Item 1. - Business. - ---------------------
Worthington Industries, Inc. was initially incorporated in Ohio in 1955. It reincorporated in Delaware in 1986 through a statutory merger. Worthington Industries, Inc. and its subsidiaries are herein referred to as the "Company." The Company's operations are grouped into three segments: processed steel products, custom products and cast products. The Company's sales for its fiscal year ended May 31, 1997 were $1.9 billion.
The Company is the largest independent flat rolled steel processor in the United States. The Company's steel processing operations do not make steel, but rather, they purchase it from steel producers and then process it to exact specifications for approximately 1,700 industrial customers primarily in the automotive, automotive supply, appliance, electrical, communication, construction, office furniture, office equipment, agricultural, machinery, aerospace and leisure time industries. The Company believes it offers the widest array of steel processing services in the industry. The Company currently operates eleven steel processing facilities (with its twelfth under construction) and is a partner in three steel processing joint ventures, with a concentration in the largest steel consuming region of the United States.
For the year ended May 31, 1997, net sales of the Company's processed steel products segment were approximately $1.4 billion, representing approximately 74.1% of the Company's total fiscal year 1997 sales. In addition to steel processing, this segment also includes (i) the Company's pressure cylinder business which management believes to be the largest producer of portable low pressure liquefied petroleum gas cylinders and refrigerant gas cylinders in North America, (ii) the Company's metal framing products business, Dietrich Industries, which is the nation's largest producer and supplier of metal framing products for the commercial and residential construction markets, and (iii) the recently acquired automotive body panel business of The Gerstenslager Company ("Gerstenslager").
The Company acquired Gerstenslager on February 21, 1997 in a tax-free, stock-for-stock exchange valued at approximately $113 million and accounted for as a pooling of interests. Gerstenslager is a major independent producer of aftermarket automotive body panels in the United States. Gerstenslager's sales in fiscal 1997 were approximately $123 million. Gerstenslager's customers include domestic automobile and truck manufacturers and foreign automotive transplants. Based in Wooster, Ohio, Gerstenslager employs over 1,000 people and occupies over 800,000 square feet of manufacturing, warehouse and office space. Under pooling of interests accounting, Gerstenslager has been included in the processed steel products segment as if it were always a part of the Company.
The principal stockholder of Gerstenslager was JDEL, Inc., an investment vehicle of John H. McConnell, the Company's Chairman Emeritus and Founder, John P. McConnell, the Company's Chairman and Chief Executive Officer, and their families. In connection with the transaction, the Company received a fairness opinion from an independent investment banker and approval of the transaction by a Special Committee of the Company's Board of Directors comprised of independent directors.
The Company's custom products segment includes Worthington Custom Plastics, Inc., one of the ten largest plastic injection molding companies in the United States, which sells primarily to the automotive, lawn and garden, recreational, appliance, furniture, business equipment, audio equipment, airline and medical industries, and Worthington Precision Metals, Inc., which supplies components primarily for automotive transmission, power steering and brake applications.
The Company's cast products segment consists primarily of Buckeye Steel Castings Company, one of the two largest suppliers of large railcar castings in the United States and the leading North American designer and producer of undercarriages for mass transit cars.
For information regarding the net sales and revenues, earnings before income taxes, and identifiable assets attributable to each segment for each of the last three fiscal years, reference is made to such information appearing on page I-14 of the Company's 1997 Annual Report to Shareholders, which information is incorporated herein by reference.
See Note J of the Company's Notes to Consolidated Financial Statements, which are incorporated by reference into Item 8 hereof, for information concerning the Company's investments in unconsolidated affiliates.
Processed Steel Products. - -------------------------
The Company's processed steel products segment includes its steel processing businesses, its pressure cylinder business and commencing with its acquisition in February 1996, the metal framing business. It also includes the Gerstenslager automotive body panel business. Since Gerstenslager was acquired in a pooling of interests transaction, its results are included as if it were always part of the Company. For the fiscal year ended May 31, 1997, sales of the processed steel products segment were $1.418 billion, approximately 74.1% of the Company's total sales.
