June 27, 2014 - Direct volumes for Worthington Industries Inc.’s core steel processing operations “are now approaching pre-recession levels, volumes that we have not seen since the fourth quarter of our fiscal 2008,” President and Chief Operating Officer Mark A. Russel reported in an earnings call June 26.
Companywide revenues in the fourth quarter ended May 31 jumped 26.5 percent, with steel processing’s shipment volume rising 20 percent--not including operations of Tailor Welded Blanks. With TWB, steel processing volume jumped 35 percent to 949,000 tons, compared with the same three months of last year. Operating profits were basically flat year over year.
Steel shipments “outpaced the Metals Service Center Institute’s increase of 5 percent for the total market and provides further evidence that we are gaining share,” said Russell. “Our volumes compared to last quarter improved significantly in several markets including Tier 1 auto which was up 30 percent, automotive OEM, which was up 19 percent, and agriculture [equipment], up 14 percent.
“Other markets show smaller but still significant increases including heavy truck, which was up 7 percent, and construction, which was up 4 percent.”
Looking ahead, “Shipments for new programs and new customers should continue to positively impact these numbers going forward as several customers are still in the process of transitioning volume to us from their current suppliers,” Russell continued.
Worthington’s Tailored Welded Blanks joint venture with Wuhan Iron & Steel continues to “take advantage of the automotive lightweighting trend as OEMs continue to increase the number of parts design with our tailor-welded blanks.” Lightweighting is also driving greater demand for tailor-welded coil technology.
TWB recently started up North America’s first dedicated aluminum tailor-welded blank production line using cutting edge friction stir welding technology rather than lasers.
Both the joint venture Worthington has with U.S. Steel Corp. and its joint venture with Wuhan process aluminum. TWB can weld two dissimilar pieces of aluminum—which “we’re doing with the friction stir welding because of the metallurgical properties of the aluminum,” Russell explained. “That’s a neat capability and gives us the ability to be pretty much agnostic about which material an automaker uses. If it’s aluminum, we will process that or if it’s steel, we will process that.”
For the 12 months ended May 31, Worthington’s steel processing net sales steel processing net sales $1.93 billion, up 32.4 percent from the prior fiscal year. Volume for the year topped 3.28 million tons, up 23.4 percent from 2.66 million tons in fiscal 2013.