WORTHINGTON INDUSTRIES INC (Form: 8-K, Received: 07/02/2013 15:56:27)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

June 27, 2013

WORTHINGTON INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Ohio

1-8399

31-1189815

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

200 Old Wilson Bridge Road, Columbus, Ohio

43085

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (614) 438-3210

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

Management of Worthington Industries, Inc. (the “Registrant”) conducted a conference call on June 27, 2013 beginning at approximately 1:30 p.m., Eastern Daylight Time, to discuss the Registrant’s unaudited financial results for the fourth quarter of fiscal 2013 (the fiscal quarter ended May 31, 2013). Additionally, the Registrant’s management addressed certain issues related to the outlook for the Registrant and its subsidiaries and their 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 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 earnings per share excluding restructuring and impairment charges. This represents a non-GAAP financial measure and is used by management as a measure of operating performance. Earnings per share excluding restructuring and impairment charges is calculated by adding the after tax impact of impairment of long-lived assets, restructuring and other expense, joint venture transactions and non-recurring charges within equity in net income of unconsolidated affiliates (equity income) to 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 measure of earnings per share (EPS) attributable to controlling interest of $1.91 and the earnings per share excluding restructuring and impairment charges financial measure of $2.08 for the fiscal year ended May 31, 2013, as mentioned in the conference call, is outlined below.

Diluted EPS attributable to controlling interest	$	1.91
Impairment of long-lived assets		0.06
Restructuring and other expense		0.03
Joint venture transactions		(0.01	)
Non-recurring charges in equity in net income of unconsolidated affiliates		0.08
Adjusted diluted EPS attributable to controlling interest 2	$	2.08

2 The sum of the components do not equal the total due to rounding

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Base Salary and Short-Term Incentive Compensation for Named Executive Officers .

The Compensation and Stock Option Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of the Registrant approved, effective June 28, 2013, the following base salaries and short-term incentive compensation awards for the twelve-month performance period ending May 31, 2014, for the named executive officers identified below.

		Short-Term Incentive Compensation Awards for the Period ending May 31, 2014(i):
Name	Annual Base Salary ($)(ii)	Threshold ($)	Target($)	Maximum($)
John P. McConnell	625,000	430,000	860,000	1,720,000
B. Andrew Rose	464,000	244,500	489,000	978,000
Mark A. Russell	515,000	309,000	618,000	1,236,000
Virgil L. Winland	334,000	181,000	362,000	724,000
Andrew J. Billman	390,000	175,000	350,000	700,000
George P. Stoe	5,000	0	0	0

(i)

The last three columns show the potential payouts which can be earned under short-term incentive compensation awards based on achievement of specified levels of performance for the twelve-month period ending May 31, 2014. Payouts of these awards for corporate executives are generally tied to achieving specified levels (threshold, target and maximum) of corporate economic value added and adjusted earnings per share for the twelve-month performance period with each performance measure carrying a 50% weighting. For Mr. Billman, a business unit executive, the corporate earnings per share measure carries a 20% weighting, the Pressure Cylinders business unit operating income carries a 30% weighting and the Pressure Cylinders business unit economic value added carries a 50% weighting. If the performance level falls between threshold and target or between target and maximum, the award is to be prorated. If threshold levels are not achieved for any performance measure, no payout will be made.

(ii)

These base salaries become effective September 2013. George P. Stoe, the other named executive officer of the Registrant for purposes of this Item 5.02, retired as President and Chief Operating Officer of the Registrant effective August 1, 2012, but remained employed as non-executive chairman of the Specialty Cabs business unit. He retired from that position effective May 31, 2013, but remains employed by the Registrant as an advisor. He will receive a base salary during fiscal 2014 of $5,000 per month, but will not receive a short-term cash incentive compensation award for the fiscal year ending May 31, 2014.

LTIP Performance Awards to Named Executive Officers .

The Compensation Committee made, effective June 28, 2013, the following long-term cash performance awards and performance share awards to the named executive officers identified below under the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan (the “1997 Long-Term Incentive Plan”) for the three-year performance period ending May 31, 2016.

Cash Performance Awards for the Three-Year Period Ending May 31, 2016 :

Name	Threshold ($)	Target ($)	Maximum ($)
John P. McConnell	500,000	1,000,000	2,000,000
B. Andrew Rose	300,000	600,000	1,200,000
Mark A. Russell	300,000	600,000	1,200,000
Virgil L. Winland	115,000	230,000	460,000
Andrew J. Billman	150,000	300,000	600,000

Performance Share Awards for the Three-Year Period Ending May 31, 2016:

	No. of Common Shares
Name	Threshold	Target	Maximum
John P. McConnell	8,500	17,000	34,000
B. Andrew Rose	3,500	7,000	14,000
Mark A. Russell	3,500	7,000	14,000
Virgil L. Winland	1,000	2,000	4,000
Andrew J. Billman	1,500	3,000	6,000

Pay-outs of performance awards are generally tied to achieving specified levels (threshold, target and maximum) of cumulative corporate economic value added for the three-year performance period and earnings per share growth over the performance period, with each performance measure carrying a 50% weighting. For Mr. Billman, a business unit executive, the corporate earnings per share measure carries a 25% weighting, the corporate economic value added carries a 25% weighting, and the Pressure Cylinders business unit operating income carries a 50% weighting. If the performance level falls between threshold and target or between target and maximum, the award is prorated. Performance award pay-outs would generally be made no later than three months following the end of the applicable performance period. Cash performance awards may be paid in cash, common shares of the Registrant, other property, or any combination thereof, at the sole discretion of the Compensation Committee at the time of payment. Performance share awards will be paid in common shares of the Registrant. In general, termination of employment results in termination of awards. However, if termination is due to death, disability or retirement, a pro rata payout will be made if the performance period will end 24 months or less after termination of employment based on the number of months of employment completed by the named executive officer during the performance period before the effective date of termination, provided that the applicable performance goals are achieved. No payout will be made if the performance period will end more than 24 months after termination of employment. Unless the Board specifically provides otherwise, in the event of a change in control of the Registrant, performance awards will be considered to be earned, payable in full, and immediately settled or distributed, if the change in control is followed by specified types of termination of employment within two years of the change in control.

For further information about the 1997 Long-Term Incentive Plan, and the performance awards which may be made to executive officers of the Registrant, please refer to the 1997 Long-Term Incentive Plan (which was filed as Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2008 (SEC File No. 1-8399)) and the form of letter evidencing performance awards granted under the 1997 Long-Term Incentive Plan with targets for three-year periods (which is included as Exhibit 10.1 to the Current Report on Form 8-K)).

Stock Option Grants to Named Executive Officers.

The Compensation Committee approved, effective June 28, 2013, the following stock option grants to the named executive officers identified below, with the exercise price of each stock option equal to the $31.10 closing price of the common shares of the Registrant on June 28, 2013. All of these stock options were granted as non-qualified stock options pursuant to the Worthington Industries, Inc. 2010 Stock Option Plan (the “2010 Stock Option Plan”) and will expire on June 27, 2023, subject to the terms of the 2010 Stock Option Plan in respect of earlier termination or forfeiture.

Name	No. of Common Shares Underlying Stock Options Granted
John P. McConnell	17,000
B. Andrew Rose	9,000
Mark A. Russell	9,000
Virgil L. Winland	3,000
Andrew J. Billman	6,000
George P. Stoe	30,000

Each non-qualified stock option granted effective June 28, 2013, has an expiration date of June 27, 2023 and vests in one-third increments on each annual anniversary of the grant date, becoming fully vested and exercisable on the third anniversary of the grant date (i.e., June 28, 2016), except for the option granted to Mr. Stoe which is to fully vest on June 28, 2014. If a named executive officer’s employment terminates due to death, disability or retirement, the vested and exercisable portion of the named executive officer’s non-qualified stock option will remain exercisable until the earlier of the expiration date of the non-qualified stock option (June 27, 2023) or the third anniversary of the named executive officer’s termination of employment, and the Compensation Committee may elect, in its sole discretion, to accelerate the vesting of any unvested portion of the non-qualified stock option. Unless the Compensation Committee otherwise determines, in the event of a change in control (as defined in the 2010 Stock Option Plan), the portion of the non-qualified stock option at that time outstanding will become fully vested and exercisable if the employment of a named executive officer is terminated by the Registrant without cause or by the named executive officer due to an adverse change in his employment terms at any time within the two years following the change in control. If a named executive officer’s employment terminates other than due to the named executive officer’s death, disability or retirement or following a change in control as described above, any outstanding portion of the non-qualified stock option (whether or not vested) will be forfeited.

For further information about the 2010 Stock Option Plan and the stock options which may be granted thereunder, please refer to the 2010 Stock Option Plan (which was filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 5, 2010 (SEC File No. 1-8399) and the form of Non-Qualified Stock Option Award Agreement to be entered into by the Registrant in order to evidence the grant of non-qualified stock options to executive officers of the Registrant pursuant to the 2010 Stock Option Plan (which is included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 6, 2011 (SEC File No. 1-8399).

Restricted Stock Awards.

The Compensation Committee approved, effective June 28, 2013, the following restricted stock awards (also referred to as “restricted shares”) to the named executive officers identified below pursuant to the 1997 Long-Term Incentive Plan:

Name	Number of Common Shares Underlying Restricted Stock Award
John P. McConnell	22,000
B. Andrew Rose	11,000
Mark A. Russell	11,000
Virgil Winland	4,000
Andrew J. Billman	5,500
George P. Stoe	5,000

The restricted shares will be held in escrow by the Registrant and may not be sold, gifted, transferred, pledged, assigned or otherwise alienated or hypothecated until the restrictions thereon have lapsed. Subject to continued employment of the named executive officer, the restrictions on the restricted shares will lapse and the restricted shares will become fully vested on the third anniversary of the grant date (i.e., on June 28, 2016) or in the case of Mr. Stoe, the first anniversary of the grant date (June 28, 2014). Any unvested restricted shares will become fully vested if the named executive officer dies or becomes disabled, as determined by the Compensation Committee. Upon a change in control (as defined in the 1997 Long-Term Incentive Plan), the restrictions on the restricted shares will lapse and the restricted shares will become fully vested if the named executive officer’s employment is terminated within two years thereafter by the Registrant without cause or by the named executive officer due to an adverse change in his employment terms. If the named executive officer retires, the Compensation Committee may elect, in its discretion, to accelerate the vesting of all or a portion of the restricted shares of the named executive officer. If a named executive officer’s employment with the Registrant terminates for any other reason, the restricted shares will be forfeited. During the time between the grant date and the vesting date of the restricted shares, a named executive officer may exercise full voting rights in respect of the restricted shares and dividends will be accrued and paid in respect of the restricted shares upon the vesting date, if the underlying restricted shares vest.

