Worthington Industries looks to optimize portfolio; debt paydown in Q2

By Jennifer Lanning Drey

Savannah, Ga., March 31 - Worthington Industries, Inc. continues to evaluate and optimize its portfolio of businesses by divesting assets that no longer meet its goals for margin and return on capital while investing more aggressively in the businesses that do, Andy Rose, Worthington's chief financial officer, said during a Thursday conference call held to discuss its results for the third quarter of fiscal 2011.

"The combination of steady economic improvement combined with a more efficient portfolio of businesses provides a solid platform for earnings growth," Rose said.

Worthington reported third-quarter net sales of $569.4 million and net earnings of $26.3 million. The figures compared with net sales of $451.1 million and a net loss of $17.7 million in the third quarter of 2010.

The company generated $52.6 million of free cash flow in the third quarter, compared with cash used by operations of $14.1 million in the third quarter of 2010.

Debt reduction

Cash from operations and lower working capital needs allowed Worthington to pay down debt by $43 million from the end of the second quarter. As a result, the company had total debt of $331 million at Feb. 28, Rose reported.

At quarter end, the company's liquidity included $50 million of cash and more than $400 million in available debt capacity, he said.

During the third quarter, Worthington invested $5.1 million in property, plant and equipment and paid $19.5 million, net of cash acquired, for a 60% ownership interest in Nitin Cylinders Ltd.

"The company continues on a good trajectory. Beyond solid results, we have taken several positive actions aligned with achieving our goals of increasing our margins while decreasing the volatility of our earnings," John McConnell, Worthington's chief executive officer, said Thursday.

Worthington is a diversified metal processing company based in Columbus, Ohio.

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