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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended May 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______________ to _____________
Commission File No. 1-8399
WORTHINGTON INDUSTRIES, INC.
----------------------------
(Exact name of Registrant as specified in its Charter)
OHIO 31-1189815
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1205 Dearborn Drive, Columbus, Ohio 43085
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (614) 438-3210
-----------------------------
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------
Common Shares, Without Par Value New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
-------------
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 [ ]
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. [X]
Based upon the closing price of the Common Shares on August 11, 2000,
as reported on the New York Stock Exchange composite tape (as reported by the
Wall Street Journal), the aggregate market value of the Common Shares held by
non-affiliates of the Registrant as of such date was approximately $795,320,759.
The number of Common Shares issued and outstanding as of August 11,
2000, was 85,754,525.
Portions of the Registrant's Annual Report to Shareholders for the
fiscal year ended May 31, 2000 are incorporated by reference into Part I and
Part II of this Form 10-K. 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 28, 2000 are incorporated by reference into
Part III of this Form 10-K.
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SAFE HARBOR STATEMENT
Statements contained in this FORM 10-K, including, without limitation,
the statements incorporated by reference into "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations", constitute
"forward-looking statements" that are based on management's beliefs, estimates,
assumptions and currently available information. Such forward-looking statements
include, without limitation, statements relating to future operating results,
growth, stock appreciation, projected capacity levels, pricing trends,
anticipated capital expenditures, plant start-ups and capabilities and other
non-historical information. Because they are based on beliefs, estimates and
assumptions, forward-looking statements are inherently subject to risks and
uncertainties that could cause actual results to differ materially from those
projected. Any number of factors could affect actual results, including, without
limitation, product demand, changes in product mix and market acceptance of
products; changes in pricing or availability of raw materials, particularly
steel; capacity restraints and efficiencies; conditions in major product
markets; delays in construction or equipment supply; ability to integrate recent
acquisitions; inherent risks of international development, including foreign
currency risks; the ability to improve processes and business practices to keep
pace with the economic, competitive and technological environment; general
economic conditions, business environment and the impact of governmental
regulations, both in the United States and abroad; and other risks described
from time to time in filings with the Securities and Exchange Commission.
PART I
ITEM 1. - BUSINESS
------------------
Worthington Industries, Inc. is referred to herein individually as the
"Registrant" or "Worthington" or, together with its subsidiaries, as the
"Company". Founded in 1955, the Company is a diversified steel processor that
focuses on steel processing and metals-related businesses. It operates 40
facilities worldwide and its corporate headquarters are located at 1205 Dearborn
Drive, Columbus, Ohio 43085. The Company also holds equity positions in seven
joint ventures, which operate 15 facilities worldwide.
For the fiscal year ended May 31, 2000 ("fiscal 2000"), the Company's
operations are reported principally in three business segments: Processed Steel
Products, Metal Framing and Pressure Cylinders. The Processed Steel Products
segment includes The Worthington Steel Company business unit and The
Gerstenslager Company business unit. The Metal Framing segment is made up of
Dietrich Industries, Inc. and the Pressure Cylinders segment consists of
Worthington Cylinder Corporation. In addition, the Company holds an equity
position in seven joint ventures as described below. During the fiscal year
ended May 31, 1999 ("fiscal 1999") in keeping with its strategy to focus on
steel processing and metals-
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related businesses, the Company divested its Worthington Custom Plastics, Inc.,
Worthington Precision Metals, Inc. and Buckeye Steel Castings Company
operations. The divested operations, which previously made up the Company's
Custom Products and Cast Products segments, have been reported as discontinued
operations for fiscal 1999 and prior thereto.
During fiscal 1999, Worthington reincorporated from the State of
Delaware into the State of Ohio. On October 13, 1998, Worthington Industries,
Inc., a Delaware corporation ("Worthington Delaware"), was merged (the "Merger")
with and into Worthington, an Ohio corporation and, at the time, a wholly-owned
subsidiary of Worthington Delaware. Each share of common stock, par value $0.01
per share, of Worthington Delaware was converted into one common share, without
par value, of Worthington. By virtue of the Merger, Worthington succeeded to all
the business, properties, assets and liabilities of Worthington Delaware and the
directors, officers and employees of Worthington Delaware became directors,
officers and employees of Worthington.