For further information about these restricted shares, please refer to the 1997 Long-Term Incentive Plan and the forms of Restricted Stock Award Agreement for 2013 entered into by the Registrant in order to evidence the grant of restricted shares to the named executive officers (other than George P. Stoe) effective June 28, 2013 (which is included as Exhibit 10.2 to this Current Report on Form 8-K) and to George P. Stoe effective June 28, 2013 (which is included as Exhibit 10.3 to this Current Report on Form 8-K).

Performance Based Restricted Shares .

The Compensation Committee also granted, effective June 28, 2013, the following awards of restricted shares to the named executive officers identified below pursuant to the 1997 Long-Term Incentive Plan.

Name	Number of Restricted Shares Subject to Award

B. Andrew Rose	180,000
Mark A. Russell	180,000

For further information about the additional awards of restricted shares made to Messrs. Rose and Russell, please refer to the form of Restricted Stock Award Agreement entered into by the Registrant in order to evidence such awards, which form is included as Exhibit 10.3 to this Current Report on Form 8-K.

The restricted shares will be held in escrow by the Registrant and may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated until the restrictions thereon have lapsed. Subject to continued employment of each named executive officer, restrictions on the restricted shares will lapse and the restricted shares will become fully vested if and when both of the following conditions are met: (a) the closing price of the Registrant’s common shares equals or exceeds $50 per share for 30 consecutive calendar days during the five-year period ending on the fifth anniversary of the grant date (i.e., June 28, 2018) (the “Performance Condition”); and (b) the executive officer has continuously remained an employee of the Registrant or a subsidiary of the Registrant through the third anniversary of the grant date (i.e., June 28, 2016) (the “Time-Based Vesting Condition”). Upon a change in control (as defined in the 1997 Long-Term Incentive Plan), the restrictions on the restricted shares will lapse and the restricted shares will become fully vested if the named executive officer’s employment is terminated within two years thereafter by the Registrant without cause or by the named executive officer due to an adverse change in the terms of his employment. Any unvested restricted shares generally are forfeited if the named executive officer terminates employment due to death or disability as determined by the Compensation Committee but (i) the Compensation Committee, in its sole discretion, may cause all or a portion of the restricted shares to vest as of the date of termination due to death or disability, as determined by the Compensation Committee; and (ii) the Compensation Committee will cause all of the restricted shares to vest as of the date of termination due to death or disability, as determined by the Compensation Committee, if the Performance Condition has been met, but not the Time-Based Vesting Condition. In addition, if the Registrant terminates the named executive officer’s employment without “cause” (as defined in the award agreement) after the Performance Condition has been met, but before the Time-Based Vesting Condition has been met, the restricted shares will fully vest as of the date of such termination of employment. If a named executive officer’s employment with the Registrant terminates for any other reason, the restricted shares will be forfeited. During the time between the grant date and the vesting date of the restricted shares, the named executive officer may exercise full voting rights in respect of the restricted shares and dividends will be accrued and paid in respect of the restricted shares upon the vesting date, if the underlying restricted shares vest. The restricted shares will be forfeited five years from the effective date of the award (i.e., on June 28, 2018) to the extent that the restrictions thereon have not lapsed. The named executive officers must hold the restricted shares following vesting for the longer of (a) five years after the grant date, or (b) two years after vesting.

Item 9.01. Financial Statements and Exhibits.

(a)-(c) Not applicable.

(d) Exhibits :

The following exhibits are included with this Current Report on Form 8-K:

Exhibit No.	Description
10.1	Form of letter evidencing performance awards granted under the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan with targets for three-year periods ending on or after May 31, 2015.
10.2	Form of Notice of Grant and Restricted Stock Award Agreement entered into by the Registrant in order to evidence the grant for 2013, effective as of June 28, 2013, of restricted common shares, which will vest on the third anniversary of the grant date, pursuant to the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan.
10.3	Form of Notice of Grant and Restricted Stock Award Agreement entered into by the Registrant with George P. Stoe, in order to evidence the grant, effective as of June 28, 2013, of restricted common shares, which will vest in one year, pursuant to the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan.
10.4	Form of Notice of Grant and Restricted Stock Award Agreement entered into by the Registrant with each of B. Andrew Rose and Mark A. Russell in order to evidence the grant, effective as of June 28, 2013, of 180,000 performance based restricted common shares pursuant to the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan.
99.1	Transcript of Worthington Industries, Inc. Earnings Conference Call for Fourth Quarter of Fiscal 2013 (Fiscal Quarter ended May 31, 2013), held on June 27, 2013.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	WORTHINGTON INDUSTRIES, INC.


Date: July 2, 2013
	By:	/s/Dale T. Brinkman
		Dale T. Brinkman, Vice President-
		Administration, General Counsel & Secretary

Memorandum
To:
From:
Date:

Re: Long-Term Incentive Awards: Performance Share and Performance Cash Awards

It’s an exciting time to be a part of Worthington Industries. The successes of our Transformation are becoming apparent in our results and goals have been established that will continue to push us to drive performance, growth and excellence in all of our businesses. Our three-year strategy has been defined, and with your help, we will grow earnings to $400 million and all businesses will hit or exceed EVA targets. Because of your role in achieving these goals, you been selected to participate in the Long-Term Incentive Awards Plan.

At its June meeting, the Board’s Compensation Committee approved the grant of Performance Cash and Performance Share Awards for the three-year period ending May 31, xxxx, under the Company’s Long-Term Incentive Plan (LTIP) These awards become payable if the Company achieves specified levels (threshold, target, maximum) of the selected financial measures.

In an effort to focus on both the quantity of earnings and the amount of capital employed to generate those earnings, the Performance Cash Awards and Performance Share Awards incorporate both an EPS and EVA component. For Corporate officers, half of the possible award is allocated to EPS targets and half to EVA targets.

For Business Unit officers, half of the possible award is allocated to Business Unit EOI targets, and the other half is divided equally between Corporate EPS and EVA targets.

Your target Performance Awards for the three-year performance period ending May 31, xxxx are: (a) a Cash Award of $xxx,xxx and (b) a Performance Share Award of xxxx common shares of Worthington Industries, Inc. (“Company Stock”). The specific performance targets, and the related Performance Cash and Performance Share Awards for 20xx are listed in the table below.

Three Year Period Ending May 31, 2015


EPS Targets	20xx Corporate EPS	Cash Award	Share Award
Threshold	$x.xx	$xxx,xxx	xxx shares
Target	$x.xx	$xxx,xxx	xxx shares
Maximum	$x.xx	$xxx,xxx	xxx shares

EVA Targets	Cumulative 3-Year Corporate EVA Ending 20xx	Cash Award	Share Award
Threshold	$xx million	$xxx,xxx	xxx shares
Target	$xx million	$xxx,xxx	xxx shares
Maximum	$xx million	$xxx,xxx	xxx shares

For the three-year performance period ending May 31, 20xx, the FIFO impact, positive or negative, restructuring items and unusual or non-recurring items, will be excluded for the purposes of measuring Corporate EPS and Business Unit EOI as determined by the Compensation Committee. No FIFO adjustment will be made to the EVA calculation.

Performance falling between threshold and maximum will be prorated on a linear basis. No payments will be made if performance falls below threshold. Each of the performance measures is freestanding so that you will be able to earn a pay-out based upon the achievement of one measure, even if the threshold performance level is not achieved in the other measure.

Calculation of the Company results and attainment of performance measures will be made solely by the Compensation Committee based upon the Company’s audited consolidated financial statements as adjusted for FIFO impact, restructuring items and unusual or non-recurring items. The Compensation Committee has the right to make changes and adjustments in calculating the performance measures to take into account unusual or non-recurring events, including, without limitation, changes in tax and accounting rules and regulations; extraordinary gains and losses; mergers and acquisitions and purchases or sales of substantial assets; provided that, if Section 162(m) of the Internal Revenue Code would be applicable to the pay-out of the Performance Awards hereunder, any such change or adjustment must be permissible under Section 162(m).

The determination of the attainment of performance objectives and the amount of the Performance Awards payable will generally be finalized within a reasonable time after the audit of the applicable consolidated financial statements of the Company has been completed. Payments will then be made within a reasonable time after finalization by the Committee, unless there is a need for a delay.

Unless the Committee elects a different form of pay-out, payments of the Cash Award will be made in cash and payment of the Performance Share Award will be made in Company Stock. The Committee may adopt provisions permitting the deferral of a portion or all of the pay-out into a Deferred Compensation Plan, provided that a timely deferral election is made. The Company may require payment of, or may withhold from payments, amounts necessary to meet any federal, state or local tax withholding requirements.

If you are transferred out of your current position of employment into another LTIP-eligible position, your award will generally be amended at the discretion of the Compensation Committee to reflect your new position. In such case, a new award will be given to reflect the remaining time in the Performance Period with new award amounts and new performance targets set in accordance with those established at the beginning of the performance period (similar amounts for those given for comparable positions at the beginning of the performance period). Your awards for the performance period will then be prorated based on the two awards (the previous award for your previous position and the new award for your new position). The proration will be made based on the number of months in each position, prorated over the 36 month period. The Compensation Committee can choose the effective time of the change from your previous performance award to your new performance award when it amends the performance award. If the Compensation Committee elects not to amend the performance award, this award shall remain in place with no proration.

