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Worthington Reports Fourth Quarter Fiscal 2022 Results

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Worthington Industries, Inc.
Worthington Industries, Inc.

COLUMBUS, Ohio, June 22, 2022 (GLOBE NEWSWIRE) -- Worthington Industries, Inc. (NYSE: WOR) today reported net sales of $1.5 billion and net earnings of $80.3 million, or $1.61 per diluted share, for its fiscal 2022 fourth quarter ended May 31, 2022. In the fourth quarter of fiscal 2021, the Company reported net sales of $978.3 million and net earnings of $113.6 million, or $2.15 per diluted share. Results in both the current and prior year quarter were impacted by certain unique items, as summarized in the table below.

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

 

 

4Q 2022

 

 

4Q 2021

 

 

 

After-Tax

 

 

Per Share

 

 

After-Tax

 

 

Per Share

 

Net earnings

 

$

80.3

 

 

$

1.61

 

 

$

113.6

 

 

$

2.15

 

Impairment and restructuring (gains) charges

 

 

(1.8

)

 

 

(0.03

)

 

 

10.9

 

 

 

0.20

 

Incremental expenses related to Nikola gains

 

 

-

 

 

 

-

 

 

 

(1.1

)

 

 

(0.02

)

Adjusted net earnings

 

$

78.5

 

 

$

1.58

 

 

$

123.4

 

 

$

2.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

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

 

4Q 2022

 

 

4Q 2021

 

 

12M 2022

 

 

12M 2021

 

Net sales

$

1,520.3

 

 

$

978.3

 

 

$

5,242.2

 

 

$

3,171.4

 

Operating income

 

65.4

 

 

 

110.5

 

 

 

329.3

 

 

 

167.5

 

Equity income

 

53.0

 

 

 

42.4

 

 

 

213.6

 

 

 

123.3

 

Net earnings

 

80.3

 

 

 

113.6

 

 

 

399.3

 

 

 

741.5

 

Earnings per diluted share

$

1.61

 

 

$

2.15

 

 

$

7.44

 

 

$

13.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“We finished our 2022 fiscal year with strong results in the fourth quarter and delivered record earnings per share for the full year,” said Andy Rose, President and CEO.  “Steel Processing was negatively impacted by inventory holding losses in the fourth quarter but our Building Products and Consumer Products segments both continued to perform exceptionally well, as our investments in new product development and production capacity are positively impacting our results.  I’m very pleased with the way our teams continue to execute in a challenging environment, and I want to thank all our employees for their continued hard work and commitment to our customers.”

Consolidated Quarterly Results

Net sales for the fourth quarter of fiscal 2022 were $1.5 billion compared to $978.3 million, an increase of $542.0 million, or 55%, over the comparable quarter in the prior year. The increase was driven by higher average selling prices across all segments and contributions from the acquisitions of Tempel Steel Company and Shiloh Industries’ U.S. BlankLight® business in the current fiscal year.

Gross margin decreased $58.4 million from the prior year quarter to $167.7 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 $92.8 million unfavorable swing related to inventory holding losses in the current quarter compared to inventory holding gains in the prior year quarter.

Operating income for the current quarter was $65.4 million, down $45.1 million from the prior year quarter. Excluding restructuring items in both quarters and the impact of the Nikola-related expense adjustment in the prior year quarter, operating income was down $63.1 million from the prior year quarter on the combined impact of lower gross margin and higher SG&A expense, up $4.7 million over the prior year quarter primarily due to the impact of acquisitions.

Interest expense was $8.2 million in the current quarter, up $0.5 million over the prior year quarter due to the impact of higher average debt levels associated with short-term borrowings.

The Company generated equity income of $53.0 million in the current quarter and received cash distributions of $22.6 million from unconsolidated joint ventures during the quarter. The $10.7 million increase in equity income in the current quarter was driven primarily by higher equity earnings at ClarkDietrich, partially offset by a decline in equity earnings at WAVE.

Income tax expense was $25.0 million in the current quarter compared to $27.4 million in the prior year quarter. The decrease was driven by lower pre-tax earnings, partially offset by a discrete tax benefit realized in connection with the sale of the Company’s liquified petroleum gas (LPG) fuel storage business in Poland in the prior year quarter. Tax expense in the current quarter reflects an annual effective rate of 23.3% compared to 19.6% for the prior year quarter.

Balance Sheet

At quarter-end, total debt of $744.6 million was up $34.1 million from May 31, 2021. The Company had $34.5 million of cash at quarter end, a decrease of $605.8 million from May 31, 2021, primarily due to acquisitions and an increase in working capital associated with higher average steel prices.

Quarterly Segment Results

Steel Processing’s net sales totaled $1.1 billion, up $464.6 million, over the prior year quarter. The increase in net sales was driven by higher average selling prices and, to a lesser extent, the impact of acquisitions. Adjusted EBIT was down $81.3 million from the prior year quarter to $16.5 million, as the favorable impact of acquisitions and higher selling prices was more than offset by inventory holding losses, estimated to be $42.3 million in the current quarter compared to estimated inventory holding gains of $50.5 million in the prior year quarter. The mix of direct versus toll tons processed was 56% to 44% in the current quarter, compared to 48% to 52% in the prior year quarter.

