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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 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
--------------------------------------------- ---------------------------------
(State of Incorporation) (IRS Employer Identification No.)
1205 Dearborn Drive, Columbus, Ohio 43085
--------------------------------------------- --------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 438-3210
-----------------------------
Not Applicable
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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 the number of shares outstanding of each of the Issuer's
classes of common stock as of the latest practicable date.
As of December 31, 2000, 85,375,425 of the Registrant's common shares,
without par value, were outstanding.
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WORTHINGTON INDUSTRIES, INC.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets -
November 30, 2000 and May 31, 2000.............................3
Condensed Consolidated Statements of Earnings -
Three and Six Months Ended November 30, 2000 and 1999 .........5
Condensed Consolidated Statements of Cash Flows -
Six Months Ended November 30, 2000 and 1999 ...................6
Notes to Condensed Consolidated Financial Statements...........7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...............9
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..............................15
SIGNATURES..................................................................15
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WORTHINGTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
ASSETS
<TABLE>
<CAPTION>
November 30, May 31,
2000 2000
---------- ----------
(Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 936 $ 538
Accounts receivable, less allowances of $4,881 at
November 30, 2000 and $3,879 at May 31, 2000 154,502 301,175
Inventories
Raw materials 132,206 144,903
Work in process 61,767 81,632
Finished products 77,668 64,669
---------- ----------
Total Inventories 271,641 291,204
Other current assets 29,897 31,312
---------- ----------
TOTAL CURRENT ASSETS 456,976 624,229
Property, plant and equipment 1,208,377 1,180,622
Less accumulated depreciation 350,247 318,110
---------- ----------
Property, plant and equipment, net 858,130 862,512
Other Assets 193,543 187,132
---------- ----------
TOTAL ASSETS $1,508,649 $1,673,873
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
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WORTHINGTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
November 30, May 31,
2000 2000
---------- ----------
(Unaudited) (Audited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 148,697 $ 157,998
Notes payable 56,692 160,194
Current maturities of long-term debt 2,498 2,688
Other current liabilities 70,378 112,390
---------- ----------
TOTAL CURRENT LIABILITIES 278,265 433,270
Long-Term Debt 361,367 362,190
Other Liabilities 75,698 79,117
Deferred Income Taxes 129,226 125,942
Shareholders' Equity 664,093 673,354
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,508,649 $1,673,873
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
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WORTHINGTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands, Except Per Share)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30,
--------------------------- ---------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 457,369 $ 473,331 $ 941,593 $ 936,242
Cost of goods sold 400,748 388,289 821,094 768,025
--------- --------- --------- ---------
GROSS MARGIN 56,621 85,042 120,499 168,217
Selling, general & administrative expense 41,975 41,832 83,966 83,711
--------- --------- --------- ---------
OPERATING INCOME 14,646 43,210 36,533 84,506
Other income (expense):
Miscellaneous income (expense) (430) 24 (347) 986
Interest expense (9,550) (10,079) (18,907) (20,294)
Equity in net income of unconsolidated
affiliates 6,168 6,406 13,204 13,176
--------- --------- --------- ---------
EARNINGS BEFORE INCOME TAXES 10,834 39,561 30,483 78,374
Income taxes 3,954 14,835 11,126 29,390
--------- --------- --------- ---------
NET EARNINGS $ 6,880 $ 24,726 $ 19,357 $ 48,984
========= ========= ========= =========
AVERAGE COMMON SHARES OUTSTANDING
- DILUTED 85,755 89,483 85,755 89,796
EARNINGS PER COMMON SHARE - BASIC &
DILUTED $ 0.08 $ 0.28 $ 0.23 $ 0.55
========= ========= ========= =========
CASH DIVIDENDS DECLARED PER COMMON
SHARE $ 0.16 $ 0.15 $ 0.32 $ 0.30
========= ========= ========= =========
</TABLE>
See notes to condensed consolidated financial statements.
