SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - K
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/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended May 31,1996 Commission File No. 0-4016
WORTHINGTON INDUSTRIES, INC.
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(Exact name of Registrant as specified in its Charter)
DELAWARE 31-1189815
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(State of Incorporation) (IRS Employer Identification No.)
1205 Dearborn Drive, Columbus, Ohio 43085
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(Address of principal executive offices) (Zip Code)
(614) 438-3210
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(Registrant's telephone number, including area code)
Securities Registered Pursuant To Section 12(b) of the Act: None
Securities Registered Pursuant To Section 12(g) of the Act:
Title of each class:
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Common Stock, $.01 par value (90,826,161 shares outstanding at August 8, 1996)
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES X NO __
The aggregate market value of the voting stock held by non-affiliates of
the Registrant at August 8, 1996 was $1,398,150,000 (computed by reference to
the closing price for such shares on such date).
Portions of the Registrant's Annual Report to Shareholders for the fiscal
year ended May 31, 1996 are incorporated by reference into Part I and Part II.
Portions of the definitive proxy statement furnished to shareholders of the
Registrant in connection with the annual meeting of shareholders to be held on
September 19, 1996 are incorporated by reference into Part III.
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PART I
Item 1. - Business.
Worthington Industries, Inc. was initially incorporated in Ohio in 1955.
It reincorporated in Delaware in 1986 through a statutory merger. Worthington
Industries, Inc. and its subsidiaries are herein referred to as the "Company."
The Company's operations are grouped into three segments: processed steel
products, custom products and cast products. The Company's sales for its
fiscal year ended May 31, 1996 were $1.48 billion.
The Company, through its subsidiaries, is the largest independent flat
rolled steel processor in the United States. The Company's steel processing
operations do not make steel, but rather, they purchase it from steel
producers and then process it to exact specifications for over 1,700
industrial customers primarily in the automotive, automotive supply,
appliance, electrical, communication, construction, office furniture, office
equipment, agricultural, machinery and leisure time industries. The Company
believes it offers the widest array of steel processing services in the
industry, which include slitting, roller leveling, cold reduction, edge
rolling, blanking, coating, annealing, pickling and other services. The
Company currently operates ten steel processing facilities (with its eleventh
near completion) and is a partner in three steel processing joint ventures,
most of which are located in the largest steel consuming region of the United
States.
For the year ended May 31, 1996, net sales of the Company's processed
steel products segment were approximately $1 billion, representing
approximately 68.5% of the Company's total fiscal year 1996 sales. In addition
to steel processing, this segment also includes the Company's pressure
cylinder business which management believes to be the largest producer of
portable low pressure L.P. gas cylinders and refrigerant gas cylinders in
North America.
In February 1996, the Company acquired Dietrich Industries, Inc.
("Dietrich"), the nation's largest producer and supplier of metal framing
products for the commercial and residential construction markets. Dietrich is
a large user of galvanized steel and services a product market not previously
supplied by the Company. Dietrich has been included in the processed steel
products segment since its acquisition.
The Company's other operations comprise the custom products and cast
product segments. Custom products includes Worthington Custom Plastics, Inc.,
one of the ten largest plastic injection molding companies in the United
States, which sells primarily to the automotive, lawn and garden and appliance
industries, and Worthington Precision Metals, Inc., which supplies components
primarily for automotive transmission, power steering and brake applications.
The Company's cast products business consists primarily of Buckeye Steel
Castings Company, one of the two largest suppliers of large railcar castings
in the United States and the leading North American designer and producer of
undercarriages for mass transit cars.
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For information regarding the net sales and revenues, earnings from
continuing operations before income taxes, and identifiable assets
attributable to each segment for each of the last three fiscal years,
reference is made to such information appearing on page 24 of the Company's
annual report to shareholders for the year ended May 31, 1996 which
information is incorporated herein by reference.
See Note J of the Notes to the Company's Consolidated Financial
Statements, which are included in Item 8 hereof, for information concerning
the Company's investments in unconsolidated affiliates.
The Company has taken steps relative to its investment in Rouge Steel
Company which will result in the Company accounting for this investment on the
cost method rather than the equity method effective for its 1997 fiscal year.
Rouge contributed $21.7 million, $32.1 million, and $19.4 million to the
Company's pre-tax earnings during fiscal 1996, 1995 and 1994, respectively.
Processed Steel Products.
The Company's processed steel products segment includes its steel
processing businesses, its pressure cylinder business and commencing with its
acquisition in February 1996, the Dietrich metal framing business. For the
fiscal year ended May 31, 1996, sales of the processed steel products segment
were $1.013 billion, approximately 68.5% of the Company's total sales.
The Company's steel processing operations are conducted through its
Worthington Steel Company subsidiaries ("Worthington Steel"). Worthington
Steel occupies a niche in the steel industry by focusing on more specialized
products requiring more exact specifications, which typically cannot be
supplied as efficiently by steel mills, metal service centers or steel end
users. Worthington Steel is the largest independent flat rolled steel
processor in the United States and operates ten processing facilities, with a
concentration in the Michigan, Ohio and Indiana market, the largest flat
rolled steel consuming market in the United States. The Company's eleventh
steel processing facility, located in Delta, Ohio, is scheduled for start-up
late in calendar 1996.
Worthington Steel buys coils of wide, open tolerance steel from major
integrated steel mills and mini-mills and processes it to the precise type,
thickness, length, width, shape, temper and surface quality specified by more
than 1,700 industrial customers, principally in the automotive, automotive
supply, appliance, electrical, communications, construction, office furniture,
office equipment, agricultural, machinery and leisure time industries. The
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Company purchases and supplies steel based on the specific orders of customers
and does not typically process steel for inventory. Worthington Steel's
computer-aided processing capabilities include among others: pickling, a
chemical process using an acidic solution to remove surface oxide which
develops on hot rolled steel; slitting, which cuts steel to specific widths;
roller leveling, a method of applying pressure to achieve precise flatness
tolerances for steel which is cut into exact lengths; cold reduction, which
achieves close tolerances of thickness and temper by rolling; edge rolling,
which conditions the edges of the steel by imparting round, smooth or knurled
edges; blanking, through which steel is cut into specific shapes; coating, a
means of producing painted, galvanized or nickel plated steel; and annealing,
a thermal process that changes the hardness and certain metallurgical
characteristics of steel.
Worthington Steel also "toll processes" steel for the steel mills and
large end users. Toll processing is similar to Worthington's normal steel
processing, except the mill or end user retains the title to the steel and has
the responsibility for selling the product. Toll processing enables the
Company to participate in the market for wide sheet steel and large standard
orders, which is a market generally served by steel mills, rather than by
intermediate steel processors.
Steel processing is highly competitive. The Company competes with many
other intermediate processors. The Company knows of no other intermediate
processor which offers the same type and extent of technical service support
provided by the Company relating to material testing and application of
material suited to the particular needs of customers (see "Technical
Services"). The Company is unable to gauge, however, the extent to which its
technical service capability has improved its competitive position.
On February 5, 1996, the Company acquired Dietrich, the largest supplier
of metal framing products for the commercial and residential construction
markets in the United States. The Company believes that Dietrich is the only
national supplier of metal framing products and supplies approximately 35% of
the metal framing products sold in the United States. Dietrich is a large user
of galvanized steel and services a product market not previously supplied by
the Company. Dietrich operates nineteen facilities in eleven states.
The Company believes Dietrich to be the largest and only national
supplier of metal framing products in the United States. It has five large
regional competitors and numerous small, more localized competitors.
The Company's processed steel products segment also includes Worthington
Cylinder Corporation ("Worthington Cylinders"), the nation's largest producer
of portable low pressure L.P. gas and refrigerant cylinders. Worthington
Cylinders' primary products are steel cylinders with refrigerant gas
capacities of 15 to 1,000 lbs. and steel and aluminum cylinders with L.P. gas
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capacities of 4-1/4 to 420 lbs. These cylinders are designed and produced in
accordance with safety requirements prescribed by the U.S. Department of
Transportation which specify materials, design limitations, and marking,
inspection and testing procedures. The cylinders are produced by precision
stamping, deep drawing and welding of component parts to customer
specifications. They are then tested, painted and packaged as required.
The Company's refrigerant cylinders are used primarily by major
refrigerant gas producers to contain refrigerant gases for use in charging
residential, commercial, automotive and other air conditioning and
refrigeration systems. Reusable steel and aluminum L.P. gas cylinders are sold
to manufacturers of barbecue grills, propane and gas grill distributors, mass
merchandisers, and manufacturers and users of material handling, heating,
cooking and camping equipment. The Company manufactures other low pressure
cylinder products, including recapture and recycling tanks for refrigerant
gases, helium tanks, and cylinders to hold other gases. The Company also
produces high pressure acetylene, industrial, medical, halon and electronic
gas cylinders. While a large percentage of sales are made to major accounts,
Worthington Cylinders has over 2,000 customers. It operates seven
manufacturing facilities located in Ohio, Oklahoma, Georgia, Alabama and
Ontario.
The Company has two principal competitors in its major low pressure
cylinder markets, of which management believes the Company has the largest
share. The Company also has two principal competitors in its high pressure
cylinder markets, both of which have a larger share than the Company. However,
the Company otherwise has no reliable information with respect to the size of
any of its various product markets or its relative position therein.
The largest customer of the processed steel products segment is General
Motors Corporation, purchasing through decentralized divisions and
subsidiaries and in different geographical areas. (See "Marketing and
Competition"). The loss of General Motors as a customer could have an adverse
effect on the segment, but the Company has no reason to believe that the loss
of this customer is likely.
The Company purchases steel in large quantities, at regular intervals
from major primary producers for its steel processing, metal framing and
pressure cylinder operations. During the fiscal year ended May 31, 1996 the
Company's major suppliers were Rouge Steel Company (in which the Company holds
a minority equity position), AK Steel Corporation, Bethlehem Steel
Corporation, LTV Steel Corporation, USX Corporation, WCI Steel, Inc., Weirton
Steel Corporation and Wheeling-Pittsburgh Steel Corporation. During the fiscal
year ended May 31, 1996, the Company's major suppliers of aluminum for
pressure cylinders were Alumax Aluminum Sales Corporation, Aluminum
Corporation of America, Cressona Aluminum Company, Johnson Metals, and
Specialty Blanks Incorporated. Management believes that its supplier
relationships are good.
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Custom Products.
The Company's custom products segment includes its custom plastics
business and its precision metal business. Sales by the custom products
segment totaled $321 million for the year ended May 31, 1996, representing
approximately 21.7% of the Company's net sales. The Company's custom plastics
business represents the major portion of these sales.
The Company's custom plastics business is conducted through Worthington
Custom Plastics, Inc., one of the ten largest producers of injection molded
plastic products in the United States. Historically, sales to the automotive
market have dominated the customs plastic business, although in recent years
the Company has increased sales to manufacturers of appliances, lawn and
garden equipment, audio equipment, recreational products, and other items. The
Company believes it is now one of the two largest suppliers of injection
molded plastic parts for non-automotive uses. Principal custom products are a
variety of custom made injection molded plastic components (both functional
and decorative) which, depending on the customers' needs, can also be painted,
assembled, silk screened, vacuum metalized, hot stamped, roll foiled, vinyl
wrapped, foamed in-place and/or appliqued by the Company. Worthington Custom
Plastics operates five plants located in Ohio, Kentucky and South Carolina.
The Company's precision metals business is conducted through Worthington
Precision Metals, Inc. which supplies metal components requiring extremely
precise tolerances for use primarily in the automotive industry for
transmission, power steering and brake applications. This business operates
two facilities located in Ohio and Tennessee.
The custom products segment relies heavily on sales to General Motors
Corporation, The Ford Motor Company and Chrysler Corporation. The loss of any
of these customers could have an adverse effect on the segment but the Company
has no reason to believe that the loss of any of these customers is likely.
