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Worthington Reports Third Quarter Fiscal 2021 Results

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COLUMBUS, Ohio, March 24, 2021 (GLOBE NEWSWIRE) -- Worthington Industries, Inc. (NYSE: WOR) today reported net sales of $759.1 million and net earnings of $67.6 million, or $1.27 per diluted share, for its fiscal 2021 third quarter ended February 28, 2021. In the third quarter of fiscal 2020, the Company reported net sales of $764.0 million and net earnings of $15.3 million, or $0.27 per diluted share. Results in both the current and prior year quarter were impacted by several unique items, as summarized in the table below.

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

3Q 2021

3Q 2020

After-Tax

Per Share

After-Tax

Per Share

Net earnings

$

67.6

$

1.27

$

15.3

$

0.27

Impairment and restructuring charges

8.4

0.16

27.0

0.48

Gain on investment in Nikola, net of incremental expenses

(3.7

)

(0.07

)

-

-

Tank replacement program

-

-

(1.7

)

(0.03

)

Gain on consolidation of Samuel Steel Pickling

-

-

(4.6

)

(0.08

)

Adjusted net earnings

$

72.3

$

1.36

$

36.0

$

0.64

Impairment and restructuring charges in both periods mostly related to the Company’s oil and gas equipment business, which was divested on January 29, 2021. See Recent Developments below for further information related to the divestiture.

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

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

3Q 2021

3Q 2020

9M 2021

9M 2020

Net sales

$

759.1

$

764.0

$

2,193.1

$

2,447.5

Operating income (loss)

49.8

(1.4

)

57.0

16.1

Equity income

31.7

25.5

80.9

97.6

Net earnings

67.6

15.3

610.2

62.6

Earnings per diluted share

$

1.27

$

0.27

$

11.28

$

1.11

"We delivered record earnings per share in our third quarter thanks to outstanding results in Steel Processing and solid performances from Pressure Cylinders and our joint ventures," said President & CEO Andy Rose. "Healthy demand across nearly all of our major end markets, combined with inventory holding gains and lower manufacturing costs drove the record performance."

Consolidated Quarterly Results

Net sales for the third quarter of fiscal 2021 were $759.1 million, down 1% from the comparable quarter in the prior year, when net sales were $764.0 million. The decrease was driven by lower sales in the oil and gas equipment business within Pressure Cylinders, which was divested in the current quarter, partially offset by higher average selling prices in Steel Processing and higher volume in the consumer products business within Pressure Cylinders.

Gross margin increased $48.6 million over the prior year quarter to $164.1 million primarily due to improved direct spreads in Steel Processing which benefitted from significant inventory holding gains, which were estimated to be $31.1 million in the current quarter compared to an inventory holding loss of $6.0 million in the prior year quarter.

Operating income for the current quarter was $49.8 million, an increase of $51.2 million over the operating loss in the prior year quarter. Excluding impairment and restructuring charges, and the impact of the reserve decrease for the tank replacement program in the prior year quarter, adjusted operating income for the current quarter was $77.2 million, an improvement of $44.9 million over the prior year quarter, as the impact of higher gross margin was partially offset by higher SG&A expense, which was up $6.0 million on increased profit sharing and bonus expense.

Interest expense was $7.6 million for the current quarter, compared to $7.4 million in the prior year quarter. The increase was due primarily to higher average debt levels.

Equity income from unconsolidated joint ventures increased $6.2 million over the prior year quarter to $31.7 million due to higher contributions from all joint ventures except for WAVE which was down slightly. The Company received cash distributions of $18.4 million from unconsolidated joint ventures during the current quarter.

Income tax expense was $4.5 million in the current quarter compared to $4.8 million in the prior year quarter. The decrease was driven by a $19.7 million discrete tax benefit realized in connection with the sale of the oil and gas equipment business in the current quarter, partially offset by the impact of higher pre-tax earnings. Tax expense in the current quarter reflects an estimated annual effective rate of 20.1% compared to 24.6% for the prior year quarter.

