For the quarter, the Ohio-based company reported net sales of $1.1bn and net earnings of $132.5m, or $2.55 per diluted share. In comparison to net sales of $702.9m in Q1 2021, the company this year delivered a 58% increase.
Gross margin and operating income also increased for Worthington, both of which were positively impacted by the company’s Steel Processing sector. Gross margin increased $106m over the prior year quarter to $219.4m and operating income for the quarter was $135.8m, an increase of $165.9m over the operating loss in the prior year quarter.
Reflecting on the results, Andy Rose, President and CEO of Worthington Industries, said, “We again delivered record adjusted earnings per share, led by exceptional results in our Steel Processing segment.”
“We had solid demand across our major end markets but also continued to face challenges with customer shut-downs due to semi-conductor and other parts shortages, labour availability, and tight supply chains which prevented the quarter from being even better.”
Results by segment
Worthington’s Steel Processing net sales totalled $822.8m, up $391.8m, from the comparable prior year quarter. The increase in net sales was driven by higher average selling prices and, to a lesser extent, higher volume.
Adjusted EBIT of $107.7m was up $93.5m, as operating income increased $86.3m after adjusting for the impact of restructuring in both the current and prior year quarters.
Consumer Products’ net sales totalled $147.8m, up 10.6%, or $14.2m, from the comparable prior year quarter driven by the acquisition of General Tools & Instruments in the third quarter of fiscal 2021.
Adjusted EBIT of $20.6m was down $3.4m from the prior year quarter due to an increase in profit sharing and bonus expense and, to a lesser extent, compressed margins resulting from higher input costs.
Building Products’ net sales totalled $114.7m, up 30.2%, or $26.6m, from the comparable prior year quarter due to higher volume and a favourable product mix.
Adjusted EBIT of $48.8 m was $25.4m more than the prior year quarter, due primarily to higher equity earnings at WAVE and ClarkDietrich, up $20.4m on strong volume and the favourable impact of higher steel prices.
Sustainable Energy Solutions’ net sales totalled $25.5m, down 8.5%, or $2.4m, from the comparable prior year quarter on lower volume.
Adjusted EBIT was a loss of $2.6m, unfavourable $2m to the prior year quarter, on the combined impact of lower volume and an unfavourable product mix.
Outlook
Looking ahead, Rose continued, “The company is performing well, and while demand from our major end markets remains healthy, we will likely continue to face labour challenges and be impacted by lower automotive demand due to the ongoing semi-conductor shortage.”
“Despite this, we are off to a great start for fiscal 2022 and I’m confident our teams will continue to navigate these challenges and deliver for our customers.”