Plastic resins and bar steel, the major raw materials required by this
segment, are available from many sources.
The Company has numerous competitors in the sale of its custom products.
This business competes in its markets by seeking to provide well-engineered,
quality products within required delivery terms to meet the specific needs of
its plastic parts and precision metal component customers.
Cast Products.
The Company's cast products segment consists primarily of Buckeye Steel
Castings Company ("Buckeye Steel") which operates the largest single site
steel foundry in the United States. Buckeye Steel manufactures a diverse line
of cast steel products ranging in size from 100 lbs. to 30 tons. These
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products are offered to the railroad, mass transit, construction and off
highway equipment markets. The Company believes Buckeye Steel is one of the
two largest suppliers of large railcar castings in the United States and is
the leading North American designer and producer of undercarriages for mass
transit cars. The cast products segment had sales of $144 million for the year
ended May 31, 1996, representing approximately 9.7% of total Company sales.
In general, there are a number of companies involved in the sale of steel
castings; however, there are three major competitors in the sale of certain
railcar castings. The Company's cast products are generally sold under
trademark which is a stylized "Circle B", and the Company utilizes various
other owned and licensed trademarks and patents in connection with its cast
products.
Scrap steel, the major raw material required by the cast products
segment, is purchased from several sources. Supplies of scrap steel have been
adequate, although pricing in the market tends to be volatile. Other raw
materials used by this segment are obtained from a number of major suppliers.
Joint Ventures
The Company is a partner in five unconsolidated joint ventures.
* Worthington/Armstrong Venture ("WAVE"), a 50% owned joint venture
with Armstrong World Industries, is one of the three leading United
States manufacturers of suspended ceiling systems for concealed and
lay-in panel ceilings. WAVE operates facilities in Pennsylvania,
Maryland, Nevada and France and expects to expand into China in
fiscal year 1997.
* TWB Company, a 50% owned joint venture Thyssen Stahl of Germany, is
located in Monroe, Michigan. It produces laser welded blanks for use
in the auto industry for products such as inner door frames.
* Acerex S.A. de C.V., a 50% owned joint venture with Hylsa S.A. de
C.V., is a steel processing company located in Monterrey, Mexico.
* Worthington Specialty Processing, a 50% owned joint venture with USX
Corporation, operates a plant in Jackson, Michigan which primarily
toll processes for USX Corporation.
* London Industries, Inc., a 60% owned London, Ohio joint venture with
Sumitomo and Nissen Chemitech of Japan, produces injection molded
plastics parts, concentrating on sales to foreign transplant
automakers.
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See Note J of the Notes to the Company's Consolidated Financial
Statements for additional information on these unconsolidated affiliates of
the Company.
Investment In Rouge Steel
The Company also owns a minority interest (28%) in Rouge Steel Company,
an integrated steel mill located in Dearborn, Michigan. This relationship,
along with a long term steel supply agreement, have assured the Company a
steady supply of high quality steel at competitive prices in all market
conditions. Since Worthington acquired its equity position in 1990, Rouge
Steel has been the Company's largest steel supplier.
The Company has taken steps relative to its investment in Rouge Steel
Company which will result in the Company accounting for this investment on the
cost method rather than the equity method effective for its 1997 fiscal year.
Under the equity method, Rouge contributed $21.7 million, $32.1 million, and
$19.4 million to the Company's pre-tax earnings during fiscal 1996, 1995 and
1994, respectively.
Technical Services.
The Company employs a staff of engineers and other technical personnel
and maintains fully-equipped, modern laboratories to support its operations.
The facilities enable the Company to verify, analyze and document the
physical, chemical, metallurgical and mechanical properties of its raw
materials and products. Technical service personnel also work in conjunction
with the sales force to determine the types of flat rolled steel and steel
castings required for the particular needs of the Company's customers. In
order to provide such service, the Company maintains a continuing program of
developmental engineering with respect to the characteristics and performance
of its products under varying conditions. Laboratory facilities are also used
to perform the quality control and extensive testing of all low pressure
cylinders required by the regulations of the U. S. Department of
Transportation and associated agencies, as well as varying customer
requirements. The Company also maintains a separate testing facility for its
steel castings operation.
Marketing and Competition.
The Company's products and services are sold primarily by Company sales
personnel.
As a percentage of the Company's consolidated sales and revenues, sales
of steel processing services represented 51% for fiscal 1996, 57% for fiscal
1995, and 59% for fiscal 1994; sales of pressure cylinders represented 12% for
1996, 12% for 1995, and 13% for 1994; and sales of custom plastics represented
18% for 1996, 17% in 1995, and 17% in 1994.
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During fiscal year ended May 31, 1996, General Motors Corporation,
purchasing through decentralized divisions and subsidiaries in different
geographical areas, accounted for approximately 14.2% of the Company's
consolidated sales and revenues.
The principal methods of competition encountered by the Company are
quality of product, ability to meet delivery requirements of customers, and
price. Geographic proximity to customers has a significant effect upon
relative ability to meet customer delivery schedules and impacts the freight
charge portion of overall product price. See also the information set forth
above as to competition in the various segments.
Environmental Regulation.
The Company's manufacturing facilities, generally in common with those of
similar industries making similar products, are subject to many federal, state
and local requirements relating to the protection of the environment. The
Company continually examines ways to reduce emissions and waste and to effect
cost savings related to environmental compliance. Management does not
anticipate that capital expenditures for environmental control facilities
required in order to meet environmental requirements will be material when
compared with the Company's overall capital expenditures.
Employees.
The Company employs approximately 10,000 people.
Item 2. - Properties.
The Company's corporate offices are located in Columbus, Ohio. Its
principal properties consist of 46 manufacturing facilities, excluding those
of unconsolidated affiliates but including the Delta Ohio steel processing
plant currently being completed. These facilities, all of which are well
maintained and in good operating condition, contain in excess of 8,000,000 sq.
ft. in the aggregate, and are adequate to meet the Company's present needs.
The locations of these facilities are set forth on page 34 of the
Company's annual report to shareholders for the year ended May 31, 1996, which
information is incorporated herein by reference.
See Item 1 under the heading "Joint Ventures" for the location of the
Company's unconsolidated affiliates.
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Item 3. - Legal Proceedings.
The Company's subsidiary, Buckeye Steel Castings Company, has agreed to
settle certain allegations made by Ohio EPA relating to air pollution matters
at its foundry in Columbus, Ohio. The primary allegations concern (a) alleged
omissions of fugitive dust from the facility, mainly related to malfunctions
of its dust collection systems (i.e. baghouses) in 1989; (b) alleged failures
to obtain permits in a timely manner, primarily related to periods prior to
1990; and (c) alleged failures in prior years to use reasonably available
control measures to collect dust inside its facility. Although the Company
disputes the alleged violations, it has elected to settle the matter and avoid
costly litigation.
Under the terms of the settlement, the Company has agreed to (i) pay a
cash settlement of $275,000; (b) make a contribution to the Ohio Department of
Natural Resources of $65,000; and (c) undertake credit projects primarily
related to the replacement and upgrading of an old dust collection system,
which credit projects will involve capital expenditures aggregating
approximately $1 million over the Company's next two fiscal years.
Item 4. - Submission of Matters to a Vote of Security Holders.
Not applicable.
Executive Officers of the Registrant.
The following table lists the names, positions held, and ages of all the
executive officers of the Company:
Present
Office
Name Age Positions with the Company Held Since
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John H. McConnell 73 Chairman of the Board
and Director 1955
John P. McConnell 42 Vice Chairman, Chief Executive
Officer and Director 1993
Donald G. Barger, Jr. 53 Vice President-Finance and
Chief Financial Officer 1993
Robert J. Borel 53 Vice President-Engineering 1985
William S. Dietrich 58 President of Dietrich Industries
Inc., a subsidiary of the Company
and Director 1996
Edward A. Ferkany 59 Vice President-Processed Steel 1985
Thomas L. Hockman 52 Vice President-Personnel 1993
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Robert J. Klein 59 Executive Vice President-Marketing
and Planning and Director 1985
Pete A. Klisares 60 Executive Vice President
and Director 1993
Donal H. Malenick 57 President, Chief Operating
Officer and Director 1976
Charles D. Minor 69 Secretary and Director 1955
The principal employment of Donal H. Malenick, Robert J. Klein, Robert J.
Borel and Edward A. Ferkany for more than the last five years has been in
their present capacity with the Company. William S. Dietrich has been
President of Dietrich Industries for more than the last five years.
John H. McConnell was also Chief Executive Officer of the Company from
its founding in 1955 until June 1, 1993 at which time he retired as CEO and
remained Chairman of the Board.
John P. McConnell's principal occupation for more than five years prior
to July 1990 had been in various capacities with the Company. In July 1990, he
resigned his employment with the Company to become President of JMAC, Inc., a
private holding company. John P. McConnell was elected Vice Chairman of the
Company in June 1992 and became Chief Executive Officer as of June 1, 1993.
Donald G. Barger, Jr. was Vice President-Corporate Controller for B. F.
Goodrich Company for more than five years prior to September 1993, when he
became Vice President-Finance and Chief Financial Officer of the Company.
Thomas L. Hockman was Assistant Treasurer and Manager of Compensation and
Benefits for the Company for more than five years prior to becoming Vice
President-Personnel in January 1993.
Pete A. Klisares was Manufacturing Vice President and General Manager for
AT&T for more than five years prior to May 1991 and Executive Director of
JMAC, Inc. from May 1991 through December 1991. He became Assistant to the
Chairman of the Company in December 1991 and was named Executive Vice
President effective August 1993.
Charles D. Minor was a partner in the law firm of Vorys, Sater, Seymour
and Pease, counsel to the Company, for more than five years prior to January
1993. In January 1993 he became counsel to that firm.
Executive officers serve at the pleasure of the directors. John H.
McConnell is the father of John P. McConnell. There are no other family
relationships among the executive officers of the Company. No arrangements or
understandings exist pursuant to which any person has been, or is to be,
selected as an officer.
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PART II
Item 5. - Market for Registrant's Common Equity and Related Stockholder Matters.
The information called for by this Item 5 is incorporated by reference
herein from the information set forth on pages 32 and 33 of the Company's
annual report to shareholders for the year ended May 31, 1996.
Item 6. - Selected Financial Data.
The information called for by this Item 6 is incorporated by reference
herein from the information presented for each of the Company's five most
recent fiscal years under "Eleven Year Selected Financial Data" set forth on
pages 30 and 31 of the Company's annual report to shareholders for the year
ended May 31, 1996.
Item 7. - Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The information called for by this Item 7 is incorporated by reference
herein from "Management's Discussion and Analysis" set forth on pages 18, 19
and 20 of the Company's annual report to shareholders for the year ended May
31, 1996.
Item 8. - Financial Statements and Supplementary Data.
The following consolidated financial statements of Worthington
Industries, Inc. and Subsidiaries and Report of Independent Auditors, included
in the Company's annual report to shareholders for the year ended May 31,
1996, on pages 20 through 29 thereof are incorporated herein by reference.
Consolidated Balance Sheets--May 31, 1996 and 1995
Consolidated Statements of Earnings--Years ended May 31, 1996,
1995 and 1994
Consolidated Statements of Shareholders' Equity--Years ended
May 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows--Years ended May 31,
1996, 1995 and 1994
Notes to Consolidated Financial Statements
Report of Independent Auditors
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Item 9. - Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PART III
Item 10. - Directors and Executive Officers of the Registrant.