Balance Sheet

At quarter-end, total debt of $708.9 million was relatively consistent with debt at November 30, 2020, and the Company had $649.5 million of cash.

Quarterly Segment Results

Steel Processing’s net sales totaled $504.5 million, up 3%, or $13.3 million, over the comparable prior year quarter driven by higher average selling prices, which were partially offset by lower toll volume. Operating income of $62.9 million was $43.9 million higher than the prior year quarter on improved direct spreads primarily driven by estimated inventory holding gains of $31.1 million in the current quarter compared to an inventory holding loss of $6.0 million in the prior year quarter. The mix of direct versus toll tons processed was 48% to 52% in the current quarter, compared to 44% to 56% in the prior year quarter.

Pressure Cylinders’ net sales totaled $254.6 million, down 6%, or $16.4 million, from the comparable prior year quarter. The decrease was driven by a $24.3 million decline in the recently divested oil and gas equipment business, partially offset by higher volume in the consumer products business. Operating loss of $15.6 million was an improvement of $4.2 million over the prior year quarter. Excluding impairment and restructuring charges, and the impact of the reserve decrease for the tank replacement program in the prior year quarter, adjusted operating income was up slightly to $12.8 million, as declines in the oil and gas equipment business were more than offset by improvements in the consumer and industrial products businesses.

Recent Developments

  • On Jan. 4, 2021, the Company acquired PTEC Pressure Technology GmbH, a leading independent designer and manufacturer of valves and components for high-pressure hydrogen and compressed natural gas storage, transport and onboard fueling systems. The total purchase price was approximately $10.8 million.

  • On Jan. 13, 2021, the Company sold its remaining 7,048,020 shares of Nikola common stock for net proceeds of $146.6 million, resulting in a pre-tax gain of $2.7 million.

  • On Jan. 29, 2021, the Company sold its oil and gas equipment business to an affiliate of Ten Oaks Group. The Company retained the real estate associated with the business and received nominal consideration at closing, resulting in a pre-tax loss of $27.7 million within restructuring and other expense.

  • On Jan. 29, 2021, the Company acquired General Tools & Instruments Company LLC, a provider of feature-rich, specialized tools in various categories including environmental health & safety, precision measurement & layout, home repair & remodel, lawn & garden and specific purpose tools. The total purchase price was approximately $120.6 million, subject to closing adjustments.

  • On Mar. 12, 2021, the Company sold its Structural Composites Industries facility located in Pomona, CA, to Luxfer Holdings PLC for approximately $20.0 million, subject to closing adjustments. The Company expects to record a loss of approximately $7.0 million in the fourth quarter of fiscal 2021 related primarily to the allocation of goodwill associated with the divestiture.

  • During the third quarter of fiscal 2021, the Company repurchased a total of 1,000,000 of its common shares for $52.4 million, at an average purchase price of $52.37.

Outlook

“Our businesses are performing well and with the strategic acquisitions and divestitures we completed recently we are well positioned moving forward,” Rose said. “As strong as our record Q3 was, it could have been better. We faced challenges, some of which will persist, including a tight steel market, semi-conductor shortages that impacted our automotive customers, extreme weather, and continuing COVID related production issues. Our teams are exceptional, and they will continue to navigate these challenges, working safely to drive our business to new heights.”

Conference Call

Worthington will review fiscal 2021 third quarter results during its quarterly conference call on March 24, 2021, at 2:00 p.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 delivering innovative solutions to customers that span many industries including transportation, construction, industrial, agriculture, retail and energy. Worthington is North America’s premier value-added steel processor and producer of laser welded products; and a leading global supplier of pressure cylinders and accessories for applications such as fuel storage, water systems, outdoor living, tools and celebrations. The Company’s brands, primarily sold in retail stores, include Coleman®, Bernzomatic®, Balloon Time®, Mag Torch®, Well-X-Trol®, General®, Garden-Weasel®, Pactool International® and Hawkeye™. Worthington’s WAVE joint venture with Armstrong is the North American leader in innovative ceiling solutions.