PROCESSED STEEL PRODUCTS
------------------------
The Processed Steel Products segment consists of two business units,
The Worthington Steel Company ("Worthington Steel") and The Gerstenslager
Company ("Gerstenslager"). For fiscal 2000, fiscal 1999, and the fiscal year
ended May 31, 1998 ("fiscal 1998"), the percentage of the Company's sales from
continuing operations generated by the Processed Steel Products segment was
65.6%, 63.2% and 64.6%, respectively.
Both Worthington Steel and Gerstenslager are intermediate processors of
flat-rolled steel. Worthington Steel occupies a niche in the steel industry by
focusing on specialized products requiring exact specifications, which typically
cannot be supplied as efficiently by steel mills, metal service centers or steel
end users. The Company believes that Worthington Steel is the largest
independent flat rolled steel processor in the United States. Gerstenslager is a
leading independent supplier of Class A exterior body panels to the North
American automotive original equipment and service part markets.
The Company's Processed Steel Products segment operates 12 processing
facilities as well as Spartan Steel Coating, L.L.C., the Company's consolidated
joint venture with Rouge Steel Company. These facilities are concentrated in the
Michigan, Ohio and Indiana market, the largest flat rolled steel consuming
market in the United States. The segment serves over 1,000 industrial customers,
principally in the automotive, automotive supply, appliance, electrical,
communications, construction, office furniture, office equipment, agricultural,
machinery and leisure time industries.
The two newest processed steel products facilities are located in
Decatur, Alabama ("Decatur") and Delta, Ohio ("Delta"). Decatur began commercial
slitting
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and pickling operations in May 1998 and produced its first commercially saleable
cold-rolled coils in August 1998, contributing to the Company's fiscal 1999
increase in sales. Delta completed its first full year of operation during
fiscal 1998, contributing to the Company's fiscal 1998 increase in sales. In
addition, the Monroe, Ohio facility resumed pickling operations during fiscal
1999, marking the completion of its recovery from an August 1997 fire that
caused extensive damage to the plant.
The Company 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 required by customer
specifications. The Company'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; cutting-to-length, which flattens the steel and cuts it to
exact lengths; 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; configured blanking, through which steel is cut into specific
shapes; painting; hot dipped galvanizing, which coats the steel with zinc and
zinc alloys through a hot dipped process; nickel and zinc/nickel plating, which
coats the steel with zinc or zinc and nickel using an electronic process; and
annealing, a thermal process that changes the hardness and certain metallurgical
characteristics of steel. The Company also stamps, assembles, primes and
packages exterior automotive body panels. In addition, the Company "toll
processes" steel for steel mills and large end users. Toll processing is similar
to the Company's normal steel processing, except the mill or end user retains
the title to the steel and has the responsibility for selling the end 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.
The Processed Steel Products Industry is fragmented and highly
competitive. The Company competes with many other independent intermediate
processors and, with respect to automotive stamping, captive processors owned by
the automotive companies, independent tier one suppliers of current model
components and a number of smaller competitors. The Company believes it is
unique in its ability to handle a very large number of low volume aftermarket
automotive body parts, managing over 3,000 die sets for component parts on past
and current automobile and truck production models. Despite the competitive
nature of the processed steel products industry, the Company knows of no other
intermediate processor offering the same type and extent of technical service
support provided by the Company relating to material testing and application of
material to the particular needs of customers. See "Item 1 - Business -
Technical Services." The Company is unable to gauge, however, the extent to
which its technical service capability has improved its competitive position.
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METAL FRAMING
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The Metal Framing segment consists of one business unit, Dietrich
Industries, Inc. ("Dietrich"), which is the largest supplier of metal framing
products for the commercial and residential construction markets in the United
States. For fiscal 2000, fiscal 1999 and fiscal 1998, the percentage of the
Company's sales from continuing operations generated by Dietrich was 17.9%,
19.1%, and 20.7%, respectively. Dietrich's products include steel studs, floor
and wall system components, roof trusses and other metal accessory products.
Dietrich has over 2,000 customers, primarily consisting of building products
distributors, commercial and residential contractors, and gypsum producers.
The Company believes that Dietrich is the only national supplier of
metal framing products and supplies approximately 36% of the metal framing
products sold in the United States. It has five large regional competitors and
numerous small, more localized competitors. Dietrich operates 18 facilities in
thirteen states.