In accordance with General Instruction G(3), the information required by
this Item 10 is incorporated by reference herein from the material under the
heading "Election of Directors" contained on pages 2 through 6 of the
Company's definitive proxy statement filed with the Commission relating to the
Company's annual meeting of shareholders to be held on September 19, 1996. The
information regarding Executive Officers required by Item 401 of Regulation
S-K is included in Part I hereof under an appropriate caption. Disclosure
required under Item 405 of Regulation S-K is included on page 6 of the proxy
statement.
Item 11. - Executive Compensation.
In accordance with General Instruction G(3), the information required by
this Item 11 is incorporated by reference herein from the information
contained in the Company's definitive proxy statement filed with the
Commission relating to the Company's annual meeting of shareholders to be held
on September 19, 1996 under the heading "Election of Directors - Compensation
of Directors" on page 5 and under the heading "Executive Compensation"
"Summary of Cash and Certain Other Compensation" on pages 7 and 8, "Option
Grants" on page 8, and "Option Exercises and Holdings" on page 8.
Item 12. - Security Ownership of Certain Beneficial Owners and Management.
In accordance with General Instruction G(3), the information required by
this Item 12 is incorporated by reference herein from the material under the
headings "Voting Securities and Principal Holders Thereof - Security Ownership
of Certain Beneficial Owners" contained on page 2 and "Election of Directors"
contained on pages 2 through 6 of the Company's definitive proxy statement
filed with the Commission relating to the Company's annual meeting of
shareholders to be held on September 19, 1996.
Item 13. - Certain Relationships and Related Transactions.
In accordance with General Instruction G(3), the information required by
this Item 13 is incorporated by reference herein from the material under the
heading "Election of Directors" contained on pages 2 through 5 of the
Company's definitive proxy statement filed with the Commission relating to the
Company's annual meeting of shareholders to be held on September 19, 1996.
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PART IV
Item 14. - Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a)(1) and (2) The response to this portion of Item 14 is submitted as a
separate section of this report--See List of Financial
Statements and Financial Statement Schedules on page F-1
of this report.
(3) Listing of Exhibits--See Index to Exhibits beginning on
page E-1 of this report. The index to exhibits
specifically identifies each management contract or
compensatory plan required to be filed as an Exhibit to
this Form 10-K.
(b) A Form 8-K(A) dated April 19, 1996 was filed as Amendment No. 1 to
Registrant's Current Report on Form 8-K dated February 5, 1996 to amend
Item 7 and includes the following financial statements and information:
Financial Statements--Dietrich Industries, Inc. and Subsidiaries.
Independent Auditors' Report
Consolidated Balance Sheet as of December 31, 1995
Consolidated Statement of Income and Retained Earnings -
Year Ended December 31, 1995
Consolidated Statement of Cash Flows - Year Ended December 31, 1995
Notes to Consolidated Financial Statements
Unaudited Pro Form Financial Information--Worthington Industries, Inc.
Pro Forma Condensed Consolidated Statement of Earnings - Year Ended
May 31, 1995
Pro Forma Condensed Consolidated Statement of Earnings - Nine months
ended February 29, 1996
Notes to Pro Forma Condensed Consolidated Financial Statements
(c) Exhibits filed with this report are attached hereto.
(d) Financial Statement Schedules--The response to this portion of Item 14 is
submitted as a separate section of this report--See List of Financial
Statements and Financial Statement Schedules on Page F-1.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
WORTHINGTON INDUSTRIES, INC.
Date: August 29, 1996 By: /s/Donal H. Malenick
____________________________
Donal H. Malenick, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
SIGNATURE DATE TITLE
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* * Director, Chairman of the Board
John H. McConnell
* * Director, Vice Chairman,
John P. McConnell Chief Executive Officer
/s/Donal H. Malenick 8/29/96 Director, President,
Donal H. Malenick Chief Operating Officer
* * Director, Executive Vice
Pete A. Klisares President
* * Vice President-Finance,
Donald G. Barger, Jr. Chief Financial Officer
* * Director, Secretary
Charles D. Minor
* * Director
William S. Dietrich
* * Director
Charles R. Carson
-15-
<PAGE>
* * Director
John E. Fisher
* * Director
John F. Havens
* * Director
Katherine S. LeVeque
* * Director
Robert B. McCurry
* * Director
Gerald B. Mitchell
* * Director
James Petropoulos
*By: /s/Donal H. Malenick Date: 8/29/96
__________________________
Donal H. Malenick
Attorney-In-Fact
-16-
<PAGE>
ANNUAL REPORT ON FORM 10K
ITEM 14 (a) (1) AND (2) AND ITEM 14 (d)
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of Worthington Industries,
Inc., and Subsidiaries, included in the annual report of the registrant to its
shareholders for the year ended May 31, 1996, are incorporated by reference in
Item 8:
Consolidated Balance Sheets -- May 31, 1996 and 1995
Consolidated Statements of Earnings -- Years ended May 31, 1996, 1995 and 1994
Consolidated Statements of Shareholders' Equity -- Years ended May 31, 1996,
1995 and 1994
Consolidated Statements of Cash Flows -- Years ended May 31, 1996, 1995 and
1994
Notes to Consolidated Financial Statements
The following consolidated financial statement schedules of Worthington
Industries, Inc. and Subsidiaries are included in Item 14 (d):
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, therefore have been omitted.
F-1
<PAGE>
<TABLE>
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------------------------------------------
COL. A COL.B COL.C COL.D COL.E
- --------------------------------------------------------------------------------------------------------------------
Additions
- --------------------------------------------------------------------------------------------------------------------
Balance at (1)Charged to (2) Charged Deductions - Balance at End
DESCRIPTION Beginning of Cost and to Other Describe of Period
Period Expenses Accounts -
Describe
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended May 31, 1996:
Deducted from asset accounts:
Allowance for possible
losses on trade accounts
receivable $2,397,000 $355,199 $750,000 (A) $724,199(B) $2,778,000
=============================================================================
Year Ended May 31, 1995:
Deducted from asset accounts:
Allowance for possible
losses on trade accounts
receivable $2,535,000 $881,866 $0 $1,019,866(B) $2,397,000
=============================================================================
Year Ended May 31, 1994:
Deducted from asset accounts:
Allowance for possible
losses on trade accounts
receivable $2,351,000 $339,172 $0 $155,172(B) $2,535,000
=============================================================================
Note A - Amount from Dietrich acquisition.
Note B - Uncollectible accounts charged
to the allowance.
</TABLE>
F-2
<PAGE>
Exhibit
Number Description
3(a) Certificate of Incorporation Incorporated herein by reference to
of Worthington Industries, Exhibit 3 of the Company's Annual
Inc. Report on Form 10-Q for the Quarter
ended August 31, 1994
3(b) Bylaws of Worthington Incorporated herein by reference to
Industries, Inc. Exhibit 3(b) of the Company's Annual
Report on Form 10-K for the fiscal
year ended May 31, 1992
4(a) Form of Indenture dated as Incorporated herein by reference to
of ______, 1996 between Exhibit 4 of the Company's
the Company and PNC Bank, Registration Statement on Form S-3
Ohio, National Association, filed May 2, 1996 (Registration No.
as Trustee, relating to up 333-03087)
to $450,000,000 of debt
securities
4(b) Form of 7-1/8% Notes due
2007
4(c) Agreement to furnish
instruments defining rights
of holders of long-term debt
10(a) Amended 1980 Stock Option Incorporated here by reference to
Plan, as amended* Annex B to the Prospectus filed as
part of Post-Effective Amendment No.
1 to the Company's Registration
Statement on Form S-8 (Registration
No. 2-80094)
10(b) 1990 Stock Option Plan* Incorporated herein by reference to
Exhibit 10(d) of the Company's Annual
Report on Form 10-K for the fiscal
year ended May 31, 1991.
10(c) Executive Deferred Incorporated herein by reference to
Compensation Plan* Exhibit 10(e) of the Company's Annual
Report on Form 10-K for the fiscal
year ended May 31, 1984
10(d) Deferred Compensation Plan Incorporated herein by reference to
for Directors* Exhibit 10(f) of the Company's Annual
Report on Form 10-K for the fiscal
year ended May 31, 1984
13 Portions of 1996 Annual
Report to security holders
incorporated by reference
into Form 10-K
21 Subsidiaries of the Company
23(b) Consent of Ernst & Young LLP
24 Powers of Attorney
E-1
<PAGE>
27 Financial Data Schedule
E-2
<PAGE>
EXHIBIT 4(b)
Form of 7-1/8% Notes due 2007
<PAGE>
NOTE
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL DEBT
SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY
Unless this certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
WORTHINGTON INDUSTRIES, INC.
7-1/8% Note Due May 15, 2006
CUSIP No. 981811AB8 $150,000,000
No. ___
Worthington Industries, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Issuer", which
term includes any successor Person under the Indenture hereinafter referred
to) as obligor, for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of ONE HUNDRED FIFTY MILLION and 00/100
DOLLARS on May 15, 2006, and to pay interest thereon from May 24, 1996, or
from the most recent interest payment date to which interest has been paid or
duly provided for, semi-annually on May 15 and November 15 in each year,
commencing November 15, 1996, at the rate of 7-1/8% per annum, until the
principal hereof is paid or made available for payment. The Issuer shall also
pay interest on overdue principal or installments of interest at such rate.
The interest so payable, and punctually paid or duly provided for, on any
interest payment date will, as provided in such Indenture, be paid to the
Person in whose name this Debt Security is registered at the close of business
on the record date for such interest, which shall be May 1 or November 1
(whether or not a business day), as the case may be, next preceding such
interest payment date. Any interest on this Debt Security which is
E-4
<PAGE>
payable, but is not punctually paid or duly provided for, on the dates and in
the manner provided in the Debt Security and such Indenture shall forthwith
cease to be payable to the Registered Holder hereof on the relevant record
date, and such Defaulted Interest may be paid by the Issuer to the Person in
whose name this Debt Security is registered at the close of business on a
special record date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to the Holder hereof not less than
10 days prior to such special record date, or may be paid by the Issuer on
this Debt Security in any other lawful manner not inconsistent with the
requirements of any securities exchange on which this Debt Security may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, payment of interest on this Debt Security shall be made at the
corporate trust office of the Trustee, or at the option of the Issuer, by
check mailed to the address of the Person entitled hereto as such address
shall appear in the Debt Security Register, or, at the option of the
Registered Holder by wire transfer to an account designated by the Registered
Holder, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
This Debt Security is one of a duly authorized issue of securities of the
Issuer (herein called the "Debt Securities"), issued and to be issued in one
or more series under an Indenture, dated as of May 15, 1996 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Issuer and PNC Bank, Ohio, National Association as
Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), and reference is hereby made to the Indenture
for a statement of the respective rights, limitation of rights, duties and
immunities thereunder of the Issuer, the Trustee and the Registered Holders of
the Debt Securities and of the terms upon which the Debt Securities are, and
are to be, authenticated and delivered. This Debt Security is one of the
series designated on the face hereof.
This Debt Security is not subject to redemption and is not callable prior
to maturity.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Debt Security or certain restrictive covenants and
Events of Default with respect to this Debt Security, in each case upon
compliance with certain conditions set forth in the Indenture. Such provisions
shall be applicable to this Debt Security.
