Financial Performance - Net sales for the three months ended February 28, 2023, were $1,103,322, a decrease of 20% compared to $1,378,235 for the same period in 2022[19] - Operating income for the three months ended February 28, 2023, was $30,095, compared to $37,611 for the same period in 2022, representing a decrease of 20%[19] - Net earnings attributable to controlling interest for the three months ended February 28, 2023, were $46,325, down 17.7% from $56,342 in the same period in 2022[19] - Worthington Industries reported net earnings of $111,135,000 for the three months ended February 28, 2023, compared to $136,346,000 in the same period of 2022[36] - Net earnings attributable to controlling interest for the nine months ended February 28, 2023, were $126,625,000, compared to $299,134,000 for the same period in 2022, reflecting a decrease of approximately 57.6%[61] - Basic earnings per share attributable to controlling interest for the three months ended February 28, 2023, were $0.95, down from $1.13 in the same period of 2022, representing a decline of about 15.9%[61] - Adjusted EBIT for the three months ended February 28, 2023, was $71,320,000, compared to $84,598,000 for the same period in 2022, reflecting a decrease of about 16%[66][67] - For the nine months ended February 28, 2023, the adjusted EBIT was $218,953,000, compared to $405,545,000 for the same period in 2022, showing a decline of approximately 46%[69][70] Cash Flow and Liquidity - Cash and cash equivalents increased to $267,244 as of February 28, 2023, from $34,485 as of May 31, 2022[17] - Net cash provided by operating activities for the three months ended February 28, 2023, was $182,151, significantly higher than $74,190 for the same period in 2022[23] - Net cash provided by operating activities was $396.1 million, a significant improvement from net cash used of $94.7 million in the prior year, due to a $466.2 million decrease in net operating working capital[166] - As of February 28, 2023, the company had $175.0 million available under its AR Facility and $500.0 million under its Credit Facility, with no outstanding borrowings[173] Assets and Liabilities - Total current liabilities decreased to $664,809 as of February 28, 2023, from $932,261 as of May 31, 2022, a reduction of approximately 28.7%[17] - Total assets decreased to $3,497,672 as of February 28, 2023, from $3,643,023 as of May 31, 2022, reflecting a decline of about 4%[17] - The fair value of long-term debt was $638,163,000 as of February 28, 2023, down from $684,830,000 as of May 31, 2022[100] Dividends and Shareholder Returns - The company reported a cash dividend declared per share of $0.31 for the three months ended February 28, 2023, compared to $0.28 for the same period in 2022[19] - The Board declared a quarterly dividend of $0.31 per share, payable on June 29, 2023[170] - The company has maintained a consistent dividend payment since going public in 1968, although future payments are not guaranteed[175] Segment Performance - For the three months ended February 28, 2023, net sales totaled $1,103,322,000, a decrease from $1,378,235,000 in the same period of 2022, with Steel Processing segment sales at $757,007,000[30] - The Steel Processing segment reported direct sales of $722,328,000 for the three months ended February 28, 2023, down from $1,015,716,000 in the prior year[30] - Steel Processing segment net sales decreased by $295.6 million, primarily due to lower average selling prices as steel prices declined significantly[129] Costs and Expenses - Gross margin for the nine months ended February 28, 2023, was $418,944, down from $547,093 in the same period of 2022, reflecting a decline of approximately 23.4%[19] - Selling, general and administrative expenses increased by $22.4 million to $294.9 million, representing 8.6% of net sales[150] - Interest expense for the nine months ended February 28, 2023, was $22.2 million, down $1.0 million from the prior year due to higher interest income[153] Impairments and Restructuring - Worthington Industries recognized a pre-tax impairment charge of $484,000 during the three months ended February 28, 2023, related to impaired assets at its Building Products facility[37] - The company incurred separation costs of $6,347 for the three months ended February 28, 2023, with total restructuring and other expenses amounting to $824[19] - Separation costs incurred in connection with the anticipated separation amounted to $15,593,000 for the nine months ended February 28, 2023[71] Market Conditions - Hot-rolled steel prices decreased to $720 per ton for the three months ended February 28, 2023, down $701 from $1,421 per ton in the same period of 2022[115] - The average quarterly market price per ton of hot-rolled steel in fiscal 2023 was $813, significantly lower than $1,588 in fiscal 2022, indicating a decline of approximately 48.8%[119] - North American vehicle production increased by 7% year-over-year, with 3,448,000 vehicles produced in the three months ended February 28, 2023[115] Acquisitions and Investments - The acquisition of Level5® Tools, LLC was completed for a total purchase price of $59,321,000, which includes a potential earnout of up to $25,000,000 based on future earnings targets[72] - The company recorded a pre-tax benefit of $1,050,000 in SG&A to reverse previously accrued compensation expense related to the Level5 acquisition[68] Risk Management - The company is utilizing derivative financial instruments to manage risks related to interest rates, foreign currency exchange rates, and commodity prices[80] - The company has established strict counterparty credit guidelines to manage counterparty credit risk associated with derivative financial instruments[84] - The company does not use derivative financial instruments to manage foreign currency exchange rate risk, relying instead on contracts that change in value with exchange rates[85] Legal and Compliance - The company is involved in various legal proceedings but does not expect any material adverse effects on its financial position or operations[182] - Risk factors have not changed significantly from those disclosed in the 2022 Form 10-K, which could materially affect the company's financial condition and future results[183]
Worthington Industries(WOR_V) - 2023 Q3 - Quarterly Report