The Company's steel processing operations are conducted through its Worthington Steel Company operations ("Worthington Steel"). Worthington Steel occupies a niche in the steel industry by focusing on more specialized products requiring more exact specifications, which typically cannot be supplied as efficiently
by steel mills, metal service centers or steel end users. Worthington Steel is the largest independent flat rolled steel processor in the United States and operates eleven processing facilities, with a concentration in the Michigan, Ohio and Indiana market, the largest flat rolled steel consuming market in the United States. The Company's newest steel processing facility, located in Delta, Ohio, started up its slitting and pickling operations late in calendar 1996 and its hot dipped galvanizing line in April 1997. The Company's twelfth steel processing facility, located in Decatur, Alabama, is scheduled for start-up in calendar 1998.
Worthington Steel buys coils of wide, open tolerance steel from major integrated steel mills and mini-mills and processes it to the precise type, thickness, length, width, shape, temper and surface quality specified by approximately 1,700 industrial customers, principally in the automotive, automotive supply, appliance, electrical, communications, construction, office furniture, office equipment, agricultural, machinery and leisure time industries. The Company purchases and supplies steel based on the specific orders of customers and does not typically process steel for inventory. Worthington Steel's computer-aided processing capabilities include among others: pickling, a chemical process using an acidic solution to remove surface oxide which develops on hot rolled steel; slitting, which cuts steel to specific widths; cut-to-length, which flattens the steel and cuts it to exact lengths; roller leveling, a method of applying pressure to achieve precise flatness tolerances for steel which is cut into exact lengths; cold reduction, which achieves close tolerances of thickness and temper by rolling; edge rolling, which conditions the edges of the steel by imparting round, smooth or knurled edges; blanking, through which steel is cut into specific shapes; painting; hot dipped galvanizing; nickel plating; and annealing, a thermal process that changes the hardness and certain metallurgical characteristics of steel.
Worthington Steel also "toll processes" steel for the steel mills and large end users. Toll processing is similar to Worthington's normal steel processing, except the mill or end user retains the title to the steel and has the responsibility for selling the product. Toll processing enables the Company to participate in the market for wide sheet steel and large standard orders, which is a market generally served by steel mills, rather than by intermediate steel processors.
Steel processing is highly competitive. The Company competes with many other intermediate processors. The Company knows of no other intermediate processor which offers the same type and extent of technical service support provided by the Company relating to material testing and application of material suited to the particular needs of customers (see "Technical Services"). The Company is unable to gauge, however, the extent to which its technical service capability has improved its competitive position.
Worthington Cylinder Corporation ("Worthington Cylinders") is the nation's largest producer of portable low pressure L.P. gas and refrigerant cylinders.
Worthington Cylinders' primary products are steel cylinders with refrigerant gas capacities of 15 to 1,000 lbs. and steel and aluminum cylinders with L.P. gas capacities of 4-1/4 to 420 lbs. These cylinders are designed and produced in accordance with safety requirements prescribed by the U.S. Department of Transportation which specify materials, design limitations, and marking, inspection and testing procedures. The cylinders are produced by precision stamping, deep drawing and welding of component parts to customer specifications. They are then tested, painted and packaged as required.
The Company's refrigerant cylinders are used primarily by major refrigerant gas producers to contain refrigerant gases for use in charging residential, commercial, automotive and other air conditioning and refrigeration systems. Reusable steel and aluminum L.P. gas cylinders are sold to manufacturers of barbecue grills, propane and gas grill distributors, mass merchandisers, and manufacturers and users of material handling, heating, cooking and camping equipment. The Company manufactures other low pressure cylinder products, including recapture and recycling tanks for refrigerant gases, helium tanks, and cylinders to hold other gases. The Company also produces high pressure acetylene, industrial, medical, halon and electronic gas cylinders. While a large percentage of sales are made to major accounts, Worthington Cylinders has over 2,000 customers. It operates seven manufacturing facilities located in Ohio, Oklahoma, Alabama and Ontario, and a joint venture facility near Sao Paulo, Brazil.
