WORTHINGTON ENTERPRISES, INC. Item 2.02. Results of Operations and Financial Condition.
Management ofWorthington Industries, Inc. (the "Registrant") conducted a conference call onMarch 26, 2020 , beginning at approximately10:30 a.m., Eastern Daylight Time , to discuss the Registrant's unaudited financial results for the third quarter of fiscal 2020 (the fiscal quarter endedFebruary 29, 2020 ). Additionally, the Registrant's management addressed certain issues related to the outlook for the Registrant and its subsidiaries and their respective markets for the coming months. A copy of the transcript of the conference call is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The information contained in this Item 2.02 and in Exhibit 99.1 furnished with this Current Report on Form 8-K, is being furnished pursuant to Item 2.02 and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, unless the Registrant specifically states that the information is to be considered "filed" under the Exchange Act or incorporates the information by reference into a filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act. In the conference call, management referred to quarterly earnings per share excluding impairment, restructuring, and the impact of the tank replacement program. This represents a non-GAAP financial measure and is used by management as a measure of operating performance. Earnings per share excluding impairment, restructuring, and the impact of the tank replacement program is calculated by adding or subtracting, as appropriate, impairment of goodwill and long-lived assets and restructuring and other expense (income), net, the impact of the tank replacement program, and the gain on consolidation ofSamuel Steel Pickling (each after tax) to/from net earnings attributable to controlling interest, and dividing the result by the average diluted common shares for the period. The difference between the GAAP-based financial measure of diluted earnings per share attributable to controlling interest and the non-GAAP financial measure of diluted earnings per share excluding impairment, restructuring and the impact of the tank replacement program for the fiscal quarters endedFebruary 29, 2020 andFebruary 28, 2019 , as mentioned in the conference call, is outlined below. . Three Months Ended February 29, 2020 Net Earnings Operating Earnings Income Tax Attributable to (in thousands, except Income Before Expense Controlling Earnings per
per share amounts) (Loss) Income Taxes (Benefit)
Interest Diluted Share1
GAAP $ (1,386 ) $ 23,716 $ 4,828 $ 15,311 $ 0.27
Impairment of goodwill
and long-lived assets 34,627 34,627 7,988 26,611 0.48
Restructuring and other
expense, net 1,376 1,376 111 344 0.01
Tank replacement program (2,265 ) (2,265 ) (555 ) (1,710 ) (0.03 )
Gain on consolidation of
Samuel Steel Pickling - (6,055 ) (1,483 ) (4,572 ) (0.08 )
Non-GAAP $ 32,352 $ 51,399 $ 10,889 $ 35,984 $ 0.64
Three Months Ended February 28, 2019
Net Earnings
Earnings Attributable to(in thousands, except Operating Before Income Tax
Controlling Earnings per
per share amounts) Income Income Taxes Expense
Interest Diluted Share1
GAAP $ 25,977 $ 37,963 $ 8,415 $ 26,773 $ 0.46
Restructuring and other
income, net (11,176 ) (11,176 ) (2,776 ) (8,400 ) (0.14 )
Tank replacement program 13,000 13,000 3,245 9,755 0.17
Non-GAAP $ 27,801 $ 39,787 $ 8,884 $ 28,128 $ 0.49
Change 4,551 11,612 2,005 7,856 0.15
1 The sum of the components may not equal the total due to rounding.
-------------------------------------------------------------------------------- In the conference call, management referred to operating income excluding impairment, restructuring, and the impact of the tank replacement program for the Registrant's Pressure Cylinders operating segment. This represents a non-GAAP financial measure and is used by management as a measure of operating performance. Operating income excluding impairment, restructuring and the impact of the tank replacement program is calculated by adding or subtracting, as appropriate, impairment of goodwill and long-lived assets, restructuring and other expense (income), net, and the impact of the tank replacement program to/from operating income. The difference between the GAAP-based measure of operating income and the non-GAAP financial measure of operating income excluding impairment, restructuring, and the impact of the tank replacement program for the fiscal quarters endedFebruary 29, 2020 andFebruary 28, 2019 , as mentioned in the conference call, is outlined below for the Registrant's Pressure Cylinders operating segment: Three Months Ended February 29, (in thousands) 2020 GAAP $ (19,865 ) Impairment of goodwill and long-lived assets
33,353
Restructuring and other expense, net 747
Tank replacement program (2,265 )
Non-GAAP $ 11,970
Three Months Ended February 28,
(in thousands) 2019
GAAP $ 18,953
Restructuring and other income, net (11,176 )
Tank replacement program 13,000
Non-GAAP $ 20,777
Change $ (8,807 )
In the conference call, management referred to earnings before interest, taxes,
depreciation and amortization ("EBITDA") and trailing twelve months adjusted
EBITDA. These represent non-GAAP financial measures and are used by management
as measures of operating performance. EBITDA is calculated by adding or
subtracting, as appropriate, interest expense, income tax expense (benefit) and
depreciation and amortization to/from net earnings attributable to controlling
interest and adjusted EBITDA is calculated by adding or subtracting, as
appropriate, impairment of goodwill and long-lived assets, restructuring and
other expense (income), net, loss on early extinguishment of debt, impairment of
investment in unconsolidated joint venture, gain on sale of assets within equity
income, gain on consolidation of Samuel Steel Pickling and other non-recurring
expense (each pre-tax) to/from EBITDA. The difference between the GAAP-based
measure of net earnings attributable to controlling interest and the non-GAAP
financial measure of adjusted EBITDA for the trailing twelve months ended
February 29, 2020 as mentioned in the conference call, is outlined below.
Third Second First Fourth
Quarter Quarter Quarter Quarter
(In thousands) 2020 2020 2020 2019
Net earnings (loss) attributable to controlling
interest $ 15,311 $ 52,086 $ (4,776 ) $ 37,738
Impairment of goodwill and long-lived assets
(pre-tax) 34,003 - 40,601 3,834
Restructuring and other expense (income), net
(pre-tax) 1,050 (50 ) 455 692
Loss on early extinguishment of debt (pre-tax) - - 4,034 -
Impairment of investment in unconsolidated
joint venture (pre-tax) - - 4,236 4,017
Gain on sale of assets within equity income
(pre-tax) - (23,119 ) - -
Gain on consolidation of Samuel Steel Pickling
(pre-tax) (6,055 )
Other non-recurring expense (pre-tax) - 912 - -
Interest expense 7,362 7,315 9,480 9,522
. . .
Item 8.01. Other Events.
On March 25, 2020 , the Registrant issued a news release (the "Dividend Release")
reporting that the Board of Directors of the Registrant (the "Board") had
declared a quarterly cash dividend of $0.24 per share in respect of the
Registrant's common shares. The dividend was declared March 25, 2020 and is
payable on June 29, 2020 to shareholders of the Registrant of record at the
close of business on June 15, 2020 . A copy of the Dividend Release is included
with this Current Report on Form 8K as Exhibit 99.2 and incorporated herein by
reference.
Item 9.01. Financial Statements and Exhibits.
(a) through (c): Not applicable.
(d) Exhibits:
The following exhibits are included with this Current Report on Form 8K:
Exhibit No. Description
99.1 Transcript ofWorthington Industries, Inc. Earnings
Conference Call
for Third Quarter of Fiscal 2020 (Fiscal Quarter ended
2020), held on March 26, 2020 .
99.2 News Release issued by Worthington Industries, Inc. on
reporting declaration of quarterly cash dividend.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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