Consumer Products’ net sales totaled $186.2 million, up 18%, or $28.7 million, over the prior year quarter on higher selling prices, partially offset by an unfavorable shift in product mix. Adjusted EBIT totaled $29.5 million in the current quarter, an increase of $10.5 million over the prior year quarter driven primarily by the favorable impact of higher selling prices.

Building Products’ net sales totaled $172.9 million, up 40%, or $49.2 million, over the prior year quarter on higher selling prices and an improved product mix. Adjusted EBIT increased $22.4 million over the prior year quarter to $63.6 million, on higher contributions of both operating and equity earnings, up $11.5 million and $10.8 million respectively, on the impact of higher selling prices, an increase in equity earnings at ClarkDietrich and favorable product mix.

Sustainable Energy Solutions’ net sales totaled $41.3 million, up 1%, or $0.4 million, over the comparable prior year quarter on higher selling prices, partially offset by the May 31, 2021 divestiture of the LPG business in Poland. Adjusted EBIT reflected a loss of $1.7 million compared to a profit of $3.9 million in the prior year quarter, driven by unfavorable product mix and increased costs. Adjusted EBIT in the prior year quarter excludes a $10.3 million loss on the sale of the LPG business.

Recent Developments

  • During the fourth quarter of fiscal 2022, the Company repurchased a total of 1,000,000 of its common shares for $52.4 million, at an average purchase price of $52.41.

  • On May 19, 2022, the Company established a revolving trade accounts receivable securitization facility allowing it to borrow up to $175.0 million. The facility further enhances the Company’s liquidity position, providing low-cost incremental borrowing capacity.

  • On June 2, 2022, the Company acquired Level5® Tools, LLC, a leading provider of drywall tools and related accessories. The purchase price was approximately $55.0 million, subject to closing adjustments, with a potential earn out of up to $25.0 million based on performance through 2024.

  • On June 22, 2022, Worthington's Board of Directors declared a quarterly dividend of $0.31 per share payable on September 29, 2022 to shareholders of record on September 15, 2022, an 11% increase or $0.03 per share.

Outlook

“We are well positioned heading into our new fiscal year with solid business strategies to drive growth through transformation, innovation, and M&A,” Rose said.  “While the business environment continues to be challenging and there is some level of economic uncertainty, our teams are performing at a high level, and we remain optimistic about demand in our key end markets and our ability to execute effectively going forward.”

Conference Call

Worthington will review fiscal 2022 fourth quarter results during its quarterly conference call on June 23, 2022, at 8:30 a.m., Eastern Time. Details regarding the conference call can be found on the Company website at www.WorthingtonIndustries.com.

About Worthington Industries

Worthington Industries (NYSE:WOR) is a leading industrial manufacturing company pursuing its vision to be the transformative partner to its customers, a positive force for its communities and earn exceptional returns for its shareholders. For over six decades, the Company has been delivering innovative solutions to customers spanning industries such as automotive, energy, retail and construction. Worthington is North America’s premier value-added steel processor and producer of laser welded solutions and electrical steel laminations that provide lightweighting, safety critical and emission reducing components to the mobility market. Through on-board fueling systems and gas containment solutions, Worthington serves the growing global hydrogen ecosystem. The Company’s focus on innovation and manufacturing expertise extends to market-leading consumer products in tools, outdoor living and celebrations categories, sold under brand names, Coleman®, Bernzomatic®, Balloon Time®, Mag Torch®, Well-X-Trol®, General®, Garden-Weasel®, Pactool International® and Hawkeye™; as well as market leading building products, including water systems, heating & cooling solutions, architectural and acoustical grid ceilings and metal framing and accessories.

Headquartered in Columbus, Ohio, Worthington operates 58 facilities in 16 states and nine countries, sells into over 90 countries and employs approximately 9,500 people. Founded in 1955, the Company follows a people-first philosophy with earning money for its shareholders as its first corporate goal. Relentlessly finding new ways to drive progress and transform, Worthington is committed to providing better solutions for customers and bettering the communities where it operates by reducing waste, supporting community-based non-profits and developing the next generations of makers.

