{"id":690159,"date":"2022-09-29T07:34:42","date_gmt":"2022-09-29T11:34:42","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/worthington-reports-first-quarter-fiscal-2023-results\/"},"modified":"2022-09-29T07:34:42","modified_gmt":"2022-09-29T11:34:42","slug":"worthington-reports-first-quarter-fiscal-2023-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/worthington-reports-first-quarter-fiscal-2023-results\/","title":{"rendered":"Worthington Reports First Quarter Fiscal 2023 Results"},"content":{"rendered":"
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COLUMBUS, Ohio, Sept. 29, 2022 (GLOBE NEWSWIRE) — Worthington Industries, Inc. (NYSE: WOR) today reported net sales of $1.4 billion and net earnings of $64.1 million, or $1.30 per diluted share, for its fiscal 2023 first quarter ended August 31, 2022. In the first quarter of fiscal 2022, the Company reported net sales of $1.1 billion and net earnings of $132.5 million, or $2.55 per diluted share. Results in both the current and prior year quarter were impacted by certain unique items, as summarized in the table below.<\/p>\n

\n (U.S. dollars in millions, except per share amounts)<\/em>\n <\/p>\n\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\n\u00a0<\/td>\n\n 1Q 2023<\/strong>\n <\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n 1Q 2022<\/strong>\n <\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\n After-Tax<\/strong>\n <\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n Per Share<\/strong>\n <\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n After-Tax<\/strong>\n <\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n Per Share<\/strong>\n <\/td>\n\u00a0<\/td>\n<\/tr>\n
Net earnings<\/td>\n\u00a0<\/td>\n$<\/td>\n64.1<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n1.30<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n132.5<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n2.55<\/td>\n\u00a0<\/td>\n<\/tr>\n
Incremental expense related to Level5 earnout<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n0.4<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n0.01<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n–<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n–<\/td>\n\u00a0<\/td>\n<\/tr>\n
Impairment and restructuring charges (gains)<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n(0.7<\/td>\n)<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n(0.02<\/td>\n)<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n(4.8<\/td>\n)<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n(0.09<\/td>\n)<\/td>\n<\/tr>\n
Pension settlement charge<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n3.6<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n0.07<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n–<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n–<\/td>\n\u00a0<\/td>\n<\/tr>\n
Loss on sale of investment in ArtiFlex<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n12.0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n0.25<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n–<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n–<\/td>\n\u00a0<\/td>\n<\/tr>\n
Adjusted net earnings<\/td>\n\u00a0<\/td>\n$<\/td>\n79.4<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n1.61<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n127.7<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n2.46<\/td>\n\u00a0<\/td>\n<\/tr>\n<\/table>\n

Financial highlights for the current and comparative periods are as follows:<\/p>\n

\n (U.S. dollars in millions, except per share amounts)<\/em>\n <\/p>\n\n\n\n\n\n\n\n
\u00a0<\/td>\n\n 1Q 2023<\/strong>\n <\/td>\n\u00a0<\/td>\n\n 1Q 2022<\/strong>\n <\/td>\n<\/tr>\n
Net sales<\/td>\n$<\/td>\n1,408.7<\/td>\n\u00a0<\/td>\n$<\/td>\n1,110.8<\/td>\n<\/tr>\n
Operating income<\/td>\n\u00a0<\/td>\n66.7<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n135.8<\/td>\n<\/tr>\n
Equity income<\/td>\n\u00a0<\/td>\n31.7<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n52.9<\/td>\n<\/tr>\n
Net earnings<\/td>\n\u00a0<\/td>\n64.1<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n132.5<\/td>\n<\/tr>\n
Earnings per diluted share<\/td>\n$<\/td>\n1.30<\/td>\n\u00a0<\/td>\n$<\/td>\n2.55<\/td>\n<\/tr>\n<\/table>\n

\u201cWe are off to a good start in our new fiscal year with volumes in most of our key-end markets remaining healthy during the quarter,\u201d said\u00a0Andy Rose, President and CEO. \u201cOur teams continue to do a nice job navigating supply chain challenges and inflationary pressures to deliver value-added products and solutions for our customers.\u201d<\/p>\n

