Worthington Industries, Inc.
) first-quarter fiscal 2013 (ended August 31) earnings of 49 cents
per share beat the Zacks Consensus Estimate by a couple of cents
and exceeded the year-ago quarter's earnings of 35 cents. Profit
shot up 32% year over year to roughly $34 million, boosted by the
synergies of recent acquisitions and increased volume.
Revenues and margins
Revenues climbed 11% year over year to $666 million, beating the
Zacks Consensus Estimate of $659 million. The growth was led by
higher volume and acquisitions, partly masked by lower average
selling prices in the Steel Processing division. Strong volume was
witnessed in the Pressure Cylinders business.
The takeover of Angus Industries (acquired in late 2011) and
acquisitions in the Pressure Cylinders segment drove volume growth
in the first quarter. Worthington, which has made a host of
acquisitions over the last few years, recently snapped up leading
atmospheric tanks and pressure vessels maker Westerman Companies
for $70 million. The acquisition fits well with the company's
growth strategy as it broadens its footprint in the global energy
and alternative fuels markets
Gross margin improved to 14.1% in the quarter from 11.9% year ago,
benefiting from acquisitions and favorable mix. Operating income
jumped nearly 58% year over year to $33.4 million, aided by lower
net losses from impairments, restructuring charges and joint
Revenue from the company's larger Steel Processing segment dipped
7% year over year to $380 million on lower steel pricing. Volumes
declined marginally to 695 tons in the quarter.
The company's Pressure Cylinders division had yet another healthy
quarter with revenues soaring 15% to $194.2 million thanks to
strong volume growth and contributions of acquisitions. Volumes
surged 47% to 21,469 units.
The Engineered Cabs unit, which consists of the operations of Angus
Industries, delivered sales of $64.5 million in the quarter.
Worthington exited the quarter with cash and cash equivalents of
$30.5 million, down 17% year over year. Total debt remained flat
year over while declined 14% sequentially to $459.6 million. During
the quarter, the company used the net proceeds from the issue of
$150 million of 12-year unsecured Senior Notes to repay a portion
of its debt.
While Worthington is seeing weakness across automotive, agriculture
and mining markets, it hopes to continue its earnings momentum on
the back of acquisitions. The Westerman acquisition places it well
to capture the opportunities to boost its oil and energy business
around the Utica and Marcellus shale formations, where Westerman
has a broad customer base.
Worthington, which competes with
AK Steel Holding Corporation
) among others, retains a short-term Zacks #3 Rank (Hold).
AK STEEL HLDG (AKS): Free Stock Analysis Report
WORTHINGTON IND (WOR): Free Stock Analysis
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