Safe Harbor Statement

The Company wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the “Act”). Statements by the Company relating to the ever-changing effects of the novel coronavirus (“COVID-19”) pandemic and the various responses of governmental and nongovernmental authorities thereto (such as fiscal stimulus packages, quarantines, shut downs and other restrictions on travel and commercial, social or other activities) on economies (local, national and international) and markets, and on our customers, counterparties, employees and third-party service providers; future or expected cash positions, liquidity and ability to access financial markets and capital; outlook, strategy or business plans; future or expected growth, growth potential, forward momentum, performance, competitive position, sales, volumes, cash flows, earnings, margins, balance sheet strengths, debt, financial condition or other financial measures; pricing trends for raw materials and finished goods and the impact of pricing changes; the ability to improve or maintain margins; expected demand or demand trends for the Company or its markets; additions to product lines and opportunities to participate in new markets; expected benefits from Transformation and innovation efforts; the ability to improve performance and competitive position at the Company’s operations; anticipated working capital needs, capital expenditures and asset sales; anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing and the supply chain and the results thereof; projected profitability potential; the ability to make acquisitions and the projected timing, results, benefits, costs, charges and expenditures related to acquisitions, joint ventures, headcount reductions and facility dispositions, shutdowns and consolidations; projected capacity and the alignment of operations with demand; the ability to operate profitably and generate cash in down markets; the ability to capture and maintain market share and to develop or take advantage of future opportunities, customer initiatives, new businesses, new products and new markets; expectations for Company and customer inventories, jobs and orders; expectations for the economy and markets or improvements therein; expectations for generating improving and sustainable earnings, earnings potential, margins or shareholder value; effects of judicial rulings; and other non-historical matters constitute “forward-looking statements” within the meaning of the Act. Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected. Any number of factors could affect actual results, including, without limitation, the risks, uncertainties and impacts related to the COVID-19 pandemic – the duration, extent and severity of which is impossible to predict, including the possibility of future resurgence in the spread of COVID-19 or variants thereof – and the availability, effectiveness and acceptance of vaccines, and other actual or potential public health emergencies and actions taken by governmental authorities or others in connection therewith; the effect of national, regional and global economic conditions generally and within major product markets, including significant economic disruptions from COVID-19, the actions taken in connection therewith and the implementation of related fiscal stimulus packages; the effect of conditions in national and worldwide financial markets, including inflation and increases in interest rates, and with respect to the ability of financial institutions to provide capital; the impact of tariffs, the adoption of trade restrictions affecting the Company’s products or suppliers, a United States withdrawal from or significant renegotiation of trade agreements, the occurrence of trade wars, the closing of border crossings, and other changes in trade regulations or relationships; changing oil prices and/or supply; product demand and pricing; changes in product mix, product substitution and market acceptance of the Company’s products; volatility or fluctuations in the pricing, quality or availability of raw materials (particularly steel), supplies, transportation, utilities, labor and other items required by operations (especially in light of the COVID-19 pandemic and Russia’s invasion of Ukraine); the outcome of adverse claims experience with respect to workers’ compensation, product recalls or product liability, casualty events or other matters; effects of facility closures and the consolidation of operations; the effect of financial difficulties, consolidation and other changes within the steel, automotive (especially in light of the semi-conductor shortages), construction and other industries in which the Company participates; failure to maintain appropriate levels of inventories; financial difficulties (including bankruptcy filings) of original equipment manufacturers, end-users and customers, suppliers, joint venture partners and others with whom the Company does business; the ability to realize targeted expense reductions from headcount reductions, facility closures and other cost reduction efforts; the ability to realize cost savings and operational, sales and sourcing improvements and efficiencies, and other expected benefits from Transformation initiatives, on a timely basis; the overall success of, and the ability to integrate, newly-acquired businesses and joint ventures, maintain and develop their customers, and achieve synergies and other expected benefits and cost savings therefrom; capacity levels and efficiencies, within facilities, within major product markets and within the industries in which the Company participates as a whole; the effect of disruption in the business of suppliers, customers, facilities and shipping operations due to adverse weather, casualty events, equipment breakdowns, labor shortages (especially in light of the COVID-19 pandemic), interruption in utility services, civil unrest, international conflicts (especially in light of Russia’s invasion of Ukraine), terrorist activities or other causes; changes in customer demand, inventories, spending patterns, product choices, and supplier choices; risks associated with doing business internationally, including economic, political and social instability (especially in light of Russia’s invasion of Ukraine), foreign currency exchange rate exposure and the acceptance of the Company’s products in global markets; the ability to improve and maintain processes and business practices to keep pace with the economic, competitive and technological environment; the effect of inflation and interest rate increases, which may negatively impact the Company’s operations and financial results; deviation of actual results from estimates and/or assumptions used by the Company in the application of its significant accounting policies; the level of imports and import prices in the Company’s markets; the impact of environmental laws and regulations or the actions of the United States Environmental Protection Agency or similar regulators which increase costs or limit the Company’s ability to use or sell certain products; the impact of increasing environmental, greenhouse gas emission and sustainability regulations or considerations or; the impact of judicial rulings and governmental regulations, both in the United States and abroad, including those adopted by the United States Securities and Exchange Commission and other governmental agencies as contemplated by the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Consolidated Appropriations Act, 2021, the American Rescue Act of 2021, and the Dodd-Frank Wall Street Reform and the Consumer Protection Act of 2010; the effect of healthcare laws in the United States and potential changes for such laws, especially in light of the COVID-19 pandemic which may increase the Company’s healthcare and other costs and negatively impact the Company’s operations and financial results; the effects of tax laws in the United States and potential changes for such laws, which may increase the Company’s costs and negatively impact the Company’s operations and financial results; cyber security risks; the effects of privacy and information security laws and standards; and other risks described from time to time in the filings of Worthington Industries, Inc. with the United States Securities and Exchange Commission, including those described in “Part I – Item 1A. – Risk Factors” of the Annual Report on Form 10-K of Worthington Industries, Inc. for the fiscal year ended May 31, 2021.