E-5
<PAGE>
If an Event of Default with respect to this Debt Security shall occur and
be continuing, the principal of and interest on this Debt Security may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
without notice to any Holder but with the consent of Holders of not less than
a majority in aggregate principal amount of the Outstanding Debt Securities of
each series affected by such supplemental Indenture, the Company and the
Trustee at any time to enter into an Indenture or supplemental Indenture for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
Indenture or of modifying in any manner the rights of the Holders of the Debt
Securities of such series. The Indenture also permits, with certain exceptions
as therein provided, prior to the acceleration of the maturity of the Debt
Securities of any series, the Holders of specified percentages in aggregate
principal amount of the Debt Securities of that series at the time Outstanding
may on behalf of the Holders of all the Debt Securities of that series waive
any past Default or Event of Default and its consequences for that series
specified in the terms thereof. Any such consent or waiver by the Holder of
this Debt Security shall be conclusive and binding upon such Holder and upon
all future Holders of this Debt Security and of any Debt Security issued upon
the registration of transfer hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Debt Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Debt Security shall not have the right to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise, upon or under or
with respect to the Indenture, or for the appointment of a receiver or
trustee, or for any other remedy thereunder, unless such Holder previously
shall have given to the Trustee written notice of an Event of Default with
respect to the Debt Securities of this series and of the continuance thereof
and unless the Holders of not less than 25% in aggregate principal amount of
the Outstanding Debt Securities of this series shall have made written request
upon the Trustee to institute such action or proceedings in respect of such
Event of Default in its own name as Trustee thereunder and shall have offered
to the Trustee such reasonable indemnity, and the Trustee, for 60 days after
its receipt of such notice, request and offer of indemnity shall have failed
to institute any such action or proceedings and no direction inconsistent with
such written request shall have been given to the Trustee by the Holders of a
majority in aggregate principal amount of the Debt Securities of this series
at the time Outstanding. The foregoing shall not apply to any suit instituted
by the Holder of this Debt Security for the enforcement of any payment of
principal hereof or interest hereon on or after the respective due dates
expressed herein.
E-6
<PAGE>
No reference herein to the Indenture and no provision of this Debt
Security or other Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Debt Security at the times, place and rate, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Debt Security is registrable in the Debt
Security Register, upon surrender of this Debt Security for registration of
transfer at the office or agency of the Issuer in any Place of Payment, duly
endorsed or accompanied by a written instrument or instruments of transfer, in
form satisfactory to the Issuer, the Trustee and the Registrar duly executed
by the Registered Holder or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new Debt Security or
Debt Securities of authorized denominations for a like aggregate principal
amount.
The Debt Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Debt Securities of this series are exchangeable in whole or in part for
a like aggregate principal amount of Debt Securities of this series and of
like tenor and terms of a different authorized denomination, as requested by
the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations therein
set forth, no service charge shall be made for any such registration of
transfer of Debt Securities, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto.
Prior to due presentation for registration of transfer of this Debt
Security, the Issuer, the Trustee, any payment agent or any Registrar may deem
and treat the Person in whose name this Debt Security is registered as the
absolute owner hereof for all purposes, whether or not this Debt Security be
overdue, and none of the Issuer, the Trustee, any payment agent or Registrant
shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to herein by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
E-7
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated: May 24, 1996
WORTHINGTON INDUSTRIES, INC.
By: /s/Donald G. Barger, Jr.
_______________________________
Donald G. Barger, Jr.,
Vice President and
Chief Financial Officer
By: /s/Dale T. Brinkman
_______________________________
Dale T. Brinkman,
Assistant Secretary
____________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
PNC Bank, Ohio, National Association
As Trustee
By: _____________________________________
Authorized Signature
E-8
<PAGE>
EXHIBIT 4(c)
Agreement to furnish instruments defining rights of holders of long-term debt
E-9
<PAGE>
August 29, 1996
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Worthington Industries, Inc. - Form 10-K
Gentlemen:
Worthington Industries, Inc., a Delaware corporation, is
today executing a Form 10-K, Annual Report.
Pursuant to the instructions relating to the Exhibits,
Worthington Industries, Inc. hereby agrees to furnish to the Commission, upon
request, copies of instruments and agreements defining the rights of holders
of its long-term debt and of the long-term debt of its consolidated
subsidiaries.
Very truly yours,
WORTHINGTON INDUSTRIES, INC.
/s/Donal H. Malenick
____________________________
Donal H. Malenick
President
Enclosures
E-10
<PAGE>
EXHIBIT 13
PORTIONS OF 1996 ANNUAL REPORT TO SECURITY HOLDERS
INCORPORATED BY REFERENCE INTO FORM 10-K
E-11
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF EARNINGS
- -----------------------------------------------------------------------------------------------------------
In thousands, except per share Year Ended May 31 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------
SALES
<S> <C> <C> <C>
Net sales $ 1,477,838 $ 1,483,569 $ 1,285,134
Cost of goods sold 1,256,574 1,244,633 1,093,350
----------- ----------- -----------
Gross Margin 221,264 238,936 191,784
Selling, general and administrative expense 95,123 85,102 72,372
----------- ----------- -----------
Operating Income 126,141 153,834 119,412
Other income (expense):
Miscellaneous income 950 573 389
Interest expense (8,350) (6,036) (3,017)
Equity in net income of
affiliates - Joint Ventures 7,333 6,216 (555)
Equity in net income of
affiliate - Rouge 21,729 32,111 19,406
----------- ----------- -----------
Earnings Before Income Taxes 147,803 186,698 135,635
Income taxes 56,461 70,012 50,782
----------- ----------- -----------
EARNINGS
Net Earnings $ 91,342 $ 116,686 $ 84,853
=========== =========== ===========
Average Common Shares Outstanding 90,812 90,730 90,378
EARNINGS
PER SHARE
Earnings Per Share $ 1.01 $ 1.29 $ .94
=========== =========== ===========
See notes to consolidated financial statements.
Worthington Industries, Inc. and Subsidiaries
</TABLE>
E-11
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------------
Dollars in thousands, except for per share 1996 1995 1994
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON SHARES
Balance at beginning of year $ 908 $ 906 $ 601
Sale of common shares under stock option plan,
(116,051 in 1996; 198,144 in 1995; 375,155 in 1994) 1 2 4
Par value of shares issued in connection with share split -- -- 301
Purchase and retirement of common shares,
(216,500 in 1996; 1,436 in 1994) (1) -- --
--------- --------- ---------
Balance at May 31 $ 908 $ 908 $ 906
--------- --------- ---------
ADDITIONAL
PAID-IN CAPITAL
Balance at beginning of year $ 102,733 $ 96,427 $ 81,250
Sale of common shares under stock option plan,
(116,051 in 1996; 198,144 in 1995; 375,155 in 1994) 1,549 2,569 3,875
Sale of shares under dividend reinvestment plan,
(90,561 in 1996; 81,102 in 1995; 74,101 in 1994) 1,820 1,664 1,471
Par value of shares issued in connection with share split -- -- (301)
Transactions of unconsolidated affiliate 10 2,073 10,134
Purchase and retirement of common shares,
(216,500 in 1996; 1,436 in 1994) (243) -- (2)
--------- --------- ---------
Balance at May 31 $ 105,869 $ 102,733 $ 96,427
--------- --------- ---------
MINIMUM PENSION
LIABILITY
Balance at beginning of year $ (871) $ (1,674) $ (230)
Transactions of unconsolidated affiliate 682 803 (1,444)
--------- --------- ---------
Balance at May 31 $ (189) $ (871) $ (1,674)
--------- --------- ---------
TRANSLATION
ADJUSTMENT
Balance at beginning of year $ (146) -- --
Foreign currency translation adjustment (1,102) $ (146) --
--------- --------- ---------
Balance at May 31 $ (1,248) $ (146) --
--------- --------- ---------
RETAINED EARNINGS
Balance at beginning of year $ 487,708 $ 408,234 $ 356,567
Net earnings 91,342 116,686 84,853
Cash dividends declared:
(per share: $.450 in 1996; $.410 in 1995; $.367 in 1994) (40,872) (37,212) (33,161)
Purchase and retirement of common shares,
(216,500 in 1996; 1,436 in 1994) (3,978) -- (25)
--------- --------- ---------
Balance at May 31 $ 534,200 $ 487,708 $ 408,234
--------- --------- ---------
</TABLE>
E-12
See notes to consolidated financial statements.
Worthington Industries, Inc. and Subsidiaries
<TABLE>
CONSOLIDATED BALANCE SHEETS
- -----------------------------------------------------------------------------------
Dollars in thousands May 31 1996 1995
- -----------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 19,029 $ 2,003
Accounts receivable, less allowances of
$2,778 and $2,397 at May 31, 1996 and 1995 224,956 216,443
Inventories
Raw materials 128,884 142,738
Work in process and finished products 79,141 58,140
----------- ---------
208,025 200,878
Prepaid expenses and other current assets 24,031 32,578
----------- ---------
Total Current Assets 476,041 451,902
Investment in Unconsolidated Affiliates 138,212 104,764
Intangible Assets 65,256 --
Other Assets 28,280 25,381
Property, Plant and Equipment
Land 20,658 11,383
Buildings 154,774 122,073
Machinery and equipment 528,965 427,927
Construction in progress 88,877 27,903
----------- ---------
793,274 589,286
Less accumulated depreciation 280,938 254,369
----------- ---------
512,336 334,917
----------- ---------
Total Assets $ 1,220,125 $ 916,964
=========== =========
LIABILITIES
Current Liabilities
Accounts payable $ 82,178 $ 87,329
Notes payable -- 38,200
Accrued compensation, contributions to
employee benefit plans and related taxes 33,234 31,741
Dividends payable 10,901 9,992
Other accrued items 17,652 8,597
Income taxes 5,829 2,709
Current maturities of long-term debt 1,475 660
----------- ---------
Total Current Liabilities 151,269 179,228
Other Liabilities 17,912 18,055
Long-Term Debt 298,742 53,476
Deferred Income Taxes 112,662 75,873
Contingent Liabilities -- Note G
EQUITY
Shareholders' Equity
Preferred shares, $1.00 par value, authorized--
1,000,000 shares, issued and outstanding--none -- --
Common shares, $.01 par value, authorized --
150,000,000 shares, issued and outstanding--
1996 --90,830,440 shares; 1995 --90,840,328 shares 908 908
Additional paid-in capital 105,869 102,733
Minimum pension liability of unconsolidated affiliate (189) (871)
Foreign currency translation adjustment (1,248) (146)
Retained earnings 534,200 487,708
----------- ---------
639,540 590,332
----------- ---------
Total Liabilities and Shareholders' Equity $ 1,220,125 $ 916,964
=========== =========
</TABLE>
- --------------------------------------------------------------------------------
See notes to consolidated financial statements.
Worthington Industries, Inc. and Subsidiaries
E-14
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------------------------
In thousands Year Ended May 31 1996 1995 1994
- -------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net earnings $ 91,342 $ 116,686 $ 84,853
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation 39,222 34,129 32,385
Gain on sale of short-term investments -- -- (911)
Provision for deferred income taxes 10,355 15,541 7,911
Equity in undistributed net income of
unconsolidated affiliates (25,153) (37,847) (19,345)
Changes in assets and liabilities:
Accounts receivable 13,456 (26,702) (20,886)
Inventories 35,175 (15,996) (25,895)
Prepaid expenses and other current assets 2,443 (7,418) (6,460)
Other assets (1,951) 554 (6,576)
Accounts payable and accrued expenses (25,990) (11,156) 4,001
Other liabilities (457) (1,390) 11,777
--------- --------- --------
Net Cash Provided By Operating Activities 138,442 66,401 60,854
INVESTING ACTIVITIES
Investment in property, plant and equipment, net (108,996) (61,485) (46,554)
Acquisition of Dietrich Industries, net of cash acquired (169,391) -- --
Investments in unconsolidated affiliates (8,315) (10,857) --
Other, net -- -- 1,287
--------- --------- --------
Net Cash Used By Investing Activities (286,702) (72,342) (45,267)
FINANCING ACTIVITIES
Proceeds from (payments on) short-term borrowings (38,200) 28,200 10,000
Proceeds from long-term debt 424,774 27,000 --
Principal payments on long-term debt (180,473) (28,490) (1,165)
Proceeds from issuance of common shares 3,370 4,235 5,350
Repurchase of common shares (4,222) -- (27)
Dividends paid (39,963) (36,276) (33,161)
--------- --------- --------
Net Cash Provided (Used) By Financing Activities 165,286 (5,331) (19,003)
--------- --------- --------
Increase(decrease) in cash and cash equivalents 17,026 (11,272) (3,416)
Cash and cash equivalents at beginning of year 2,003 13,275 16,691
--------- --------- --------
Cash and Cash Equivalents at End of Year $ 19,029 $ 2,003 $ 13,275
========= ========= ========
</TABLE>
- --------------------------------------------------------------------------------
See notes to consolidated financial statements.