PRESSURE CYLINDERS
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The Pressure Cylinders segment consists of one business unit,
Worthington Cylinder Corporation ("Worthington Cylinders"). For fiscal 2000,
fiscal 1999 and fiscal 1998, the percentage of the Company's sales from
continuing operations generated by Worthington Cylinders was 16.2%, 17.3%, and
13.8%, respectively.
During fiscal 1999, the Company expanded its Pressure Cylinders segment
by acquiring the cylinder operations of Jos. Heiser vormals J. Winter's Sohn,
GmbH ("Worthington Austria"), based in Kienberg, Austria, in June 1998; certain
assets of Metalurgica Progresso de Vale de Cambra, Lda. ("Worthington
Portugal"), based in Vale de Cambra, Portugal, in May 1999; and a majority
interest in Gastec spol. s.r.o. ("Worthington Czech"), based in Hustopece, Czech
Republic, in February 1999.
Worthington Cylinders is the nation's largest producer of portable
low-pressure liquid propane and refrigerant gas cylinders, and is a global
leader in the production of portable high-pressure cylinders. Worthington
Cylinders' primary low-pressure cylinder products are steel cylinders with
refrigerant gas capacities of 15 to 1,000 lbs. and steel and aluminum cylinders
with liquid propane gas capacities of 4-1/4 to 420 lbs. The Company produces
low-pressure cylinders in accordance with U. S. Department of Transportation
safety requirements as well as various International requirements and standards.
Low-pressure cylinders are produced by precision stamping, drawing and welding
of component parts to customer specifications. They are then tested, painted and
packaged as required.
The Company's refrigerant gas 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 liquid propane gas cylinders are sold to
manufacturers and distributors
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of barbecue grills and propane, 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.
Worthington Cylinders' high-pressure cylinders are manufactured by
several processes, including deep drawing, billet piercing and spinning. They
are sold primarily to gas suppliers and fillers as containers for acetylene,
medical, industrial, halon, electronics, cutting and welding gases.
While a large percentage of cylinder sales are made to major accounts,
Worthington Cylinders has over 3,000 customers. It operates nine wholly-owned
manufacturing operations throughout the United States, Austria, Canada and
Portugal; and two joint venture facilities, Worthington S.A. in Itu, Brazil and
Worthington Czech.
The Company has two principal domestic competitors in its major
low-pressure cylinder markets, as to which management believes the Company has
the largest domestic market share. The Company also has two principal domestic
competitors in its high-pressure cylinder markets, both of which have a larger
domestic market share than the Company. The Company believes that Worthington
Austria has the largest share of the European industrial gas cylinder market.
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.
SEGMENT DATA
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For financial information about the Company's segments, see "Note H -
Industry Segment Data" of the Company's Notes to Consolidated Financial
Statements included in Worthington's 2000 Annual Report to Shareholders, which
is incorporated herein by reference.
CUSTOMERS
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During fiscal 2000, the Company's Processed Steel Products, Metal
Framing and Pressure Cylinders segments served over 1,000, 2,000 and 3,000
customers, respectively. The Company's customers are located primarily in the
United States, Canada and Europe and operate in a variety of industries,
including without limitation, the automotive, automotive supply, appliance,
electrical, building products distribution, communications, commercial and
residential construction, office furniture and equipment, agricultural,
machinery and leisure industries. See "Item 1 - Business - Processed Steel
Products," "--Metal Framing," and "--Pressure Cylinders" for a discussion
regarding customers within the Company's segments. The Company has no single
customer that accounts for over 10% of the Company's consolidated net sales.
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SUPPLIERS
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In fiscal 2000, the Company purchased in excess of three million tons
of steel for use as raw material for its Processed Steel Products, Pressure
Cylinders and Metal Framing segments. It purchases steel in large quantities at
regular intervals from major primary producers, both domestically and globally.
The Company primarily purchases and supplies steel based on the specific orders
of customers and does not typically purchase steel for inventory. The Company
purchases the majority of its raw materials in the open market at prevailing
market prices, but, occasionally, will enter into long-term fixed-price
contracts. During fiscal 2000, the Company's major suppliers of steel were
Bethlehem Steel Corporation, Inland Steel Company, LTV Steel Corporation,
NorthStar BHP Steel, Rouge Industries, Inc., TRICO Steel, USX Corporation and
WCI Steel, Inc. In addition, the Company's primary aluminum suppliers in fiscal
2000 for its Pressure Cylinders segment were Alcoa, Inc. and Specialty Blanks
Incorporated. Management believes that its supplier relationships are good.