Headquartered in Columbus, Ohio, Worthington operates 50 facilities in 15 states and seven countries, sells into over 90 countries and employs approximately 8,000 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 practicing a shared commitment to transformation, Worthington makes better solutions possible for customers, employees, shareholders and communities.

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 – the duration, extent and severity of which are impossible to predict, including the possibility of further resurgence in the spread of COVID-19 – on economies (local, national and international) and markets, and on our customers, counterparties, employees and third-party service providers, as well as the effects of various responses of governmental and nongovernmental authorities to the COVID-19 pandemic (such as quarantines, shut downs and other restrictions on travel and commercial, social or other activities), the development, availability and effectiveness of vaccines, and the implementation of fiscal stimulus packages; 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; uncertainty regarding the impact of changes to the U.S. presidential administration and Congress on the regulatory landscape, capital markets, and the response to and management of the COVID-19 pandemic; 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 COVID-19 and other actual or potential public health emergencies and actions taken by governmental authorities or others in connection therewith, their potential impacts related to the ability and costs to continue to operate facilities and their potential to exacerbate other risks; the effect of national, regional and global economic conditions generally and within major product markets, including significant economic disruptions from COVID-19 and the actions taken therewith; the effect of conditions in national and worldwide financial markets 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; lower oil prices as a factor in demand for products; product demand and pricing; changes in product mix, product substitution and market acceptance of the Company’s products; fluctuations in the pricing, quality or availability of raw materials (particularly steel), supplies, transportation, utilities and other items required by operations; 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, construction, oil and gas, 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, interruption in utility services, civil unrest, international conflicts, terrorist activities or other causes; changes in customer demand, inventories, spending patterns, product choices, and supplier choices; risks associated with doing business internationally, including economic, political and social instability, foreign currency 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; 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 judicial rulings and governmental regulations, both in the United States and abroad, including those adopted by the United States governmental agencies as contemplated by the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Consolidated Appropriations Act, 2021 and the Dodd-Frank Wall Street Reform and 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; cyber security risks; the effects of privacy and information security laws and standards; and other risks described from time to time in the Company’s filings with the United States Securities and Exchange Commission, including those described in “Part I – Item 1A. – Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2020.



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

Three Months Ended

Nine Months Ended

February 28,
2021

February 29,
2020

February 28,
2021

February 29,
2020

Net sales

$

759,109

$

763,996

$

2,193,110

$

2,447,492

Cost of goods sold

595,011

648,451

1,780,180

2,094,045

Gross margin

164,098

115,545

412,930

353,447

Selling, general and administrative expense

86,895

80,928

251,220

260,294

Impairment of goodwill and long-lived assets

-

34,627

13,739

75,228

Restructuring and other expense, net

28,212

1,376

37,656

1,781

Incremental expenses related to Nikola gains

(781

)

-

53,300

-

Operating income (loss)

49,772

(1,386

)

57,015

16,144

Other income (expense):

Miscellaneous income, net

539

6,985

1,366

8,316

Interest expense

(7,558

)

(7,362

)

(22,696

)

(24,157

)

Equity in net income of unconsolidated affiliates

31,674

25,479

80,939

97,592

Gains on investment in Nikola

2,740

-

655,102

-

Loss on extinguishment of debt

-

-

-

(4,034

)

Earnings before income taxes

77,167

23,716

771,726

93,861

Income tax expense

4,485

4,828

148,818

20,506

Net earnings

72,682

18,888

622,908

73,355

Net earnings attributable to noncontrolling interests

5,073

3,577

12,668

10,734

Net earnings attributable to controlling interest

$

67,609

$

15,311

$

610,240

$

62,621

Basic

Average common shares outstanding

52,149

54,930

53,076

55,078

Earnings per share attributable to controlling interest

$

1.30

$

0.28

$

11.50

$

1.14

Diluted

Average common shares outstanding

53,217

55,898

54,077

56,164

Earnings per share attributable to controlling interest

$

1.27

$

0.27

$

11.28

$

1.11

Common shares outstanding at end of period

51,813

54,598

51,813

54,598

Cash dividends declared per share

$

0.25

$

0.24

$

0.75

$

0.72

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

February 28,
2021

May 31,
2020

Assets

Current assets:

Cash and cash equivalents

$

649,505

$

147,198

Receivables, less allowances of $1,051 and $1,521 at February 28, 2021

and May 31, 2020, respectively

525,768

341,038

Inventories:

Raw materials

172,735

234,629

Work in process

135,233

76,497

Finished products

105,213

93,975

Total inventories

413,181

405,101

Income taxes receivable

3,351

8,376

Assets held for sale

21,202

12,928

Prepaid expenses and other current assets

73,909

68,538

Total current assets

1,686,916

983,179

Investments in unconsolidated affiliates

220,415

203,329

Operating lease assets

33,245

31,557

Goodwill

358,543

321,434

Other intangible assets, net of accumulated amortization of $87,052 and

$92,774 at February 28, 2021 and May 31, 2020, respectively

245,543

184,416

Other assets

32,986

34,956

Property, plant and equipment:

Land

23,159

24,197

Buildings and improvements

288,009

302,796

Machinery and equipment

1,105,686

1,055,139

Construction in progress

48,972

52,231

Total property, plant and equipment

1,465,826

1,434,363

Less: accumulated depreciation

905,601

861,719

Total property, plant and equipment, net

560,225

572,644

Total assets

$

3,137,873

$

2,331,515

Liabilities and equity

Current liabilities:

Accounts payable

$

412,793

$

247,017

Accrued compensation, contributions to employee benefit plans and

related taxes

112,781

64,650

Dividends payable

14,847

14,648

Other accrued items

48,475

49,974

Current operating lease liabilities

10,396

10,851

Income taxes payable

37,516

949

Current maturities of long-term debt

453

149

Total current liabilities

637,261

388,238

Other liabilities

87,419

75,786

Distributions in excess of investment in unconsolidated affiliate

104,391

103,837

Long-term debt

708,511

699,516

Noncurrent operating lease liabilities

26,440

25,763

Deferred income taxes, net

110,666

71,942

Total liabilities

1,674,688

1,365,082

Shareholders' equity - controlling interest

1,311,790

820,821

Noncontrolling interests

151,395

145,612

Total equity

1,463,185

966,433

Total liabilities and equity

$

3,137,873

$

2,331,515


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

Three Months Ended

Nine Months Ended

February 28,
2021

February 29,
2020

February 28,
2021

February 29,
2020

Operating activities:

Net earnings

$

72,682

$

18,888

$

622,908

$

73,355

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

Depreciation and amortization

21,893

22,780

65,664

69,553

Impairment of goodwill and long-lived assets

-

34,627

13,739

75,228

Provision for (benefit from) deferred income taxes

(30,129

)

(5,006

)

9,126

(1,661

)

Bad debt (income) expense

(95

)

273

(160

)

584

Equity in net income of unconsolidated affiliates, net of distributions

(13,288

)

(4,474

)

(15,437

)

(19,271

)

Net (gain) loss on sale of assets

27,641

(5,838

)

35,314

(5,237

)

Stock-based compensation

4,727

2,725

14,437

10,000

Gains on investment in Nikola

(2,740

)

-

(655,102

)

-

Charitable contribution of Nikola shares

-

-

20,653

-

Loss on extinguishment of debt

-

-

-

4,034

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

Receivables

(32,105

)

5,992

(110,719

)

15,517

Inventories

(96,836

)

3,024

(6,591

)

90,907

Accounts payable

62,299

29,630

157,629

(28,347

)

Accrued compensation and employee benefits

10,779

(9,144

)

48,591

(22,740

)

Income taxes payable

(2,474

)

390

36,567

(742

)

Other operating items, net

(13,098

)

(6,546

)

(2,547

)

(5,330

)