If you are demoted from or otherwise transferred out of your current position to a position that is not LTIP eligible, but remain employed by the Company, at a time that there are more than 12 months remaining in the performance period, your award will be reduced on a prorata basis to reflect the number of months during the performance period in which you are no longer in an LTIP-eligible position. For example, if you are transferred to a non LTIP-eligible position after 20 months of the performance period, your performance award would be prorated on the basis of 20/36.

In general, termination of employment terminates Performance Awards. Termination of employment for reasons of death, disability or retirement will result in a pro rata pay-out for performance periods ending within 24 months after termination, based on the number of months of employment completed by you during the performance period before the effective date of termination. No pay-out will be made for performance periods ending more than 24 months after termination. Termination of employment for any other reason, voluntary or involuntary, prior to the Committee’s determination of the attainment of performance objectives and finalization of the Performance Award amount will result in the forfeiture of all Performance Awards from the Plan.

If there is a Change in Control and within two years thereafter your employment is terminated by the Company without “cause” or by your “due to an adverse change of the Participant’s employment” (as those terms are defined in rules adopted by the Compensation Committee) your reward will be considered earned and payable in full at the maximum amount and will be immediately settled or distributed. The provisions of this paragraph will apply in lieu of the provisions of Section 10 of the Plan.

If the Company determines that any payment or benefit related to these awards in connection with a Change in Control, when combined with any other payment or benefit due to you form the Company or any other entity in connection with such Change in Control, would be considered a “parachute payment” within the meaning of Section 280G of the Code, the payments and benefits due to you under this Agreement may be reduced by the Company to $1.00 less than the amount that would otherwise be considered a “parachute payment” within the meaning of Section 280G of the Code, in accordance with rules and procedures which may be established by the Compensation Committee.

The provisions of the Plan are incorporated herein by reference and a copy is enclosed in this packet.

Your continuing efforts on behalf of the Company are greatly appreciated. If you have any questions after reviewing the enclosed information, please feel free to call me at 614-438-7506 .

EXHIBIT 10.2

WORTHINGTON INDUSTRIES, INC.

AMENDED AND RESTATED 1997 LONG-TERM INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT FOR 2013

Effective as of the date specified in the attached Notice of Grant of Restricted Stock (the “Grant Date”), Worthington Industries, Inc. hereby grants to the individual identified in the Notice of Grant of Restricted Stock (the “Participant”) an award consisting of the number of restricted common shares of the Company (“Restricted Stock”) set forth in the Notice of Grant of Restricted Stock. The Restricted Stock is subject to the terms and conditions described in the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan (the “Plan”) and this Restricted Stock Award Agreement for 2013 (this “Agreement”). The “Company” shall mean Worthington Industries, Inc. individually, or together with its subsidiaries, as the context requires.

Section 1. Vesting

Except as provided in Section 2 of this Agreement, the Restricted Stock will vest on the third anniversary of the Grant Date, provided that the Participant has continuously remained an employee of the Company through such date.

Section 2. Termination of Employment or Change in Control

(a) Death or Disability . Any unvested shares of Restricted Stock shall become fully vested if the Participant dies or becomes permanently disabled, as determined by the Committee.

(b) Retirement. Any unvested shares of Restricted Stock generally are immediately forfeited if the Participant terminates employment due to retirement, but the Committee, in its sole discretion, may cause all or a portion of the shares of the Restricted Stock to vest as of the date of the Participant’s retirement, as determined by the Committee.

(c) Change in Control . If there is a Change in Control and within two years thereafter, the Participant’s employment is terminated by the Company without “cause” or by the Participant “due to an adverse change in the terms of the Participant’s employment” (as those terms are defined in rules adopted by the Committee), any unvested shares of Restricted Stock shall become fully vested on the date the Participant’s employment is terminated. The provisions of this Section 2(c) shall apply in lieu of the provisions of Section 10 of the Plan.

Section 3. Transferability

Until the shares of Restricted Stock become vested as described in Section 1 or Section 2, the shares of Restricted Stock may not be sold, gifted, transferred, pledged, assigned or otherwise alienated or hypothecated.

Section 4. Rights Before Vesting .

Before the shares of Restricted Stock vest, (a) the shares of Restricted Stock will be held in escrow by the Company; (b) the Participant may exercise full voting rights associated with the shares of Restricted Stock; and (c) the Participant shall be entitled to all dividends and other distributions paid with respect to the shares of Restricted Stock, but such dividends and other distributions will be held in escrow by the Company and shall be subject to the same restrictions, terms and conditions as the shares of Restricted Stock to which they relate.

Section 5. Settlement

If the applicable terms and conditions of this Agreement are satisfied, the appropriate number of shares of Restricted Stock will be released from any transfer restrictions or delivered to the Participant with reasonable promptness after all applicable restrictions have lapsed. Any fractional shares of Restricted Stock shall be settled in cash based upon the Fair Market Value of a common share of the Company on the settlement date.

The issuance of common shares of the Company shall be subject to the satisfaction of the Company’s counsel that such issuance shall be in compliance with applicable Federal and state securities laws. Any common shares of the Company delivered under the Plan shall be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the common shares of the Company are then listed and any applicable Federal or state securities law, and the Committee may cause a legend or legends to be put on any certificates which may be issued to evidence such common shares to make appropriate reference to such restrictions.

Section 6. Withholding

The Company is authorized to withhold in respect of the shares of Restricted Stock, the amount of withholding taxes due in respect of vesting of such shares of Restricted Stock and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes. The Committee may establish procedures for election by the Participant to satisfy such withholding taxes by delivery of, or directing the Company to retain, common shares that would otherwise be deliverable upon vesting of the shares of Restricted Stock.

Section 7. Forfeiture

In the event that the Participant terminates employment with the Company for any reason whatsoever, and within 18 months after the date thereof becomes associated with, employed by, renders services to, or owns any interest in (other than any nonsubstantial interest, as determined by the Committee), any business that is in competition with the Company or with any business in which the Company has a substantial interest as determined by the Committee, the Committee, in its sole discretion, may require the Participant to return to the Company the economic value of the shares of Restricted Stock which is realized or obtained (measured as of the date on which the shares of Restricted Stock vested) by the Participant at any time during the period beginning on that date which is six months prior to the date of the Participant’s termination of employment with the Company plus any dividends or other distributions paid with respect to the shares of Restricted Stock.

Section 8. Other Terms and Conditions .

(a) Beneficiaries . The Participant may designate a beneficiary to receive any shares of Restricted Stock that are unsettled or vest in the event of the Participant’s death. If no beneficiary is designated, the Participant’s beneficiary shall be the Participant’s surviving spouse and, if there is no surviving spouse, the Participant’s estate.

(b) No Guarantee of Employment . The granting of shares of Restricted Stock shall not confer upon the Participant any right to continued employment with the Company, nor shall it interfere in any way with the right of the Company to terminate the employment of the Participant at any time, with or without cause.

(c) Governing Law . This Agreement shall be governed by and construed in accordance with the laws (other than laws governing conflicts of laws) of the State of Ohio.

(d) Rights and Remedies Cumulative . All rights and remedies of the Company and of the Participant enumerated in this Agreement shall be cumulative and, except as expressly provided otherwise in this Agreement, none shall exclude any other rights or remedies allowed at law or in equity, and each of said rights or remedies may be exercised and enforced concurrently.

(e) Captions . The captions contained in this Agreement are included only for convenience of reference and do not define, limit, explain or modify this Agreement or its interpretation, construction or meaning and are in no way to be construed as a part of this Agreement.

(f) Severability . If any provision of this Agreement or the application of any provision hereof to any person or any circumstance shall be determined to be invalid or unenforceable, then such determination shall not affect any other provision of this Agreement or the application of said provision to any other person or circumstance, all of which other provisions shall remain in full force and in effect.

(g) Entire Agreement . This Agreement, together with the Notice of Grant of Restricted Stock and the Plan, which are incorporated herein by reference, constitutes the entire agreement between the Company and the Participant in respect of the subject matter of this Agreement, and this Agreement supersedes all prior and contemporaneous agreements between the parties hereto in connection with the subject matter of this Agreement. No officer, director, employee or other servant or agent of the Company, and no servant or agent of the Participant, is authorized to make any representation, warranty or other promise not contained in this Agreement. No change, termination or attempted waiver of any of the provisions of this Agreement shall be binding upon either party hereto unless contained in a writing signed by the party to be charged.

(h) Restricted Stock Subject to the Plan . The shares of Restricted Stock are granted subject to the terms and conditions described in this Agreement and the Plan, which is incorporated by reference into and made a part of this Agreement. In the event of a conflict between the terms of the Plan and the terms of this Agreement, the terms of the Plan will govern except as specifically provided in this Agreement. The Committee has the sole responsibility for interpreting the Plan and this Agreement, and the Committee’s determination of the meaning of any provision in the Plan or this Agreement will be binding on the Participant. Capitalized terms that are not defined in this Agreement have the same meaning as in the Plan.

(i) Section 83(b) Election . The Participant may file an election pursuant to Section 83(b) of the Code to be taxed currently on the Fair Market Value of the shares of Restricted Stock (less any purchase price paid for the shares of Restricted Stock). The election will be made on a form provided by the Company and must be filed with the Internal Revenue Service no later than 30 days after the Grant Date. The Participant must seek the advice of the Participant’s own tax advisors as to the advisability of making such an election, the potential consequences of making such an election, the requirements for making such an election, and the other tax consequences associated with the shares of Restricted Stock under federal, state, and any other laws, rules and regulations that may be applicable. The Company and its agents have not and are not providing any tax advice to the Participant.

Section 9. Application of Section 280G of the Code .

