On Sept. 25, steel-processing expert Worthington Industries
- Materials are getting more expensive, and Worthington's customers demand lower product prices -- hardly an ideal profit-generation setup. The effects are showing up as thinner margins and lower net income.
- The metal framing segment came up short, losing $8 million on an operational basis this quarter after making a $17.8 million operating profit last year. Worthington is going to close a few framing plants to save $9 million a year going forward, but the restructuring itself will cost about $15 million.
- Worthington prides itself on its employee and customer relationships, just like Nucor
(NYSE:NUE) , which is one of its larger steel suppliers. Is that good enough to set Worthington apart from its competitors? Your fellow CAPS Fools don't think so, giving Worthington a middle-of-the-road three-star rating. Do you agree? Disagree? Head on over to Motley Fool CAPS and share your thoughts right now!
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q1 2008 |
Q1 2007 |
Change |
|
|---|---|---|---|
|
Sales |
$759.0 |
$778.7 |
(2.5%) |
|
Net Profit |
$20.2 |
$43.2 |
(53.3%) |
|
EPS |
$0.24 |
$0.48 |
(50%) |
|
Diluted Shares |
85.0 |
89.4 |
(4.9%) |
Get back to basics with the income statement.
Margin Checkup
|
Q1 2008 |
Q1 2007 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
10.4% |
15.6% |
(5.2) |
|
Operating Margin |
2.6% |
7% |
(4.4) |
|
Net Margin |
2.7% |
5.6% |
(2.9) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q1 2008 |
Q1 2007 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$78.7 |
$17.0 |
362.6% |
|
Accounts Rec. |
$384.2 |
$400.0 |
(3.9%) |
|
Inventory |
$445.2 |
$555.0 |
(19.8%) |
|
Liabilities |
Q1 2008 |
Q1 2007 |
Change |
|---|---|---|---|
|
Accounts Payable |
$284.3 |
$288.9 |
(1.6%) |
|
Long-Term Debt |
$245.0 |
$245.0 |
(0%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q1 2008 |
Q1 2007 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$74.8 |
($103.7) |
N/A |
|
Capital Expenditures |
$16.5 |
$16.8 |
(1.9%) |
|
Free Cash Flow |
$58.3 |
($120.5) |
N/A |
|
$21.8 |
$41.3 |
(47.3%) |
Free cash flow is a Fool's best friend.
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