Net cash provided by operating activities

9,256

87,321

234,072

255,850

Investing activities:

Investment in property, plant and equipment

(16,377

)

(21,219

)

(65,321

)

(71,774

)

Proceeds from sale of Nikola shares

146,590

-

634,449

-

Acquisitions, net of cash acquired

(129,743

)

(500

)

(129,818

)

(29,783

)

Proceeds from sale of assets

(985

)

119

20,595

9,318

Net cash provided (used) by investing activities

(515

)

(21,600

)

459,905

(92,239

)

Financing activities:

Proceeds from long-term debt, net of issuance costs

-

-

-

101,464

Principal payments on long-term obligations and debt redemption costs

(99

)

(344

)

(292

)

(154,811

)

Proceeds from issuance of common shares, net of tax withholdings

565

429

1,709

(6,595

)

Payments to noncontrolling interests

(7,250

)

-

(7,810

)

(1,453

)

Repurchase of common shares

(52,367

)

(21,373

)

(145,250

)

(50,972

)

Dividends paid

(13,215

)

(13,263

)

(40,027

)

(40,177

)

Net cash used by financing activities

(72,366

)

(34,551

)

(191,670

)

(152,544

)

Increase (decrease) in cash and cash equivalents

(63,625

)

31,170

502,307

11,067

Cash and cash equivalents at beginning of period

713,130

72,260

147,198

92,363

Cash and cash equivalents at end of period

$

649,505

$

103,430

$

649,505

$

103,430

WORTHINGTON INDUSTRIES, INC.
SUPPLEMENTAL DATA
(In thousands, except volume)

This supplemental information is provided to assist in the analysis of the results of operations.

Three Months Ended

Nine Months Ended

February 28,
2021

February 29,
2020

February 28,
2021

February 29,
2020

Volume:

Steel Processing (tons)

1,014,873

1,139,280

2,967,296

3,035,514

Pressure Cylinders (units)

20,683,470

17,381,319

61,607,281

59,173,363

Net sales:

Steel Processing

$

504,477

$

491,136

$

1,404,220

$

1,531,448

Pressure Cylinders

254,643

270,995

787,831

865,527

Other

(11

)

1,865

1,059

50,517

Total net sales

$

759,109

$

763,996

$

2,193,110

$

2,447,492

Material cost:

Steel Processing

$

314,124

$

342,620

$

933,041

$

1,109,822

Pressure Cylinders

103,140

119,285

327,787

373,267

Selling, general and administrative expense:

Steel Processing

$

42,333

$

36,001

$

116,700

$

109,000

Pressure Cylinders

46,169

45,417

134,303

140,631

Operating income (loss):

Steel Processing

$

62,874

$

19,021

$

114,315

$

42,361

Pressure Cylinders

(15,641

)

(19,865

)

(3,694

)

25,405

Other

111

(1,785

)

(970

)

(48,835

)

Segment operating income (loss)

47,344

(2,629

)

109,651

18,931

Unallocated corporate and other

1,647

1,243

664

(2,787

)

Incremental expenses related to Nikola gains

781

-

(53,300

)

-

Total operating income (loss)

$

49,772

$

(1,386

)

$

57,015

$

16,144

Equity income (loss) by unconsolidated affiliate:

WAVE

$

19,473

$

20,074

$

54,409

$

85,729

ClarkDietrich

5,906

4,909

16,213

13,916

Serviacero Worthington

4,223

797

7,393

2,354

ArtiFlex

1,734

1,688

2,879

3,028

Other

338

(1,989

)

45

(7,435

)

Total equity income

$

31,674

$

25,479

$

80,939

$

97,592

WORTHINGTON INDUSTRIES, INC.
SUPPLEMENTAL DATA
(In thousands, except volume)

The following provides detail of Pressure Cylinders volume and net sales by principal class of products.

