UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

Commission File Number 1-8399

WORTHINGTON INDUSTRIES, INC.

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Based upon the closing price of the Common Shares on November 29, 2002, as reported on the New York Stock Exchange composite tape (as reported byThe Wall Street Journal), the aggregate market value of the Common Shares (the only common equity) held by non-affiliates of the Registrant as of such date was approximately $1,203,763,000.

The number of Common Shares issued and outstanding as of August 1, 2003, was 86,028,496.

DOCUMENTS INCORPORATED BY REFERENCE

Selected portions of the Registrant’s 2003 Proxy Statement, to be furnished to shareholders of the Registrant in connection with the Annual Meeting of Shareholders to be held on September 25, 2003, are incorporated by reference into Part III of this Form 10-K to the extent provided herein.

TABLE OF CONTENTS

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SAFE HARBOR STATEMENT

Selected statements contained in this Annual Report on Form 10-K, including, without limitation, in “PART I–Item 1–Business” and “PART II–Item 7–Management’s Discussion and Analysis of Financial Condition and Results of Operations”, constitute “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based, in whole or in part, on management’s beliefs, estimates, assumptions and currently available information and can often be identified by the words “will”, “may”, “designed to”, “outlook”, “believes”, “should”, “plans”, “expects”, “intends”, “estimates” and similar expressions. These forward-looking statements include, without limitation, statements relating to:

Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected. Any number of factors could affect actual results, including, without limitation:

Any forward-looking statements in this Form 10-K are based on current information as of the date of this Form 10-K, and we assume no obligation to correct or update any such statements in the future, except as required by law.

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PART I

Item 1. – Business

General Overview

          Worthington Industries, Inc., an Ohio corporation (individually, the “Registrant” or “Worthington Industries” or, together with its subsidiaries, “Worthington”), headquartered in Columbus, Ohio, is a leading diversified metal processing company. We focus on value-added steel processing and manufactured metal products such as metal framing, pressure cylinders, automotive part stampings and, through joint ventures, metal ceiling grid systems and laser welded blanks. Worthington was founded in 1955 and has grown from a single steel slitting line into a diversified metal processor, which operates 44 manufacturing facilities worldwide and holds equity positions in seven joint ventures, which operate an additional 16 manufacturing facilities worldwide.

          Worthington Industries maintains an Internet website at www.WorthingtonIndustries.com. (This uniform resource locator, or URL, is an inactive textual reference only and is not intended to incorporate Worthington Industries’ web site into this Annual Report on Form 10-K.) We make available, free of charge, on or through this web site, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

          Our operations are reported principally in three business segments: Processed Steel Products, Metal Framing and Pressure Cylinders. The Processed Steel Products segment includes the Worthington Steel business unit (“Worthington Steel”) and the Gerstenslager business unit (“Gerstenslager”). The Metal Framing segment is comprised of the Dietrich Metal Framing business unit (“Dietrich”). The Pressure Cylinders segment consists of the Worthington Cylinders business unit (“Worthington Cylinders”). In addition, we hold equity positions in seven joint ventures, which are described below, two of which are consolidated into our consolidated financial statements included in “Item 8. – Financial Statements and Supplementary Data.” During the year ended May 31, 2003 (“fiscal 2003”), our Processed Steel Products, Metal Framing and Pressure Cylinders segments served over 1,200, 4,100 and 2,400 customers, respectively, located primarily in the United States. Foreign sales account for less than 10% of consolidated net sales and are comprised primarily of sales to customers in Canada and Europe. No single customer accounts for over 10% of our consolidated net sales.