If the Company determines that any payment or benefit, including any accelerated vesting, due to the Participant under this Agreement in connection with a Change in Control, when combined with any other payment or benefit due to the Participant from the Company or any other entity in connection with such Change in Control, would be considered a "parachute payment" within the meaning of Section 280G of the Code, the payments and benefits due to the Participant under this Agreement may be reduced by the Company to $1.00 less than the amount that would otherwise be considered a "parachute payment" within the meaning of Section 280G of the Code, in accordance with rules and procedures which may be established by the Committee.

WORTHINGTON INDUSTRIES, INC.

AMENDED AND RESTATED 1997 LONG-TERM INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT FOR GEORGE STOE - 2013

Effective as of the date specified in the attached Notice of Grant (the “Grant Date”), Worthington Industries, Inc. (the “Company” shall mean Worthington Industries, Inc. individually, or together with its subsidiaries, as the context requires), hereby grants to the individual identified in the Notice of Grant (the “Participant”) an award consisting of the number of restricted common shares of the Company (“Restricted Stock”) set forth in the Notice of Grant . The Restricted Stock is subject to the terms and conditions described in the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan (the “Plan”) and this Restricted Stock Award Agreement (this “Agreement”).

Section 1.

Vesting

Except as provided in Section 2, the Restricted Stock will vest on the first anniversary of the Grant Date, provided that the Participant has continuously remained an employee of the Company though such date.

Section 2 .

Accelerated Vesting

(a) Death or Disability . Any unvested Restricted Stock shall become fully vested if the Participant dies or becomes disabled, as determined by the Committee.

(b) Retirement . Any unvested Restricted Stock generally is forfeited if the Participant terminates employment due to on retirement, but the Committee, in its sole discretion, may cause all or a portion of the Restricted Stock to vest as of the date of retirement, as determined by the Committee.

(c) Change in Control . If there is a Change of Control and within two years thereafter the Participant’s employment is terminated by the Company without “cause” or by the Participant “due to an adverse change in the terms of the Participant’s employment” (as those terms are defined in rules adopted by the Committee), any unvested Restricted Stock shall become fully vested on the date employment is terminated. The provisions of this Section 2(c) shall apply in lieu of the provisions of Section 10 of the Plan.

Section 3.

Transferability

Until the Restricted Stock becomes vested as described in Sections 1 or 2, the Restricted Stock may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated.

Section 4.

Rights Before Vesting.

Before the Restricted Stock vests, (a) the Restricted Stock will be held in escrow by the Company; (b) the Participant may exercise full voting rights associated with the Restricted Stock; and (c) the Participant shall be entitled to all dividends and other distributions paid with respect to the Restricted Stock, but such dividends and other distributions will be held in escrow by the Company and shall be subject to the same restrictions, terms and conditions as the Restricted Stock to which they relate.

Section 5.

Settlement

If the applicable terms and conditions of this Agreement are satisfied, the Restricted Stock will be released from any transfer restrictions or delivered to the Participant with reasonable promptness after all applicable restrictions have lapsed. Any fractional shares of Restricted Stock shall be settled in cash based upon the Fair Market Value of a Common Share on the settlement date.

The issuance of Shares shall be subject to the satisfaction of the Company’s counsel that such issuance shall be in compliance with applicable Federal and state securities laws. Any Shares delivered under the Plan shall be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Shares are then listed and any applicable Federal or state securities law, and the Committee may cause a legend or legends to be put on any certificates evidencing such Shares to make appropriate reference to such restrictions.

Section 6.

Withholding

The Company is authorized to withhold in respect of the Restricted Stock, the amount of withholding taxes due in respect of vesting of such Restricted Stock and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes. The Committee may establish procedures for election by the Participant to satisfy such withholding taxes by delivery of, or directing the Company to retain, Shares that would otherwise be deliverable upon vesting of the Restricted Stock.

Section 7.

Forfeiture

In the event that the Participant terminates employment with the Company for any reason whatsoever, and within 18 months after the date thereof becomes associated with, employed by, renders services to, or owns any interest in (other than any nonsubstantial interest, as determined by the Committee), any business that is in competition with the Company or with any business in which the Company has a substantial interest as determined by the Committee, the Committee, in its sole discretion, may require the Participant to return to the Company the economic value of the Restricted Stock which is realized or obtained (measured as of the date on which the Restricted Stock vested) by the Participant at any time during the period beginning on that date which is six months prior to the date of the Participant’s termination of employment with the Company.

Section 8.

Other Terms and Conditions.

(a) Beneficiaries . The Participant may designate a beneficiary to receive any Restricted Stock that is unsettled in the event of the Participant’s death. If no beneficiary is designated, the Participant’s beneficiary shall be the Participant’s surviving spouse and, if there is no surviving spouse, the Participant’s estate.

(b) No Guarantee of Employment . The granting of Restricted Stock shall not confer upon the Participant any right to continued employment with the Company, nor shall it interfere in any way with the right of the Company to terminate the employment of the Participant at any time, with or without cause.

(c) Governing Law . This Agreement shall be governed by and construed in accordance with the laws (other than laws governing conflicts of laws) of the State of Ohio.

(g) Entire Agreement . This Agreement, together with the Notice of Grant and the Plan, which are incorporated herein by reference, constitutes the entire agreement between the Company and the Participant in respect of the subject matter of this Agreement, and this Agreement supersedes all prior and contemporaneous agreements between the parties hereto in connection with the subject matter of this Agreement. No officer, director, employee or other servant or agent of the Company, and no servant or agent of the Participant, is authorized to make any representation, warranty or other promise not contained in this Agreement. No change, termination or attempted waiver of any of the provisions of this Agreement shall be binding upon any party hereto unless contained in a writing signed by the party to be charged.

(h) Restricted Stock Subject to the Plan. The Restricted Stock is subject to the terms and conditions described in this Agreement and the Plan, which is incorporated by reference into and made a part of this Agreement. In the event of a conflict between the terms of the Plan and the terms of this Agreement, the terms of the Plan will govern except as specifically provided in this Agreement. The Committee has the sole responsibility for interpreting the Plan and this Agreement, and the Committee’s determination of the meaning of any provision in the Plan or this Agreement will be binding on the Participant. Capitalized terms that are not defined in this Agreement have the same meaning as in the Plan.

(i) Section 83(b) Election . The Participant may file an election pursuant to Section 83(b) of the Code to be taxed currently on the Fair Market Value of the Restricted Stock (less any purchase price paid for the Restricted Stock). The election will be made on a form provided by the Company and must be filed with the Internal Revenue Service no later than 30 days after the Grant Date. The Participant must seek the advice of the Participant’s own tax advisors as to the advisability of making such an election, the potential consequences of making such an election, the requirements for making such an election, and the other tax consequences of the Restricted Stock under federal, state, and any other laws, rules and regulations that may be applicable. The Company and its agents have not and are not providing any tax advice to the Participant.

EXHIBIT 10.4

WORTHINGTON INDUSTRIES, INC.

AMENDED AND RESTATED 1997 LONG-TERM INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

180,000 SHARES

[FORM]

This Restricted Stock Award Agreement (this “Agreement”) is made effective as of June 28, 2013 (the “Grant Date”) by and between Worthington Industries, Inc. (the “Company”) and the undersigned participant (the “Participant”).

Section 1.

Award of Restricted Stock.

The Company hereby grants the Participant an award of 180,000 restricted common shares of the Company (the “Restricted Stock”). The Restricted Stock is subject to the terms and conditions described in the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan (the “Plan”) and this Agreement, and is granted pursuant to Section 11 of the Plan.

Section 2.

Vesting .

(a) General . Subject to Section 3, the Restricted Stock will vest if both the Time Based Vesting Condition and the Performance Condition are met within the Award Period (as defined below).

(b) Time Based Vesting Condition . The Restricted Stock will meet the Time Based Vesting Condition on the third annual anniversary of the Grant Date (June 28, 2016); provided that the Participant has continuously remained an employee of the Company or a subsidiary of the Company through such date.

(c) Performance Based Vesting Condition . The Performance Condition will be met if during any 30-consecutive-calander-day period falling within the Award Period (as defined below), the reported closing price of the Company’s Shares equals or exceeds $50.00 per Share provided that the Participant remains continuously employed by the Company or a subsidiary of the Company during the portion of the Award Period occurring prior to the date on which the Performance Condition is met. Meeting of the Performance Condition is subject to certification by the Committee that the foregoing performance criteria have been established and the Performance Condition applicable to the Restricted Stock have been met on the date as of which such certification is made.

The Restricted Stock will be forfeited if the conditions for vesting set forth in Section 2 or Section 3 are not met by the end of the Award Period.

The “Award Period” is the period beginning on the Grant Date and ending on the fifth anniversary of the Grant Date.

Section 3 .

Accelerated Vesting .

(a) Death or Disability . Any unvested Restricted Stock generally is forfeited if the Participant terminates employment due to death or disability as determined by the Committee, but (i) the Committee, in its sole discretion, may cause all or a portion of the Restricted Stock to vest as of the date of termination due to death or disability, as determined by the Committee; and (ii) the Committee shall cause all of the Restricted Stock to vest as of the date of termination due to death or disability, as determined by the Committee, if the Performance Condition has been met, but not the Time Based Vesting Condition.

(b) Change in Control . If there is a Change in Control and within two years thereafter the Participant’s employment is terminated by the Company without “cause” or by the Participant “due to an adverse change in the terms of the Participant’s employment” (as those terms are defined in rules adopted by the Committee), any unvested Restricted Stock (to the extent not then forfeited) will become fully vested on the date employment is terminated. The provisions of this Section 3(b) will apply in lieu of the provisions of Section 10 of the Plan. For purposes of clarity, no unvested Restricted Stock will vest if the Participant’s termination occurs after the end of the Award Period.