Contacts:
SONYA L. HIGGINBOTHAM
VP, CORPORATE COMMUNICATIONS AND BRAND MANAGEMENT
614.438.7391 | sonya.higginbotham@worthingtonindustries.com

MARCUS A. ROGIER
TREASURER AND INVESTOR RELATIONS OFFICER
614.840.4663 | marcus.rogier@worthingtonindustries.com

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

WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)

 

Three Months Ended

 

 

Twelve Months Ended

 

 

May 31,

 

 

May 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net sales

$

1,520,305

 

 

$

978,319

 

 

$

5,242,219

 

 

$

3,171,429

 

Cost of goods sold

 

1,352,582

 

 

 

752,171

 

 

 

4,527,403

 

 

 

2,532,351

 

Gross margin

 

167,723

 

 

 

226,148

 

 

 

714,816

 

 

 

639,078

 

Selling, general and administrative expense

 

104,642

 

 

 

99,925

 

 

 

399,568

 

 

 

351,145

 

Impairment of long-lived assets

 

-

 

 

 

-

 

 

 

3,076

 

 

 

13,739

 

Restructuring and other (income) expense, net

 

(2,314

)

 

 

18,441

 

 

 

(17,096

)

 

 

56,097

 

Incremental expenses related to Nikola gains

 

-

 

 

 

(2,676

)

 

 

-

 

 

 

50,624

 

Operating income

 

65,395

 

 

 

110,458

 

 

 

329,268

 

 

 

167,473

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Miscellaneous income, net

 

651

 

 

 

797

 

 

 

2,714

 

 

 

2,163

 

Interest expense

 

(8,167

)

 

 

(7,650

)

 

 

(31,337

)

 

 

(30,346

)

Equity in net income of unconsolidated affiliates

 

53,041

 

 

 

42,386

 

 

 

213,641

 

 

 

123,325

 

Gains on investment in Nikola

 

-

 

 

 

-

 

 

 

-

 

 

 

655,102

 

Earnings before income taxes

 

110,920

 

 

 

145,991

 

 

 

514,286

 

 

 

917,717

 

Income tax expense

 

24,963

 

 

 

27,449

 

 

 

115,022

 

 

 

176,267

 

Net earnings

 

85,957

 

 

 

118,542

 

 

 

399,264

 

 

 

741,450

 

Net earnings attributable to noncontrolling interests

 

5,705

 

 

 

4,987

 

 

 

19,878

 

 

 

17,655

 

Net earnings attributable to controlling interests

$

80,252

 

 

$

113,555

 

 

$

379,386

 

 

$

723,795

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

48,780

 

 

 

51,587

 

 

 

49,940

 

 

 

52,701

 

Earnings per share attributable to controlling interest

$

1.65

 

 

$

2.20

 

 

$

7.60

 

 

$

13.73

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

49,701

 

 

 

52,862

 

 

 

50,993

 

 

 

53,917

 

Earnings per share attributable to controlling interest

$

1.61

 

 

$

2.15

 

 

$

7.44

 

 

$

13.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding at end of period

 

48,380

 

 

 

51,330

 

 

 

48,380

 

 

 

51,330

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

$

0.28

 

 

$

0.28

 

 

$

1.12

 

 

$

1.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



CONSOLIDATED BALANCE SHEETS
WORTHINGTON INDUSTRIES, INC.
(In thousands)

 

May 31,

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

34,485

 

 

$

640,311

 

Receivables, less allowances of $1,292 and $608 at May 31, 2022

 

 

 

 

 

and May 31, 2021, respectively

 

857,493

 

 

 

639,964

 

Inventories:

 

 

 

 

 

Raw materials

 

323,609

 

 

 

266,208

 

Work in process

 

255,019

 

 

 

183,413

 

Finished products

 

180,512

 

 

 

115,133

 

Total inventories

 

759,140

 

 

 

564,754

 

Income taxes receivable

 

20,556

 

 

 

1,958

 

Assets held for sale

 

20,318

 

 

 

51,956

 

Prepaid expenses and other current assets

 

93,661

 

 

 

69,049

 

Total current assets

 

1,785,653

 

 

 

1,967,992

 

Investments in unconsolidated affiliates

 

327,381

 

 

 

233,126

 

Operating lease assets

 

98,769

 

 

 

35,101

 

Goodwill

 

401,469

 

 

 

351,056

 

Other intangible assets, net of accumulated amortization of $93,973 and

 

 

 

 

 

$80,513 at May 31, 2022 and May 31, 2021, respectively

 

299,017

 

 

 

240,387

 

Other assets

 

34,394

 

 

 

30,566

 

Property, plant and equipment:

 

 

 

 

 

Land

 

51,483

 

 

 

