Despite having to tackle various headwinds, Andy Rose, President and CEO of Worthington Industries, said the Ohio-based firm has delivered “solid earnings” in its quarter three (Q3) 2022 financial results.

Worthington on Tuesday (22nd March) reported net sales of $1.4bn and net earnings of $1.4bn for the quarter, which ended 28th February (2022), representing considerable growth from Q3 2021.

Commenting on the company growth, Worthington said the increase was driven by high average selling prices across all of our business and contributions from the acquisition of Tempel Steel company and Shiloh Industries’ US BlankLight® business.

Gross margin for the quarter decreased $21m from the prior year quarter to $143.1m, as improvements in both the consumer and building products businesses were more than offset by the $56m unfavourable variance.

Operating income for the quarter was $37.6m, a decrease of $12.2m from the prior year quarter. Excluding impairment, restructuring and the Nikola-related expense adjustment from both periods, adjusted operating income was down $37m from the prior year quarter.

Rose said, “We delivered solid earnings in the quarter. Steel Processing faced headwinds due to continued steel pricing volatility and choppy but improving automotive demand.”

“Building Products improved across the board with increased contributions from ClarkDietrich and our wholly owned businesses, while Consumer Products benefitted from robust demand and improved margins.”

Quarterly segments

Steel Processing’s net sales totalled $1.1bn, up $548.1m over the comparable prior year quarter. The increase in net sales was driven by higher average selling prices and, to a lesser extent, the impact of acquisitions completed in fiscal 2022.

Adjusted EBIT was down $54.7m from the prior year quarter to $7.1m due to inventory holding losses, estimated to be $24.9m, in the current quarter compared to inventory holding gains of $31.1m in the prior year quarter.

Consumer Products’ net sales totalled $161.7m, up 41%, or $46.6 million, from the comparable prior year quarter due to higher average selling prices and, to a lesser extent, higher volume. Adjusted EBIT was up $12.1 million over the prior year quarter to $26.7 million on the combined impact of higher average selling prices and higher volume, which were partially offset by higher wages.

Building Products’ net sales totalled $132.9 million, up 38%, or $36.6m, from the comparable prior year quarter on higher average selling prices.

Adjusted EBIT of $49.6m was $22.3m more than the prior year quarter, due to higher equity earnings at ClarkDietrich, up $15.5m, and an increase in operating income, up $7.9m, on the favourable impact of higher average selling prices, partially offset by higher wages and freight costs.

Sustainable Energy Solutions’ net sales totalled $31m, down 3%, or $1.1m, from the comparable prior year quarter on lower volume, associated with the May 31, 2021 divestiture of the Liquified Petroleum Gas business in Poland.

Adjusted EBIT was a loss of $2.8m, compared to a profit of $0.1m in the prior year quarter, on the combined impact of higher production costs and unfavourable mix. Both volume and mix in the current quarter were negatively impacted by the ongoing semi-conductor chip shortage.