The Company has two principal competitors in its major low pressure cylinder markets, of which management believes the Company has the largest share. The Company also has two principal competitors in its high pressure cylinder markets, both of which have a larger share than the Company. However, the Company otherwise has no reliable information with respect to the size of any of its various product markets or its relative position therein.
The Company's metal framing business is carried on by Dietrich Industries, which was acquired on February 5, 1996. Dietrich is the largest supplier of metal framing products for the commercial and residential construction markets in the United States. The Company believes that Dietrich is the only national supplier of metal framing products and supplies approximately 35% of the metal framing products sold in the United States. It has five large regional competitors and numerous small, more localized competitors. Dietrich operates eighteen facilities in thirteen states.
On February 21, 1997 the Company acquired The Gerstenslager Company, a leading independent supplier of Class A exterior body panels to the North American automotive original equipment and service part markets. The Company believes Gerstenslager to be the largest independent supplier of exposed sheet metal products for the North American automotive aftermarket. Gerstenslager is unique in its ability to handle the very large number of low volume parts managing over
3,000 die sets for component parts on past and current automobile and truck production models. The Company's largest customers are the domestic automobile manufacturers. It also serves transplant automobile manufacturers, heavy duty truck manufacturers, and suppliers to the automotive industry.
Gerstenslager competes with captive stamping plants owned by the automotive companies and independent tier one suppliers of current model components, however these stampers are generally unwilling to keep tooling for past model service business which has a low volume nature. The Company has a number of smaller competitors in this market, but believes that Gerstenslager has the largest share of the automotive aftermarket for exterior body panels.
The largest customer of the processed steel products segment is General Motors Corporation, purchasing through decentralized divisions and subsidiaries and in different geographical areas. (See "Marketing and Competition"). The loss of General Motors as a customer could have an adverse effect on the segment, but the Company has no reason to believe that the loss of this customer is likely.
The Company purchases steel in large quantities, at regular intervals from major primary producers for its steel processing, pressure cylinder, metal framing and automotive body panel operations. During the fiscal year ended May 31, 1997 the Company's major suppliers were Rouge Steel Company (in which the Company holds a minority equity position), AK Steel Corporation, Bethlehem Steel Corporation, LTV Steel Corporation, USX Corporation, WCI Steel, Inc. and Weirton Steel Corporation. During the fiscal year ended May 31, 1997, the Company's major suppliers of aluminum for pressure cylinders were Alumax Aluminum Sales Corporation and Specialty Blanks Incorporated. Management believes that its supplier relationships are good.
Custom Products. - ----------------
The Company's custom products segment includes its custom plastics business and its precision metal business. Sales by the custom products segment totaled $380 million for the year ended May 31, 1997, representing approximately 19.9% of the Company's net sales. The Company's custom plastics business represents the major portion of these sales.
The Company's custom plastics business is conducted through Worthington Custom Plastics, Inc., one of the ten largest producers of injection molded plastic products in the United States. Historically, sales to the automotive market had dominated the customs plastic business. In recent years the Company has increased sales to manufacturers of appliances, lawn and garden equipment, audio equipment, business equipment, furniture, recreational products, and other items.
On December 3, 1996, the Company acquired substantially all of the assets of Plastics Manufacturing, Inc. ("PMI") of Harrisburg, North Carolina, one of the
largest manufacturers of plastic injection molded and thermoformed parts in the southeastern United States. With annualized revenues of approximately $80 million, PMI primarily serves the business equipment, commercial airline and medical industries. The Company believes that Worthington Custom Plastics is one of the two largest suppliers of injection molded plastic parts for non-automotive uses.
Principal custom products are a variety of custom made injection molded plastic components (both functional and decorative) which, depending on the customers' needs, can also be painted, assembled, silk screened, vacuum metalized, hot stamped, roll foiled, vinyl wrapped, foamed in-place and/or appliqued by the Company. Worthington Custom Plastics operates nine plants located in Ohio, Kentucky, North Carolina and South Carolina.
