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Dec 18, 2008

Worthington Industries posts 2Q loss on write-downs, job cuts

Severance costs and write-downs driven by steep drops in steel prices and demand sent Worthington Industries Inc. to a nearly $160 million loss in its second quarter, the company told investors Thursday.

The Columbus-based steel processor said it lost $159.5 million, or $2.02 a share, for the quarter ended Nov. 30, versus a profit of $14.7 million, or 18 cents a share, a year earlier. The loss included a $98 million inventory write-down and a $96.9 million write-down on the non-cash, or goodwill, value of its metal framing business.

Worthington Industries (NYSE:WOR) also absorbed $11.9 million in charges primarily for worker severances – the company has shed hundreds of jobs through idling and closing plants and making across-the-board cuts to its steel-processing work force – and boosted its bad debt reserves by $2.9 million.

Revenue for the quarter, however, grew 4 percent to $745.4 million from $713.7 million a year earlier.

“We anticipated a softening in our markets and some headwinds as we entered the second quarter, but no one predicted the financial collapse that contributed to a massive and swift decline in steel prices and demand,” CEO John McConnell said in a release. “We believe the steps we have announced to close or idle facilities, sell non-core assets, reduce the work force and work schedules and, in general, to cut costs throughout the company are required in this extraordinary period.”

Worthington Industries’ loss for the first half totaled $90.8 million, or $1.15 a share, versus a profit of $34.9 million, or 42 cents a share, in the first six months of last fiscal year.

Revenue for the six months was up 13 percent at $1.66 billion from $1.47 billion a year earlier.

Worthington Industries, one of Central Ohio’s 10 largest publicly held companies, earned $107.1 million on $3.07 billion in revenue in its year ended May 31.

Source : Biz Journals
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