Worthington Industries Posts $160 Million 2Q09 Loss on Softening Demand and Price of Steel

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Researched by Industrial Info Resources (Sugar Land, Texas)--Worthington Industries Incorporated (NYSE:WOR) (Columbus, Ohio) has posted a second-quarter 2009 loss of about $160 million as a result of the economic downturn and a major drop in steel prices. "The swiftness and severity of the downturn was surprising," said George Stoe, Executive President and Chief Operating Officer. "This, coupled with an approximate 50% drop in steel prices, led to the dramatic change in our situation from our first fiscal quarter. Economic realities like those we now face call for decisive and forceful actions." However, net sales totaled $745.4 million, up 4.4% compared with $713.7 million in the same period last year. The sales gain is largely attributed to major price hikes, although it was almost completely offset by weak demand in all segments.

Worthington Industries has taken several steps to cut costs, including temporary or permanent plant closures and job cuts. In total, the company has reduced its work force by more than 300 salaried and hourly employees this year, Stoe said. The company plans to permanently close its Louisville Cold-Rolled Steel Plant in Kentucky by the end of 2009. Industrial Info has been tracking the plant closure, which is expected to cost about $1.5 million, since November. Equipment dismantling is scheduled to begin in the second half of 2009, with closure set for September.

"The future course of the economy remains unclear, and until the depth and breadth of the retraction begins to clarify, we will continue to operate under the assumption that the economy will continue to weaken and that it will be an extended period of time before it begins to recover," Chairman and CEO John McConnell said.

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