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WORTHINGTON INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
November 30,
---------------------------
2000 1999
--------- ---------
OPERATING ACTIVITIES
<S> <C> <C>
Net Earnings $ 19,357 $ 48,984
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 35,848 35,285
Other adjustments (6,563) 26,482
Changes in current assets and liabilities 120,001 (19,521)
--------- ---------
Net Cash Provided By Operating Activities 168,643 91,230
INVESTING ACTIVITIES
Investment in property, plant and equipment, net (32,697) (31,946)
Proceeds from sale of assets 719 519
--------- ---------
Net Cash Used By Investing Activities (31,978) (31,427)
FINANCING ACTIVITIES
Payments on short-term borrowings (103,502) (16,508)
Proceeds from long-term debt 482 86
Principal payments on long-term debt (1,228) (4,633)
Repurchase of common shares (737) (12,902)
Dividends paid (27,441) (26,858)
Other (3,841) 582
--------- ---------
Net Cash Used By Financing Activities (136,267) (60,233)
--------- ---------
Increase (decrease) in cash and cash equivalents 398 (430)
Cash and cash equivalents at beginning of period 538 7,641
--------- ---------
Cash and cash equivalents at end of period $ 936 $ 7,211
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
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WORTHINGTON INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands)
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and six months
ended November 30, 2000 are not necessarily indicative of the results that may
be expected for the year ended May 31, 2001. For further information, refer to
the consolidated financial statements and footnotes thereto included in the
Worthington Industries, Inc. 2000 Annual Report to Shareholders and incorporated
by reference in the Form 10-K for the fiscal year ended May 31, 2000 of
Worthington Industries, Inc.
NOTE B - INDUSTRY SEGMENT DATA
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30,
-------------------------------- -----------------------------------
($000) 2000 1999 2000 1999
-------------- -------------- ------------------ ----------------
<S> <C> <C> <C> <C>
NET SALES:
Processed Steel Products $306,578 $316,012 $624,691 $616,416
Metal Framing 89,215 84,315 184,225 172,802
Pressure Cylinders 59,815 71,443 129,791 144,483
Other 1,761 1,561 2,886 2,541
-------------- -------------- ------------------ ----------------
$457,369 $473,331 $941,593 $936,242
============== ============== ================== ================
OPERATING INCOME:
Processed Steel Products $ 5,029 $27,491 $14,393 $51,252
Metal Framing 7,414 10,306 16,441 20,908
Pressure Cylinders 3,172 6,929 8,485 15,131
Other (969) (1,516) (2,786) (2,785)
-------------- -------------- ------------------ ----------------
$14,646 $43,210 $36,533 $84,506
============== ============== ================== ================
</TABLE>
<TABLE>
<CAPTION>
Nov. 30, May 31,
2000 2000
------------------ ----------------
<S> <C> <C>
TOTAL ASSETS:
Processed Steel Products $ 877,779 $ 1,049,579
Metal Framing 247,427 256,505
Pressure Cylinders 198,451 215,873
Other 184,992 151,916
------------------ ----------------
$ 1,508,649 $ 1,673,873
================== ================
</TABLE>
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NOTE C - COMPREHENSIVE INCOME
Total comprehensive income was $5,842 and $25,386 for the three months
ended November 30, 2000 and 1999, respectively. Total comprehensive income was
$18,182 and $47,784 for the six months ended November 30, 2000 and 1999,
respectively.
NOTE D - SALE OF ACCOUNTS RECEIVABLE
On November 30, 2000, Worthington Industries, Inc. (the "Company") and
certain of its subsidiaries entered into a revolving trade receivables
securitization facility. Pursuant to the terms of the facility, such
subsidiaries of the Company will sell their accounts receivable to a
wholly-owned, bankruptcy-remote subsidiary, Worthington Receivables Corporation
("WRC"). In turn, WRC will sell, on a revolving basis, up to $120.0 million
undivided ownership interest in the purchased accounts receivable to independent
third parties. The Company will continue to service the receivables. No
servicing asset or liability has been recognized as the Company's cost to
service the receivables is expected to approximate the servicing income.
In accordance with the facility, WRC has sold $107.0 million of
undivided interest in accounts receivable as of November 30, 2000. The proceeds
from the sale were reflected as a reduction of accounts receivable on the
condensed consolidated balance sheet and as operating cash flows in the
condensed consolidated statement of cash flows. The sale proceeds were used to
pay down short-term debt.
NOTE E - ACQUISITION
On October 13, 2000, Worthington Techs, L.P., a subsidiary of
Worthington Industries, Inc., signed an agreement to acquire substantially all
of the net assets of MetalTech, NexTech and GalvTech (collectively "the Techs").
This agreement has been terminated by mutual consent of both parties.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Statements contained in this Quarterly Report on Form 10-Q, as filed
with the Securities and Exchange Commission (the SEC), including, without
limitation, the Management's Discussion and Analysis that follows, 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 SEC.
OVERVIEW
Worthington Industries, Inc. is a diversified steel processor that
focuses on value-added steel processing and metals-related businesses. We
operate 40 facilities worldwide, principally in three reportable business
segments: Processed Steel Products, Metal Framing and Pressure Cylinders. We
also hold equity positions in seven joint ventures which operate 15 facilities
worldwide.