21,744

 

Buildings and improvements

 

303,269

 

 

 

271,196

 

Machinery and equipment

 

1,196,806

 

 

 

1,046,065

 

Construction in progress

 

59,363

 

 

 

53,903

 

Total property, plant and equipment

 

1,610,921

 

 

 

1,392,908

 

Less: accumulated depreciation

 

914,581

 

 

 

877,891

 

Total property, plant and equipment, net

 

696,340

 

 

 

515,017

 

Total assets

$

3,643,023

 

 

$

3,373,245

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

668,438

 

 

$

567,392

 

Short-term borrowings

 

47,997

 

 

 

-

 

Accrued compensation, contributions to employee benefit plans and related taxes

 

117,530

 

 

 

137,698

 

Dividends payable

 

15,988

 

 

 

16,536

 

Other accrued items

 

70,125

 

 

 

52,250

 

Current operating lease liabilities

 

11,618

 

 

 

9,947

 

Income taxes payable

 

300

 

 

 

3,620

 

Current maturities of long-term debt

 

265

 

 

 

458

 

Total current liabilities

 

932,261

 

 

 

787,901

 

Other liabilities

 

115,991

 

 

 

82,824

 

Distributions in excess of investment in unconsolidated affiliate

 

81,149

 

 

 

99,669

 

Long-term debt

 

696,345

 

 

 

710,031

 

Noncurrent operating lease liabilities

 

88,183

 

 

 

27,374

 

Deferred income taxes, net

 

115,132

 

 

 

113,751

 

Total liabilities

 

2,029,061

 

 

 

1,821,550

 

Shareholders' equity - controlling interest

 

1,480,752

 

 

 

1,398,193

 

Noncontrolling interests

 

133,210

 

 

 

153,502

 

Total equity

 

1,613,962

 

 

 

1,551,695

 

Total liabilities and equity

$

3,643,023

 

 

$

3,373,245

 

 

 

 

 

 

 

 

 



WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

 

Three Months Ended

 

 

Twelve Months Ended

 

 

May 31,

 

 

May 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net earnings

$

85,957

 

 

$

118,542

 

 

$

399,264

 

 

$

741,450

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

28,248

 

 

 

21,990

 

 

 

98,827

 

 

 

87,654

 

Impairment of long-lived assets

 

-

 

 

 

-

 

 

 

3,076

 

 

 

13,739

 

Provision for (benefit from) deferred income taxes

 

5,839

 

 

 

(4,304

)

 

 

19,175

 

 

 

4,822

 

Bad debt expense (income)

 

63

 

 

 

(95

)

 

 

959

 

 

 

(255

)

Equity in net income of unconsolidated affiliates, net of
distributions

 

(30,487

)

 

 

(16,881

)

 

 

(113,583

)

 

 

(32,318

)

Net (gain) loss on sale of assets

 

(2,320

)

 

 

18,293

 

 

 

(16,150

)

 

 

53,607

 

Stock-based compensation

 

4,141

 

 

 

4,692

 

 

 

16,100

 

 

 

19,129

 

Gains on investment in Nikola

 

-

 

 

 

-

 

 

 

-

 

 

 

(655,102

)

Charitable contribution of Nikola shares

 

-

 

 

 

-

 

 

 

-

 

 

 

20,653

 

Changes in assets and liabilities, net of impact of acquisitions:

 

 

 

 

 

 

 

 

 

 

 

Receivables

 

4,123

 

 

 

(112,535

)

 

 

(151,328

)

 

 

(223,254

)

Inventories

 

111,323

 

 

 

(163,149

)

 

 

(118,490

)

 

 

(169,740

)

Accounts payable

 

(38,737

)

 

 

157,593

 

 

 

12,230

 

 

 

315,222

 

Accrued compensation and employee benefits

 

23,576

 

 

 

27,134

 

 

 

(29,348

)

 

 

75,725

 

Income taxes payable

 

(4,490

)

 

 

(33,896

)

 

 

(5,977

)

 

 

2,671

 

Other operating items, net

 

(22,398

)

 

 

22,923

 

 

 

(44,643

)

 

 

20,376

 

Net cash provided by operating activities

 

164,838

 

 

 

40,307

 

 

 

70,112

 

 

 

274,379

 

 

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

Investment in property, plant and equipment

 

(22,796

)

 

 

(16,857

)

 

 

(94,600

)

 

 

(82,178

)

Purchase of noncontrolling interest in WSP - Taylor

 

(6,811

)

 

 

-

 

 

 

(6,811

)

 

 

-

 

Acquisitions, net of cash acquired

 

548

 

 

 

203

 

 

 

(376,713

)

 

 

(129,615

)

Proceeds from sale of assets, net of selling costs

 

4,032

 

 

 

25,259

 

 

 

39,936

 

 

 

45,854

 

Proceeds from sale of Nikola shares

 

-

 

 

 

-

 

 

 

-

 

 

 

634,449

 

Net cash provided (used) by investing activities

 

(25,027

)

 

 

8,605

 

 

 

(438,188

)