MARKETING AND COMPETITION
-------------------------
The Company believes that it has established and maintains customer
relationships primarily because of its tradition of leadership in value-added
steel processing and metals-related industries. The Company's products and
services are sold primarily by Company sales personnel, who receive orders on
both an order-by-order basis and through long-term program commitments. Foreign
operations and exports represent less than 10% of the Company's production,
sales and assets.
The Company competes primarily on the basis of quality of product,
ability to meet delivery requirements 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 "Item 1 - Business - Processed Steel Products," "--Metal Framing,"
and "--Pressure Cylinders" for a discussion regarding marketing and competition
within the Company's segments.
TECHNICAL SERVICES
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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 required for the particular
needs of the Company's customers. In order to provide such services, 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
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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.
EMPLOYEES
---------
As of May 31, 2000, the Company employed approximately 8,000 employees
in its operations, excluding unconsolidated joint ventures. Approximately 20% of
the Company's labor force is covered by collective bargaining agreements. The
Company believes that it has good relationships with its employees.
JOINT VENTURES
--------------
As part of its strategy to selectively develop new products, markets
and technological capabilities, and to expand its international presence while
mitigating the risks and costs associated with such activities, the Company
participates in three consolidated and four unconsolidated joint ventures.
Worthington Armstrong Venture ("WAVE"), a 50%-owned joint venture with
Armstrong World Industries, Inc., is one of the three leading global
manufacturers of suspended ceiling systems for concealed and lay-in panel
ceilings. WAVE operates facilities in Pennsylvania, Maryland, Michigan, Nevada,
England, France, Spain and China.
TWB Company, L.L.C., a 33%-owned joint venture with Thyssen Krupp,
Rouge Steel, LTV Steel and Bethlehem Steel produces laser-welded tailored blanks
which the North American automotive industry uses in the production of products
such as door inner panels, frame rails, and body side frames. TWB's two
facilities are located in Monroe, Michigan and Saltillo, Mexico.
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 in Jackson, Michigan, operates primarily as a toll processor for USX
Corporation.
Worthington Gastec a.s., a 51%-owned consolidated joint venture with a
local Czech Republic entrepreneur, operates a pressure cylinder manufacturing
facility in Hustopece, Czech Republic.
Spartan Steel Coating, L.L.C., a 52%-owned consolidated joint venture
with Rouge Steel Company, operates a cold rolled hot dipped galvanizing facility
in Monroe, Michigan.
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Worthington S.A., a 52%-owned consolidated joint venture with three
Brazilian propane producers, operates a cylinder manufacturing facility in Itu,
Brazil.
See "Note J - Investment in Unconsolidated Affiliates" of the Company's
Notes to Consolidated Financial Statements included in Worthington's 2000 Annual
Report to Shareholders for additional information on the Company's
unconsolidated joint ventures.
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 and, accordingly, will not be material to
its financial position or results of operations.
ITEM 2. - PROPERTIES
--------------------
The Company's corporate offices are located in Columbus, Ohio. Its
principal properties consist of 40 manufacturing facilities, excluding those of
unconsolidated joint ventures. These facilities are well maintained and in good
operating condition. The Company's manufacturing facilities contain in excess of
9,000,000 sq. ft. in the aggregate and are adequate to meet the Company's
present needs.
The locations of these facilities, as well as the Company's joint
ventures, are set forth on page 33 of the Company's 2000 Annual Report to
Shareholders, which information is incorporated herein by reference.
See "Item 1 - Business - Processed Steel Products," "- Metal Framing,"
and "- Pressure Cylinders" for further discussion on properties owned within
particular segments.
ITEM 3. - LEGAL PROCEEDINGS
---------------------------
Various legal actions arising in the ordinary course of business are
pending against the Company. None of the litigation pending against the Company,
individually or collectively, is expected to have a material adverse effect on
the Company.
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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None.