RESULTS FROM OPERATIONS
The following discussion and analysis of financial condition and
results of operations should be read in conjunction with our Condensed
Consolidated Financial Statements included elsewhere in this report. Our Annual
Report on Form 10-K for the fiscal year ended May 31, 2000, includes additional
information about Worthington, our operations and our financial position, and
should be read in conjunction with this Quarterly Report on Form 10-Q.
SECOND QUARTER - FISCAL 2001 COMPARED TO FISCAL 2000
For the second quarter ended November 30, 2000 (the "second quarter")
of the fiscal year ending May 31, 2001 ("fiscal 2001"), net sales decreased 3%
to $457.4 million, down $15.9 million from the comparable quarter of the fiscal
year ended May 31, 2000 ("fiscal 2000"). The overall decrease in net sales was
due to softening demand within the Processed Steel Products and Pressure
Cylinders segments as well
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as competitive pricing pressure in all segments. The following provides further
information on net sales by segment:
- Processed Steel Products. Net sales decreased 3% to $306.6
million for the second quarter of fiscal 2001 from $316.0
million in the comparable quarter of fiscal 2000. The decline
in net sales primarily was due to a general economic slow-down
resulting in lower shipments from every plant, except Monroe
and Decatur. In addition, toll-processing shipments decreased
16% as integrated steel mills experienced lower demand and
retained much of this business. The dry lube line at our
Monroe facility continued to provide substantial volume
increases and the expanded annealing capabilities of Decatur
allowed for additional shipments.
- Metal Framing. Net sales of $89.2 million for the second
quarter of fiscal 2001 increased 6% from $84.3 million in the
comparable quarter of fiscal 2000. The increase in net sales
was mainly attributable to continued strength in the building
products line of business. However, severe competitive
pressures reduced the average selling prices, partially
offsetting the volume increases.
- Pressure Cylinders. Net sales decreased 16% to $59.8 million
for the second quarter of fiscal 2001 from $71.4 million in
the comparable quarter of fiscal 2000. The decrease was due to
lower sales volumes in the portable LPG, refrigerant and
industrial gas cylinders resulting from the weakening economy
and the competitive pressure in the European market.
Gross margin on sales decreased to 12.4% for the second quarter of
fiscal 2001 from 18.0% in the comparable quarter of fiscal 2000. Most of the
decline occurred in the Processed Steel Products segment due to the lower spread
between selling prices and raw material costs and the decrease in toll
processing.
For the second quarter of fiscal 2001, selling, general and
administrative ("SG&A") costs of $42.0 million were virtually unchanged from the
comparable quarter of fiscal 2000. Higher health care and salary expenses were
offset by the lack of Y2K consulting expenses in fiscal 2001.
Operating income decreased 66% to $14.6 million for the second quarter
of fiscal 2001 from $43.2 million in the comparable quarter of fiscal 2000. The
decrease in operating income primarily was due to the inability to pass through
higher raw material costs to customers in the Processed Steel Products and Metal
Framing segments, and due to shrinking demand in certain markets in the
Processed Steel Products and Pressure Cylinders segments. The following provides
further information on operating income by segment:
- Processed Steel Products. Operating income decreased 82% to
$5.0 million for the second quarter of fiscal 2001 from $27.5
million in the comparable quarter of fiscal 2000. The higher
average cost of raw materials, a shift to lower margin
products and reductions in direct and toll processing volumes
all negatively impacted operating income.
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- Metal Framing. Operating income decreased 28% to $7.4 million
for the second quarter of fiscal 2001 from $10.3 million in
the comparable quarter of fiscal 2000. Despite the sales
volume increase, lower selling prices, increased raw material
costs and unfavorable product mix resulted in a decrease in
operating income.
- Pressure Cylinders. Operating income decreased 54% to $3.2
million for the second quarter of fiscal 2001 from $6.9
million in the comparable quarter of fiscal 2000. The decrease
was due to lower sales volumes and unfavorable overall product
mix.
Interest expense decreased 5% to $9.6 million for the second quarter of
fiscal 2001 from $10.1 million in the comparable quarter of fiscal 2000. The
DECS liability was paid off in the fourth quarter of fiscal 2000 resulting in no
comparable interest expense during fiscal 2001. However, this was partially
offset by higher average short-term debt levels and interest rates. The second
quarter average interest rate on short-term unsecured notes payable was 6.93%
for fiscal 2001 compared to 5.54% in the second quarter of fiscal 2000. At
November 30, 2000, approximately 86.5% of our $420.6 million of consolidated
debt was at fixed rates of interest.
