Worthington Industries ends quarter with reduced debt of $604 million

By Lisa Kerner

Charlotte, N.C., Sept. 24 – Worthington Industries, Inc. ended its fiscal first quarter of 2016 on Aug. 31 with total debt of about $604 million and cash of about $19 million. The company had about $19 million drawn on its $500 million revolving credit facility at quarter’s end.

Total debt was down about $67 million from May 31 due to lower short-term borrowings, according to a news release.

Worthington held its earnings conference call on Thursday.

Declining steel prices hampered earnings in steel processing, and oil and gas equipment sales were weak, resulting in “aggressive cost reductions” to maintain profitability, according to chief executive officer John McConnell.

Financial highlights

Net sales for the quarter were down 12% year over year at about $758 million due to lower volume in all business segments, along with lower average selling prices in steel processing as a result of a decline in steel prices.

Worthington’s net earnings were also down year over year at about $31 million, or $0.48 per diluted share, compared to net earnings of $44.2 million, or $0.63 per diluted share, for the year-ago quarter.

Lower volume attributed to a decline in gross margin to $16.5 million from $113 million.

Operating income for the quarter was down about $21 million year over year at $31 million. The decrease was attributed to higher impairment and restructuring charges, according to the earnings release.

The Columbus, Ohio-based metal processing company repurchased 1 million common shares during the quarter for $27.6 million, or an average price of $27.58.

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