          On July 31, 2002, Worthington Industries acquired all of the outstanding capital stock of Unimast Incorporated (“Unimast”), a metal framing products company, for approximately $114.7 million in cash plus the assumption of approximately $9.3 million of debt. Unimast manufactures construction steel products, including light gauge steel framing, plastering steel and trim accessories, and serves the construction industry from ten locations. The acquisition increased capacity for our existing products, expanded our product line to include Unimast’s complementary products and introduced new products to the Metal Framing segment, including metal corner bead and trim and vinyl construction accessories. For the calendar year ended December 31, 2001, Unimast, together with its subsidiaries, produced revenue of approximately $230.0 million from ten manufacturing facilities. Beginning July 31, 2002, the operations of Unimast and its subsidiaries have been included as part of Dietrich in our Metal Framing segment. See “Item 1. – Business – Metal Framing” See also “Item 8. – Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements – Note Q – Acquisition.”

          In January 2002, we announced a consolidation plan (the “Consolidation Plan”) which resulted in the closure of the Processed Steel Products facilities in Malvern, Pennsylvania (in September 2002), and Jackson, Michigan (in November 2002), and the Pressure Cylinders facilities in Claremore, Oklahoma (in June 2002), and Itu, Brazil (in January 2002). Also, the Fredericksburg, Virginia, Metal Framing operation was moved to the Worthington Steel Rock Hill facility in December 2002, which is now operated as a Metal Framing facility. A more detailed discussion of the Consolidation Plan is contained in “Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Fiscal 2002 Compared to Fiscal 2001” and “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note N – Restructuring Expense.” Also, the Pressure Cylinders Citronelle, Alabama, facility was closed in October 2002.

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Further, as part of the ongoing efforts to consolidate the Dietrich and Unimast operations, in January 2003, the Unimast corporate offices and the Dietrich plants in East Brunswick, New Jersey, and Atlanta, Georgia, were closed, with operations moving to existing facilities.

Processed Steel Products

          Our Processed Steel Products segment consists of two business units, Worthington Steel and Gerstenslager. For fiscal 2003, the fiscal year ended May 31, 2002 (“fiscal 2002”), and the fiscal year ended May 31, 2001 (“fiscal 2001”), the percentage of consolidated net sales from continuing operations generated by our Processed Steel Products segment was 60.5%, 64.9% and 64.9%, respectively.

          Both Worthington Steel and Gerstenslager are intermediate processors of flat-rolled steel. Worthington Steel occupies a niche in the steel industry by focusing on products requiring exact specifications. These products typically cannot be supplied as efficiently by steel mills or steel end users. We believe that Worthington Steel is one of the largest independent flat-rolled steel processors in the United States. Gerstenslager is a leading independent supplier of automotive quality exterior body panels to the North American automotive original equipment and past model service markets. Gerstenslager’s strength is its ability to handle a large number of past model service and current model production automotive and heavy-duty truck body parts.

          Our Processed Steel Products segment operates 11 manufacturing facilities, including Spartan Steel Coating, LLC, our consolidated joint venture with Rouge Steel. We serve over 1,200 customers from these facilities, principally in the automotive, construction, lawn and garden, hardware, furniture, office equipment, electrical control, tubing, leisure and recreation, appliance, farm implement, HVAC, container and aerospace markets. During fiscal 2003, no single customer represented greater than 10% of net sales for the segment.

          Pursuant to the Consolidation Plan announced in January 2002, Processed Steel Products closed operations at two facilities: Malvern, Pennsylvania, and Jackson, Michigan. In addition, the Rock Hill, South Carolina, plant was converted to a Metal Framing facility during the year. A more detailed discussion of the Consolidation Plan is set forth in “Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Fiscal 2002 Compared to Fiscal 2001” and in “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note N – Restructuring Expense.”

          Worthington Steel buys coils of steel, primarily restricted to minimum standard gauge, from major integrated steel mills and mini-mills and processes it to the precise type, thickness, length, width, shape, temper and surface quality required by customer specifications. Our computer-aided processing capabilities include, among others:

          Worthington Steel also “toll processes” steel for steel mills, large end-users, service centers and other processors. Toll processing is different from our typical steel processing because the mill or end user retains title to the steel and has the responsibility for selling the end product. Toll processing enables Worthington to participate in the market for wide sheet steel and large standard orders, which is a market generally served by steel mills rather than by intermediate steel processors.