Worthington Industries, Inc. and Subsidiaries
E-15
<PAGE>
<TABLE>
INDUSTRY SEGMENT DATA
- ------------------------------------------------------------------------------------------------------------------------------------
In thousands May 31 1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------------
SALES
<S> <C> <C> <C> <C> <C>
Net Sales
Processed steel products $ 1,013,099 $ 1,028,326 $ 920,199 $ 767,682 $ 668,578
Custom products 321,013 302,096 249,459 241,916 217,731
Cast products 143,726 153,147 115,476 103,644 85,037
----------- ----------- ----------- ----------- ---------
$ 1,477,838 $ 1,483,569 $ 1,285,134 $ 1,113,242 $ 971,346
=========== =========== =========== =========== =========
EARNINGS
Operating Income
Processed steel products $ 93,379 $ 112,390 $ 98,062 $ 79,187 $ 70,317
Custom products 18,200 19,754 15,334 20,360 13,948
Cast products 14,562 21,690 6,016 6,544 4,092
----------- ----------- ----------- ----------- ---------
126,141 153,834 119,412 106,091 88,357
Miscellaneous income 950 573 389 598 1,289
Interest expense (8,350) (6,036) (3,017) (3,421) (3,986)
Equity in net income of
unconsolidated affiliates 29,062 38,327 18,851 4,587 5,440
----------- ----------- ----------- ----------- ---------
$ 147,803 $ 186,698 $ 135,635 $ 107,855 $ 91,100
=========== =========== =========== =========== =========
ASSETS
Identifiable Assets
Processed steel products $ 758,836 $ 507,073 $ 471,458 $ 428,891 $ 410,051
Custom products 178,679 165,619 138,015 117,856 105,483
Cast products 71,225 78,099 75,733 69,843 62,350
Corporate 73,173 61,409 61,406 59,674 41,273
----------- ----------- ----------- ----------- ---------
1,081,913 812,200 746,612 676,264 619,157
Investment in unconsolidated
affiliates 138,212 104,764 51,961 17,945 8,803
----------- ----------- ----------- ----------- ---------
$ 1,220,125 $ 916,964 $ 798,573 $ 694,209 $ 627,960
=========== =========== =========== =========== =========
DEPRECIATION
Depreciation Expense
Processed steel products $ 22,054 $ 19,041 $ 19,075 $ 17,745 $ 15,927
Custom products 10,330 8,710 7,047 5,598 5,233
Cast products 4,647 4,362 4,095 3,900 3,879
Corporate 2,191 2,016 2,168 1,961 1,848
----------- ----------- ----------- ----------- ---------
$ 39,222 $ 34,129 $ 32,385 $ 29,204 $ 26,887
=========== =========== =========== =========== =========
EXPENDITURES
Capital Expenditures
Processed steel products $ 79,551 $ 31,869 $ 14,693 $ 9,876 $ 28,081
Custom products 17,423 22,254 19,086 12,640 9,345
Cast products 5,427 4,041 6,787 5,283 1,631
Corporate 6,595 3,321 5,988 1,341 6,063
----------- ----------- ----------- ----------- ---------
$ 108,996 $ 61,485 $ 46,554 $ 29,140 $ 45,120
=========== =========== =========== =========== =========
</TABLE>
- --------------------------------------------------------------------------------
( ) Indicates deduction
Corporate expenses are allocated on a consistent basis among industry segments
over the five-year period. Earnings are before income taxes and cumulative
effect of accounting changes. "Capital expenditures" are net of normal
disposals and exclude amounts in connection with acquisitions and
divestitures.
See notes to consolidated financial statements.
Worthington Industries, Inc. and Subsidiaries
E-16
<PAGE>
Notes To Consolidated Financial Statements
NOTE A - Summary of Significant Accounting Policies
Consolidation: The consolidated financial statements include the accounts
of Worthington Industries, Inc. and Subsidiaries (the "Company"). Investments
in unconsolidated affiliates are accounted for using the equity method.
Significant intercompany accounts and transactions are eliminated. Certain
reclassifications were made to prior years' amounts to conform with the 1996
presentation.
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
Cash and Cash Equivalents: The Company considers all highly liquid
investments purchased with a maturity of three months or less to be cash
equivalents.
Inventories: Inventories are valued at the lower of cost or market. Cost
is determined using the specific identification method for steel processing
and the first-in, first-out method for all other businesses.
Property and Depreciation: Property, plant and equipment are carried at
cost and depreciated using the straight-line method over the estimated useful
lives of the assets. Accelerated depreciation methods are used for income tax
purposes.
Capitalized Interest: Interest is capitalized in connection with
construction of qualified assets. Under this policy, interest of $2,085,000
was capitalized in 1996 and $529,000 in 1995.
Post Retirement Benefits Other Than Pensions: The Company adopted
Financial Accounting Standards Board (FASB) issued Statement No. 106,
"Employer's Accounting for Post Retirement Benefits Other Than Pensions,"
effective June 1, 1993. The adoption of this Statement did not have a material
impact on the Company's operating results or financial position. As permitted
by Statement 106, the Company elected not to restate the financial statements
of prior years.
Stock-Based Compensation: During 1995, the FASB issued Statement No. 123,
"Accounting for Stock-Based Compensation," effective June 1, 1996. This
Statement sets forth standards for accounting for stock-based compensation or
allows companies to continue using Accounting Principles Board Opinion (APB)
No. 25 with additional disclosures in the notes to consolidated financial
statements. It is the Company's intention to continue using APB No. 25 with
additional disclosures in the notes beginning in 1997.
Statements of Cash Flows: With respect to non-cash activities, the
Company recorded its increased equity from the Rouge Steel Company's initial
public offering as an increase in investments in unconsolidated affiliates of
$3,215,000 in 1995 and $15,451,000 in 1994 and additional paid-in-capital (net
of deferred taxes) of $2,073,000 in 1995 and $10,134,000 in 1994.
Supplemental cash flow information for the years ended May 31, is as
follows:
In thousands 1996 1995 1994
- --------------------------------------------------------------------------------
Interest paid $10,936 $ 6,688 $ 2,973
Income taxes paid 46, 131 60,520 39,957
E-18
<PAGE>
Fair Value of Financial Instruments: The following methods and
assumptions were used by the Company in estimating the fair value of its
financial instruments:
Cash and cash equivalents, other assets, and long-term debt - The
carrying amounts reported in the balance sheets approximate fair value.
The concentration of credit risks from financial instruments, related to
the markets discussed in Business Profile on page 3 is not expected to have a
material effect on the Company's consolidated financial position, cash flow or
future results of operations.
NOTE B - Shareholders' Equity
On September 16, 1993, the Company's Board of Directors authorized a
three-for-two split of the common shares, with distribution of the additional
shares on October 22, 1993, to holders of record on October 1, 1993. Also on
September 16, 1993, the shareholders adopted an amendment to the Certificate
of Incorporation of the Company to increase the authorized number of common
shares from 100,000,000 shares to 150,000,000 shares. References in this
annual report to per share amounts and to the number of common shares have
been adjusted, where appropriate, to give retroactive effect to the share
split.
The Board of Directors is empowered to determine the issue prices,
dividend rates, amounts payable upon liquidation, voting rights and other
terms of the preferred shares when issued.
NOTE C - Debt
Debt at May 31, is summarized as follows:
In thousands 1996 1995
- --------------------------------------------------------------------------------
Short-term notes payable to bank - unsecured -- $38,200
Industrial development revenue bonds and notes $ 13,476 14,136
Notes payable to banks - unsecured -- 13,000
Revolver - unsecured 85,000 27,000
Senior notes due 2006 - unsecured 200,000 --
Other 1,741 --
-------- -------
300,217 92,336
Less current maturities 1,475 38,860
-------- -------
$298,742 $53,476
======== =======
The industrial development revenue bonds and notes (IRBs) represent loans
to purchase facilities and equipment costing $24,601,000. The IRBs mature
serially through 2011 and may be retired in whole or in part at any time. At
May 31, 1996, the IRBs have fixed interest rates: $9,945,000 at 5.9% and the
remainder at 8.0%.
The Company maintains a $150,000,000 revolving credit agreement with five
banks, of which $65,000,000 was available on May 31, 1996. The credit
agreement is committed through 2001 and has one annual extension option. The
rate of interest is determined at the time of borrowing, based upon a choice
of options as specified in the agreement, and was 5.6% at May 31, 1996.
E-19
<PAGE>
During the year ended May 31, 1996, the Company filed a shelf
registration for the issuance of up to $450,000,000 of debt securities and
issued $200,000,000 of 7.125% Notes due 2006. The majority of the proceeds
were used to repay a bridge loan credit facility that was used to finance the
acquisition of Dietrich Industries (see Note K).
The Company enters into interest rate hedge agreements to manage interest
costs and exposure to changing interest rates. At May 31, 1996, agreements
were in place that effectively converted $150,000,000 of fixed rate debt to
floating. The counterparties to these agreements are major financial
institutions.
Various debt agreements place restrictions on financial conditions and
require maintenance of certain ratios. One of these restrictions limits cash
dividends and certain other payments to $3,000,000 plus 75% of net earnings,
as defined, subsequent to May 31, 1976. Retained earnings of $347,333,000 were
unrestricted at May 31, 1996.
Principal payments on long-term debt, including lease purchase
obligations, in the next five fiscal years are as follows: 1997 -- $1,475,000;
1998 -- $5,057,000; 1999 -- $720,000; 2000 -- $660,000; 2001 -- $660,000; and
thereafter -- $291,645,000.
The Company is guarantor on bank loans for four separate joint ventures.
The guarantees totaled $30,700,000 at May 31, 1996, and relate to debt with
varying maturities. The Company believes the guarantees will not significantly
affect the consolidated financial position or future results of operations.
NOTE D - Income Taxes
Income taxes for the years ended May 31, were as follows:
In thousands 1996 1995 1994
- --------------------------------------------------------------------------------
Current: Federal $ 38,704 $45,559 $36,907
State and local 7,403 8,912 5,964
Deferred: Federal 10,386 14,382 7,627
State (32) 1,159 284
======== ======= =======
$ 56,461 $70,012 $50,782
======== ======= =======
Under Statement of Financial Accounting Standards Board Number 109,
"Accounting for Income Taxes," the liability method is used in accounting for
income taxes. Under this method, deferred tax assets and liabilities are
determined based on differences between financial reporting and tax bases of
assets and liabilities, and are measured using enacted tax rates and laws that
will be in effect when the differences are expected to reverse.
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting and the amounts used for income tax purposes. The
components of the Company's deferred tax liabilities and assets as of May 31
are as follows:
- --------------------------------------------------------------------------------
E-20
<PAGE>
In thousands 1996 1995
- --------------------------------------------------------------------------------
Deferred tax assets:
Allowance for doubtful accounts $1,176 $1,284
Inventory (5,352) 1,375
Accrued expenses 4,317 3,888
Income taxes 2,916 2,460
Other 553 388
--- ---
3,610 9,395
Deferred tax liabilities:
Property, plant and equipment 73,751 45,426
Undistributed earnings of unconsolidated
affiliates 38,911 30,447
-------- -------
112,662 75,873
-------- -------
Net deferred tax liability $109,052 $66,478
-------- -------
The reasons for the difference between the effective income tax rate and
the statutory federal income tax rate were as follows:
1996 1995 1994
- --------------------------------------------------------------------------------
Federal statutory rate 35.0% 35.0% 35.0%
State and local income taxes, net
of federal tax benefit 3.4 3.6 3.0
Other (.2) (1.1) (.6)
----------- ------------ -----------
38.2% 37.5% 37.4%
=========== ============ ===========
NOTE E - Employee Benefit Plans
Nonunion employees of the Company participate in a current cash profit
sharing plan and a deferred profit sharing plan. Contributions to and costs of
these plans are determined as a percentge of the Company's pretax income
before profit sharing.