Equity in net income of unconsolidated affiliates decreased 4% to
$6.2 million for the second quarter of fiscal 2001 from $6.4 million in the
comparable quarter of fiscal 2000. The main reason for the decrease from the
prior year was lower margins at the TWB and WSP joint ventures due to increases
in raw material costs and lower sales, respectively.
The effective tax rate for the second quarter of fiscal 2001 was 36.5%,
down from 37.5% in fiscal 2000, due to ongoing tax planning initiatives,
primarily in the state and local tax areas.
YEAR-TO-DATE - FISCAL 2001 COMPARED TO FISCAL 2000
For the first six months of fiscal 2001, net sales increased 1% to
$941.6 million, up $5.4 million from the comparable period of fiscal 2000. The
overall increase in net sales was volume driven within the Processed Steel
Products and Metal Framing segments partially offset by lower selling prices in
all segments. The following provides further information on net sales by
segment:
- Processed Steel Products. Net sales increased 1% to $624.7
million for the first six months of fiscal 2001 from $616.4
million in the comparable period of fiscal 2000. The increase
in net sales was primarily due to higher volumes at our
Decatur plant, resulting from expanded annealing capacity and
at our Monroe plant, where the dry lube line continued to
provide volume increases. Lower volumes at most of the other
plants and an 18% decrease in toll processing almost offset
these increases.
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- Metal Framing. Net sales of $184.2 million for the first six
months of fiscal 2001 increased 7% from $172.8 million in the
comparable period of fiscal 2000. The increase in net sales
was principally volume driven in the building products line of
business partially offset by continuing decreases in sales
prices brought on by stiff competition.
- Pressure Cylinders. Net sales decreased 10% to $129.8 million
for the first six months of fiscal 2001 from $144.5 million in
the comparable period of fiscal 2000. The decrease was due to
softening global demand in the refrigerant, portable LPG and
industrial gas cylinders resulting from the weakening economy
and lower volumes in the competitive European market.
Gross margin on sales decreased to 12.8% for the first six months of
fiscal 2001 from 18.0% in the comparable period of fiscal 2000. The majority of
the decline occurred in the Processed Steel Products segment due to the
inability to pass on the cost of higher priced raw materials in a declining
market and due to lower toll processing volumes.
For the first six months of fiscal 2001, SG&A costs of $84.0 million
were flat compared to the first six months of fiscal 2000. Increased health care
and salary expenses were offset by the lack of Y2K consulting expenses in fiscal
2001.
Operating income decreased 57% to $36.5 million for the first six
months of fiscal 2001 from $84.5 million in the comparable period of fiscal
2000. The inability to pass through higher raw material costs to customers in
the Processed Steel Products and Metal Framing segments coupled with lower
demand in certain markets in the Pressure Cylinders segment, led to the overall
decrease in operating income. The following provides further information on
operating income by segment:
- Processed Steel Products. Operating income decreased 72% to
$14.4 million for the first six months of fiscal 2001 from
$51.3 million in the comparable period of fiscal 2000. The
main reasons for the reduction in operating income were higher
average raw material prices, changes in sales mix to lower
margin products and lower toll processing volumes.
- Metal Framing. Operating income decreased 22% to $16.4 million
for the first six months of fiscal 2001 from $20.9 million in
the comparable period of fiscal 2000. Lower selling prices and
unfavorable raw material variances outweighed the sales volume
increases resulting in lower operating income.
- Pressure Cylinders. Operating income decreased 44% to $8.5
million for the first six months of fiscal 2001 from $15.1
million in the comparable period of fiscal 2000. The decrease
primarily was attributable to lower volumes and unfavorable
overall product mix.
Interest expense decreased 7% to $18.9 million for the first six months
of fiscal 2001 from $20.3 million in the comparable period of fiscal 2000. The
DECS liability was paid off in the fourth quarter of fiscal 2000 resulting in no
comparable interest expense
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during fiscal 2001. However, this was partially offset by higher average
short-term debt levels and interest rates. The average interest rate on
short-term unsecured notes payable for the first six months of fiscal 2001 was
6.84% compared to 5.39% for the first six months of fiscal 2000.
Equity in net income of unconsolidated affiliates was unchanged at
$13.2 million for the first six months of both fiscal 2001 and fiscal 2000.
Increases in sales and operating income at the WAVE and Acerex joint ventures
were offset by lower margins at the TWB and WSP joint ventures due to increases
in raw material costs and lower sales, respectively.
The effective tax rate for the first six months of fiscal 2001 was
36.5%, down from 37.5% in fiscal 2000, primarily due to ongoing state and local
tax planning initiatives.