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          Gerstenslager stamps, assembles, primes and packages exterior automotive body parts and panels. We primarily purchase the steel used in our Gerstenslager operations but occasionally process consigned material, similar to toll processing. Gerstenslager processes a large number of past model service and current model production automotive and heavy-duty truck parts, managing over 3,000 finished good part numbers and over 25,000 die/fixture sets.

          The Processed Steel Products industry is fragmented and highly competitive. We compete with many other independent intermediate processors and, with respect to automotive stamping, captive processors owned by the automotive companies, independent tier one suppliers of current model components and a number of smaller competitors. We compete primarily on the basis of product quality, our ability to meet delivery requirements and price. Our technical service and support for material testing and customer specific applications enhance the quality of our products. However, we have not quantified the extent to which our technical service capability has improved our competitive position. See “Item 1. – Business – Technical Services.” We believe that our ability to meet tight delivery schedules is, in part, based on the proximity of our facilities to customers and to one another. Again, we have not quantified the extent to which plant location has impacted our competitive position. Our processed steel products are priced competitively, primarily based on market factors including, among other things, the cost and availability of raw material, transportation and shipping costs and overall economic conditions in the United States and abroad.

          We use our “Worthington Steel” and “Gerstenslager” trade names in our Processed Steel Products segment, and we use the unregistered trademark “CleanCoat™” in connection with our dry lubrication process. We intend to continue the use of our intellectual property. While the “CleanCoat™” trademark is important to our Processed Steel Products segment, we do not consider it material.

Metal Framing

          Our Metal Framing segment consists of one business unit, Dietrich, which designs and produces metal framing components and systems and related accessories for the commercial and residential construction markets within the United States. For fiscal 2003, fiscal 2002 and fiscal 2001, the percentage of consolidated net sales from continuing operations generated by Dietrich was 24.3%, 17.5% and 18.9%, respectively.

          Our Metal Framing products include steel studs and track, floor and wall system components, roof trusses and other metal framing accessories. Some of our specific products include “TradeReady®” Floor Systems, “Spazzer®” bars, “Clinch-On®” metal corner bead and trim and, through the Aegis Metal Framing, LLC (“Aegis”) joint venture, “Ultra-Span®” trusses. Our July 2002 acquisition of Unimast expanded our Metal Framing segment by adding capacity for our existing products, broadening our product line to include Unimast’s complementary products and introducing new products, including metal corner bead and trim and vinyl construction accessories. See “Item 1. – Business – General Overview”, “Item 2. – Properties – Metal Framing” and “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note Q – Acquisition.”

          Our Metal Framing segment has 27 operating facilities located throughout the United States. We believe that Dietrich is the largest national supplier of metal framing products and supplies, supplying approximately 45% of the metal framing products sold in the United States. We have over 4,100 customers, primarily consisting of wholesale distributors, big box building material retailers and commercial and residential building contractors. During fiscal 2003, two customers represented 22% of net sales for the segment, while no other single customer represented more than 3% of net sales for the segment.

          Pursuant to the Consolidation Plan, the Fredericksburg, Virginia, facility was closed in December 2002 and its operations moved to Rock Hill, South Carolina. As part of our ongoing efforts to consolidate the Dietrich and Unimast operations, during January 2003, the Unimast corporate offices near Chicago, Illinois, were closed, and Dietrich’s East Brunswick, New Jersey, and Atlanta, Georgia, plants were closed, with operations moving into other facilities. A more detailed discussion of the Consolidation Plan is set forth below in “Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Fiscal 2002 Compared to Fiscal 2001” and in “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note N – Restructuring Expense.”