Certain operations have non-contributory defined benefit pension plans
covering a majority of their employees qualified by age and service. Company
contributions to these plans comply with ERISA's minimum funding requirements.
A summary of the components of net periodic pension cost for the defined
benefit plans in 1996, 1995 and 1994, and the contributions charged to pension
expense for the defined contribution plans follows:
<TABLE>
In thousands 1996 1995 1994
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Defined benefit plans:
Service cost (benefits earned during the period) $ 1,171 $ 1,078 $ 1,089
Interest cost on projected benefit obligation 3,330 3,091 2,875
Actual return on plan assets (9,480) (3,884) (1,222)
Net amortization and deferral 5,582 283 (2,544)
------- ------- -------
Net pension cost on defined benefit plans 603 568 198
Defined contribution plans 4,307 4,985 3,935
------- ------- -------
Total pension expense $ 4,910 $ 5,553 $ 4,133
======= ======= =======
</TABLE>
E-21
<PAGE>
Pension expense was calculated assuming a weighted average discount rate
and an expected long-term rate of return on plan assets of 8%. Plan assets
consist principally of listed equity securities and fixed income instruments.
The following table sets forth the funded status and amounts recognized in the
Company's consolidated balance sheet for defined benefit pension plans at
May 31:
<TABLE>
Plans Whose
Plans Whose Assets Exceed Accumulated Benefits
Accumulated Benefits Exceed Assets
In thousands 1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested $ 37,849 $ 35,546 $ 6,399 $ 6,361
======== ======== ======= =======
Accumulated $ 38,200 $ 35,945 $ 6,809 $ 6,590
======== ======== ======= =======
Projected benefit obligation $ 38,200 $ 35,945 $ 6,809 $ 6,590
Plan assets at fair value 52,199 43,922 6,020 5,022
-------- -------- ------- =======
Projected benefit obligation less than
(in excess of) plan assets $ 13,999 $ 7,977 $ (789) $(1,568)
======== ======== ======= =======
Comprised of:
Accrued pension cost -- -- $ (557) $(1,361)
Prepaid pension cost $ 3,244 $ 2,030 (23) --
Unrecognized:
Net gain 15,541 10,905 829 60
Prior service cost (6,505) (6,950) (1,292) (1,393)
Unrecorded net asset (obligation) at transition,
net of amortization 1,718 1,992 (48) (45)
Adjustment to recognize minimum liability -- -- 302 1,171
-------- -------- ------- =======
$ 13,999 $ 7,977 $ (789) $(1,568)
======== ======== ======= =======
</TABLE>
NOTE F -- Stock Options
Under its employee stock option plans, the Company may grant employees
incentive stock options to purchase shares at not less than 100% of market
value at date of grant or non-qualified stock options at a price determined by
the Stock Option Committee. Generally, options are exercisable at the rate of
20% a year beginning one year from date of grant and expire ten years
thereafter.
The following table summarizes the option plans:
<TABLE>
In thousands, Price Range Number of Options
except per share Per Share 1996 1995 1994
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Exercised $4.68- $19.25 116 198 375
At May 31,
Granted $19.25-$21.375 501 882
Outstanding $7.11- $21.375 2,174 1,821 1,164
Exercisable 996 1,115 933
Available for grants 3,117 3,618 4,500
</TABLE>
The options outstanding at May 31, 1996, were held by 688 persons, had an
average exercise price of $15.57 per share and had expiration dates ranging
from May 1997 to March 2006.
E-22
<PAGE>
NOTE G -- Contingent Liabilities
The Company is a defendant in certain legal actions. In the opinion of
management, the outcome of these actions, which is not clearly determinable at
the present time, would not significantly affect the Company's consolidated
financial position or future results of operations.
NOTE H - Industry Segment Data
Industry segment descriptions on page 3, Company locations on page 34,
and segment data on page 24 of the annual report are an integral part of these
financial statements.
Sales for processed steel products and custom products include
$209,826,000 in 1996, $204,338,000 in 1995 and $161,602,000 in 1994 to a major
automobile manufacturer purchasing through decentralized divisions and
subsidiaries in different geographical areas.
NOTE I -- Related Party Transactions
The Company purchases from and sells to affiliated companies, certain raw
materials and services at prevailing market prices. Sales for fiscal 1996,
1995 and 1994, totaled $51 million, $61 million and $62 million, respectively.
Accounts receivable related to these transactions were $10 million and $12
million at May 31, 1996 and 1995, respectively. Purchases for fiscal 1996,
1995 and 1994, totaled $167 million, $194 million and $168 million,
respectively. Accounts payable related to these transactions included $18
million and $27 million at May 31, 1996 and 1995, respectively.
NOTE J - Investment in Unconsolidated Affiliates
The Company's investments in affiliated companies which are not majority
owned or controlled are accounted for using the equity method. Investments
carried at equity and the percentage interest owned consist of Worthington
Specialty Processing, partnership (50%), London Industries, Inc. (60%),
Worthington Armstrong Venture, partnership (50%), TWB Company, partnership
(50%), Acerex, S.A. de C.V. (50%) and Rouge Steel Company (28%).
The market value of the Company's investment in the class A and class B
common stock of Rouge at May 31 1996, ($22.25 per share) was approximately
$134 million. At May 31, 1996, the Company's share of the underlying net
assets of Rouge exceeded the carrying amount included in investment in
unconsolidated affiliates of $101,134,000 by $9,106,000. The excess is being
amortized into income by increasing equity in net income of unconsolidated
affiliates using the straight-line method over 12 years.
Financial information for affiliated companies accounted for by the
equity method is as follows:
In thousands 1996 1995 1994
- --------------------------------------------------------------------------------
Current assets $ 553,023 $ 569,447
Noncurrent assets 287,247 227,315
Current liabilities 233,441 240,044
Noncurrent liabilities 176,618 167,915
Minority interests 6,404 21,404
Net sales 1,383,343 1,386,824 $1,189,470
Gross margin 122,500 170,234 106,309
Net income $ 88,644 $ 122,116 $ 64,152
E-23
<PAGE>
The Company's share of undistributed earnings of unconsolidated
affiliates included in consolidated retained earnings was $67,935,000 at May
31, 1996.
Note K - Acquisition
On February 5, 1996, the Company acquired all of the outstanding capital
stock of Dietrich Industries, Inc. for approximately $146 million in cash and
$23 million in assumed liabilities, net of cash acquired. Dietrich, based in
Pittsburgh, Pa., is involved primarily in the manufacture and sale of metal
framing products for the commercial and residential construction markets. The
acquisition was accounted for using purchase accounting with results for
Dietrich included since the purchase date. The purchase price exceeded the
fair value of the net assets acquired by approximately $66 million which is
being amortized over 40 years.
The following pro forma data summarizes the results of operations of the
Company for the twelve months ended May 31, 1996 and May 31, 1995, assuming
Dietrich was acquired at the beginning of each period presented. In preparing
the pro forma data, adjustments have been made to conform Dietrich's
accounting policies to those of the Company and to reflect purchase accounting
adjustments and interest expense:
In thousands, Twelve Months Ended
except per share (unaudited) May 31, 1996 May. 31, 1995
- --------------------------------- ------------- -------------
Net sales $ 1,660,815 $1,768,931
=========== ==========
Net earnings $ 92,503 $ 120,459
=========== ==========
Earnings per common share $ 1.02 $ 1.33
=========== ==========
The pro forma information does not purport to be indicative of the
results of operations which would have actually been obtained if the
acquisition had occurred on the dates indicated or the results of operations
which will be reported in the future.
NOTE L - Quarterly Results of Operations (Unaudited)
The following is a summary of the unaudited quarterly results of
operations for the years ended May 31, 1996 and 1995:
In thousands, Three Months Ended
------------------------------------------------------------
except per share Aug. Nov. Feb. May
- --------------------------------------------------------------------------------
1996
Net sales $325,736 $354,544 $360,224 $437,334
Gross margin 47,005 53,011 54,289 66,958
Net earnings 21,508 26,188 20,896 22,750
Earnings per share $ .24 $ .29 $ .23 $ .25
1995
Net sales $346,257 $363,276 $370,117 $403,919
Gross margin 52,132 58,008 60,392 68,404
Net earnings 25,448 28,264 28,651 34,323
Earnings per share $ .28 $ .31 $ .32 $ .38
E-24
<PAGE>
Report of Management
The management of Worthington Industries is responsible for the
preparation of the accompanying consolidated financial statements in
conformity with generally accepted accounting principles appropriate in the
circumstances. Management is also responsible for the determination of
estimates and judgments used in the financial statements, and the preparation
of other financial information included in this annual report to shareholders.
The financial statements have been audited by Ernst & Young LLP, independent
auditors.
The management of the Company has established and maintains an accounting
system and related internal controls that it believes are sufficient to
provide reasonable assurance that assets are safeguarded against unauthorized
acquisition, use or disposition, that transactions are executed and recorded
in accordance with management's authorization and that the financial records
are reliable for preparing financial statements. The concept of reasonable
assurance is based on the recognition that the cost of a system of internal
control must be related to the benefits derived and that the balancing of the
factors requires estimates and judgments. Management considers the
recommendations of the internal auditors and independent certified public
accountants concerning the Company's system of internal control and takes
appropriate actions which are cost effective in the circumstances.
The Board of Directors has an Audit Committee of Directors who are not
members of management. The Audit Committee meets periodically with the
Company's management, internal auditors and independent certified public
accountants to review matters relating to financial reporting, auditing and
internal control. To ensure auditor independence, both the internal auditors
and independent certified public accountants have full and free access to the
Audit Committee.
/s/ John H. McConnell
John H. McConnell, Chairman & Founder
/s/ John P. McConnell
John P. McConnell, Vice Chairman & CEO
/s/ Donald G. Barger, Jr.
Donald G. Barger, Jr., Vice President-CFO
/s/ Michael R. Sayre
Michael R. Sayre, Controller
E-25
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Worthington Industries, Inc.
We have audited the accompanying consolidated balance sheets of
Worthington Industries, Inc. and Subsidiaries as of May 31, 1996 and 1995, and
the related consolidated statements of earnings, shareholders' equity, and
cash flows for each of the three years in the period ended May 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Worthington Industries, Inc. and Subsidiaries at May 31, 1996 and 1995, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended May 31, 1996, in conformity with generally
accepted accounting principles.