The Company's precision metals business is conducted through Worthington Precision Metals, Inc. which supplies metal components requiring extremely precise tolerances for use primarily in the automotive industry for transmission, power steering and brake applications. This business operates two facilities located in Ohio and Tennessee.
The custom products segment relies heavily on sales to General Motors Corporation, The Ford Motor Company and Chrysler Corporation. The loss of any of these customers could have an adverse effect on the segment but the Company has no reason to believe that the loss of any of these customers is likely.
Plastic resins and bar steel, the major raw materials required by this segment, are available from many sources.
The Company has numerous competitors in the sale of its custom products. This business competes in its markets by seeking to provide well-engineered, quality products within required delivery terms to meet the specific needs of its plastic parts and precision metal component customers.
Cast Products. - --------------
The Company's cast products segment consists primarily of Buckeye Steel Castings Company ("Buckeye Steel") which operates the largest single site steel foundry in the United States. Buckeye Steel manufactures a diverse line of cast steel products ranging in size from 100 lbs. to 30 tons. These products are offered to the railroad, mass transit, construction and off highway equipment markets. The Company believes Buckeye Steel is one of the two largest suppliers of large railcar castings in the United States and is the leading North American designer and producer of undercarriages for mass transit cars. The cast products segment had sales of $114 million for the year ended May 31, 1997, representing approximately 6.0% of total Company sales.
In general, there are a number of companies involved in the sale of steel castings; however, there are three major competitors in the sale of certain railcar castings. The Company's cast products are generally sold under trademark which is a stylized "Circle B", and the Company utilizes various other owned and licensed trademarks and patents in connection with its cast products.
Scrap steel, the major raw material required by the cast products segment, is purchased from several sources. Supplies of scrap steel have been adequate, although pricing in the market tends to be volatile. Other raw materials used by this segment are obtained from a number of major suppliers.
Joint Ventures - --------------
The Company is a member in one consolidated and six unconsolidated joint ventures.
- Spartan Steel Coating, L.L.C., a 52% owned consolidated joint venture with Rouge Steel, is constructing a cold rolled hot dipped galvanizing facility near Monroe, Michigan. This facility is expected to begin operations in mid-1998.
- Worthington/Armstrong Venture ("WAVE"), a 50% owned joint venture with Armstrong World Industries, is one of the three leading United States manufacturers of suspended ceiling systems for concealed and lay-in panel ceilings. WAVE operates facilities in Pennsylvania, Maryland, Nevada, Spain, China, and France and expects to open facilities in England and Michigan.
- Worthington Specialty Processing, a 50% owned joint venture with USX Corporation, operates a plant in Jackson, Michigan which primarily toll processes for USX Corporation.
- Acerex S.A. de C.V., a 50% owned joint venture with Hylsa S.A. de C.V., is a steel processing company located in Monterrey, Mexico.
- TWB Company, a 33.3% owned joint venture with Thyssen Steel, Rouge Steel, LTV Steel and Bethlehem Steel, is located in Monroe, Michigan. It produces laser welded blanks for use in the auto industry for products such as inner door frames.
- Worthington S.A., a 52% owned joint venture with three Brazilian propane producers, operates a cylinder manufacturing facility near Sao Paulo, Brazil.
- London Industries, Inc., a 60% owned London, Ohio joint venture with Sumitomo and Nissen Chemitech of Japan, produces injection molded plastics parts, concentrating on sales to foreign transplant automakers.
See Note J of the Company's Notes to Consolidated Financial Statements for additional information on these joint ventures.
Investment In Rouge Steel - -------------------------
The Company also owns a minority interest (27%) in Rouge Steel Company, an integrated steel mill located in Dearborn, Michigan. This relationship, along with a long term steel supply agreement, have assured the Company a steady supply of high quality steel at competitive prices in all market conditions. Since Worthington acquired its equity position in 1990, Rouge Steel has been the Company's largest steel supplier.
