Gross margin for the quarter increased $25.5m over the prior year to $115.5m, driven primarily by higher direct spreads and higher toll volume in Steel Processing combined with a higher contribution from Pressure Cylinders.
Operating loss for the current quarter with $1.4m compared to operating income of $26m in the prior year quarter as the improvement in gross margin was more than offset by high impairment and restructuring charges ins Pressure Cylinders and high SG&A expense.
“While I’m pleased with our results in the third quarter, today, our top priority is keeping our people safe and managing our businesses through this difficult crisis,” said John McConnell, Chairman and CEO of Worthington.
“I am extremely proud of how our employees have come together, collectively navigating the unprecedented challenges facing our company and the country.”
Quarterly Segment Results
Steel Processing’s net sales totalled $491.1m, down 12%, or $64.7m, from the comparable prior year quarter driven primarily by lower average selling prices, partially offset by higher volume. Operating income was $19m, up $8.9m from the prior year quarter on higher direct spreads and the impact of higher toll volume.
Pressure Cylinders’ net sales totalled $271m, down 7%, or $19.7m, from the comparable prior year quarter due to lower volumes in both the industrial products and consumer products businesses. Operating loss of $19.9m in the current quarter compared to operating income of $19m in the prior year.
Outlook
“There are still many unknowns regarding the spread of COVID-19 and how the measures to control it will impact the economy and our company,” McConnell said.
“Many of our facilities are considered ‘essential businesses’ under the various state and federal guidelines and will continue to operate based on customer demand. I am especially grateful to our production workforce who are leading our effort to serve our customers and our country by continuing to make products.”