/s/Ernst & Young LLP
_____________________
ERNST & YOUNG LLP
Columbus, Ohio
June 14, 1996
E-26
<PAGE>
<TABLE>
SELECTIVE FINANCIAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
In thousands, except per share May 31 1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL RESULTS
<S> <C> <C> <C> <C> <C>
Net Sales $ 1,477,838 $ 1,483,569 $ 1,285,134 $ 1,113,242 $ 971,346
Cost of Goods Sold 1,256,574 1,244,633 1,093,350 938,342 820,587
----------- ----------- ----------- ----------- ---------
Gross Margin 221,264 238,936 191,784 174,900 150,759
Selling, General & Administrative Expense 95,123 85,102 72,372 68,809 62,402
----------- ----------- ----------- ----------- ---------
Operating Income 126,141 153,834 119,412 106,091 88,357
Miscellaneous Income 950 573 389 598 1,289
Interest Expense (8,350) (6,036) (3,017) (3,421) (3,986)
Equity in Net Income of Unconsolidated
Affiliates - Joint Ventures 7,333 6,216 (555) 1,816 1,522
Equity in Net Income of Unconsolidated
Affiliate - Rouge 21,729 32,111 19,406 2,771 3,918
----------- ----------- ----------- ----------- ---------
Earnings From Continuing Operations Before Taxes
and Accounting Changes 147,803 186,698 135,635 107,855 91,100
Income Taxes 56,461 70,012 50,782 39,907 33,069
----------- ----------- ----------- ----------- ---------
Earnings From Continuing Operations Before
Accounting Changes 91,342 116,686 84,853 67,948 58,031
Per Share 1.01 1.29 0.94 0.76 0.65
Depreciation 39,222 34,129 32,385 29,204 26,887
Cash Provided By Operating Activities 138,442 66,401 60,854 65,924 72,905
Cash Dividends Declared 40,872 37,212 33,161 29,329 27,127
Per Share 0.4501 0.4101 0.3669 0.3270 0.3048
Capital Expenditures $ 108,996 $ 61,485 $ 46,554 $ 29,140 $ 45,120
Average Shares Outstanding 90,812 90,730 90,378 89,699 88,990
----------- ----------- ----------- ----------- ---------
============================================================================================================================
FINANCIAL POSITION
Current Assets $ 476,041 $ 451,902 $ 413,116 $ 363,513 $ 311,247
Current Liabilities 151,269 179,228 161,866 139,791 121,008
----------- ----------- ----------- ----------- ---------
Working Capital 324,772 272,674 251,250 223,722 190,239
Net Fixed Assets 512,336 334,917 307,561 293,392 293,456
Total Assets 1,220,125 916,964 798,573 694,209 627,960
Long-Term Debt 298,742 53,476 54,136 55,626 57,345
Shareholders' Equity 639,540 590,332 503,893 438,188 392,295
Per Share 7.04 6.50 5.56 4.86 4.39
Total Capital $ 938,282 $ 643,808 $ 558,029 $ 493,814 $ 449,640
Shares Outstanding 90,830 90,840 90,561 90,113 89,308
==============================================================================================================================
PERFORMANCE COMPARISON
Profitability (After Taxes)
Return on Net Sales 6.2% 7.9% 6.6% 6.1% 6.0%
Return on Average Total Assets 8.5% 13.6% 11.4% 10.3% 9.7%
Return on Average Total Capital 11.5% 19.4% 16.1% 14.4% 13.4%
Return on Average Shareholders' Equity 14.9% 21.3% 18.0% 16.4% 15.4%
Financial Condition
Current Ratio 3.2 X 2.5 X 2.6 X 2.6 X 2.6 X
Long-Term Debt/Total Capital 32% 8% 10% 11% 13%
Asset Use
Inventory Turnover 6.5 X 6.0 X 6.4 X 6.4 X 6.1 X
Accounts Receivable/Days Sales 43 46 43 45 47
Growth
Net Sales -0.4% 15.4% 15.4% 14.6% 11.5%
Earnings From Continuing Operations
Before Accounting Changes -21.7% 37.5% 24.9% 17.1% 21.4%
Earnings Per Share From Continuing Operations
Before Accounting Changes -21.7% 37.2% 23.7% 16.9% 20.4%
Cash Dividends Declared Per Share 9.7% 11.8% 12.2% 7.3% 12.6%
</TABLE>
================================================================================
E-27
<PAGE>
SHAREHOLDER INFORMATION
<TABLE>
- ------------------------------------------------------------------------------------------------------
Quarterly Volume, Price and Dividend Information NASDAQ
Prices
-------------------------
Fiscal 1995 Shares Average Daily Price Earnings Cash
Quarter Ended Traded Volume Ratio Range Low High Dividends
- --------------------------- --------------------- ------------------------ ------------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
August 31 9,542,161 146,802 19-24 $ 17.50 $ 22.00 $ 0.100
November 30 15,776,732 250,424 19-23 $ 19.25 $ 23.50 $ 0.100
February 28 12,795,463 209,762 17-20 $ 18.75 $ 21.75 $ 0.100
May 31 14,825,214 231,643 15-19 $ 18.13 $ 22.38 $ 0.110
- ------------------------------------------------------------------------------------------------------
Quarterly Volume, Price and Dividend Information NASDAQ
Prices
-------------------------
Fiscal 1996 Shares Average Daily Price Earnings Cash
Quarter Ended Traded Volume Ratio Range Low High Dividends
- --------------------------- --------------------- ------------------------ ------------------------- --------------
August 31 17,608,160 270,895 15-18 $ 19.13 $ 23.25 $ 0.110
November 30 25,205,177 400,082 13-16 $ 16.63 $ 20.25 $ 0.110
February 29 18,062,061 291,324 15-18 $ 18.50 $ 22.13 $ 0.110
May 31 14,697,302 229,645 17-20 $ 19.50 $ 22.50 $ 0.120
</TABLE>
At May 31, 1996 (10,563 Shareholders)
E-27
<PAGE>
Shares Trading
Shares of Worthington Industries common stock are traded in the
over-the-counter market as part of the NASDAQ National Market System. The
Company is identified by the NASDAQ symbol "WTHG" and in most newspaper
listings as "WorthtnInd."
E-28
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Fiscal 1996 was the second best year in the 41 year history of the
Company. Net sales of $1.478 billion were comparable to last year's results,
while earnings of $91.3 million and earnings per share of $1.01 were off 22%
from last year's strong records. Fiscal 1995 net sales of $1.484 billion , net
earnings of $116.7 million, and earnings per share of $1.29 were all records,
increasing 15%, 38% and 37%, respectively, from fiscal 1994.
On February 5, 1996, the Company purchased Dietrich Industries, Inc. for
$169 million. Dietrich, based in Pittsburgh, is involved primarily in the
manufacture and sale of metal framing products for the commercial and
residential construction markets. Results for this metal framing business
since the purchase date are included in the Company's financial results.
Fiscal 1996 profitability percentages reflected the year's lower
earnings. Return on sales was 6.2% for 1996, down from 7.9% in 1995 and 6.6%
in 1994. Return on average assets decreased to 8.5% in 1996 from 13.6% in 1995
and 11.4% in 1994 due to the lower earnings and the addition of Dietrich
assets. Return on average shareholders' equity decreased to 14.9% from 21.3%
in 1995 and 18.0% in 1994.
E-29
<PAGE>
Fiscal 1996 results were affected by slowing demand in most of the
Company's product lines. Margins declined due to the lower volume and lower
selling prices used to stimulate demand. Shifts in product mix, designed to
increase volume in some lines of business while increasing overall
profitability, reduced average selling prices and margins.
In fiscal 1995, as the economy continued to expand, the Company benefited
from high demand throughout its markets, high volume economies, and the
productivity efforts of its employees. The higher sales for 1995 were a result
of higher order levels and some selling price increases, as higher raw
material costs were generally passed through to customers.
Cost of goods sold increased 1% for 1996, reflecting the interplay
between the addition of Dietrich in February and lower volume in the Company's
other businesses. Manufacturing and direct labor costs also increased due to
the same factors. In fiscal 1995, cost of goods sold increased 14%, roughly in
line with sales, as higher raw material costs offset the benefits gained from
cost reductions, increased productivity, and the leveraging of fixed costs
with higher volume.
Gross margin decreased 7% in 1996, following a 25% increase in 1995. As a
percentage of sales, gross margin was 15.0% in 1996, 16.1% in 1995 and 14.9%
in 1994. In 1996, lower volumes in steel processing, steel castings and a mix
change in cylinders more than offset Dietrich's contribution to gross margin.
In 1995, gross margin improved as the expanding economy provided a more
favorable environment for passing raw material cost increases to customers.
E-30
<PAGE>
Selling, general and administrative (S,G&A) expense as a percentage of
sales was 6.4% in 1996, 5.7% in 1995 and 5.6% in 1994. During 1996, higher
benefit costs and the addition of Dietrich's costs were only partially offset
by decreased profit sharing. Dietrich's cost structure is more S,G&A intensive
than that of the Company's other businesses. Fiscal 1995's increase was
attributable to higher sales volumes and increased profit sharing
distributions resulting from the higher profits.
For the reasons discussed above, fiscal 1996 operating income decreased
18%, after a 29% increase in 1995. As a percentage of sales, operating income
decreased to 8.5% from 10.4% in 1995 and 9.3% in 1994.
Interest expense increased 38% in 1996 following a 100% increase in
fiscal 1995. In 1996, both the average debt outstanding and the average
interest rate increased. Debt levels rose in 1996 due to the high level of
capital spending and the acquisition of Dietrich. During May 1996, the Company
issued $200 million of public debt was issued primarily to pay off the bridge
loan used to acquire Dietrich. In 1995, both the average debt outstanding and
average interest rate increased. The 1995 increase in average debt outstanding
was due to the high level of capital spending and increased working capital to
support the sales growth. The average interest rate was 6.3% in 1996, up from
6.2% in 1995 and 4.0% in 1994. Interest of $2.1 million was capitalized during
1996.
E-31
<PAGE>
Equity in net income of unconsolidated affiliates decreased 24% in 1996.
This was primarily due to a decline in equity income from Rouge Steel
resulting from competitive pricing pressure in the primary steel industry.
Equity in net income from affiliates excluding Rouge, increased 18%. Equity
from Worthington Armstrong Venture (WAVE) was up significantly on increased
volume in both the U.S. and Europe. TWB made good progress and its operating
loss decreased. The Acerex joint venture in Mexico started production in
October 1995 and is shipping within Mexico and into the southwest U.S.
The majority of 1995's fourfold increase in equity in net income of
affiliates came from the equity in Rouge Steel, which benefited from higher
steel prices that year. TWB Company, in its startup mode, lost significantly
less than in 1994. WAVE contributed to the increased equity in 1995 as demand
for its products grew and its plant in France became profitable in its first
full year of operation.
In fiscal 1997, the Company initiated steps relative to its investment in
Rouge which, if completed, would result in the Company accounting for this
investment on the cost method instead of the equity method. Rouge contributed
$21.7 million, $32.1 million, and $19.4 million to pretax earnings during
fiscal 1996, 1995 and 1994, respectively.
E-32
<PAGE>
The effective tax rate rose in fiscal 1996 due to permanent differences
which became a larger percentage of pretax earnings. The effective tax rate
increased to 38.2% from 37.5% in 1995 and 37.4% in 1994. In 1995, increases in
state tax rates and a shift in sales to states with higher rates were
partially offset by permanent differences.
Processed Steel Products
In 1996, the processed steel products segment had its second best year
ever, but both sales and operating income were lower than in 1995. Sales of
$1.013 billion and operating income of $93.4 million were down 1% and 17%,
respectively. Operating income return on sales decreased to 9.2%. Steel
processing sales were below last year primarily due to lower volume. Operating
margins were lower due to the reduced volume and lower selling prices. Profits
were also affected by the General Motors strike during the third quarter and
the shutdown of a zinc plating line at the Malvern, Pennsylvania plant in the
fourth quarter, which is being replaced by a new nickel plating line.
Dietrich's operations, which were included from the date of acquisition only ,
suffered from pricing pressures, and the traditionally slow winter commercial
construction season. Pressure cylinders' sales and earnings were down as
increased demand for heating tanks did not fully offset lower shipments of
refrigerant cylinders. This shift in product mix also affected margins.