In the first quarter of fiscal 1997, the Company converted certain of its Class B common stock of Rouge Steel into Class A common stock of Rouge Steel, which reduced its voting percentage in Rouge Steel below 20%, and it resigned from its two seats on the Rouge Steel Board of Directors. As a result, the Company's investment in Rouge no longer qualified for the equity method of accounting and was changed to the cost method for the 1997 fiscal year. Under the equity method, Rouge Steel had contributed $21.7 million and $32.1 million to the Company's pre-tax earnings during fiscal 1996 and 1995, respectively. Under the cost method of accounting, only dividends received by Worthington from its Rouge Common Stock are credited to pre-tax earnings.
In March 1997, the Company issued 5,999,600 DECS SM (Debt Exchangeable for Common Stock SM). Under the DECS the Company issued $93 million principal amount of 7-1/4% exchangeable notes due March 1, 2000. At maturity of the Notes, the principal amount of each DECS will be mandatorily exchanged by Worthington into shares of Rouge Class A Common Stock (or at the Company's option cash equivalent for all or part thereof) at a defined exchange rate. The Company's current Rouge stockholdings are sufficient to settle the DECS liability.
Technical Services. - -------------------
The Company employs a staff of engineers and other technical personnel and maintains fully-equipped, modern laboratories to support its operations. The facilities enable the Company to verify, analyze and document the physical, chemical, metallurgical and mechanical properties of its raw materials and products. Technical service personnel also work in conjunction with the sales force to determine the types of flat rolled steel and steel castings required for the particular needs of the Company's customers. In order to provide such service, the Company maintains a continuing program of developmental engineering with respect to the
characteristics and performance of its products under varying conditions. Laboratory facilities are also used to perform the quality control and extensive testing of all low pressure cylinders required by the regulations of the U. S. Department of Transportation and associated agencies, as well as varying customer requirements. The Company also maintains a separate testing facility for its steel castings operation.
Marketing and Competition. - --------------------------
The Company's products and services are sold primarily by Company sales personnel.
As a percentage of the Company's consolidated sales and revenues, sales of steel processing services represented 42% for fiscal 1997, 48% for fiscal 1996, and 54% for fiscal 1995; sales of metal framing products represented 15.6% for fiscal 1997 and less than 10% in fiscal 1996 and 1995 since it was acquired in February 1996; sales of pressure cylinders represented 10% for fiscal 1997, 11% for fiscal 1996, and 12% for 1995; sales of custom plastics represented 17% for fiscal 1997, 17% in 1996, and 16% in 1995.
During fiscal year ended May 31, 1997, General Motors Corporation, purchasing through decentralized divisions and subsidiaries in different geographical areas, accounted for approximately 14.0% of the Company's consolidated sales and revenues.
The principal methods of competition encountered by the Company are quality of product, ability to meet delivery requirements of customers, and price. Geographic proximity to customers has a significant effect upon relative ability to meet customer delivery schedules and impacts the freight charge portion of overall product price. See also the information set forth above as to competition in the various segments.
Environmental Regulation. - -------------------------
The Company's manufacturing facilities, generally in common with those of similar industries making similar products, are subject to many federal, state and local requirements relating to the protection of the environment. The Company continually examines ways to reduce emissions and waste and to effect cost savings related to environmental compliance. Management does not anticipate that capital expenditures for environmental control facilities required in order to meet environmental requirements will be material when compared with the Company's overall capital expenditures.
Employees. - ----------
The Company employs approximately 12,000 people.
Subsequent Event - ----------------
On August 14, 1997, the Company experienced a fire at its steel processing facility in Monroe, Ohio. The fire significantly damaged the pickling area of the facility and caused less extensive damage to the remainder of the plant. The Company has shifted as much business as possible to its other locations, with the remainder being sent to third party processors. Although the Company has not yet been able to fully evaluate the damages and the time for repairs or replacement of the facilities and its equipment, the Company anticipates that operations will return in stages, with blanking to return first, slitting second, and pickling over a longer period.