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EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------
The following table lists the names, positions held, and ages of all
executive officers of the Registrant:
<TABLE>
<CAPTION>
PRESENT OFFICE HELD
NAME AGE POSITIONS WITH THE REGISTRANT SINCE
---- --- ----------------------------- -----
<S> <C> <C> <C>
John H. McConnell 77 Chairman Emeritus & Founder 1996
John P. McConnell 46 Chairman & Chief Executive Officer 1996
John S. Christie 50 President & Chief Operating Officer 1999
Edward A. Ferkany 63 Executive Vice President 1998
John T. Baldwin 43 Vice President & Chief Financial Officer 1998
Dale T. Brinkman 47 Vice President-Administration, General Counsel & 1998
Assistant Secretary
Ralph V. Roberts 53 President, The Worthington Steel Company 1998
Mark H. Stier 53 Vice President-Human Resources 1997
Richard G. Welch 42 Controller 2000
Gregory P. Youngblood 41 Treasurer 1999
</TABLE>
John H. McConnell founded Worthington in 1955 and served as its Chief
Executive Officer and Chairman of the Board of Directors until May 1993. Mr.
McConnell retired from the position of Chief Executive Officer in May 1993 and
as Chairman of the Board in September 1996, when he assumed the role of Chairman
Emeritus and Founder. John H. McConnell is John P. McConnell's father.
John P. McConnell has served as Worthington's Chief Executive Officer
since June 1993 and Chairman of the Board of Directors since September 1996. Mr.
McConnell has served as a Director continuously since 1990 and as Vice Chairman
of Worthington from 1992 through 1996. John P. McConnell is John H. McConnell's
son.
John S. Christie has served as President and Chief Operating Officer of
Worthington since June 1999. Prior to that time, Mr. Christie served as
President of JMAC, Inc., a private investment company, from 1995 through 1999.
From 1988 through 1995, Mr. Christie served as Senior Vice President, Corporate
Development for Battelle Memorial Institute, a non-profit research and
development institute.
Edward A. Ferkany has served as Executive Vice President of Worthington
since June 1998. Prior to that time, Mr. Ferkany served as Group Vice President-
Processed Steel for Worthington from 1985 through 1998.
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John T. Baldwin has served as Vice President and Chief Financial
Officer of Worthington since December 1998. Prior to that time, Mr. Baldwin
served as Worthington's Treasurer since September 1997. Before joining
Worthington, Mr. Baldwin served as Assistant Treasurer of Tenneco, Inc. from
1994 through September 1997.
Dale T. Brinkman has served as Vice President-Administration, General
Counsel and Assistant Secretary of Worthington since December 1998. Prior to
that time, Mr. Brinkman served as Worthington's General Counsel and Assistant
Secretary from 1982 through 1998.
Ralph V. Roberts has served as President, The Worthington Steel Company
since June 1998. Prior to that time, Mr. Roberts served as Worthington's Vice
President-Corporate Development from June 1997 through May 1998, and as
President of Worthington's WAVE joint venture from its formation in June 1992
through June 1997.
Mark H. Stier has served as Vice President-Human Resources of
Worthington since August 1997. Prior to that time, Mr. Stier served for more
than ten years as General Manager of Worthington's steel processing facility in
Porter, Indiana.
Richard G. Welch has served as Controller of Worthington since March
2000 and, prior thereto, as Assistant Controller since September 1999. Prior to
that time, Mr. Welch served in various accounting and financial reporting
capacities with Time Warner Cable, a distributor of cable programming, including
as Assistant Controller from March 1999 through September 1999 and as an
accounting director from September 1990 through March 1999.
Gregory P. Youngblood has served as Treasurer since he joined
Worthington in January 1999. Prior thereto, Mr. Youngblood served in various
treasury capacities, including as Assistant Treasurer, for Cardinal Health,
Inc., a healthcare products company from October 1995 through January 1999.
Prior to October 1995, Mr. Youngblood served in various capacities for Lyondell
Petrochemical Co., a chemical company, including Treasury Management Consultant,
from 1994 through 1995.
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 or directors of the Registrant. No
arrangements or understandings exist pursuant to which any person has been, or
is to be, selected as an executive officer.
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PART II
ITEM 5. - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
-------------------------------------------------------------------------------
The information called for by this Item 5 is incorporated herein by
reference to the information set forth under the caption "Stock Trading, Price
and Dividend Information" on page 3 of the Worthington Industries, Inc. 2000
Annual Report to Shareholders (the "2000 Annual Report").
ITEM 6. - SELECTED FINANCIAL DATA
---------------------------------
The information called for by this Item 6 is incorporated herein by
reference to the information set forth under the caption "Six Year Selected
Financial Data" on page 4 of the 2000 Annual Report.