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          The light gauge metal framing industry is very competitive. We compete with five large regional competitors and numerous small, more localized competitors. We compete primarily on the basis of quality, service and price. Similar to our Processed Steel Products segment, the proximity of our facilities to our customers and their project sites provides us with a service advantage and impacts our freight and shipping costs. Our products are transported almost exclusively by common carrier. Again, we have not quantified the extent to which facility location has impacted our competitive position.

          Dietrich uses the registered trademarks “Spazzer®”, “TradeReady®” and “Clinch-On®.” The “Spazzer®” trademark is used in connection with wall component products that are the subject of two United States patents, four pending United States patent applications and several pending foreign applications. The trademark “TradeReady®” is used in connection with floor system products that are the subject of two United States patents, three foreign patents, three pending United States patent applications and five pending foreign patent applications. The “Clinch-On®” trademark is used in connection with corner bead and metal trim products for gypsum wallboard that are subject to United States patents. The Aegis joint venture uses the “Ultra-Span®” registered trademark in connection with certain patents for proprietary roof trusses. We intend to continue to use and renew each of our registered trademarks. Dietrich also has a number of other patents and trade names relating to specialized products. Although trademarks, trade names and patents are important to our Metal Framing segment, none is considered material.

Pressure Cylinders

          Our Pressure Cylinders segment consists of one business unit, Worthington Cylinders. For fiscal 2003, fiscal 2002 and fiscal 2001, the percentage of consolidated net sales from continuing operations generated by Worthington Cylinders was 14.5%, 16.8%, and 15.8%, respectively.

          Worthington Cylinders operates six manufacturing facilities, three in Ohio and one each in Austria, Canada and Portugal. The segment also operates one consolidated joint venture, Worthington Cylinders, a.s., in the Czech Republic. During fiscal 2003, we discontinued operations at two Pressure Cylinders joint venture plants in Itu, Brazil, and closed our Citronelle, Alabama, and Claremore, Oklahoma, facilities.

          Our Pressure Cylinders segment produces a diversified line of pressure cylinders, including low-pressure liquefied petroleum gas (“LPG”) and refrigerant gas cylinders and high-pressure industrial/specialty gas cylinders. Our LPG cylinders are sold to manufacturers, distributors and/or mass merchandisers and are used for gas barbecue grills, recreational vehicle equipment, residential heating systems, industrial forklifts and commercial/residential cooking (outside North America). Refrigerant cylinders are sold primarily to major refrigerant gas producers and distributors and are used to hold refrigerant gases for commercial and residential air conditioning and refrigeration systems and for automotive air conditioning systems. Industrial/specialty gas high-pressure cylinders are sold primarily to gas producers and distributors and are used as containers for gases for: cutting and welding metals; breathing (medical, diving and firefighting); semiconductor production; beverage delivery; and compressed natural gas systems. Worthington Cylinders also produces recovery tanks for refrigerant gases, air reservoirs for truck and trailer original equipment manufacturers and non-refillable cylinders for “Balloon Time®” helium kits. While a large percentage of our cylinder sales are made to major accounts, Worthington Cylinders has over 2,400 customers. During fiscal 2003, one customer represented 11% of net sales for the segment, while no other single customer represented more than 5% of net sales for the segment.

          Worthington Cylinders’ primary low-pressure cylinder products are steel cylinders with refrigerant gas capacities of 15 to 1,000 lbs. and steel and aluminum cylinders with LPG capacities of 4-1/4 to 420 lbs. In the United States and Canada, our high-pressure and low-pressure cylinders are manufactured in accordance with U.S. Department of Transportation and Transport Canada safety requirements, respectively. Outside the United States and Canada, we manufacture cylinders according to European Union specifications, as well as various other international requirements and standards. Low-pressure cylinders are produced by precision stamping, drawing and welding component parts to customer specifications. They are then tested, painted and packaged as required. Our high-pressure cylinders are manufactured by several processes, including deep drawing, tube spinning and billet piercing.