The Company carries both property damage and business interruption insurance and as a result, the Company does not expect the fire to have a material adverse impact on the Company's financial results.
Item 2.
Item 2. - Properties. - ---------------------
The Company's corporate offices are located in Columbus, Ohio. Its principal properties consist of 52 manufacturing facilities, excluding those of unconsolidated affiliates. These facilities are well maintained and in good operating condition, excluding the Monroe, Ohio steel processing facility which was recently damaged by a fire - see Item 1 under "Subsequent Events." These facilities contain in excess of 9,000,000 sq. ft. in the aggregate and are adequate to meet the Company's present needs.
The locations of these facilities are set forth on page I-28 of the Company's Annual Report to Shareholders for the year ended May 31, 1997, which information is incorporated herein by reference.
See Item 1 under the heading "Joint Ventures" for the location of the Company's unconsolidated affiliates.
Item 3.
Item 3. - Legal Proceedings. - ----------------------------
Not Applicable.
Item 4.
Item 4. - Submission of Matters to a Vote of Security Holders. - --------------------------------------------------------------
Not Applicable.
Executive Officers of the Registrant. - -------------------------------------
The following table lists the names, positions held, and ages of all the executive officers of the Company:
The principal employment of Donal H. Malenick, Robert J. Borel and Edward A. Ferkany for more than the last five years has been in their present capacity with the Company. William S. Dietrich has been President of Dietrich Industries for more than the last five years.
John P. McConnell's principal occupation for more than five years prior to July 1990 had been in various capacities with the Company. In July 1990, he resigned his employment with the Company to become President of JMAC, Inc., a private holding company. John P. McConnell was elected Vice Chairman of the Company in June 1992, Chief Executive Officer as of June 1, 1993, and Chairman of the Board in September 1996.
John H. McConnell was Chairman and Chief Executive Officer of the Company from its founding in 1955 until he retired from the position of Chief Executive Officer in 1993 and as Chairman in 1996.
Donald G. Barger, Jr. was Vice President-Corporate Controller for B. F. Goodrich Company for more than five years prior to September 1993, when he became Vice President, Chief Financial Officer of the Company.
Thomas L. Hockman was Assistant Treasurer and Manager of Compensation and Benefits for the Company for more than five years prior to becoming Vice President-Personnel in January 1993. He became Vice President-Administration in 1997.
Pete A. Klisares was Manufacturing Vice President and General Manager for AT&T for more than five years prior to May 1991 and Executive Director of JMAC, Inc. from May 1991 through December 1991. He became Assistant to the Chairman of the Company in December 1991. He was named Executive Vice President effective August 1993 and maintained that position until August 1997 when he again assumed the position of Assistant to the Chairman.
Charles D. Minor was a partner in the law firm of Vorys, Sater, Seymour and Pease, counsel to the Company, for more than five years prior to January 1993. In January 1993 he became counsel to that firm.
Ralph V. Roberts served as President of Worthington Armstrong Venture, a joint venture between the Company and Armstrong World Industries, Inc. from its formation in June 1992 until he became Vice President Corporate Development in June 1997. Prior to that time, he served in various positions with the Company including as Vice President-General Manager of two of the Company's steel processing facilities.
Mark H. Stier was Vice President - General Manager of the Company's subsidiary, The Worthington Steel Company, Porter, Indiana, for more than ten years prior to August 1997, when he became Vice President-Corporate Human Resources of the Company. Prior to that time he had served in various capacities with the Company.
Executive officers serve at the pleasure of the directors. John H. McConnell is the father of John P. McConnell. There are no other family relationships among the executive officers of the Company. No arrangements or understandings exist pursuant to which any person has been, or is to be, selected as an officer.
PART II
Item 5.
