Metal processor Worthington Industries (WOR - Snapshot Report) saw its profit drop in fourth quarter fiscal 2013 (ended May 31) as it had to take sizable impairment and restructuring charges. Worthington logged earnings of 46 cents a share in the quarter, down from 75 cents earned a year ago. Profit slipped 36% year over year to $33.5 million.
Barring charges and inventory holding losses, earnings came in at 62 cents a share, falling short of the Zacks Consensus Estimate by a nickel.
Revenue fell 7% year over year to $704.1 million and trailed the Zacks Consensus Estimate of $715 million. The top line was hurt by lower average selling prices due to falling market price of steel.
Gross margin fell to 15.8% from 16.1% a year ago. Lower volume contributed to the decline.
For the full year, profit climbed 18% year over year to $136.4 million or $1.91 per share. Adjusted earnings (excluding items) were $2.10 per share, missing the Zacks Consensus Estimate by a penny.
Revenues for fiscal 2013 rose 3% year over year to $2,612.2 million, aided by acquisitions. It, however, missed the Zacks Consensus Estimate of $2,631 million.
Revenues from the core Steel Processing division dipped 13% year over year to $374.6 million in the fourth quarter on lower pricing and direct and toll processing volumes. Volumes fell 12% year over year to 703 units in the quarter.
Worthington’s Pressure Cylinders segment sales rose 7% year over year to $252.3 million, buoyed by the acquisition of leading atmospheric tanks and pressure vessels maker Westerman Companies and steel and fiberglass tanks maker Palmer. Volumes went down 3% to 23,363 units.
The Engineered Cabs segment, which consists of the operations of Angus Industries Inc. (acquired in late 2011), posted revenues of $55.1 million in the quarter. The division’s results were affected lower volumes due to production delays and weak demand.
Worthington ended fiscal 2013 with cash and cash equivalents of $51.4 million, up 25% year over year. Long-term debt increased 58% year over year to $406.2 million. Operating cash flows for the full year increased 57% year over year to $273 million.
Worthington’s board, on Jun 26, approved 2 cents per share increase in its quarterly dividend to 15 cents per share. The revised dividend is payable on Sep 27, 2013, to shareholders of record as of Sep 13, 2013.
Worthington is positive about the new fiscal year and expects growth both organically and from its acquisitions. The company is seeing strength in automotive market and envisions some improvement in commercial construction. Worthington expects its engineered cabs business to gain from the full implementation of the transformation to optimize and improve operations.
Worthington is engaged in processing steel for application in the automotive, construction, hardware, agricultural, aerospace and other industries. The company makes a range of processed steel items, pressure cylinders (including oxygen and helium tanks and hand torches), metal framing products, racks, shipping pallets, airbrake tanks and consumer products. The company operates 83 facilities throughout 11 nations.
Worthington currently retains a Zacks Rank #3 (Hold).
Other companies in the metal processing and fabrication industry having favorable Zacks Rank are NSK Ltd. , Kaiser Aluminum Corporation (KALU - Snapshot Report) and Northwest Pipe Co. (NWPX - Snapshot Report) . While NSK holds a Zacks Rank #1 (Strong Buy), Kaiser Aluminum and Northwest Pipe retain a Zacks Rank #2 (Buy).