(c) Termination Without Cause . If the Company terminates the Participant’s employment without “Cause” after the Performance Condition has been met, but before the Time Based Vesting Condition has been met, the Restricted Stock will fully vest as of the date of such termination of employment. “Cause” shall mean the Participant’s (i) willful and continued failure to substantially perform assigned duties; (ii) gross misconduct; (iii) material breach of any term of any material agreement with the Company or any subsidiary, including this Agreement; (iv) conviction of (or plea of no contest or nolo contendere to) (A) a felony or (B) a crime other than a felony, which involves a breach of trust or fiduciary duty owned to the Company or any subsidiary; or (v) material violation of the Company’s code of conduct or any other policy of the Company or any subsidiary that applies to the Participant.

Section 4 .

Restrictions on Transferability.

(a) Until the Restricted Stock becomes vested as described in Section 2 or Section 3, the Restricted Stock may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated.

(b) After the Restricted Stock becomes vested as described in Section 2, the Restricted Stock may not be transferred for a period equal to the later of (i) two years after the date of such vesting; or (ii) five years after the Grant Date. Notwithstanding the foregoing, the Committee will adopt rules and procedures to permit a portion of the vested Restricted Stock to be delivered to or retained by the Company (or which is otherwise necessary to be sold) to satisfy any withholding obligations pursuant to Section 7 (or other income tax obligations) which may arise upon vesting of the Restricted Stock. The restrictions on transfer of vested Restricted Stock contained in this Section 4(b) will not apply following the death or disability of the Participant or a Change in Control. The Committee may, in its sole discretion, eliminate the restrictions on transfer contained in this Section 4(b) as to all or any portion of the Restricted Stock in cases of hardship or for such other reasons the Committee deems appropriate.

Section 5 .

Rights Before Vesting.

Before the Restricted Stock vests, (a) the Restricted Stock will be held in escrow by the Company; (b) the Participant may exercise full voting rights associated with the Restricted Stock; and (c) the Participant will be entitled to all dividends and other distributions paid with respect to the Restricted Stock, but such dividends and other distributions will be held in escrow by the Company and will be subject to the same restrictions, terms and conditions as the Restricted Stock to which they relate.

Section 6.

Settlement.

If the applicable terms and conditions of this Agreement are satisfied, the Restricted Stock will be released from any transfer restrictions or delivered to the Participant with reasonable promptness after all applicable restrictions have lapsed. Any fractional shares of Restricted Stock will be settled in cash based upon the Fair Market Value of a Common Share on the settlement date.

The issuance of Shares will be subject to the satisfaction of the Company’s counsel that such issuance will be in compliance with applicable Federal and state securities laws. Any Shares delivered under the Plan will be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Shares are then listed and any applicable Federal or state securities law, and the Committee may cause a legend or legends to be put on any certificates evidencing such Shares to make appropriate reference to such restrictions.

Section 7.

Withholding.

Section 8.

Non-Competition.

In the event that the Participant terminates employment with the Company for any reason whatsoever, and within 18 months after the date thereof becomes associated with, employed by, renders services to, or owns any interest in (other than any nonsubstantial interest, as determined by the Committee), any business that is in competition with the Company or any subsidiary of the Company or with any business in which the Company or any subsidiary of the Company has a substantial interest as determined by the Committee, the Committee, in its sole discretion, may require the Participant to return to the Company the economic value of the Restricted Stock which is realized or obtained (measured as of the date on which the Restricted Stock vested) by the Participant at any time during the period beginning on that date which is six months prior to the date of the Participant’s termination of employment with the Company.

Section 9.

Other Terms and Conditions.

(a) Beneficiaries . The Participant may designate a beneficiary to receive any Restricted Stock that is unsettled in the event of the Participant’s death. If no beneficiary is designated, the Participant’s beneficiary will be the Participant’s surviving spouse and, if there is no surviving spouse, the Participant’s estate.

(b) No Guarantee of Employment . The granting of Restricted Stock will not confer upon the Participant any right to continued employment with the Company, nor will it interfere in any way with the right of the Company to terminate the employment of the Participant at any time, with or without cause.

(c) Governing Law . This Agreement will be governed by and construed in accordance with the laws (other than laws governing conflicts of laws) of the State of Ohio.

(d) Rights and Remedies Cumulative . All rights and remedies of the Company and of the Participant enumerated in this Agreement will be cumulative and, except as expressly provided otherwise in this Agreement, none will exclude any other rights or remedies allowed at law or in equity, and each of said rights or remedies may be exercised and enforced concurrently.

(f) Severability . If any provision of this Agreement or the application of any provision hereof to any person or any circumstance will be determined to be invalid or unenforceable, then such determination will not affect any other provision of this Agreement or the application of said provision to any other person or circumstance, all of which other provisions will remain in full force and in effect.

(g) Entire Agreement . This Agreement, together with the Notice of Grant and the Plan, which are incorporated herein by reference, constitutes the entire agreement between the Company and the Participant in respect of the subject matter of this Agreement, and this Agreement supersedes all prior and contemporaneous agreements between the parties hereto in connection with the subject matter of this Agreement. No officer, director, employee or other servant or agent of the Company, and no servant or agent of the Participant, is authorized to make any representation, warranty or other promise not contained in this Agreement. No change, termination or attempted waiver of any of the provisions of this Agreement will be binding upon any party hereto unless contained in a writing signed by the party to be charged.

Section 10.

Application of Section 280G of the Code.

If the Company determines that any payment or benefit, including any accelerated vesting, due to the Participant under this Agreement in connection with a Change in Control, when combined with any other payment or benefit due to the Participant from the Company or any other entity in connection with such Change in Control, would be considered a “parachute payment” within the meaning of Section 280G of the Code, the payments and benefits due to the Participant under this Agreement may be reduced by the Company to $1.00 less than the amount that would otherwise be considered a “parachute payment” within the meaning of Section 280G of the Code, in accordance with rules and procedures which may be established by the Committee.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed effective as of the Amendment Date set forth above.

PARTICIPANT	WORTHINGTON INDUSTRIES, INC.
______________________________	By: ______________________________
Signature

______________________________	Its: ______________________________
Printed Name

Dated: ____________________, 2013	Dated: ____________________, 2013

THOMSON REUTERS STREETEVENTS

EDITED TRANSCRIPT

WOR - Q4 2013 Worthington Industries Earnings Conference Call

EVENT DATE/TIME: JUNE 27, 2013 / 05:30PM GMT

OVERVIEW:

WOR reported FY13 EPS (excluding restructuring and impairment charges) of $2.08 and 4Q13 EPS of $0.46.

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

CORPORATE PARTICIPANTS

Cathy Lyttle Worthington Industries - VP Corporate Communications, IR

John McConnell Worthington Industries - Chairman, CEO

Andy Rose Worthington Industries - VP, CFO

Mark Russell Worthington Industries - President, COO

CONFERENCE CALL PARTICIPANTS

Luke Folta Jefferies & Company - Analyst

Sal Tharani Goldman Sachs - Analyst

Aldo Mazzaferro Macquarie Research - Analyst

Michelle Applebaum Steel Market Intelligence - Analyst

Chris Haberlin Davenport - Analyst

Mark Parr KeyBanc Capital Markets - Analyst

John Tumazos John Tumazos Very Independent Research - Analyst

PRESENTATION

Operator

Good afternoon and welcome to the Worthington Industries fourth quarter 2013 earnings call. During today's conference all participants will be in a listen-only mode until the question and answer session of the call. (Operator Instructions).

As a reminder this conference is being recorded at the request of Worthington Industries. If anyone objects, you may disconnect at this time.

I would like to introduce the host, Ms. Cathy Lyttle, Vice President of Corporate Communications and Investor Relations. Ms. Lyttle, you may begin.

Cathy Lyttle - Worthington Industries - VP Corporate Communications, IR

Thank you, Shannon. Good afternoon and welcome to our fourth quarter and year-end earnings call. Certain statements made on this call are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risk and uncertainties and could cause actual results to differ from those suggested. Please refer to our fourth quarter earnings release issued this morning for more details on those factors that could cause actual results to differ materially.

For anyone interested in listening to this call again, a replay will be made available on our Company website, worthingtonindustries.com.

On the call today are John McConnell, Chairman and Chief Executive Officer, Mark Russell, President and Chief Operating Officer, and Andy Rose, Vice President and Chief Financial Officer. Let's begin with John.

John McConnell - Worthington Industries - Chairman, CEO

Well, Cathy, thank you and good afternoon everyone. We appreciate your joining us. This morning we announced a good, not our best, but a good fourth quarter which tops off a great year for our shareholders; a year in which we delivered in excess of 100% increase in share value. A year in which we delivered an increased dividend to our shareholders in a tax effective manner, and a year in which we continue to make progress on our primary objective of increasing operating margins while decreasing the volatility of our earnings.

I am very proud of everyone here at Worthington for their hard work, their focus and for clearly moving our Company forward to the benefit of our shareholders.

I will turn the call over now to Andy and Mark for more detail on the quarter and the year.

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Andy Rose - Worthington Industries - VP, CFO

Thank you, John, and good afternoon. The Company's performance in the fourth quarter of fiscal 2013 was solid.

The decline from the prior year, due to volume declines in steel and Engineered Cabs, offset by healthy earnings growth in Cylinders and at the joint ventures. The prior year also included a $2.1 million gain on the sale of a steel processing facility in Vonore, Tennessee.

Quarterly earnings per share of $0.46 were down $0.29 from the prior year, but were negatively impacted by several restructuring and impairment charges totaling $0.14 a share. Inventory holding losses also hurt earnings by $0.02 a share during the quarter as steel prices fell compared to the prior year when rising prices led to FIFO gains of $0.03 per share.

Restructuring charges totaling $0.14 can be found in three places on our income statement. First, in the restructuring line, we recorded a $5 million impairment charge on our Indian cylinder operation. And the remaining $2 million was primarily severance related to the recently-announced consolidation of our Medina hand torch facility.

Second, 40% of the Indian impairment charge, or $2 million, is attributable to our minority partner and is eliminated in the noncontrolling interest line. So the net impairment on India to Worthington was approximately $3 million.