Item 5. - Market for Registrant's Common Equity and Related Stockholder Matters. - --------------------------------------------------------------------------------
The information called for by this Item 5 is incorporated by reference herein from the information set forth under the caption "Stock Trading, Price and Dividend Information" on page I-4 of the Company's 1997 Annual Report to Shareholders.
Item 6.
Item 6. - Selected Financial Data. - ----------------------------------
The information called for by this Item 6 is incorporated by reference herein from the information on page I-5 under the caption "Five Year Selected Financial Data" under the headings "Financial Results" and "Financial Position."
Item 7.
Item 7. - Management's Discussion and Analysis of Financial Condition and - ------------------------------------------------------------------------- Results of Operations. - ----------------------
The information called for by this Item 7 is incorporated by reference herein from the information set forth under the caption "Management's Discussion and Analysis" on pages I-6 through I-9 of the Company's 1997 Annual Report to Shareholders.
Item 7A.
Item 7A. - Quantitative and Qualitative Disclosures about Market Risk. - ----------------------------------------------------------------------
Not applicable.
Item 8.
Item 8. - Financial Statements and Supplementary Data. - ------------------------------------------------------
The following consolidated financial statements of Worthington Industries, Inc. and Subsidiaries and Report of Independent Auditors, set forth on pages I-10 through I-27 of the Company's 1997 Annual Report to Shareholders are incorporated herein by reference.
Consolidated Balance Sheets--May 31, 1997 and 1996
Consolidated Statements of Earnings--Years ended May 31, 1997, 1996 and 1995.
Consolidated Statements of Shareholders' Equity--Years ended May 31, 1997, 1996 and 1995.
Consolidated Statements of Cash Flows--Years ended May 31, 1997, 1996 and 1995.
Notes to Consolidated Financial Statements
Report of Independent Auditors
Item 9.
Item 9. - Changes in and Disagreements with Accountants on Accounting and - ------------------------------------------------------------------------- Financial Disclosure. - ---------------------
Not applicable.
PART III
Item 10.
Item 10. - Directors and Executive Officers of the Registrant. - --------------------------------------------------------------
In accordance with General Instruction G(3), the information required by this Item 10 is incorporated by reference herein from the material under the heading "Election of Directors" contained on pages 2 through 5 of the Company's Proxy Statement for its 1997 Annual Meeting of Shareholders to be held on September 18, 1997. The information regarding Executive Officers required by Item 401 of Regulation S-K is included in Part I hereof under an appropriate caption. Disclosure required under Item 405 of Regulation S-K is included on page 5 of the Proxy Statement.
Item 11.
Item 11. - Executive Compensation. - ----------------------------------
In accordance with General Instruction G(3), the information required by this Item 11 is incorporated by reference herein from the information contained in the Company's Proxy Statement for its 1997 Annual Meeting of Shareholders under the heading "Election of Directors - Compensation of Directors" on pages 4 and 5, and under the heading "Executive Compensation" - "Summary of Cash and Certain Other Compensation" on page 12, "Option Grants" on page 13, and "Option Exercises and Holdings" on pages 13 and 14.
Item 12.
Item 12. - Security Ownership of Certain Beneficial Owners and Management. - --------------------------------------------------------------------------
In accordance with General Instruction G(3), the information required by this Item 12 is incorporated by reference herein from the material under the headings "Voting Securities and Principal Holders Thereof - Security Ownership of Certain Beneficial Owners" contained on page 2 and "Election of Directors" contained on pages 3 and 4 of the Company's Proxy Statement for its 1997 Annual Meeting of Shareholders.
Item 13.
Item 13. - Certain Relationships and Related Transactions. - ----------------------------------------------------------
In accordance with General Instruction G(3), the information required by this Item 13 is incorporated by reference herein from footnote 2 to the table under the heading "Election of Directors" contained on page 3 and the material under the heading "Gerstenslager Transaction" on page 13 of the Company's Proxy Statement for its 1997 Annual Meeting of Shareholders.
PART IV
Item 14.
