Financial Performance - Net sales for fiscal 2021 were $3,171.4 million, an increase of 3.7% from $3,059.1 million in fiscal 2020[175]. - Operating income rose to $167.5 million in fiscal 2021, up $145.0 million from $22.5 million in fiscal 2020, driven by improved direct spreads in the Steel Processing segment[182]. - Net earnings attributable to controlling interest reached $723.8 million in fiscal 2021, significantly higher than $78.8 million in fiscal 2020[182]. - Total current assets increased to $1,968.0 million in fiscal 2021 from $983.2 million in fiscal 2020, reflecting a substantial growth in liquidity[175]. - Total debt remained relatively stable at $710.5 million in fiscal 2021 compared to $699.7 million in fiscal 2020[175]. - The company declared cash dividends of $55.1 million in fiscal 2021, slightly increasing from $53.7 million in fiscal 2020[175]. - The average diluted shares outstanding decreased to 53,917 thousand in fiscal 2021 from 55,983 thousand in fiscal 2020[175]. - The company experienced a significant reduction in impairment and restructuring charges, down $22.9 million from the prior year[182]. - The estimated annual effective tax rate decreased to 19.6% from 25.1% in fiscal 2020, influenced by significant pre-tax income increases and losses from divestitures[32]. Acquisitions and Divestitures - In January 2021, the company acquired PTEC Pressure Technology GmbH for $10.8 million, enhancing its Pressure Cylinders segment[29]. - In June 2021, the company acquired Shiloh Industries U.S. BlankLight® business for approximately $105.0 million, expanding its laser welded products capacity[34]. - The company completed several strategic transactions, including the acquisition of General Tools & Instruments Company for approximately $120.4 million and the acquisition of PTEC Pressure Technology GmbH for about $10.8 million[187]. - The company sold its oil & gas equipment business in January 2021, resulting in a pre-tax loss of $27.7 million[30]. - The company also divested its LPG fuel storage business for net proceeds of approximately $6.0 million, resulting in a pre-tax loss of $11.0 million[187][189]. Market and Customer Insights - The company served approximately 760 customers in Steel Processing and around 4,400 customers in Pressure Cylinders during fiscal 2021[24][49]. - Sales to one customer in the automotive industry represented 11.2% of consolidated net sales in fiscal 2021[24]. - The automotive market accounted for approximately 57% of net sales in the Steel Processing segment, with North American vehicle production increasing by 11% in fiscal 2021[188][196]. - Demand for most products remained strong throughout fiscal 2021, with sales typically peaking in the fourth quarter[62]. - The COVID-19 pandemic has caused significant volatility in demand for the company's products, impacting financial position and cash flows[79]. Operational Insights - The company operates 68 manufacturing facilities across 22 states and 8 countries as of May 31, 2021[20]. - Worthington operates four consolidated and five unconsolidated joint ventures to develop new products and expand markets[64]. - The company is obligated to make aggregate operating and financing lease payments of $41.0 million and $7.3 million, respectively, under lease agreements as of May 31, 2021[114]. - The company operates 21 manufacturing facilities and 9 warehouses, totaling approximately 10,000,000 square feet, with 8,800,000 square feet dedicated to manufacturing and distribution[142]. - The company has a total of 47 manufacturing facilities operated by its consolidated and unconsolidated joint ventures as of May 31, 2021[146]. Challenges and Risks - The company faces intense competition, which may lead to decreased demand, market share, and pricing pressures[84]. - Financial difficulties and bankruptcy filings by customers could negatively impact the company's sales and financial results[85]. - Fluctuations in raw material prices, particularly steel, could significantly affect operating results and financial performance[87]. - A significant loss of business from key customers, especially in the automotive sector, could adversely affect sales and financial results[96]. - Increased competition from both domestic and foreign companies could negatively impact financial results and market share[101]. - The company faces challenges in attracting and retaining qualified personnel, which could impair operations and competitiveness[122]. - Business disruptions from various factors, including severe weather and pandemics, could adversely impact operations and financial results[109]. Shareholder and Capital Management - The company announced a share repurchase authorization covering 5,618,464 common shares on March 24, 2021[33]. - Worthington Industries has a history of strategic acquisitions and mergers, enhancing its market position[155]. - The company’s Board of Directors authorized the repurchase of up to 10 million shares of common stock, reflecting a commitment to returning value to shareholders[189]. - Worthington Industries had 6,592 registered shareholders as of July 23, 2021[165]. - The company has paid a dividend every quarter since becoming public in 1968, although future payments are not guaranteed[166]. Capital Expenditures and Investments - Total capital expenditures for the five-year period ended May 31, 2021, were approximately $862.4 million, indicating a capital-intensive business model[114]. - Capital expenditures, including acquisitions, were $211.8 million in fiscal 2021, up from $126.3 million in fiscal 2020[175]. - Future investment activities may be reduced or eliminated based on economic conditions, with no assurance that acquisition opportunities will arise[214]. - Cash outflow for Pressure Cylinders included $8.8 million for new production lines and $3.8 million for equipment updates[213]. Environmental and Regulatory Considerations - The company is subject to various federal, state, local, and foreign environmental regulations, which may lead to substantial operating costs and potential liabilities[126]. - Risks associated with foreign operations include potential adverse changes in local political climates and economic conditions, which could negatively impact international financial results[110]. - Changes in global data privacy laws, such as GDPR, may increase operational costs and impact the company's ability to transfer data across borders[136].
Worthington Industries(WOR_V) - 2021 Q4 - Annual Report