Worthington Industries, Inc. WOR reported a 15.3% year-over-year decline in first-quarter FY24 net sales, totaling $1.19 billion and missing the consensus of $1.23 billion.
The decrease resulted from lower average selling prices in Steel Processing and reduced overall volumes.
Adjusted EPS stood at $2.06, beating the consensus of $2.04.
Gross profit rose by 16.6% Y/Y to $197.49 million, with the margin expanding by 453 bps to 16.5%. Operating income reached $77.71 million (+16.6% Y/Y), and the margin was 6.5%, up 178 bps.
Adjusted operating income increased by $18.7 million compared to the prior year quarter, reaching $85.1 million due to higher overall gross margin, partially offset by an $8.9 million increase in SG&A expense.
Total debt as of August 31, 2023, was $448.4 million, down $244.4 million from May 31, 2023. WOR concluded the quarter with $201.0 million in cash.
Net cash used by operating activities for the quarter was $59.69 million, compared to cash provided of $81.04 million a year ago.
Dividend: Worthington’s Board of Directors declared a quarterly dividend of $0.32 per share, payable on December 15, 2023, to shareholders of record on November 15, 2023.
“Steel Processing experienced healthy demand across most key end markets, while Building Products benefited from strong contributions from both WAVE and ClarkDietrich, combined with growth in our wholly-owned businesses. Our Consumer Products business faced headwinds due to weather, customer destocking, and lower consumer spending, but we anticipate demand and margins will improve in upcoming quarters,” commented Andy Rose, President, and CEO.
“We continue to make significant progress on our Worthington 2024 plan, aiming to create two distinct market-leading companies, Worthington Enterprises and Worthington Steel. We are on track to complete the separation as early as December 2023,” Rose added.
Price Action: WOR shares are trading 2.19% lower at $69.52 in Thursday’s premarket session.
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