Finally, additional restructuring charges of $5.8 million are contained in the equity and net income line, the majority of which are related to the write-off of our China construction JV.

Volume growth was mixed in the fourth quarter. Cylinder volumes overall were down 2.7% year over year, but this metric does not tell you much about the underlying strength of some of the higher-growth segments such as alternative fuels and energy, which tanks tend to be lower in volume but higher-priced.

Steel Processing direct volumes were down 6% while Toll volumes declined 18%. Steel volume declines were concentrated in our coatings business, primarily Spartan, where our partner has moved business to their in-house galvanizing facility. This decline has reversed recently and Spartan remains solidly profitable.

The Engineered Cabs business continues to be soft, primarily at its largest customer. The business generated $3.8 million of EBITDA during the quarter before corporate allocations and $25 million for the fiscal year, a 22% decline from when we purchased the business in December 2011.

Equity income from our joint ventures during the quarter was down $1.2 million, but up $4.6 million or 21% after excluding the previously mentioned $5.8 million in restructuring charges. Improved performance at WAVE, ClarkDietrich, TWB, and ArtiFlex were offset by modest declines at WSP and Serviacero. We received dividends of $30 million during the quarter, including our first $10 million earnings distribution from ClarkDietrich.

Free cash flow for the quarter was $67 million after a modest decrease in working capital and $10.2 million in capital projects. We distributed no dividends during the quarter as the March dividend payment was made back in December 2012 to shareholders. But we did repurchase 925,000 shares during the quarter at an average price of $32.88.

The Board of Directors yesterday declared a dividend of $0.15 per share, a $0.02 per share increase over the previous amount payable in September 2013.

Our business has been performing well and generating an increasing amount of free cash flow, and we are pleased to raise our payout by 15% to our shareholders. We continue to believe that maintaining a competitive dividend is an important component of shareholder returns and will continue to evaluate further moves as our business grows.

Debt increased by $83 million during the quarter primarily related to the acquisition of Palmer Tank in April for $113 million. Our balance sheet remains strong. At quarter end we had total funded debt of $521 million and $405 million available under our revolving credit facilities. Debt has declined an additional $40 million just in the month of June. The integration and financial performance of Palmer Tank, our second acquisition in the oil and gas energy production space, are going well. We are already investing in new production capacity to meet current market demands.

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Looking back, we have acquired 12 companies in the past four years for just over $585 million. At current run rates these businesses will contribute over $140 million of EBITDA in the coming year while furthering our objective of raising our margins, free cash flow and return on capital. Several of these companies are in fast-growing markets such as alternative fuels and energy production and storage.

Excluding the restructuring and impairment charges, fiscal 2013 earnings per share of $2.08 was the highest in the Company's history. Our 12-month trailing EBITDA at the end of the fiscal year was almost $300 million.

Fiscal 2013 saw our stock price appreciate 112%. In addition we distributed $44 million in dividends and repurchased shares totaling $30 million. In fiscal 2013, the shareholders of Worthington Industries had a very good year.

Our multi-pronged growth strategy continues to drive base business improvement via the centers of excellence. Particularly in Cylinders and Engineered Cabs, we are in the early stages. Acquisitions of new products and entry into new markets, and accelerated organic growth from product development and innovation.

We are proud of everything our employees, accomplished in 2013 and even more excited about the momentum we carry into 2014.

I will now pass the call to Mark Russell, who will discuss operations.

Mark Russell - Worthington Industries - President, COO

Thanks, Andy. We had a solid quarter from an operations perspective. The WAVE joint venture with Armstrong continues their strength with yet another record year, not just for profits, but in all aspects of operations including safety. Their locations are not only the safest and most productive within Worthington, they are among the safest and most productive in the world.

WAVE remains very well-positioned as the North American commercial construction market continues to recover. Our ClarkDietrich JV with Marubeni-Itochu continues to strengthen, and like WAVE is well-positioned to capitalize on the commercial construction market's recovery and growth.

TWB had another strong quarter. It continues to thrive in the steady automotive market.

Customer demand at Engineered Cabs remains soft, though we saw some evidence of significant reductions in the excess downstream inventory levels, which clearly accentuated the correction in some end markets. However, we saw no real increases in demand and the mining equipment market in particular remains soft.

As in our steel business during the 2009 and 2010 downturn, we are taking advantage of these market conditions to increase the pace and focus of our transformation work. We recently kicked off the diagnostic stage of our process at the third Cabs facility, which is the flagship operation in South Dakota. We see strong engagement and potential improvement on multiple fronts which match or exceed those we saw at this stage in Steel or Cylinders.

The previously announced retirement of Bob Kluver and the appointment of John Lamprinakos as the new president of this business will be effective July 1. For most of the last decade, John has led our extraordinarily successful WAVE joint venture with Armstrong. So we look forward to the results of his leadership as he takes the reins at Engineered Cabs next week.

Overall we are still confident in our long-term prospects for the Cab business.

Volume and demand in steel match the quarterly market data published by the MSCI, with the notable exception of coated products. The main driver of the shortfall here was tolling volume at our Spartan JV with Severstal, which is still negatively affected by our partner's balancing of production between Spartan and their new Dearborn galvanizing operation.

But by the end of the quarter, Spartan's volume had begun to recover as Severstal's new line is now full. So we expect Spartan's volume to continue to improve going forward. Otherwise, demand in automotive and other key steel markets was steady, with residential construction showing surprising strength. Of course, our exposure there is limited.

We announced during the quarter our intention to invest capital to increase our cold rolling and annealing capacity and productivity. Specialty strip is Steel's highest value added product, and we intend to maintain world-class capability to meet or exceed customer needs going forward.

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Our transformation approach combined with the strong performance of our recently acquired entities continues to yield impressive results in Cylinders. Restructuring charges Andy outlined include the consolidation of all BernzOmatic production into one location, which will further decrease cost and increase productivity going forward.

Alternative fuels revenue surpassed $77 million in fiscal 2013, up 27% year on year. We are very focused on accelerating this organic growth curve by adding liquid cryogenics to our product offering. We introduced industrial gas customers to our first ever cryogenic cylinder prototyped during the quarter. Regular production will begin in a few months, and similar natural gas cryogenic products are currently in our development pipeline.

Our sales growth in energy production tanks and separators continues to be nearly off the chart, starting of course from a very low base prior to the acquisitions of Westerman and Palmer. The integration of these companies continues to go very well, particularly on the commercial front. Plugging these businesses into our commercial sales organization has yielded immediate order increases.

Energy and alternative fuels continue to be among our best growth ideas going forward. Together, alternative fuels and energy will represent more than one-quarter of total revenue and an even greater proportion of Cylinder's earnings in fiscal 2014. So you will hear more from us in future quarters about our expansion in these markets, where the shale gas revolution is driving impressive and sustainable growth.

John, back to you.

John McConnell - Worthington Industries - Chairman, CEO

Thank you, Mark. Andy, thank you. We began fiscal 2014 with optimism and excitement -- optimism in the continued strengthening of the broader economy and in particular the early stage strengthening of single-family and commercial construction markets. I am excited about the future organic growth in all of our businesses and our acquisition pipeline.

What I am most excited about is our strong balance sheet provides us the ability to fund our growth and our future. We are very well-positioned to make additional acquisitions, raise our dividend, invest in businesses and buy back outstanding shares, the mix of which we'll determine by the circumstances at any given point in time.

At this point we would be happy to try to answer your questions.

QUESTION AND ANSWER

Operator

(Operator Instructions). Luke Folta, Jefferies LLC.

Luke Folta - Jefferies & Company - Analyst

Good afternoon, guys, wanted to ask a question about CNG. I mean you and your competitors have some really bullish things to say about what is going on with market conditions. I remember when you acquired some of these businesses, them being interesting growth opportunities, but maybe not the most profitable of Cylinder businesses that you owned.

There has been some consolidation in this space. Has that changed at all, and when you think about margins and profitability for those tanks?

Andy Rose - Worthington Industries - VP, CFO

I don't think -- we have bought three businesses in this space. We bought a company in California, SCI, back in 2010. We bought a company in Poland, Stako, and then we bought a business in India.

The only one that wasn't profitable when we bought it was in India. And that continues to be a challenging market, which is why we had an impairment charge there. The other two businesses have and continue to be profitable.

And in particular, the business that we bought in California has been very profitable. And while I recognize that that is a competitive market, I think we continue to expect that to be a good place to do business from a margin standpoint.

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Mark Russell - Worthington Industries - President, COO

I would add those are some of our best margins. And that correlates, Luke, with the fact that shale gas is driving that in North America and that is not yet global. If you correlate with that, SCI is doing very well.

Luke Folta - Jefferies & Company - Analyst

Okay. All right, you talked about what's -- can you just -- I have been pretty excited thinking about the opportunity of you getting involved with the cryogenic cylinders, and you just noted that you, I guess, sent some prototype tanks out to your customers. Is there anything more you can tell us about what the feedback has been and what your level of confidence is that this becomes a commercial product line for you?

John McConnell - Worthington Industries - Chairman, CEO

We are highly confident it is going to be a commercial product line. That is why we are entering it. It was one of the only holes in the cylinder lineup that we felt was important to close.

We have looked at a number of opportunities to get into this market and at the moment the best way to do it is to develop our own. So, yes, we are committed to developing a full line of cryogenic tanks and just do a methodical march until we have got them across the board.

Luke Folta - Jefferies & Company - Analyst

Okay. And on the investment you are making in Steel processing is that -- the cold rolling and annealing, is that basically more capacity similar to what you have? Are you moving into the more like the ultra-high-strength steel type of annealing? Like something like in the US Steel deal with [Colby], like the next generation technology?

Mark Russell - Worthington Industries - President, COO

We are looking at that Luke, but the investments that we are referring to and the ones we talked about in the announcement are in the -- showed up in the press are -- these are enhancements to our existing facilities. We are not going to build any new facilities.