Three Months Ended

Nine Months Ended

February 28,
2021

February 29,
2020

February 28,
2021

February 29,
2020

Volume (units):

Consumer products

16,980,470

14,096,440

50,753,077

49,669,887

Industrial products

3,702,888

3,284,605

10,853,769

9,501,983

Oil & gas equipment

112

274

435

1,493

Total Pressure Cylinders

20,683,470

17,381,319

61,607,281

59,173,363

Net sales:

Consumer products

$

120,808

$

113,258

$

375,208

$

360,803

Industrial products

129,428

129,042

391,673

411,994

Oil & gas equipment

4,407

28,695

20,950

92,730

Total Pressure Cylinders

$

254,643

$

270,995

$

787,831

$

865,527

The following provides detail of impairment of goodwill and long-lived assets and restructuring and other expense, net included in operating income by segment.

Three Months Ended

Nine Months Ended

February 28,
2021

February 29,
2020

February 28,
2021

February 29,
2020

Impairment of goodwill and long-lived assets:

Steel Processing

$

-

$

1,274

$

-

$

1,274

Pressure Cylinders

-

33,353

13,739

33,353

Other

-

-

-

40,601

Total impairment of goodwill and long-lived assets

$

-

$

34,627

$

13,739

$

75,228

Restructuring and other expense (income), net:

Steel Processing

$

(42

)

$

728

$

1,804

$

702

Pressure Cylinders

28,435

747

36,006

747

Other

(181

)

(99

)

(154

)

332

Total restructuring and other expense, net

$

28,212

$

1,376

$

37,656

$

1,781

WORTHINGTON INDUSTRIES, INC.
NON-GAAP FINANCIAL MEASURES
(In thousands, except 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 earnings per diluted share and adjusted operating income to assist in the understanding of its results of operations. These represent non-GAAP financial measures and are used by management as measures of operating performance. In general, these measures exclude impairment and restructuring charges, but may also exclude other items that management does not believe reflect the Company’s core operations.

The following provides a reconciliation of adjusted operating income and adjusted earnings per diluted share to the most comparable GAAP measures for the periods presented.

Three Months Ended February 28, 2021

Operating
Income

Earnings
Before Income
Taxes

Income Tax
Expense
(Benefit)

Net Earnings
Attributable to
Controlling
Interest

Earnings per
Diluted
Share

GAAP

$

49,772

$

77,167

$

4,485

$

67,609

$

1.27

Restructuring and other expense, net

28,212

28,212

(19,843

)

8,372

0.16

Incremental expenses related to Nikola gains

(781

)

(781

)

(755

)

(1,536

)

(0.03

)

Gain on investment in Nikola

-

(2,740

)

575

(2,165

)

(0.04

)

Non-GAAP

$

77,203

$

101,858

$

24,508

$

72,280

$

1.36


Three Months Ended February 29, 2020

Operating
Income
(Loss)

Earnings
Before Income
Taxes

Income Tax
Expense
(Benefit)

Net Earnings
Attributable to
Controlling
Interest

Earnings per
Diluted
Share

GAAP

$

(1,386

)

$

23,716

$

4,828

$

15,311

$

0.27

Impairment of goodwill and long-lived assets

34,627

34,627

(7,988

)

26,611

0.48

Restructuring and other expense, net

1,376

1,376

(111

)

344

-

Tank replacement program

(2,265

)

(2,265

)

555

(1,710

)

(0.03

)

Gain on consolidation of Samuel Steel Pickling

-

(6,055

)

1,483

(4,572

)

(0.08

)

Non-GAAP

$

32,352

$

51,399

$

10,889

$

35,984

$

0.64

Change

$

44,851

$

50,459

$

13,619

$

36,296

$

0.72

The following provides a reconciliation of adjusted operating income to the most comparable GAAP measure for the Company’s Pressure Cylinders segment for the periods presented.

Three Months Ended

February 28,
2021

February 29,
2020

Operating loss

$

(15,641

)

$

(19,865

)

Impairment of goodwill and long-lived assets

-

33,353

Restructuring and other expense, net

28,435

747

Tank replacement program

-

(2,265

)

Adjusted operating income

$

12,794

$

11,970

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