CHICAGO Worthington Industries Inc.s net income fell sharply in its fiscal fourth quarter, hurt by impairment and restructuring charges totaling $10.8 million as well as lower revenue.
The largest hit was a $4.8-million write-off on its 40-percent stake in a Chinese metal framing joint venture, but the Columbus, Ohio-based company also took a $2.5-million charge for the expected severance costs associated with consolidating the BernzOmatic hand torch manufacturing operation in Medina, N.Y., into the companys Chilton, Wis., facility (amm.com, June 24).
Worthington posted net income of $33.52 million for the three months ended May 31, down 35.6 percent from $52.08 million in the same period last year on net sales that fell 6.8 percent to $704.06 million. The company attributed the revenue dip to lower average selling prices, primarily in its steel processing segment, due to the declining market price of steel.
"We had a solid performance this (fiscal) quarter and an excellent fiscal year," Worthington chairman and chief executive officer John McConnell said. "Excluding impairment and restructuring charges, we achieved the highest annual earnings per share in our history."
The companys steel processing segment posted quarterly operating earnings of $19.28 million, down 40.7 percent from $32.51 million a year earlier on sales that fell 12.8 percent to $374.65 million from $429.625 million. Lower average selling prices negatively impacted sales by $30.9 million and lower direct and toll processing volumes reduced sales by $24.1 million. Toll processing accounted for 44 percent of sales, down from 47 percent a year ago. "There was some softening in steels volumes, largely attributable to one tolling customer," McConnell said.
The company posted full-year net income of $136.44 million, up 18 percent from $115.6 million the previous year on a 3.1-percent increase in sales to more than $2.61 billion.