Financial Performance - Net sales for the three months ended August 31, 2023, were $1,193,256, a decrease of 15.3% compared to $1,408,665 for the same period in 2022[19] - Net earnings attributable to controlling interest for the three months ended August 31, 2023, were $96,106, up 50.0% from $64,082 in the same period of 2022[19] - Earnings per common share attributable to controlling interest increased to $1.97 for the three months ended August 31, 2023, compared to $1.32 in the prior year[19] - The company reported a comprehensive income of $94,295 for the three months ended August 31, 2023, compared to $44,782 in the same period of 2022, an increase of 110.5%[22] - Adjusted EBIT for the three months ended August 31, 2023, was $136,419, compared to $112,333 for the same period in 2022, reflecting an increase of approximately 21.5%[63][64] Assets and Liabilities - Total current assets decreased to $1,691,856 as of August 31, 2023, from $1,868,337 as of May 31, 2023, a decline of 9.4%[17] - Total liabilities decreased to $1,574,776 as of August 31, 2023, from $1,829,290 as of May 31, 2023, a reduction of 13.9%[17] - Total assets as of August 31, 2023, were $3,476,692, down from $3,650,918 as of May 31, 2023, indicating a decrease of about 4.8%[67] - Total long-term debt as of August 31, 2023, was $298,083, a decrease from $689,718 on May 31, 2023[43] Cash Flow and Dividends - Cash and cash equivalents at the end of the period were $201,009, down from $454,946 at the beginning of the period, a decrease of 55.8%[24] - The company reported cash dividends declared of $16,081,000 during the three months ended August 31, 2023[48] - The Board declared a quarterly dividend of $0.32 per share payable on December 15, 2023, to shareholders of record on November 15, 2023[150] Separation and Spin-off Plans - The company incurred separation costs of $6,035 related to the anticipated separation of its Steel Processing business[29] - The anticipated separation is expected to be completed by early calendar 2024, subject to market conditions and regulatory approvals[28] - The planned spin-off of Worthington Steel is intended to be a tax-free distribution of 100% of its common shares to Worthington Industries' shareholders, subject to various conditions[101] Segment Performance - Steel Processing segment direct sales were $845,363, down 15.7% from $1,002,135 year-over-year[30] - Steel Processing segment net sales were $881.3 million, representing 73.9% of consolidated net sales, down from $1,038.9 million in the prior year[125] - Adjusted EBIT for Steel Processing was $78.0 million in Q1 FY2024, an increase of $43.1 million compared to Q1 FY2023, primarily due to favorable direct spreads[143] Market Conditions and Risks - The average market price of hot-rolled steel in the first quarter of fiscal 2024 was $879 per ton, down from $978 per ton in the same quarter of fiscal 2023[119] - Inflation and high interest rates continue to impact input costs and overall SG&A expenses, with the U.S. Federal Reserve raising interest rates to the highest level in over 15 years[114] - The UAW strikes against the Detroit Three automakers could have material adverse effects on the company's business, financial position, results of operations, and cash flows, as well as the planned Separation[163] Stock and Share Repurchase - The company purchased a total of 139,562 common shares during the three months ended August 31, 2023, at an average price of $65.72 per share[166] - As of August 31, 2023, there are 6,065,000 common shares available for repurchase under the publicly announced repurchase authorizations[170] - The Board authorized the repurchase of up to 10,000,000 common shares, with 3,935,000 common shares repurchased since the latest authorization[170] Other Financial Metrics - The estimated annual effective income tax rate for the three months ended August 31, 2023, was 23.3%, slightly down from 23.9% in 2022[56] - Selling, general and administrative expenses rose by $8.9 million to $112.3 million, accounting for 9.4% of net sales, compared to 7.3% in the previous year[129] - Interest expense decreased by $5.5 million to $3.1 million, primarily due to higher interest income and lower long-term debt levels[134]
Worthington Industries(WOR_V) - 2024 Q1 - Quarterly Report