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          Worthington Cylinders has two principal domestic competitors and several smaller foreign competitors in its major low-pressure cylinder markets, and we believe that we have the largest domestic market share. In our high-pressure cylinder market, we compete against two principal domestic competitors. We believe that we have the leading market share of the European industrial gas cylinder market and the non-refillable refrigerant cylinder market. As with our other segments, we compete on the basis of service, price and quality.

          Our Pressure Cylinders segment uses the trade name “Worthington Cylinders” to conduct business and the registered trademark “Balloon Time®” to market our low-pressure helium balloon kits. We intend to continue to use and renew our registered trademark. We also hold domestic and foreign patents applicable to the non-refillable valve we use for our refrigerant cylinders. Although this intellectual property is important to our Pressure Cylinders segment, it is not considered material.

Segment Financial Data

          Financial information for our segments is provided in “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements - - Note H – Industry Segment Data.”

Financial Information About Geographic Areas

          Foreign operations and exports represent less than 10% of our production and consolidated net sales. Summary information about our foreign operations is set forth in “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note A – Summary of Significant Accounting Policies – Risks and Uncertainties.” For fiscal 2003, we had operations in North America and Europe while prior years also included operations in South America. Net sales by geographic region are provided in “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note H – Industry Segment Data.”

Suppliers

          In fiscal 2003, we purchased over 3 million tons of steel for use as raw material for our Processed Steel Products, Pressure Cylinders and Metal Framing segments. We purchase steel in large quantities at regular intervals from major primary producers, both domestic and foreign. In our Processed Steel Products segment, we primarily purchase and process steel based on specific customer orders and do not typically purchase steel for inventory. Our Metal Framing and Pressure Cylinders segments purchase steel to meet our production schedules. We purchase the majority of our raw materials in the open market on a negotiated spot market basis at prevailing market prices, but we also enter into long-term contracts, some of which have fixed or capped pricing. During fiscal 2003, our major suppliers of steel were, in alphabetical order: Gallatin Steel Company; Inland Steel Company; International Steel Group (including Bethlehem Steel facilities); NorthStar BHP Steel; Nucor Corporation; Rouge Steel Company; Steel Dynamics, Inc.; US Steel Corporation; and WCI Steel, Inc. Alcoa, Inc. was our primary aluminum supplier for our Pressure Cylinders segment in fiscal 2003. We believe that our supplier relationships are good.

Technical Services

          We employ a staff of engineers and other technical personnel and maintain fully equipped modern laboratories to support our operations. These facilities enable us to verify, analyze and document the physical, chemical, metallurgical and mechanical properties of our raw materials and products. Technical service personnel also work in conjunction with our sales force to determine the types of flat-rolled steel required for our customers’ particular needs. Additionally, technical service personnel design and engineer metal framing structures and provide sealed shop drawings to the building construction markets. To provide these services, we maintain a continuing program of developmental engineering with respect to the characteristics and performance of our products under varying conditions. Laboratory facilities also perform metallurgical and chemical testing as dictated by the regulations of the U.S. Department of Transportation, Transport Canada and other associated agencies, along with International Organization for Standardization, or ISO, and customer requirements. All design work complies with current local and national building code requirements. Our ICBO (International Conference of Building Officials) accredited product-testing laboratory supports these design efforts.

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Employees

          As of May 31, 2003, Worthington employed approximately 6,700 employees in its operations, excluding unconsolidated joint ventures, approximately 12% of whom were covered by collective bargaining agreements. We believe that we have good relationships with our employees.

Joint Ventures

          As part of our strategy to selectively develop new products, markets and technological capabilities and to expand our international presence, while mitigating the risks and costs associated with those activities, we participate in two consolidated and five unconsolidated joint ventures.