 

 

468,510

 

 

 

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

Net proceeds from (repayments of) short-term borrowings

 

(63,912

)

 

 

-

 

 

 

41,726

 

 

 

-

 

Principal payments on long-term obligations

 

(11

)

 

 

(330

)

 

 

(565

)

 

 

(622

)

Proceeds from issuance of common shares, net of tax withholdings

 

236

 

 

 

4,872

 

 

 

(6,280

)

 

 

6,581

 

Payments to noncontrolling interests

 

(19,724

)

 

 

(2,880

)

 

 

(35,160

)

 

 

(10,690

)

Repurchase of common shares

 

(52,406

)

 

 

(46,804

)

 

 

(180,248

)

 

 

(192,054

)

Dividends paid

 

(13,833

)

 

 

(12,964

)

 

 

(57,223

)

 

 

(52,991

)

Net cash used by financing activities

 

(149,650

)

 

 

(58,106

)

 

 

(237,750

)

 

 

(249,776

)

Increase (decrease) in cash and cash equivalents

 

(9,839

)

 

 

(9,194

)

 

 

(605,826

)

 

 

493,113

 

Cash and cash equivalents at beginning of year

 

44,324

 

 

 

649,505

 

 

 

640,311

 

 

 

147,198

 

Cash and cash equivalents at end of year

$

34,485

 

 

$

640,311

 

 

$

34,485

 

 

$

640,311

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WORTHINGTON INDUSTRIES, INC.
NON-GAAP FINANCIAL MEASURES / SUPPLEMENTAL DATA
(In thousands, except volume and per share amounts)

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP). The Company also presents adjusted operating income and adjusted net earnings per diluted share attributable to controlling interest, which generally exclude impairment and restructuring charges as well as other items that management believes are not reflective of, and thus should not be included when evaluating the performance of its ongoing operations. Additionally, the Company presents adjusted earnings before interest and taxes attributable to controlling interest (“adjusted EBIT”) for purposes of evaluating segment performance. These represent non-GAAP financial measures and are used by management to evaluate the Company’s performance, engage in financial and operational planning and determine incentive compensation because it believes that these measures provide additional perspective and, in some circumstances are more closely correlated to, the performance of the Company’s ongoing operations.

The following provides a reconciliation to adjusted operating income and adjusted earnings per diluted share from the most comparable GAAP measures for the three months ended May 31, 2022 and 2021.

 

 

Three Months Ended May 31, 2022

 

 

 

Operating Income

 

 

Earnings Before Income Taxes

 

 

Income Tax Expense (Benefit)

 

 

Net Earnings Attributable to Controlling Interest(1)

 

 

Earnings per Diluted Share

 

GAAP

 

$

65,395

 

 

$

110,920

 

 

$

24,963

 

 

$

80,252

 

 

$

1.61

 

Restructuring and other income, net

 

 

(2,314

)

 

 

(2,314

)

 

 

570

 

 

 

(1,847

)

 

 

(0.03

)

Non-GAAP

 

$

63,081

 

 

$

108,606

 

 

$

24,393

 

 

$

78,405

 

 

$

1.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Three Months Ended May 31, 2021

 

 

 

Operating Income

 

 

Earnings Before Income Taxes

 

 

Income Tax Expense (Benefit)

 

 

Net Earnings Attributable to Controlling Interest(1)

 

 

Earnings per Diluted Share

 

GAAP

 

$

110,458

 

 

$

145,991

 

 

$

27,449

 

 

$

113,555

 

 

$

2.15

 

Restructuring and other expense, net

 

 

18,441

 

 

 

18,441

 

 

 

(7,413

)

 

 

10,998

 

 

 

0.20

 

Incremental expenses related to Nikola gains

 

 

(2,676

)

 

 

(2,676

)

 

 

1,544

 

 

 

(1,132

)

 

 

(0.02

)

Non-GAAP

 

$

126,223

 

 

$

161,756

 

 

$

33,318

 

 

$

123,421

 

 

$

2.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

$

(63,142

)

 

$

(53,150

)

 

$

(8,925

)

 

$

(45,016

)

 

$

(0.75

)

The following provides a reconciliation to adjusted operating income and adjusted earnings per diluted share from the most comparable GAAP measures for the year ended May 31, 2022 and 2021.

 

 

Twelve Months Ended May 31, 2022

 

 

 

Operating Income

 

 

Earnings Before Income Taxes

 

 

Income Tax Expense (Benefit)

 

 

Net Earnings Attributable to Controlling Interest(1)

 

 

Earnings per Diluted Share

 

GAAP

 

$

329,268

 

 

$

514,286

 

 

$

115,022

 

 

$

379,386

 

 

$

7.44

 

Impairment of long-lived assets

 

 

3,076

 

 

 

3,076

 

 

 

(450

)

 

 

1,486

 

 

 

0.03

 

Restructuring and other income, net

 

 

(17,096

)

 

 

(17,096

)

 

 

2,598

 

 

 

(8,572

)

 

 

(0.17

)

Non-GAAP

 

