Steel Mills

Sales Down in all Segments at Worthington Industries
Written by Sandy Williams
September 24, 2015
Worthington Industries reported net earnings of $31.4 million for first quarter 2016 ending August 31, 2015. Earnings were down from $44.2 million in Q1 2015 but up from Q4 FY 2015’s $28.9 million. Net sales declined 12 percent to $758.1 million, driven by lower volume in all business segments and lower average steel pricing.
Gross margin dropped $15.4 million year over year to $113.0 million as a result of low volumes and inventory holding losses in Steel Processing.
“The Company generated solid earnings and free cash flow in our first quarter despite some challenging end markets,” said John McConnell, Chairman and CEO. “Declining steel prices continued to hamper our earnings in Steel Processing but our team performed well generating steady volume led by the heavy-duty truck market. Cylinders saw good results in Industrial and Consumer Products, while Oil and Gas Equipment sales were weak resulting in aggressive cost reductions to maintain profitability. Our joint ventures continued to perform well.” McConnell added, “The consolidation plan in Engineered Cabs will be completed by the end of this month positioning it for better results.”
Steel Processing net sales were down 11 percent y/y due to lower toll volume and average selling price.
Pressure Cylinders sales fell 10 to $224.4 million as volumes decreased for Oil and Gas Equipment.
Engineered Cabs’ net sales plummeted 22 percent y/y due to the January sale of Advanced Component Technologies and lower volume in the construction and agricultural markets. Operating loss of $9.3 million was due to lower volume and impairment and restructuring charges, including costs associated with the pending closure of the Engineered Cabs segment in Florence, SC.
“In the face of challenging markets, we are pleased with the Company’s performance and we are optimistic about our momentum going into the next quarter,” McConnell said. “However, we are mindful of the uncertainty of the macro economic issues and we remain focused on the things we can control. We re-launched our lean Transformation process across the Company and we have already seen a positive impact from several Kaizen events. Our innovation teams are helping us launch new consumer products in Cylinders with more in development.”

Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills

Hyundai still on for Louisiana steel mill despite US raid at Georgia battery plant
Hyundai has reaffirmed its commitment to build a steel plant in Louisiana following a US government immigration raid at its battery facility in Georgia.

Hybar lowers output forecast, owning up to EAF startup delay
Hybar LLC’s rebar mill in Osceola, Ark., is now melting scrap and will soon be fulfilling orders, according to CEO David Stickler, despite a six-to-eight-week delay caused by commissioning the world’s first Aura electrical system.

Steel Dynamics guides to more metal, more money in Q3
Steel Dynamics Inc. is bullish heading into the close of the third quarter, with all three of its operating segments tracking higher.

AHMSA opens doors to potential buyers as $1.3B asset auction nears
AHMSA is opening its doors to potential buyers to tour its steel plant and mining operations in northern Mexico in preparation for the next stage of its bankruptcy process: the auction of its assets.

USW seeks clarity on USS plans for Granite City Works
The United Steelworkers union has asked U.S. Steel to elaborate on its Granite City Works plans following reports that the steelmaker is ending processing at the facility.