ITEM 7. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
-------------------------------------------------------------------------
The information called for by this Item 7 is incorporated herein by
reference to the information set forth under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations" on
pages 5 through 11 of the 2000 Annual Report and should be read in conjunction
with the information incorporated by reference into Item 8 of this Form 10-K.
ITEM 7A. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
---------------------------------------------------------------------
The information called for by this Item 7A is incorporated herein by
reference to the information set forth under the caption "Quantitative and
Qualitative Disclosures About Market Risk" on page 11 of the 2000 Annual Report.
ITEM 8. - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-----------------------------------------------------
The following Consolidated Financial Statements of Worthington
Industries, Inc. and Subsidiaries, Notes to Consolidated Financial Statements
and Report of Independent Auditors, set forth on pages 12 through 17, 18 through
30 and 32, respectively, of the 2000 Annual Report are incorporated herein by
reference:
Consolidated Balance Sheets--May 31, 2000 and 1999
Consolidated Statements of Earnings--Years ended May 31, 2000, 1999 and
1998
Consolidated Statements of Shareholders' Equity--Years ended May
31, 2000, 1999 and 1998
Consolidated Statements of Cash Flows--Years ended May 31, 2000, 1999
and 1998
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Notes to Consolidated Financial Statements
Report of Independent Auditors
ITEM 9. - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
-------------------------------------------------------------------------
None.
PART III
ITEM 10. - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------------------------------------------------------------
In accordance with General Instruction G(3) of Form 10-K, the
information required by this Item 10 with respect to the identification of
directors is incorporated herein by reference to the material under the heading
"PROPOSAL 1: ELECTION OF DIRECTORS" contained on pages 3 through 7 of the
Worthington Industries, Inc. definitive Proxy Statement (the "Proxy Statement")
for the 2000 Annual Meeting of Shareholders to be held on September 28, 2000.
The information regarding executive officers required by Item 401 of Regulation
S-K is included in Part I hereof under the heading "Executive Officers of the
Company." No disclosure is required to be made under Item 405 of Regulation S-K.
ITEM 11. - EXECUTIVE COMPENSATION
---------------------------------
In accordance with General Instruction G(3) of Form 10-K, the
information required by this Item 11 is incorporated herein by reference to the
information contained in the Proxy Statement under the headings "PROPOSAL 1:
ELECTION OF DIRECTORS --Compensation of Directors" on page 6, "EXECUTIVE
COMPENSATION -- Summary of Cash and Other Compensation" on page 12, "--Option
Grants" on page 14, "--Option Exercises and Holdings" on page 15, and
"--Long-Term Incentive Plan Awards" on page 15.
ITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-------------------------------------------------------------------------
In accordance with General Instruction G(3) of Form 10-K, the
information required by this Item 12 is incorporated herein by reference to the
material contained in the Proxy Statement under the headings "VOTING SECURITIES
AND PRINCIPAL HOLDERS THEREOF - Security Ownership of Certain Beneficial Owners
and Management" on pages 2 and 3 and "PROPOSAL 1: ELECTION OF DIRECTORS"
contained on pages 3 through 7.
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ITEM 13. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
---------------------------------------------------------
In accordance with General Instruction G(3) of Form 10-K, the
information required by this Item 13 is incorporated herein by reference to the
biographical information for John H. McConnell and John P. McConnell under the
heading "PROPOSAL 1: ELECTION OF DIRECTORS" both contained on pages 4 and 5 of
the Proxy Statement.
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) No reports on Form 8-K were filed during the last quarter of fiscal
2000.
(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.
14
<PAGE> 15
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, 2000 By: /s/John P. McConnell
--------------------------
John P. McConnell
Chairman & Chief Executive Officer
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
--------- ---- -----
/s/John P. McConnell August 29, 2000 Director, Chairman &
--------------------------- Chief Executive Officer
John P. McConnell
* * Director, Chairman Emeritus
--------------------------- & Founder
John H. McConnell
* * Director, President &
--------------------------- Chief Operating Officer
John S. Christie
s/John T. Baldwin August 29, 2000 Vice President & Chief
--------------------------- Financial Officer
John T. Baldwin
* * Director, Secretary
---------------------------
Charles D. Minor
* * Director
---------------------------
John B. Blystone
* * Director
---------------------------
Charles R. Carson
* * Director
---------------------------
William S. Dietrich, II
15
<PAGE> 16
* * Director
---------------------------
Michael J. Endres
* * Director
---------------------------
John F. Havens
* * Director
---------------------------
Peter Karmanos, Jr.
