2022 ended on a positive note for Worthington Industries, with the manufacturing company reporting net sales of $1.5bn and net earnings of $80.3m in its fourth quarter (Q4) fiscal financials.

Described by the Ohio-based firm’s President and CEO Andy Rose as ‘strong’, the results represent a 55% increase over the comparable quarter in 2021, primarily driven by higher average selling prices across all segments and contributions from acquisitions.

“We finished our 2022 fiscal year with strong results in the fourth quarter and delivered record earnings per share for the full year,” Rose commented.

The quarter did, however, see gross margin decrease $58.4n from the prior year quarter to $167.7m and operating income for the quarter of $65.4m, down from $45.1m. Worthington notes that margins in Steel Processing were negatively impacted by an estimated $92.8m unfavourable swing related to inventory holding losses in the quarter.

At quarter-end, total debt of $744.6m was up $34.1m from 31st May 2021. The company had $34.5m of cash at quarter end, a decrease of $605.8m from 31st May 2021, primarily due to acquisitions and an increase in working capital associated with higher average steel prices.

Rose continued, “Steel Processing was negatively impacted by inventory holding losses in the fourth quarter, but our Building Products and Consumer Products segments both continued to perform exceptionally well, as our investments in new product development and production capacity are positively impacting our results.”

“I am very pleased with the way our teams continue to execute in a challenging environment, and I want to thank all our employees for their continued hard work and commitment to our customers.”

Quarterly segment results

Steel Processing’s net sales totals $1.1bn, up $464.6m, over the prior year quarter. The increase in net sales was driven by high average selling prices and, to a lesser extent, the impact of acquisitions.

Adjusted EBIT was down $81.3m from the prior year quarter to $16.5m, as the favourable impact of acquisitions and higher selling prices was more than offset by inventory holding losses, estimated to be $42.3m in the current quarter compared to estimated inventory holding gains of $50.5 million in the prior year quarter.

Consumer Products’ net sales totalled $186.2m, up 18%, or $28.7m, over the prior year quarter on higher selling prices, partially offset by an unfavourable shift in product mix.

Adjusted EBIT totalled $29.5m in the current quarter, an increase of $10.5m over the prior year quarter driven primarily by the favourable impact of higher selling prices.

Building Products’ net sales totalled $172.9m, up 40%, or $49.2m, over the prior year quarter on higher selling prices and an improved product mix.

Adjusted EBIT increased $22.4m over the prior year quarter to $63.6m, on higher contributions of both operating and equity earnings, up $11.5m and $10.8m respectively, on the impact of higher selling prices, an increase in equity earnings at ClarkDietrich and favourable product mix.

Sustainable Energy Solutions’ net sales totalled $41.3m, up 1%, or $0.4m, over the comparable prior year quarter on higher selling prices, partially offset by the divesture of the LPG business in Poland.

Adjusted EBIT reflected a loss of $1.7m, compared to a profit of $3.9m in the prior year quarter, driven by unfavourable product mix and increased costs. Adjusted ABIT in the prior year quarter excludes a $10.3m loss on the sale of the LPG business.

Outlook

Looking ahead at what’s to come, Rose continued, “We are well positioned heading into our new fiscal year with solid business strategies to drive growth through transformation, innovation and M&A.”

“While the business environment continues to be challenging and there is some level of economic uncertainty, our teams are performing at a high level, and we remain optimistic about demand in our key end markets and our ability to execute effectively going forward.”