LIQUIDITY AND CAPITAL RESOURCES
For the first six months of fiscal 2001, we generated $168.6 million in
cash from operating activities representing a $77.4 million increase from the
comparable period of fiscal 2000. The increase primarily was due to the sale of
$107.0 million in accounts receivable and a reduction in inventories. Partially
offsetting these factors were a $31.0 million tax payment relating to the tax
gain from the disposition of our investment in the common shares of Rouge
Industries (which occurred in the fourth quarter of fiscal 2000) and lower net
income.
In November 2000, we entered into a $120.0 million revolving trade
receivables securitization ("TRS") facility with a commercial bank. Under the
TRS, certain of our subsidiaries sell receivables to Worthington Receivables
Corporation ("WRC"), a wholly-owned, bankruptcy-remote subsidiary. WRC will sell
undivided ownership interests in the receivables to third parties. As of
November 30, 2000, $107.0 million of accounts receivable had been sold. The
proceeds from this sale were used to reduce short-term borrowings.
During the first six months of fiscal 2001, we invested $32.7 million
in capital projects, paid our shareholders $27.4 million in dividends and
provided for our working capital requirements. These transactions were funded by
the cash flow from operations.
Capital investments during the first six months included amounts for
completing the annealing capacity at the Decatur, Alabama plant, adding the
ability to apply a dry film lubricant at the Monroe plant and continued
construction on Gerstenslager's Clyde facility, all within the Processed Steel
Products segment. Expenditures were made in the Metal Framing segment for plant
startups in Seattle and Hawaii, in the Pressure Cylinders segment for a new
low-pressure cylinder line in Portugal, and in our steel pallet business,
SteelPac, for additional weld cells.
Net working capital decreased $12.2 million from May 31, 2000 to $178.7
million at November 30, 2000. The majority of the decrease was due to a
reduction in
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accounts receivable caused by lower sales levels and a planned decrease in
inventory levels, partially offset by the previously mentioned tax payment.
During the first six months of fiscal 2001, we did not repurchase any
of our common shares. However, we did disburse $737,000 in cash for common
shares that were purchased in the fourth quarter of fiscal 2000. As of November
30, 2000, approximately 2.9 million common shares remain available for
repurchase under programs authorized by our Board of Directors. The timing and
amount of any future repurchases will be at our discretion and will depend upon
market conditions and our operating performance and liquidity. Any repurchase
will also be subject to the covenants contained in our credit facilities and our
other debt instruments.
We use short-term uncommitted lines of credit extended by various
commercial banks as part of our strategy to finance our business operations.
Maturities on these borrowings typically range from one to ninety days. We also
maintain a $190.0 million revolving credit facility (the "Revolver") with a
group of commercial banks, which expires in May 2003. There were no outstanding
borrowings under the Revolver at November 30, 2000.
At November 30, 2000, our total debt was $420.6 million compared to
$525.1 million at the end of fiscal 2000 due to the previously mentioned
reduction of short-term debt from the proceeds of the accounts receivable sale.
This decreased the debt to committed capital ratio to 38.8% from 43.8% at the
end of fiscal 2000.
On October 13, 2000, Worthington Techs, L.P., a subsidiary of
Worthington Industries, Inc., signed an agreement to acquire substantially all
of the net assets of MetalTech, NexTech and GalvTech (collectively "the Techs").
This agreement was terminated by mutual consent of both parties.
From time to time, we engage in discussions with respect to selected
acquisitions and expect to continue to assess acquisition opportunities as they
arise. Additional financing may be required if we decide to make additional
acquisitions. There can be no assurance, however, that any such opportunities
will arise, any such acquisitions will be consummated or that any needed
additional financing will be available on satisfactory terms when required.
Absent any acquisitions, we anticipate that cash flows from operations, working
capital and unused short-term borrowing capacity should be more than sufficient
to fund expected normal operating costs, dividends, and capital expenditures for
our existing businesses.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibits:
None
Reports on Form 8-K:
A Current Report on Form 8-K, dated October 13, 2000, was filed during
the second quarter of fiscal 2001 to summarize the material provisions
of the agreement to acquire the Techs' net assets and to provide
historical financial statements of the Techs and pro forma financial
information regarding the acquisition. This information was provided
under Item 5 - Other Events.
SIGNATURES
Pursuant to the requirements 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: January 15, 2001 By: /s/John T. Baldwin
------------------ -------------------
John T. Baldwin
Vice President & Chief Financial Officer
(On behalf of the Registrant and as Principal
Financial Officer
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