$

315,248

 

 

$

500,266

 

 

$

112,874

 

 

$

372,300

 

 

$

7.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Twelve Months Ended May 31, 2021

 

 

 

Operating Income

 

 

Earnings Before Income Taxes

 

 

Income Tax Expense (Benefit)

 

 

Net Earnings Attributable to Controlling Interest(1)

 

 

Earnings per Diluted Share

 

GAAP

 

$

167,473

 

 

$

917,717

 

 

$

176,267

 

 

$

723,795

 

 

$

13.42

 

Impairment of long-lived assets

 

 

13,739

 

 

 

13,739

 

 

 

(3,200

)

 

 

10,539

 

 

 

0.20

 

Restructuring and other expense, net

 

 

56,097

 

 

 

56,097

 

 

 

(29,450

)

 

 

26,421

 

 

 

0.50

 

Incremental expenses related to Nikola gains

 

 

50,624

 

 

 

50,624

 

 

 

(10,241

)

 

 

40,383

 

 

 

0.75

 

Gains on investment in Nikola

 

 

-

 

 

 

(655,102

)

 

 

136,035

 

 

 

(519,067

)

 

 

(9.63

)

Non-GAAP

 

$

287,933

 

 

$

383,075

 

 

$

83,123

 

 

$

282,071

 

 

$

5.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

$

27,315

 

 

$

117,191

 

 

$

29,751

 

 

$

90,229

 

 

$

2.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Excludes the impact of the noncontrolling interest.

 

 

 


To further assist in the analysis of segment results for the periods presented, the following volume and sales information for the three and twelve months ended May 31, 2022 and 2021 has been provided along with a reconciliation of adjusted EBIT to the most comparable GAAP measure, which is operating income for purposes of measuring segment profit:

 

Three Months Ended May 31, 2022

 

 

Steel Processing

 

 

Consumer Products

 

 

Building Products

 

 

Sustainable Energy Solutions

 

 

Other

 

 

Consolidated

 

Volume (tons/units)

 

1,042,465

 

 

 

22,008,912

 

 

 

3,469,962

 

 

 

181,026

 

 

 

-

 

 

n/a

 

Sales

$

1,119,808

 

 

$

186,212

 

 

$

172,945

 

 

$

41,335

 

 

$

5

 

 

$

1,520,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

16,877

 

 

$

29,734

 

 

$

19,834

 

 

$

(1,756

)

 

$

706

 

 

$

65,395

 

Restructuring and other income, net

 

(2,281

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(33

)

 

 

(2,314

)

Adjusted operating income (loss)

 

14,596

 

 

 

29,734

 

 

 

19,834

 

 

 

(1,756

)

 

 

673

 

 

 

63,081

 

Miscellaneous income, net

 

827

 

 

 

(245

)

 

 

99

 

 

 

80

 

 

 

(110

)

 

 

651

 

Equity in net income of unconsolidated affiliates (1)

 

6,922

 

 

 

-

 

 

 

43,634

 

 

 

-

 

 

 

2,485

 

 

 

53,041

 

Less: Net earnings attributable to noncontrolling interests (2)

 

5,809

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,809

 

Adjusted earnings before interest and taxes

$

16,536

 

 

$

29,489

 

 

$

63,567

 

 

$

(1,676

)

 

$

3,048

 

 

$

110,964

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Three Months Ended May 31, 2021

 

 

Steel Processing

 

 

Consumer Products

 

 

Building Products

 

 

Sustainable Energy Solutions

 

 

Other

 

 

Consolidated

 

Volume (tons/units)

 

1,099,477

 

 

 

21,518,383

 

 

 

3,389,854

 

 

 

252,366

 

 

 

-

 

 

n/a

 

Sales

$

655,177

 

 

$

157,492

 

 

$

123,689

 

 

$

40,908

 

 

$

1,053

 

 

$

978,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

94,333

 

 

$

19,344

 

 

$

8,043

 

 

$

(6,448

)

 

$

(4,814

)

 

$

110,458

 

Restructuring and other expense, net

 

79

 

 

 

(78

)

 

 

256

 

 

 

10,293

 

 

 

7,891

 

 

 

18,441

 

Incremental expenses related to Nikola gains

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,676

)

 

 

(2,676

)

Adjusted operating income

 

94,412

 

 

 

19,266

 

 

 

8,299

 

 

 

3,845

 

 

 

401

 

 

 

126,223

 

Miscellaneous income, net

 

(127

)

 

 

(264

)

 

 

104

 

 

 

11

 

 

 

1,073

 

 

 

797

 

Equity in net income of unconsolidated affiliates (1)

 

8,571

 

 

 

-

 

 

 

32,824

 

 

 

-

 

 

 

991

 

 

 

42,386

 

Less: Net earnings attributable to noncontrolling interests (2)

 

5,025

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,025

 

Adjusted earnings (loss) before interest and taxes

$

97,831

 

 

$

19,002

 

 

$

41,227

 

 

$

3,856

 

 

$

2,465

 

 

$

164,381

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) See supplemental break-out of equity income by unconsolidated affiliate in the table below.

