Worthington’s business segments
Worthington Industries (WOR) isn’t a primary steel producer like Steel Dynamics (STLD) and TimkenSteel (TMST). It does purchase steel from these companies, but then it processes it into value-added products.
The graphic above shows Worthington’s three operating segments. Steel is its biggest segment, accounting for more than half of the company’s operating profits. It’s one of the biggest processors of flat rolled steel, and is among the top five purchasers of flat rolled steel in the United States.
Worthington also processes steel on a tolling basis for other metal producers. Under the tolling structure, counterparties provide raw steel to Worthington. It then processes it into value-added steel products. It also produces cold rolled steel and galvanized steel products.
The automobile sector is Worthington’s Steel segment’s largest consumer base. More than 60% of this segment’s revenue comes from the automobile industry. Agriculture, construction, and heavy trucks account for another quarter of the Steel segment’s direct sales.
Clearly, it’s crucial that Worthington investors keep a close watch on indicators related to the US automobile industry. For more on the latest trends in the US automobile industry, read The steel industry is not in the best of health.
Pressure Cylinders is another of Worthington’s business segments. It’s a leading manufacturer of pressure cylinders and related products, and serves 4,000 customers in 70 markets. In the next part of our series, we’ll learn more about this segment.