And they are focused on increasing our cold rolling and annealing capacity. We are looking at possibilities in ultra-high-strength and advanced high-strength. But these are -- the ones we are talking about are for cold-rolled strip.

Luke Folta - Jefferies & Company - Analyst

Okay. And just last one, if I could. Engineered Cabs, can you give us some sense of what the impact was from production issues with your customer in the quarter? I guess what I am trying to get at is what is the base level of business at the current demand level and how much of it was just a one quarter phenomenon?

Andy Rose - Worthington Industries - VP, CFO

When you say at the base level, you mean like what is the revenue run rate?

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Luke Folta - Jefferies & Company - Analyst

Yes.

Andy Rose - Worthington Industries - VP, CFO

I think where we are right now is sort of a comfortable run rate. I don't sense and I don't think our guys sense that there is a big decline ahead of us. The question at this point is -- is there a recovery in the market.

Luke Folta - Jefferies & Company - Analyst

I thought I read something about a production issue with a customer this quarter in your press release.

Andy Rose - Worthington Industries - VP, CFO

No.

Luke Folta - Jefferies & Company - Analyst

Okay, I must have misread that. All right, well, thanks a lot for the color and good luck.

Operator

Sal Tharani, Goldman Sachs.

Sal Tharani - Goldman Sachs - Analyst

I was wondering, how far are you in your [ore] restructuring? How many -- how much is it going to take, because you have been taking the restructuring charges for the last couple of years?

Andy Rose - Worthington Industries - VP, CFO

Yes. Well, the restructuring that we are doing now is very specific to mostly plants. Some of the restructuring that we did four-ish years ago was related to transformation. But now what is happening is these are businesses that we have invested in. At least this quarter two businesses that weren't performing in meeting expectations, not so much restructuring related to transformation.

The BernzOmatic restructuring charge is really an acquisition that we made. It had two facilities. And because we had a complementary facility, it made sense to consolidate to become more efficient and more productive.

So I -- it is hard to predict when these things are going to appear, but it's not -- there's not any major restructuring on the horizon that we are aware of. It doesn't mean something might come up, but at least right now I would not expect more quarters like this one with respect to restructuring.

Sal Tharani - Goldman Sachs - Analyst

Okay, also I thought I read somewhere that you are increasing the capacity of your strip mills, strip products. Is that correct?

Mark Russell - Worthington Industries - President, COO

That's correct. We are doing that.

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Sal Tharani - Goldman Sachs - Analyst

Okay. What -- how much are you increasing it by?

John McConnell - Worthington Industries - Chairman, CEO

How much are we increasing it by?

Mark Russell - Worthington Industries - President, COO

That will depend on the final decisions on the equipment, but we are looking at an increase in the range of 15% to 25%.

Sal Tharani - Goldman Sachs - Analyst

Okay. And this is -- you already had an increase when you bought, I believe, the Gibraltar products, Gibraltar business.

Mark Russell - Worthington Industries - President, COO

Correct. That basically doubled our capacity and now we are full again. So we need to increase it.

Sal Tharani - Goldman Sachs - Analyst

Okay. Now you do a lot of tolling business for the auto industry. I'm just wondering, there has been some talk that over the next few years there will be quite a bit of aluminum in the auto bodies going to get involved. And I was wondering if you have started to think about it or talk to any of the suppliers or buyers, if you will be able to provide that service also in terms of cutting aluminum for tolling.

Mark Russell - Worthington Industries - President, COO

Absolutely. We actually already are processing small amounts of aluminum. And as that transition happens, we will just simply pivot to processing aluminum.

Sal Tharani - Goldman Sachs - Analyst

And would you be also -- do you also do service center for aluminum products, or mostly -- I mean I am not talking about the tolling in terms of your typical service center, do you do aluminum flat-rolled also or just steel at the moment?

Mark Russell - Worthington Industries - President, COO

Well like I said we do do some aluminum tolling business. It is very small, but we do some now and we are prepared to increase that as customer needs require.

Sal Tharani - Goldman Sachs - Analyst

Okay, but not sort of stocking aluminum flat-rolled products?

Mark Russell - Worthington Industries - President, COO

No. No, we don't. We are not an aluminum stock-ist by any means. No. We will be -- but we are prepared to process.

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Sal Tharani - Goldman Sachs - Analyst

Okay. Great. Thank you very much.

Operator

Aldo Mazzaferro, Macquarie.

Aldo Mazzaferro - Macquarie Research - Analyst

Good afternoon. I was wondering if you could discuss a little bit your decision to buy back shares in the quarter. How does that compare with opportunities you see on the acquisition front? Does it imply anything about your opportunities as you see them going forward?

Andy Rose - Worthington Industries - VP, CFO

Not really. I would say a couple things on that front. One is one of the benefits of performing at higher level is you generate a lot more free cash flow. And so we have been able -- for example, we bought Palmer and we have probably paid off half of the acquisition already since the middle of April, just through cash flow generation.

So, and as John mentioned, we have a very strong balance sheet. We have probably less than $500 million worth of debt today and a trailing EBITDA of $300 million. So we are comfortable with our leverage level.

The other thing that has been a little bit of headwind for us over the past year is, as our stock price has appreciated, we have had a number of option exercises. So our share count has actually gone up 2.5 million shares, maybe even a little more over the past year. So we try and -- we'd like to try and offset some of that increase in share count as well.

I think also, not to try and get to sales-y, but I think with the number of initiatives that we have and the strategy that we are deploying and the confidence that we have in our ability to create value going forward, you might say, hey, the stock was up 100%. What the heck are you doing buying stock? But we think we are still a long way from the earnings potential of the business. So it's somewhat of a sign of confidence as well.

Aldo Mazzaferro - Macquarie Research - Analyst

All right. That sounds good, thanks. In terms of your -- another follow-up I had was -- the cash distributions you got this quarter, I thought you said it was about $30 million.

Andy Rose - Worthington Industries - VP, CFO

It was.

Aldo Mazzaferro - Macquarie Research - Analyst

And $20 million came from ClarkDietrich. Is that a one-time payment or is ClarkDietrich going to try to maintain that kind of a payout for you?

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Andy Rose - Worthington Industries - VP, CFO

No. Clark paid us $10 million. So they actually did a $40 million distribution. We own 25%. But that business, obviously three years ago that was -- that's what we talked about on every earnings call was how poorly performing Dietrich was. And we put that together with their largest competitor, Clark, and they have done of great job of turning that business around.

And so they are generating a lot of cash flow over there and so they are going to distribute earnings. So it has been a good success story for us.

And that, as our joint ventures continued to perform, the only JVs that have debt on them are WAVE, as you know, which continues to pay strong dividends. I think in this quarter $15 million or $17 million was the WAVE dividend. And ArtiFlex has a modest amount of debt, but all of the other JVs, as they generate cash, they are going to build cash. And ultimately we would expect to receive dividends.

Aldo Mazzaferro - Macquarie Research - Analyst

So do you expect the cash to exceed the accrued equity income?

Andy Rose - Worthington Industries - VP, CFO

For ClarkDietrich specifically?

Aldo Mazzaferro - Macquarie Research - Analyst

No, I mean overall, if you just look at your portfolio.

Andy Rose - Worthington Industries - VP, CFO

Well, the only way that would happen is if we leverage the companies. We have done that a little bit with WAVE. We don't have any specific plans to do that with other joint ventures. It is a possibility, though.

Aldo Mazzaferro - Macquarie Research - Analyst

All right. Thank you.

Andy Rose - Worthington Industries - VP, CFO

Yes. I mean, I think the way to think about it is we expect to get 80% to 100% of the equity income in the form of dividends every year. The only way it would go above that is if we were to leverage the JVs.

Aldo Mazzaferro - Macquarie Research - Analyst

Okay. Thanks very much.

Operator

Michelle Applebaum, Steel Market Intel.

Michelle Applebaum - Steel Market Intelligence - Analyst

I want to ask Mark to comment on the recent steel price increases, the third one that came out yesterday. And I would like an answer on the specific question of how sustainable is that and are we inviting imports in? And I would like a non-diplomatic answer. Mark, you are such a diplomat.

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Mark Russell - Worthington Industries - President, COO

(laughter) No, we always tell you what we think. And the price increases are justified, I think, more on the supply side than the demand side. The demand is steady, but it is not strengthening mightily anywhere. But there is a reason for them to be raising the price.

And as you are watching scrap, you see scrap starting to strengthen also. So it is not just certain products. It seems to be moving across the board. But there isn't a whole lot of demand side drive for that at this point that I can see.

You obviously talk to a lot more people than we do and we would be interested in your opinion.

Michelle Applebaum - Steel Market Intelligence - Analyst

That is the diplomat answer. I want your opinion. You can call me and pay me for my opinion later if you want.

Mark Russell - Worthington Industries - President, COO

(laughter) As far as this is sustainable, if they get out of hand, they know they will invite more imports. And you see some of the signs of imports starting to increase. So if they get greedy, the imports will come and discipline them. We have seen that before and it will happen again.

Michelle Applebaum - Steel Market Intelligence - Analyst

Okay. The second question is, can you help me out, please, on the Cabs because I don't understand. So there was a problem because Cat was adjusting production? And I am not a good machinery analyst, so I don't know this stuff really well.

And so it looks like you still had a pretty weak quarter, but I thought -- it is the same question I think that someone else was asking, but I still didn't understand it. And I apologize. I'm a better steel analyst than I am a machinery analyst.

John McConnell - Worthington Industries - Chairman, CEO

Well, I think the story in Cabs is that it did retract, but it is fairly stable at these levels at this point. And we are seeing some signs, as Mark said in his remarks, that the inventory throughout the chain is going down. So we think that is a good sign leading us back to shipping more cabs in the future. But it is going to take a little while. The end markets are still a little soft.

Andy Rose - Worthington Industries - VP, CFO

And the other thing, Michelle, that we are trying to convey mostly through my commentary is the underlying EBITDA of that business is down 20% from when we bought it. And that is the way we think about the performance of the business.