 

(2) Excludes the noncontrolling interest portion of restructuring charges of $104 and $38 for the three months ended May 31, 2022 and 2021, respectively.

 

 

 


 

Twelve months ended May 31, 2022

 

 

Steel Processing

 

 

Consumer Products

 

 

Building Products

 

 

Sustainable Energy Solutions

 

 

Other

 

 

Consolidated

 

Volume (tons/units)

 

4,170,931

 

 

 

82,393,013

 

 

 

11,707,258

 

 

 

610,811

 

 

 

-

 

 

n/a

 

Sales

$

3,933,021

 

 

$

636,478

 

 

$

541,757

 

 

$

130,954

 

 

$

9

 

 

$

5,242,219

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

199,120

 

 

$

94,378

 

 

$

39,905

 

 

$

(6,157

)

 

$

2,022

 

 

$

329,268

 

Impairment of long-lived assets

 

3,076

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,076

 

Restructuring and other income, net

 

(14,480

)

 

 

-

 

 

 

(35

)

 

 

(143

)

 

 

(2,438

)

 

 

(17,096

)

Adjusted operating income (loss)

 

187,716

 

 

 

94,378

 

 

 

39,870

 

 

 

(6,300

)

 

 

(416

)

 

 

315,248

 

Miscellaneous income, net

 

862

 

 

 

(76

)

 

 

240

 

 

 

64

 

 

 

1,624

 

 

 

2,714

 

Equity in net income of unconsolidated affiliates (3)

 

29,787

 

 

 

-

 

 

 

176,498

 

 

 

-

 

 

 

7,356

 

 

 

213,641

 

Less: Net earnings attributable to noncontrolling interests (4)

 

15,093

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

15,093

 

Adjusted earnings (loss) before interest and taxes

$

203,272

 

 

$

94,302

 

 

$

216,608

 

 

$

(6,236

)

 

$

8,564

 

 

$

516,510

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Twelve months ended May 31, 2021

 

 

Steel Processing

 

 

Consumer Products

 

 

Building Products

 

 

Sustainable Energy Solutions

 

 

Other

 

 

Consolidated

 

Volume (tons/units)

 

4,066,773

 

 

 

74,656,594

 

 

 

11,181,873

 

 

 

897,261

 

 

 

33,419

 

 

n/a

 

Sales

$

2,059,397

 

 

$

523,697

 

 

$

402,038

 

 

$

134,890

 

 

$

51,407

 

 

$

3,171,429

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

208,648

 

 

$

74,901

 

 

$

12,584

 

 

$

(5,535

)

 

$

(123,125

)

 

$

167,473

 

Impairment of long-lived assets

 

-

 

 

 

506

 

 

 

1,423

 

 

 

-

 

 

 

11,810

 

 

 

13,739

 

Restructuring and other income, net

 

1,883

 

 

 

41

 

 

 

256

 

 

 

10,293

 

 

 

43,624

 

 

 

56,097

 

Incremental expenses related to Nikola gains

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

50,624

 

 

 

50,624

 

Adjusted operating income (loss)

 

210,531

 

 

 

75,448

 

 

 

14,263

 

 

 

4,758

 

 

 

(17,067

)

 

 

287,933

 

Miscellaneous income, net

 

(371

)

 

 

(512

)

 

 

194

 

 

 

203

 

 

 

2,649

 

 

 

2,163

 

Equity in net income of unconsolidated affiliates (3)

 

15,965

 

 

 

-

 

 

 

103,447

 

 

 

-

 

 

 

3,913

 

 

 

123,325

 

Less: Net earnings attributable to noncontrolling interests (4)

 

17,950

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

17,950

 

Adjusted earnings (loss) before interest and taxes

$

208,175

 

 

$

74,936

 

 

$

117,904

 

 

$

4,961

 

 

$

(10,505

)

 

$

395,471

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3) See supplemental break-out of equity income by unconsolidated affiliate in the table below

 

(4) Excludes the noncontrolling interest portion of impairment and restructuring (charges) gains of $4,785 and $(295) for the year ended May 31, 2022 and 2021, respectively.

 

 

 

The following tables outlines our equity income (loss) by unconsolidated affiliate for the periods presented:

 

Three Months Ended

 

 

Twelve Months Ended

 

 

May 31,

 

 

May 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

WAVE

$

20,755

 

 

$

24,460

 

 

$

87,426

 

 

$

78,869

 

ClarkDietrich

 

22,879

 

 

 

8,365

 

 

 

89,072

 

 

 

24,578

 

Serviacero Worthington

 

6,922

 

 

 

8,571

 

 

 

29,787

 

 

 

15,965

 

ArtiFlex

 

2,806

 

 

 

1,596

 

 

 

7,590

 

 

 

4,475

 

Cabs

 

(321

)

 

 

(606

)

 

 

(234

)

 

 

(562

)

Total equity income

$

53,041

 

 

$

42,386

 

 

$

213,641

 

 

$

123,325