\n Consolidated Quarterly Results <\/strong>\n <\/p>\n

Net sales for the first quarter of fiscal 2023 were $1.4 billion compared to $1.1 billion, an increase of $297.9 million, or 27%, over the comparable quarter in the prior year. The increase was primarily driven by contributions from the acquisition of Tempel Steel Company (\u201cTempel\u201d) in fiscal 2022 and higher average selling prices across all segments.<\/p>\n

Gross margin decreased $50.0 million from the prior year quarter to $169.4 million, as improvements in both the Consumer Products and Building Products segments were more than offset by lower margin contributions from Steel Processing. Margins in Steel Processing were negatively impacted by an estimated $48.6 million unfavorable swing related to inventory holding losses in the current quarter compared to inventory holding gains in the prior year quarter.<\/p>\n

Operating income for the current quarter was $66.7 million, down $69.1 million from the prior year quarter. Excluding restructuring items in both quarters, operating income was down $57.1 million from the prior year quarter on lower gross margin and higher SG&A expense, up $7.5 million over the prior year quarter primarily due to the impact of acquisitions.<\/p>\n

Miscellaneous expense increased $5.7 million from the prior year quarter primarily due to a pension lift-out transaction to transfer a portion of the total projected benefit obligation of the inactive Gerstenslager pension plan to a third-party insurance company, which resulted in a $4.8 million pre-tax non-cash charge.<\/p>\n

Interest expense was $8.6 million in the current quarter, up $0.9 million over the prior year quarter due to the impact of higher average debt levels associated with short-term borrowings.<\/p>\n

Equity income from unconsolidated joint ventures decreased $21.2 million from the prior year quarter due to a $15.8 million loss related to the sale of our equity investment in ArtiFlex and lower contributions from Serviacero, which were down $7.6 million as lower average steel prices reduced spreads.<\/p>\n

Income tax expense was $19.5 million in the current quarter compared to $40.2 million in the prior year quarter. The decrease was driven by lower pre-tax earnings. Tax expense in the current quarter reflects an annual effective rate of 23.9% compared to 23.3% for the prior year.<\/p>\n

\n Balance Sheet<\/strong>\n <\/p>\n

At quarter-end, total debt of $705.8 million, was down $38.8 million from May 31, 2022, on lower short-term borrowings. The Company had $35.8 million of cash at quarter end, an increase of $1.3 million from May 31, 2022.<\/p>\n

\n Quarterly Segment Results<\/strong>\n <\/p>\n

Steel Processing\u2019s net sales totaled $1.0 billion, up $216.1 million, over the comparable prior year quarter. The increase in net sales was driven by contributions from Tempel and, to a lesser extent, higher average selling prices. Adjusted EBIT was down $72.8 million from the prior year quarter to $34.9 million, on lower direct spreads, which were negatively impacted by the unfavorable swing in inventory holding gains\/losses. Adjusted EBIT was also negatively impacted by lower equity earnings at Serviacero, down $7.6 million from the prior year quarter due to unfavorable spreads. The mix of direct versus toll tons processed was 58% to 42% in the current quarter, compared to 49% to 51% in the prior year quarter.<\/p>\n

Consumer Products\u2019 net sales totaled $188.7 million, up 28%, or $40.9 million, over the prior year quarter due to higher average selling prices and contributions from the acquisition of Level5 in the current quarter. Adjusted EBIT was up slightly in the current quarter to $20.9 million, as the favorable impact of higher selling prices was mostly offset by higher wages and input costs as well as $2.9 million of expense related to transaction costs and the write-up of acquired Level5 inventory to fair value.<\/p>\n

Building Products\u2019 net sales totaled $150.3 million, up 31%, or $35.6 million, over the prior year quarter on higher average selling prices. Adjusted EBIT increased $3.9 million over the prior year quarter to $52.7 million, driven primarily by higher average selling prices, partially offset by higher production costs. Equity income was up slightly to $43.9 million, as improvements at ClarkDietrich were offset by lower contributions from WAVE.<\/p>\n

Sustainable Energy Solutions\u2019 net sales totaled $30.8 million, up 21%, or $5.3 million, from the comparable prior year quarter due to higher volume. Adjusted EBIT was a loss of $1.4 million, favorable by $1.2 million compared to the prior year quarter\u2019s loss, on higher volume, partially offset by higher production costs.<\/p>\n

\n Recent Developments<\/strong>\n <\/p>\n