Consolidated

	•		Spartan Steel Coating, LLC, a 52%-owned consolidated joint venture with Rouge Steel, operates a cold-rolled, hot-dipped galvanizing facility in Monroe, Michigan.
	•		Worthington Cylinders, a.s., a 51%-owned consolidated joint venture with a local Czech Republic entrepreneur, operates a pressure cylinder manufacturing facility in Hustopece, Czech Republic.

Unconsolidated

	•		Acerex S.A. de C.V., a 50%-owned joint venture with Hylsa S.A. de C.V., is a steel processing company located in Monterrey, Mexico.
	•		Aegis Metal Framing, LLC, a 60%-owned joint venture with MiTek Industries, Inc., headquartered in Chesterfield, Missouri, offers light gauge metal component manufacturers and contractors design, estimating and management software, a full line of metal framing products and integrated professional engineering services.
	•		TWB Company, LLC (“TWB”), a 50%-owned joint venture with ThyssenKrupp Stahl, produces laser welded blanks for use in the automotive industry for products such as inner door frames. TWB operates facilities in Monroe, Michigan; North Vernon, Indiana; and Saltillo, Mexico.
	•		Worthington Armstrong Venture (“WAVE”), a 50%-owned joint venture with Armstrong World Industries, is one of the three leading global manufacturers of suspended ceiling systems for concealed and lay-in panel ceilings. WAVE operates facilities in Sparrows Point, Maryland; Benton Harbor, Michigan; North Las Vegas, Nevada; Malvern, Pennsylvania; Shanghai, China; Team Valley, United Kingdom; Valenciennes, France; and Madrid, Spain.
	•		Worthington Specialty Processing, a 50%-owned general partnership with US Steel Corporation (“US Steel”) in Jackson, Michigan, operates primarily as a toll processor for US Steel.

See “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note J – Investments in Unconsolidated Affiliates.”

     Environmental Regulation

          Our manufacturing facilities, generally in common with those of similar industries making similar products, are subject to many federal, state and local requirements relating to the protection of the environment. We continually examine ways to reduce emissions and waste and to decrease costs related to environmental compliance. We do not anticipate that cost of compliance or capital expenditures for environmental control facilities required to meet environmental requirements will be material when compared with our overall costs and capital expenditures and, accordingly, will not have a material effect on our net earnings or competitive position.

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Item 2. – Properties

General

          Our corporate offices are currently located at 1205 Dearborn Drive, Columbus, Ohio. In the Autumn of 2003, we will consolidate our primary corporate offices and those of Worthington Steel and Worthington Cylinders into a leased, three-story office building at 200 West Old Wilson Bridge Road, Columbus, Ohio, which is approximately two miles from the current offices. Certain functions, primarily information technology and training, will remain at the current offices. The administrative offices for Dietrich will remain in leased facilities in Pittsburgh and Blairsville, Pennsylvania.

          Excluding our unconsolidated joint ventures, we have 46 manufacturing facilities and two warehouses. All of our facilities are well maintained and in good operating condition, and we believe they are sufficient to meet our current needs.

Processed Steel Products

          The Processed Steel Products segment, including our consolidated Spartan Steel Coating, LLC joint venture, operates 11 manufacturing facilities, all of which are owned. These facilities are located in Alabama, Indiana, Kentucky, Maryland, Michigan (2) and Ohio (5). This segment also maintains a warehouse in Columbus, Ohio.

Metal Framing

          Our Metal Framing segment operates 27 facilities in Arizona (2), California (2), Colorado, Florida (4), Georgia, Hawaii, Indiana (3), Illinois, Kansas, Maryland, Massachusetts, Minnesota, New Jersey, Ohio (3), South Carolina, Texas (2) and Washington. Of these facilities, 13 are leased and 14 are owned. This segment also leases administrative offices in Pittsburgh and Blairsville, Pennsylvania.

Pressure Cylinders

          The Pressure Cylinders segment operates six fully-owned, manufacturing facilities – three in Ohio, and one each in Austria, Canada and Portugal, and an owned, consolidated joint venture facility in the Czech Republic. This segment also leases a manufacturing facility in Portugal and a warehouse in Canada.