Now it's from an accounting standpoint, when you buy businesses, you write up a lot of assets and you create intangibles that you have to amortize which creates a lot of depreciation and amortization, which affects the operating income of the business. And we also put some of our corporate overhead. We are -- and it's one -- just because of the way we account for it, we spread that out across our consolidated businesses.

So you add those two things to the business and all of a sudden you have got a business that's losing a little bit of money on an EBIT basis. So while the business is not meeting our expectations, we do have a lot of work we need to do to make them a better business and it has experienced some headwinds, it is not a complete disaster like it might appear if you just look at that EBIT number that we show you.

Michelle Applebaum - Steel Market Intelligence - Analyst

Yes, but Andy, you have got to allocate the purchase price. It is return on investment. It is not what the business was doing before. I mean, I get that part, but if you over -- if you end up overpaying for a business and you are allocating too much DD&A and the overhead is appropriate, then obviously, yes, I think it is kind of apples and oranges. But -- so can you comment on transformation, then, coming in that business?

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Mark Russell - Worthington Industries - President, COO

I can certainly comment on that, Michelle. We still see as much opportunity, if not more, truly. There's a lot of opportunity in that business. And the downturn gives us a great platform to do transformation work. We've made some of our best progress in Steel during the darkest days.

Michelle Applebaum - Steel Market Intelligence - Analyst

Yes, cool, I like that.

Mark Russell - Worthington Industries - President, COO

And that is what is going on in there now. You've got new leadership in there. You have got our transformation and centers of excellence teams in there. There is as much upside there as there ever was in Steel.

Michelle Applebaum - Steel Market Intelligence - Analyst

Yes.

Mark Russell - Worthington Industries - President, COO

And that market will -- that market is going to come back and we -- for example, we are cutting costs as much as practically you can without reducing productive capacity. We are not going to reduce capacity, because we are going to need that. And this is going to be a good business for us going forward.

Michelle Applebaum - Steel Market Intelligence - Analyst

Awesome. Great. I love that. Thanks.

Operator

Chris Haberlin, Davenport.

Chris Haberlin - Davenport - Analyst

Good afternoon. Can you just provide a little bit more color about the growth trajectory of the energy and alternative fuels subsegment of Pressure Cylinders? I think I heard you say it should be at least 25% of revenue, segment revenue next year.

Andy Rose - Worthington Industries - VP, CFO

That's correct. I guess the two data points I would point to that we have already said, one is in alternative fuels that revenue was up 27% last year from a base of $60 million to $77 million.

And then we have acquired two businesses in the past year, Westerman and Palmer. That the combined revenue of those two businesses is -- I think when we bought them they were both around $70 to $75 million. So when you add those two together, they are close to $250 million in revenue. And extrapolate from there in terms of the cylinder business and that is where you are going to be.

Those businesses we expect will be a quarter of Cylinders revenue and higher portion of their earnings just because they are higher margin businesses.

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Chris Haberlin - Davenport - Analyst

And then the margin profile for those businesses, I guess the Palmer slides implied an EBITDA margin of 30%. Is that consistent with the energy and alternative fuels? Or is that above? Or how should we think about margins in that subsegment?

John McConnell - Worthington Industries - Chairman, CEO

Palmer obviously was unique business, a little bit different than some of the others and I would say an outlier in terms of being on the high side. But the margins in both of those segments overall are the highest in the Cylinder business. And part of that is because they are rapidly growing markets.

Mark Russell - Worthington Industries - President, COO

Chris, to give you some idea about the potential for the upside, both Westerman and Palmer, when we acquired them, were only using about a third of their capacity. And we immediately plugged them into our commercial machine which has some of the best representation in the world for cylinders and tanks. And we saw immediate order increases. So we are very excited about those prospects going forward.

Chris Haberlin - Davenport - Analyst

And then just lastly on Steel Processing, I guess I had expected some bigger margin contraction in the quarter than what you all reported. Were there any mitigating factors? Was there a shift in product mix towards higher-margin products?

I know you mentioned that the strip capacity is running full right now. Can you talk about some of the drivers that helped margins in the quarter with steel prices falling so much?

Mark Russell - Worthington Industries - President, COO

What helps us there is the fact that automotive is very steady and that is our biggest demand for strip. And so that held very steady. And what we -- where you see the declines is in the coated products. Mostly it is Spartan and that is mostly tolling. So that -- all of those things help us to hold good margins even if the volume was a little bit soft.

Chris Haberlin - Davenport - Analyst

Okay. Thanks very much.

Operator

Mark Parr, KeyBanc.

Mark Parr - KeyBanc Capital Markets - Analyst

Thank you. Good afternoon. I was wondering if you could give a little more color as far as the earnings impact associated with the transformation, or I guess it is kind of a restructuring going on at Spartan. How that -- the volume has come down now. Now it seems to have stabilized. And was that a major earnings contributor on the downside during the quarter?

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

John McConnell - Worthington Industries - Chairman, CEO

It was, perhaps a little better than the previous quarter. But there was no restructuring. This was just that our partner built a new galvanizing line and they wanted to fill it up and they have. So whatever they could transfer out of Spartan, they did.

And as new orders came, if they could play it their way, they did. But now we see them starting to increase their tolling business back into the joint venture because they are full. It's really that kind of simple of a story.

Mark Parr - KeyBanc Capital Markets - Analyst

So, John, the impact in the May quarter was -- you said a bit less than it was in the February quarter?

John McConnell - Worthington Industries - Chairman, CEO

If you just look at its own run rate, yes.

Mark Parr - KeyBanc Capital Markets - Analyst

Okay. All right. I appreciate that color. Thanks very much. And all of my other questions have been answered.

John McConnell - Worthington Industries - Chairman, CEO

Great. Thank you, Mark.

Mark Parr - KeyBanc Capital Markets - Analyst

Good luck.

Operator

John Tumazos, John Tumazos.

John Tumazos - John Tumazos Very Independent Research - Analyst

Good afternoon. I have some simple questions on the revenue. The reported revenue was $704.1 million. How much of that revenue was from the recent acquisitions? Or how would it have compared to a year ago on a same-store basis, the same businesses?

And then the JV revenue was reported at $447 million. And how did that compare to a year ago?

Andy Rose - Worthington Industries - VP, CFO

Well, from an acquisition standpoint we had -- let's see, Westerman was a $70 million, $75 million business. We had three quarters of Westerman and we had about 5.5 weeks of Palmer, which is a similar revenue business. So, those are the only two acquisitions that we did during the year. So you are talking probably $85 million, $80 million. That sounds probably even high.

John McConnell - Worthington Industries - Chairman, CEO

(inaudible).

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Andy Rose - Worthington Industries - VP, CFO

Yes. So, $70 million, $75 million total of revenue related to Westerman and Palmer.

John Tumazos - John Tumazos Very Independent Research - Analyst

Or about $30 million in the quarter, $10 million plus $20 million.

Andy Rose - Worthington Industries - VP, CFO

Yes. Maybe a little less than that. Maybe $15 million, $17 million. And then what was your second question, John?

John Tumazos - John Tumazos Very Independent Research - Analyst

How much was the JV revenue a year ago compared the $447 million unconsolidated revenues?

Andy Rose - Worthington Industries - VP, CFO

We'll get that and we will answer it.

John Tumazos - John Tumazos Very Independent Research - Analyst

Thank you.

Mark Russell - Worthington Industries - President, COO

John, if it is okay we are checking that. Let's take the next question; we will come back before the end the call on that.

Operator

Michelle Applebaum, Steel Market Intel.

Michelle Applebaum - Steel Market Intelligence - Analyst

Expanding Steel Processing, so where are you doing this and why are you doing this? And isn't this the first time in like 20 years anyone has done this? So can we talk more about that?

Mark Russell - Worthington Industries - President, COO

It is. Yes, it is, Michelle. Those assets have been around for a long time and they do need some upgrading. They needed some upgrading anyway, and since we are out of capacity, we are going to add capacity at the same time.

So the bulk of the investments will be focused in the Cleveland operation, but there will be some in Columbus. And it will -- our intention is to bring us up to state-of-the-art in both places.

Michelle Applebaum - Steel Market Intelligence - Analyst

Okay, so it is a combination of refurbishing existing assets which, as part of that, you end up with 20% more capacity?

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Mark Russell - Worthington Industries - President, COO

Yes. What we will do is we'll go a little wider.

Michelle Applebaum - Steel Market Intelligence - Analyst

How much wider will you go?

Mark Russell - Worthington Industries - President, COO

That is up for debate. That is why I gave you a range for the increase.

Michelle Applebaum - Steel Market Intelligence - Analyst

Okay. All right. And this is the first capacity expansion on, at least north of the border in like forever, right?

Mark Russell - Worthington Industries - President, COO

Well, the market has been in consolidation mode, as you know, for a long time now and it is consolidated. And it is where it needs to be, and now we need to make sure we can keep up with the demand. And if the build rate gets any higher, we will need it.

Michelle Applebaum - Steel Market Intelligence - Analyst

Very cool; okay. That's great. It is nice to see. That's it. Thank you.

Andy Rose - Worthington Industries - VP, CFO

John, the answer to your question on JV net sales is the sales were up 5% from fiscal 2012 to fiscal 2013. So $427 million was the 2012 number.

Cathy Lyttle - Worthington Industries - VP Corporate Communications, IR

Are you still with us, John?

John Tumazos - John Tumazos Very Independent Research - Analyst

Thank you very much.

Operator

(Operator Instructions). Please continue. There are no further questions.

John McConnell - Worthington Industries - Chairman, CEO

Well, again, thank you all for joining us today. We are off to a good start in the upcoming fiscal year and look forward to talking to you again next quarter. Thank you.

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JUNE 27, 2013 / 05:30PM GMT, WOR - Q4 2013 Worthington Industries Earnings Conference Call

Operator

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