E-33
<PAGE>
In fiscal 1995, sales of processed steel products rose 12% to $1.028
billion and operating income increased 15% to $112.4 million, setting new
records. Return on sales increased to 10.9% from 10.7%. The steel processing
operations continued to gain market share and demand remained strong due to
the expanding economy, increased auto production and strength in the
non-automotive sector. The sales increase was attributable generally to higher
volume and, to a lesser extent, higher prices as increases from the steel
mills were generally passed through to customers. In pressure cylinders,
strong worldwide demand led to higher volumes in most product lines,
particularly the largest lines, steel portables and non-refillables. Cylinder
sales increase also contained a price factor, as selling prices rose to
reflect the increase in steel prices and the higher cost of the newly required
"quick connect" valve.
In June 1996, the Company purchased SCM Technologies which designs,
engineers and manufactures high pressure industrial, medical, halon and
electronic gas cylinders. SCM, which is located just outside Windsor, Ontario,
will enable the Company to increase its penetration in the high pressure
cylinder market.
The Company's new steel processing facility in Delta, Ohio is expected to
begin operating late in calendar 1996. This plant will have pickling, slitting
and hot dipped galvanizing capabilities and will be supported by a supply
agreement with the adjacent North Star/BHP mini-mill. This arrangement is
expected to complement the supply/equity relationship with Rouge Steel and
purchases from other mills. In addition, major capital investments are
currently in process in a number of the Company's steel processing operations.
E-34
<PAGE>
Custom Products
Sales for custom products of $321 million were up 6% in fiscal 1996.
Operating income decreased 8% to $18.2 million or 5.7% of sales, as better
performance by custom plastics was offset by lower results for precision
metals. The plastics operations increased sales and earnings due to new
automotive and appliance contracts and improvements at the newer facilities in
South Carolina and Kentucky. Volume from new jobs increased sales for
precision metals above last year, but profits were lower due to inefficiencies
caused by startups and specification changes on certain high volume parts.
In fiscal 1995, custom products posted record results, as sales increased
21% to $302.1 million and operating income increased 29% to $19.8 million.
Return on sales rose to 6.5% from 6.1% in 1994. The plastics operation
benefited from high demand for automobiles and non-automotive products. The
new plastics facility in St. Matthews, South Carolina, became profitable
during the year and the new plant in Lebanon, Kentucky, became profitable in
its fourth month of operation. Precision metals sales and profits were also up
due to higher production levels and increased experience and productivity on
new contracts started in fiscal 1994.
E-35
<PAGE>
Cast Products
During 1996, sales for cast products decreased 6% to $143.7 million and
operating income was down 33% to $14.6 million. Railcar demand was down from
last year's high levels resulting in a decrease of volume, selling prices and
the leveraging of fixed costs.
During 1995, sales increased 33% to $153.1 million, while operating
income rose 261% to a record $21.7 million. Return on sales increased to 14.2%
from 5.2% in 1994. Strong demand for freight railcars drove volume and
productivity gains.
Liquidity and Capital Resources
At May 31, 1996, the Company's balance sheet remained strong. Working
capital increased to $324.8 million, representing 27% of total assets and 22%
of sales, in line with historic trends. The current ratio increased to 3.2 to
1 from 2.5 to 1 at May 31, 1995. Total debt stood at $300.2 million. Long-term
debt was $298.7 million, or 32% of total capital, compared to 8% at the end of
fiscal 1995.
Cash provided by operating activities was an all-time record reaching
$138.4 million, aided by a $13.5 million decrease in accounts receivable and a
$35.2 million decrease in inventories, which occurred because of lower raw
material costs, better inventory management, and lower sales volume and
prices. At fiscal year-end, days sales in accounts receivable and days of
inventory were down 3 and 5 days, respectively, from the end of 1995. The
funds to purchase Dietrich for a net cash price of $169 million were
originally obtained through a $180 million acquisition bridge loan credit
facility. The bridge facility was then paid off with the proceeds of a $200
million public debt offering in May 1996.
E-36
<PAGE>
Dividends paid during 1996 of $40 million were a record for the 28th
consecutive year. Capital investment in businesses (capital expenditures and
investments in unconsolidated affiliates) totaled $117 million in 1996,a 62%
increase from fiscal 1995. The most significant project was the Delta, Ohio
steel processing and galvanizing plant.
In 1995, the Company entered into a $150 million long-term revolving
credit agreement with several banks, replacing a $40 million unsecured line of
credit . At May 31, 1996, $65 million of the revolver was unused. The
Company's immediate borrowing capacity, plus its cash generated from
operations, should be more than sufficient to fund expected normal operating
costs, dividends, debt payments and capital expenditures for existing
businesses. While there are no specific needs, the Company regularly considers
long-term debt issuance as a alternative depending on financial market
conditions.
The Company believes that environmental issues will not have a material
effect on capital expenditures, consolidated financial position or future
results of operations.
E-37
<PAGE>
E-55
COMPANY LOCATIONS:
<PAGE>
PROCESSED STEEL PRODUCTS CAST PRODUCTS
Buckeye Steel Castings Company
The Worthington Steel Company Columbus, Ohio
Columbus, Monroe & Delta, Ohio Worthington Machine Technology
Louisville, Kentucky Columbus, Ohio
Rock Hill, South Carolina
Baltimore, Maryland
Jackson & Taylor, Michigan
Midland, Georgia CUSTOM PRODUCTS
Malvern, Pennsylvania
Porter, Indiana Worthington Custom Plastics, Inc.
Mason, Salem & Upper Sandusky, Ohio
Worthington Cylinder Corporation St. Matthews, South Carolina
Lebanon, Kentucky
Columbus, Jefferson & Westerville, Ohio
Claremore, Oklahoma
Midland, Georgia Worthington Precision Metals, Inc.
Guelph, Ontario Mentor, Ohio
Citronelle, Alabama Franklin, Tennessee
Tilbury, Ontario
Dietrich Industries
Hammond & LaPorte, Indiana
Hicksville, Warren & Aurora, Ohio
Ashville, Alabama
Baltimore, Maryland
Lunenburg, Massachusetts
Colton & Stockton, California
Phoenix, Arizona
Wildwood & Miami, Florida
East Brunswick, New Jersey
Hutchins, Texas
Fredericksburg, Virginia
Denver, Colorado
Lenexa, Kansas
E-30
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
E-31
<PAGE>
EXHIBIT 21
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
Jurisdiction of
Subsidiary (1) Incorporation
WI Investments, Inc. Delaware
Dietrich Industries, Inc. Pennsylvania
Subsidiaries of WI Investments, Inc.
Worthington Industries, Incorporated Ohio
The Worthington Steel Company Indiana
The Worthington Steel Company Kentucky
The Worthington Steel Company Maryland
The Worthington Steel Company Michigan
The Worthington Steel Company North Carolina
The Worthington Steel Company Pennsylvania
NRM Trucking Co. (2) Delaware
Worthington Ventures, Inc. (2)(3) Delaware
Worthington Steel of Michigan, Inc. Michigan
Worthington Cylinder Corporation Ohio
Worthington Acetylene Cylinders, Inc. (4) Alabama
(d/b/a North American Cylinders, Inc.)
Worthington Cylinders of Canada, Inc. (4) Ontario, Canada
Steel Cylinder Manufacturing, Limited (5) Ontario, Canada
Buckeye Steel Castings Company Ohio
Buckeye Energy Company, Inc. (6) Ohio
B-I Sales, Inc. (6) Michigan
GSI Engineering, Inc. (6) Delaware
Buckeye International Development, Inc.(6) Ohio
Worthington Custom Plastics, Inc. (6) Ohio
Worthington Precision Metals, Inc. (7) Tennessee
Worthington Industries of Mexico, S.A. de C.V. Mexico
* * * * * *
(1) All subsidiaries are 100% owned by the listed parent unless otherwise
noted Some minor or non-functioning corporations are not listed
(2) Wholly-owned subsidiary of Worthington Steel Company (PA)
(3) Holding company for Worthington Armstrong Venture
(4) Wholly-owned subsidiary of Worthington Cylinder Corporation
(5) Wholly-owned subsidiary of Worthington Cylinders of Canada, Inc.
(6) Wholly-owned subsidiary of Buckeye Steel Castings Company
(7) Wholly-owned subsidiary of Worthington Custom Plastics, Inc.
E-32
<PAGE>
JOINT VENTURES
Worthington Specialty Processing (8) Michigan
London Industries, Inc. (9) Ohio
TWB Company (10) Michigan
Worthington Armstrong Venture (11) Delaware
Acerex, S.A. de C.V. (12) Mexico
* * * * * *
(8) 50% Joint Venture with USX Corp.-Partnership owned by Worthington Steel
of Michigan
(9) 60% owned Joint Venture with Nissen, Sumitomo & Sumitomo Corp. of America
- owned by WCP
(10) 50% Joint Venture with Thyssen Steel- Partnership owned by Worthington
Steel of Michigan
(11) 50% Joint Venture with Armstrong Ventures, Inc.-Partnership owned by
Worthington Ventures, Inc.
(12) 50% Joint Venture with Hylsa S.A. de C.V. & Worthington Industries
Mexico, S.A. de C.V.
E-33
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
E-34
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form
10-K) of Worthington Industries, Inc. of our report dated June 14, 1996,
included in the 1996 Annual Report to Shareholders of Worthington Industries,
Inc.
Our audits also included the financial statement schedule of Worthington
Industries, Inc. listed in Item 14(a). This schedule is the responsibility of
the Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.
We also consent to the incorporation by reference in the Registration
Statements (Form S-8 No. 33-57981) pertaining to the Worthington Industries,
Inc. Deferred Profit Sharing Plan; (Form S-8 No. 2-80094) pertaining to the
Worthington Industries, Inc. Amended 1980 Stock Option Plan; (Form S-3 No.
33-46470) pertaining to the Worthington Industries, Inc. Dividend Reinvestment
and Stock Purchase Plan; (Form S-8 No. 33-38486) pertaining to the Worthington
Industries, Inc. 1990 Stock Option Plan; and (Form S-3 No. 333-03087)
pertaining to Worthington Industries, Inc. Debt Securities of our report dated
June 14, 1996, with respect to the consolidated financial statements
incorporated herein by reference, and our report included in the preceding
paragraph with respect to the financial statement schedule included in this
Annual Report (Form 10-K) of Worthington Industries, Inc.
/s/Ernst & Young LLP
Columbus, Ohio
August 28, 1996
E-35
E-36
<PAGE>
EXHIBIT 24
POWERS OF ATTORNEY
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/Donald G. Barger, Jr.
Donald G. Barger, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ Robert J. Borel
Robert J. Borel
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/Charles R. Carson
Charles R. Carson
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ William S. Dietrich, II
William S. Dietrich, II
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ Edward A. Ferkany
Edward A. Ferkany
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ John E. Fisher
John E. Fisher
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ John F. Havens
John F. Havens
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ Thomas L. Hockman
Thomas L. Hockman
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ Robert J. Klein
Robert J. Klein
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ Pete A. Klisares
Pete A. Klisares
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ Katherine S. LeVeque
Katherine S. LeVeque
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ Donal H. Malenick
Donal H. Malenick
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ John H. McConnell
John H. McConnell
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ John P. McConnell
John P. McConnell
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ Robert B. McCurry
Robert B. McCurry
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ Charles D. Minor
Charles D. Minor
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ Gerald B. Mitchell
Gerald B. Mitchell
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
and/or director of Worthington Industries, Inc., a Delaware corporation, which
is about to file with the Securities and Exchange Commission, Washington,
D.C., under the provisions of the Securities Act of 1934, its Annual Report on
Form 10-K for the year ended May 31, 1996 constitutes and appoints Donal H.
Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and lawful
attorneys-in-fact and agents, with full power to act without the other, for
him and in his name, place and stead, in any and all capacities, to sign such
Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
16th day of August, 1996.
/s/ James Petropoulos
James Petropoulos
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