Joint Ventures

          Our joint ventures operate 16 manufacturing facilities. These facilities are located in Indiana, Maryland, Michigan (4), Missouri, Nevada, and Pennsylvania domestically, and in China, the Czech Republic, France, Mexico (2), Spain and the United Kingdom. Nine of these facilities are leased, and seven are owned, three of which are subject to mortgages in favor of the joint venture’s lender. See “Item 1. – Business – Joint Ventures.”

Item 3. – Legal Proceedings

          Various legal actions, which generally have arisen in the ordinary course of business, are pending against Worthington. None of this pending litigation, individually or collectively, is expected to have a material adverse effect on Worthington.

Item 4. – Submission of Matters to a Vote of Security Holders

          None.

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Supplemental Item. – Executive Officers of the Registrant

          The following table lists the names, positions held and ages of the Registrant’s executive officers as of May 31, 2003:

John P. McConnell has served as Worthington Industries’ Chief Executive Officer since June 1993. Mr. McConnell has served as a Director continuously since 1990 and Chairman of the Board of Directors since September 1996.

John S. Christie has served as President and Chief Operating Officer and a Director of Worthington Industries since June 1999. Prior to that time, Mr. Christie served as President of JMAC, Inc., a private investment company, from 1995 through May 1999.

John T. Baldwin has served as Vice President and Chief Financial Officer of Worthington Industries since December 1998 and as its Treasurer from August 1997 through December 1998. Before joining Worthington Industries, Mr. Baldwin served as Assistant Treasurer of Tenneco, Inc., which manufactured and marketed automotive parts and packaging, from 1994 through August 1997.

Dale T. Brinkman has served as Vice President-Administration, General Counsel and Secretary of Worthington Industries since September 2000. From December 1998 through September 2000, he served as Vice President-Administration, General Counsel and Assistant Secretary for Worthington Industries. Prior to that time, Mr. Brinkman served as Worthington Industries’ General Counsel and Assistant Secretary from 1982 through 1998.

Ralph V. Roberts has served as Senior Vice President-Marketing of Worthington Industries since January 2001. From June 1998 through January 2001, he served as President of The Worthington Steel Company. Prior to that time, Mr. Roberts served as Worthington Industries’ Vice President-Corporate Development from June 1997 through May 1998 and as President of WAVE from its formation in June 1992 through June 1997.

Virgil L. Winland has served as Senior Vice President-Manufacturing of Worthington Industries since January 2001 and, prior to that time, from June 1996 through January 2001 as President of Worthington Cylinder Corporation.

Richard G. Welch has served as Controller of Worthington Industries since March 2000 and as its Assistant Controller from September 1999 to March 2000. Before joining Worthington Industries, Mr. Welch served in various accounting and financial reporting capacities with Time Warner Cable, a distributor of cable programming, including as Assistant Controller from March 1999 through September 1999 and as an accounting director from September 1990 through March 1999.

Randal I. Rombeiro has served as Treasurer of Worthington Industries since November 2002 and as Assistant Treasurer from 1999 through November 2002. Before joining Worthington Industries, Mr. Rombeiro served as Assistant Treasurer with Mettler-Toledo International, Inc., a global supplier of precision instruments and services, from 1998 to 1999.

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          Executive officers serve at the pleasure of the directors. There are no family relationships among the Registrant’s executive officers or directors. No arrangements or understandings exist pursuant to which any individual has been, or is to be, selected as an executive officer.