* * Director
---------------------------
Robert B. McCurry
* * Director
---------------------------
Gerald B. Mitchell
* * Director
---------------------------
Mary Fackler Schiavo
*By: /s/John P. McConnell Date: August 29, 2000
-------------------------------- -----------------
John P. McConnell
Attorney-In-Fact
16
<PAGE> 17
ANNUAL REPORT ON FORM 10-K
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, Notes to Consolidated Financial Statements and Report of
Independent Auditors, set forth on pages 12 through 17, 18 through 30 and page
32, respectively, of Worthington Industries, Inc.'s 2000 Annual Report to
Shareholders, are incorporated by reference in Item 8:
Consolidated Balance Sheets -- May 31, 2000 and 1999
Consolidated Statements of Earnings -- Years ended May 31, 2000, 1999 and 1998
Consolidated Statements of Shareholders' Equity -- Years ended May 31, 2000,
1999 and 1998
Consolidated Statements of Cash Flows -- Years ended May 31, 2000, 1999 and 1998
Notes to Consolidated Financial Statements
Report of Independent Auditors
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
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted, or
the required information is provided in the Consolidated Financial Statements of
Worthington Industries, Inc. and its Subsidiaries or the Notes thereto.
F-1
<PAGE> 18
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
COL. A COL.B COL.C COL.D COL.E
------------------------------------------------------------------------------------------------------------------------------------
Additions
-------------------------------------------
Balance Balance at
DESCRIPTION at Beginning Charged to Costs Charged to Other Deductions End of
of Period and Expenses Accounts - Describe -Describe Period
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended May 31, 2000:
Deducted from asset accounts:
Allowance for possible
losses on trade accounts
receivable $4,209,000 $1,842,000 $ (409,000)(A) $1,763,000 (B) $3,879,000
============== ================ ================== ================= ==================
Year Ended May 31, 1999:
Deducted from asset accounts: $ 141,000 (C)
(269,000)(D)
Allowance for possible 307,000 (A)
losses on trade accounts ------------------
receivable $4,130,000 $291,000 $ 179,000 $391,000 (B) $4,209,000
============== ================ ================== ================= ==================
Year Ended May 31, 1998:
Deducted from asset accounts:
Allowance for possible
losses on trade accounts
receivable $3,900,000 $1,099,000 $0 $869,000 (B) $4,130,000
============== ================ ================== ================= ==================
</TABLE>
Note A - Miscellaneous amounts.
Note B - Uncollectible accounts charged to the allowance.
Note C - Amount from Heiser acquisition.
Note D - Amount from discontinued operations.
F-2
<PAGE> 19
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description Location
--------------- ----------------------------------------- ---------------------------------------------------
<S> <C> <C>
2 Agreement of Merger, dated as of August Incorporated herein by reference to Exhibit 2 of
20, 1998, between Worthington the Registrant's Quarterly Report on Form 10-Q
Industries, Inc., the Delaware for the quarter ended August 31, 1998
corporation, and Worthington
Industries, Inc., the Ohio corporation.
3(a) Amended Articles of Incorporation of Incorporated herein by reference to Exhibit 3(a)
Worthington Industries, Inc. of the Registrant's Quarterly Report on Form 10-Q
for the quarter ended August 31, 1998
3(b) Code of Regulations of Worthington Incorporated by reference to Exhibit 3(b) of the
Industries, Inc. Registrant's Quarterly Report on Form 10-Q for
the quarter ended August 31, 1998
4(a) Form of Indenture dated as of May 15, Incorporated herein by reference to Exhibit 4(a)
1996 between Worthington Industries, of the Registrant's Annual Report on Form 10-K
Inc. and PNC Bank, Ohio, National for fiscal year ended May 31, 1997
Association, as Trustee, relating to up
to $450,000,000 of debt securities
4(b) Form of 7-1/8% Notes due 2006 Incorporated herein by reference to Exhibit 4(b)
of the Registrant's Annual Report on Form 10-K
for fiscal year ended May 31, 1997
4(c) First Supplemental Indenture, dated as Incorporated herein by reference to Exhibit 4(c)
of February 27, 1997 between of the Registrant's Annual Report on Form 10-K
Worthington Industries, Inc. and PNC for fiscal year ended May 31, 1997
Bank, Ohio, National Association, as
Trustee
</TABLE>
E-1
<PAGE> 20
<TABLE>
<S> <C> <C>
4(d) Form of 7-1/4% Exchangeable Note Due Incorporated herein by reference to Exhibit 4(d)
March 1, 2000 of the Registrant's Annual Report on Form 10-K
for fiscal year ended May 31, 1997
4(e)(i) Second Amended and Restated Loan Incorporated herein by referenced to Exhibit 4(e)
Agreement, dated as of October 14, of the Registrant's Annual Report on Form 10-K
1998, between Worthington Industries, for fiscal year ended May 31, 1999
Inc., The Bank of Nova Scotia, PNC
Bank, National Association,
NationsBank, N.A., Wachovia Bank of
Georgia, N.A., NBD Bank, Bank One, N.A.