Item 14. - Exhibits, Financial Statement Schedules, and Reports on Form 8-K. - ----------------------------------------------------------------------------
(a)(1) and (2) The response to this portion of Item 14 is submitted as a separate section of this report--See List of Financial Statements and Financial Statement Schedules on page of this report.
(3) Listing of Exhibits--See Index to Exhibits beginning on page E-1 of this report. The index to exhibits specifically identifies each management contract or compensatory plan required to be filed as an Exhibit to this Form 10-K.
(b) None.
(c) Exhibits filed with this report are attached hereto.
(d) Financial Statement Schedules--The response to this portion of Item 14 is submitted as a separate section of this report--See List of Financial Statements and Financial Statement Schedules on Page.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
WORTHINGTON INDUSTRIES, INC.
Date: August 27, 1997 By: /s/Donald G. Barger -------------------- Donald G. Barger, Jr. Vice President-Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
*By:/s/Donald G. Barger, Jr. Date: 8/27/97 ------------------------- ------- Donald G. Barger, Jr. Attorney-In-Fact
ANNUAL REPORT ON FORM 10-K ITEM 14 (a) (1) AND (2) AND ITEM 14 (d) WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of Worthington Industries, Inc., and Subsidiaries, set forth on pages I-10 through I-27 of the Company's 1997 Annual Report to Shareholders, are incorporated by reference in Item 8:
Consolidated Balance Sheets -- May 31, 1997 and 1996
Consolidated Statements of Earnings -- Years ended May 31, 1997, 1996 and 1995
Consolidated Statements of Shareholders' Equity -- Years ended May 31, 1997, 1996 and 1995
Consolidated Statements of Cash Flows -- Years ended May 31, 1997, 1996 and 1995
Notes to Consolidated Financial Statements
Report of Independent Auditors
The following consolidated financial statement schedules of Worthington Industries, Inc. and Subsidiaries are included in Item 14 (d):
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
Note A - Uncollectible accounts charged to the allowance. Note B - Amount from Dietrich acquisition. Note C - Amount from PMI acquisition. EXHIBIT INDEX -------------
3(a) Certificate of Incorporation of Incorporation herein by reference Worthington Industries, Inc. to Exhibit 3 of the Company's Quarterly Report on Form 10-Q for the Quarter ended August 31, 1994
3(b) Bylaws of Worthington Industries, Incorporated herein by reference Inc. to Exhibit 3(b) of the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 1992
4(a) Form of Indenture dated as of May 15, 1996 between the Company and PNC Bank, Ohio, National Association, as Trustee, relating to up to $450,000,000 of debt securities
4(b) Form of 7-1/8% Notes due 2006
4(c) First Supplemental Indenture dated as of February 27, 1997 between the Company and PNC Bank as Trustee
4(d) 7-1/4% Exchangeable Note Due March 1,
4(e) Revolving Credit Agreement dated as of May 30, 1997 between the Company and The Bank of Nova Scotia, PNC Bank, Ohio, National Association, Nationsbank, N.A., Wachovia Bank of Georgia, N.A., ABN Amro Bank N.V. and Bank One, N.A.
4(f) Agreement to furnish instruments defining rights of holders of long- term debt
10(a) Amended 1980 Stock Option Plan, Incorporated herein by reference as amended* to Annex B to the Prospectus filed as part of Post-Effective Amendment No. 1 to the Company's Registration Statement on Form S-8 (Registration No. 2-80094)
10(b) 1990 Stock Option Plan* Incorporated herein by reference to Exhibit 10(d) of the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 1991
10(c) Executive Deferred Compensation Incorporated herein by reference Plan* to Exhibit 10(e) of the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 1984
10(d) Deferred Compensation Plan for Incorporated herein by reference to Directors* Exhibit 10(f) of the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 1984
10(e) 1997 Long-Term Incentive Plan
13 Annual Report to Shareholders
21 Subsidiaries of the Company
23 Consent of Ernst & Young, LLP
24 Powers of Attorney
27 Financial Data Schedule
*Management Compensation Plan