CHICAGO When construction
activity finally heats up, it should be a boon for Worthington
Industries Inc.s steel business and its metal framing and
metal ceiling grid joint ventures, according to company
"Building and construction
(have) shown signs of life, though still much more on the
residential side than commercial," president Mark A. Russell
said during a March 21 earnings call.
"We have a fair amount of
leverage" heading into the 2013 construction season, vice
president and chief financial officer Andy Rose added.
Worthington still owns 25
percent of West Chester, Ohio-based metal framing business
Clarkwestern Dietrich Building Systems LLC, commonly known as
ClarkDietrich, and "that business is making money once again,"
"We still have exposure in our
steel (processing and distribution) company," he added. "Our
sales exposure there is around 11 percent. But that used to
represent over 20 percent of the steel companys volume,
so theres a significant upside potential there."
The Malvern, Pa.-based
Worthington Armstrong Venture (Wave), which makes metal ceiling
grids, also stands to benefit from construction growth. "The
interesting thing thats happened to Wave in the downturn
is their business mix had shifted to 80-percent remodeling work
as opposed to new construction. But when new construction comes
back, we would expect Wave to benefit," Rose said.
"Construction is traditionally
our second-largest market," according to Russell. "If we were a
4-cylinder engine, weve been running on half or one
cylinder down. When construction comes back, it should give us
substantial upside in all of the businesses that Andy
An uptick could also benefit the
Columbus, Ohio-based companys cylinders division because
new housing tracts in rural areas often use propane tanks,
chairman and chief executive officer John P. McConnell
Worthington, which is tracking
indicators such as the Architectural Billings Index, sees "a
lot of healthy signs out there," McConnell said. "The
residential and multifamily strength is well under way now, and
the question now turns to commercial. ABI is evidence of some
activity there. So we are cautiously optimistic."