) saw its profit climb in first-quarter fiscal 2014 (ended Aug
31, 2013) on strength across its Steel Processing and Pressure
Cylinders divisions and contributions of its joint ventures. It
raked in a profit of $54.6 million or 76 cents per share in the
quarter, a roughly 61% year over year surge. The Ohio-based
company's shares gained roughly 3% the day after the earnings
announcement. The stock is up around 32% so far this year.
Barring one-time items, including Tailor Welded Blanks (TWB)
joint venture write-up and tax-related gains, earnings came in at
58 cents a share, meeting the Zacks Consensus Estimate. The
company booked a $4.5 million gain associated with favorable tax
adjustments related to its purchase of an additional 10% interest
in TWB. Worthington now holds a 55% stake in TWB. Joint ventures,
including TWB, contributed $27 million in equity earnings in the
Revenues rose around 4% year over year to $692.3 million and
beat the Zacks Consensus Estimate of $689 million. The top line
was driven by higher volumes stemming from recent acquisitions,
which more than offset lower pricing.
Gross margin rose to 16% from 14.1% a year ago. The
improvement mainly resulted from contributions of recent
acquisitions, better product mix in the Pressure Cylinders
segment and reduced inventory holding losses in the Steel
Revenues from the core Steel Processing division rose 5% year
over year to $402.4 million in the reported quarter as lower
selling prices were more than offset by higher volumes from TWB
consolidation and sales gain across agriculture and heavy truck
markets. Volumes rose nearly 4% year over year to 720 tons in the
Worthington's Pressure Cylinders segment sales went up 12%
year over year to $216.9 million, boosted by acquisitions of
leading atmospheric tanks and pressure vessels maker Westerman
Companies and steel and fiberglass tanks maker Palmer. Volumes,
however, fell 3% to 20,847 units.
The Engineered Cabs segment struggled in the quarter, hit by
weak volumes from major customers. The division posted revenues
of $48.5 million, down 25% year over year. Lower selling prices
also affected the unit's results.
Worthington ended the quarter with cash and cash equivalents
of $121 million, a nearly four-fold year over year rise.
Long-term debt fell marginally year over year to $407 million.
Operating cash flows for the quarter jumped 33% year over year to
roughly $94.5 million. Worthington bought back 880,500 shares for
$30.5 million during the first quarter.
Worthington remains positive about fiscal 2014 and continues
to expect growth both organically and from acquisitions. The
company is seeing strength in the automotive space and
improvements in commercial construction and agriculture markets.
Worthington will remain committed to explore fresh opportunities
and drive improvement and optimization across its businesses.
Worthington currently retains a Zacks Rank #2 (Buy).
Other companies in the metal processing and fabrication
industry having favorable Zacks Rank are
CIRCOR International, Inc.
Northwest Pipe Co.
). All of them hold a Zacks Rank #1 (Strong Buy).
CIRCOR INTL (CIR): Free Stock Analysis Report
NSK LTD -UN ADR (NPSKY): Get Free Report
NORTHWEST PIPE (NWPX): Free Stock Analysis
WORTHINGTON IND (WOR): Free Stock Analysis
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