and National City Bank
4(e)(ii) Amendment to Second Amended and Incorporated herein by reference to Exhibit (4)
Restated Loan Agreement, dated as of of the Registrant's Quarterly Report on Form 10-Q
August 13, 1999 between Worthington for fiscal quarter ended August 31, 2000
Industries, Inc., The Bank of Nova
Scotia, PNC Bank, National Association
Bank of America, N.A., Wachovia Bank,
N.A., Bank One, Michigan, Bank One,
N.A. and National City Bank
4(f) Form of 6.7% Notes due 2009 Incorporated herein by reference to Exhibit 4(f)
of the Registrant's Annual Report on Form 10-K
for the fiscal year ended May 31, 1998.
4(g) Second Supplemental Indenture, dated as Incorporated herein by reference to Exhibit 4(g)
of December 12,1997, between of the Registrant's Annual Report on Form 10-K
Worthington Industries, Inc. and PNC for the fiscal year ended May 31, 1998
Bank, Ohio, National Association, as
Trustee
</TABLE>
E-2
<PAGE> 21
<TABLE>
<S> <C> <C>
4(h) Third Supplemental Indenture, dated Incorporated herein by reference to Exhibit 4(h)
as of October 13, 1998, between of the Registrant's Annual Report on Form 10-K
Worthington Industries, Inc., a for fiscal year ended May 31, 1999
Delaware corporation, Worthington
Industries, Inc., an Ohio corporation,
and PNC Bank, National Association
4(i) Assignment and Assumption Agreement, Incorporated herein by referenced to Exhibit 4(i)
dated as of October 14, 1998, between of the Registrant's Annual Report on Form 10-K
Worthington Industries, Inc., a for fiscal year ended May 31, 1999
Delaware corporation, Worthington
Industries, Inc., an Ohio corporation,
The Bank of Nova Scotia and PNC Bank,
Ohio, National Association, as Agents.
4(j) Agreement to furnish instruments Filed herewith
defining rights of holders of long-term
debt
10(a) Amended 1980 Stock Option Plan, as Incorporated herein by reference to Annex B to
amended* the Prospectus filed as part of Post-Effective
Amendment No. 1 to the Registrant's Registration
Statement on Form S-8 (Registration No. 2-80094)
10(b) 1990 Stock Option Plan, as amended* Incorporated herein by reference to Exhibit 10(b)
of the Registrant's Annual Report on Form 10-K
for the fiscal year ended May 31, 1999
10(c) Executive Deferred Compensation Plan, Filed herewith
as Amended and Restated
</TABLE>
E-3
<PAGE> 22
<TABLE>
<S> <C> <C>
10(d) Deferred Compensation Plan for Filed herewith
Directors, As Amended and Restated
10(e) 1997 Long-Term Incentive Plan* Incorporated herein by reference to Exhibit 10(e)
of the Registrant's Annual Report on Form 10-K
for the fiscal year ended May 31, 1997
10(f) Non-Qualified Deferred Compensation Filed herewith
Plan*
13 2000 Annual Report to Shareholders Not deemed to be filed except for portions of
which are specifically incorporated by reference
in this Annual Report on Form 10-K
21 Subsidiaries of the Registrant Filed herewith
23 Consent of Ernst & Young LLP Filed herewith
24 Powers of Attorney Filed herewith
27 Financial Data Schedule Filed herewith
*Management Compensation Plan
</TABLE>
E-4
