Participant, Beneficiary or other distributee, any interest, direct or beneficial, in any policy, policies or other property held in such a trust. A Participant’s participation in the underwriting or other steps necessary to acquire such policy or policies may be required by the Committee and, if required, shall not be a suggestion of any beneficial interest in such policy or policies to a Participant.

8.5 Binding Effect.

This Plan shall be binding one each Participant and his heirs and legal representatives and on the Company and its successors and assigns.

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8.6 Governing Laws.

All provisions of the Plan shall be construed in accordance with the laws of Ohio, except to the extent pre-empted by federal law.

WORTHINGTON INDUSTRIES, INC.

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EX-31.1

Exhibit 31.1

RULE 13a-14(a) / 15d - 14(a) CERTIFICATION (PRINCIPAL EXECUTIVE OFFICER)

I, John P. McConnell, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2004, of Worthington Industries, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 10, 2005	By:	/s/ John P. McConnell
		John P. McConnell, Chairman of the Board and Chief Executive Officer

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EX-31.2

Exhibit 31.2

RULE 13a-14(a) / 15d - 14(a) CERTIFICATION (PRINCIPAL FINANCIAL OFFICER)

I, John S. Christie, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2004, of Worthington Industries, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 10, 2005	By:	/s/ John S. Christie
		John S. Christie,
		President and Chief Financial Officer

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EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

In connection with the Quarterly Report of Worthington Industries, Inc. (the “Company”) on Form 10-Q for the quarterly period ended November 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John P. McConnell, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John P. McConnell*  

Printed Name: John P. McConnell

Title: Chairman of the Board and Chief Executive Officer 

Date: January 10, 2005

*This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

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EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

In connection with the Quarterly Report of Worthington Industries, Inc. (the “Company”) on Form 10-Q for the quarterly period ended November 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John S. Christie, President and Chief Financial Officer of the Company, certify, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John S. Christie*
Printed Name:	John S. Christie
Title:  President and Chief Financial Officer

Date: January 10, 2005

*This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

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