PART II

Item 5. - Market for Registrant’s Common Equity and Related Shareholder Matters

          The common shares of Worthington Industries, Inc. (“Worthington Industries”) trade on the New York Stock Exchange (“NYSE”) under the symbol “WOR” and are listed in most newspapers as “WorthgtnInd.” As of June 30, 2003, Worthington Industries had 9,871 registered shareholders. The following table sets forth (i) the low, high and closing prices for Worthington Industries’ common shares for each quarter of fiscal 2002 and 2003, and (ii) the cash dividends per share paid on Worthington Industries’ common shares during each quarter of fiscal 2002 and fiscal 2003.

Dividend Policy

          Dividends are declared at the discretion of the Board of Directors. Worthington Industries paid quarterly dividends of $0.16 per share in fiscal 2003. The Board of Directors reviews the dividend quarterly and establishes the dividend rate based upon our financial condition, results of operations, capital requirements, current and projected cash flows, business prospects and other factors which the Board of Directors may deem relevant. While Worthington Industries has paid a dividend every quarter since becoming a public company in 1968, there is no guarantee that this will continue in the future.

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Item 6. - Selected Financial Data

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Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Selected statements contained in this “Item 7.–Management’s Discussion and Analysis of Financial Condition and Results of Operations” constitute “forward-looking statements” as used in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based, in whole or in part, on management’s beliefs, estimates, assumptions and currently available information. For a more detailed discussion of what constitutes a forward-looking statement and of some of the factors that could cause actual results to differ materially from such forward-looking statements, please refer to “Safe Harbor Statement” in the beginning of this Annual Report on Form 10-K.

Overview

     Worthington Industries, Inc., through its subsidiaries, is a diversified metal processing company that focuses on value-added steel processing and manufactured metal products. As of May 31, 2003, we operated 44 facilities worldwide, principally in three reportable business segments: Processed Steel Products, Metal Framing and Pressure Cylinders. We also held equity positions in seven joint ventures, which as of May 31, 2003, operated 16 facilities worldwide. The following discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements included in “Item 8. – Financial Statements and Supplementary Data.”

Results of Operations

Fiscal 2003 Compared to Fiscal 2002

Consolidated Operations

          The following table presents consolidated operating results for the fiscal years indicated:

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          Net earnings increased $68.7 million to $75.2 million in the year ended May 31, 2003 (“fiscal 2003”), from $6.5 million in the year ended May 31, 2002 (“fiscal 2002”). Fiscal 2003 diluted earnings per share increased $0.79 per share to $0.87 per share from diluted earnings per share of $0.08 in fiscal 2002. The increase in fiscal 2003 net earnings primarily was due to the inclusion of two significant charges in fiscal 2002 results: a $64.6 million pre-tax restructuring expense and a $21.2 million pre-tax charge related to the impairment of certain assets. See “Fiscal 2002 Compared to Fiscal 2001” below for a detailed description of these items.

          On July 31, 2002, we acquired the stock of Unimast Incorporated, a wholly-owned subsidiary of WHX Corporation, for $114.7 million in cash (net of cash acquired) and $9.3 million of assumed debt. Unimast Incorporated (together with its subsidiaries, “Unimast”) manufactures construction steel products, including light gauge steel framing, plastering steel and trim accessories, and serves the construction industry from ten facilities. The results of Unimast have been included in our Metal Framing segment since the acquisition date.

          Net sales increased 27%, or $474.9 million, to $2,219.9 million in fiscal 2003 from $1,745.0 million in fiscal 2002. The increase primarily was due to the addition of Unimast and higher average selling prices in Metal Framing combined with higher average selling prices and volumes in Processed Steel Products.

          Gross margin increased 14%, or $38.1 million, to $302.9 million in fiscal 2003 from $264.8 million in fiscal 2002. Higher volumes, primarily in Metal Framing due to the Unimast acquisition, contributed $94.2 million. However, the improvement in gross margin was partially offset by an 8%, or $41.9 million, increase in conversion expenses. Furthermore, the net impact of higher material costs in excess of higher average selling prices reduced gross margin by $14.2 million. Together, these factors decreased gross margin as a percentage of net sales to 13.6% in fiscal 2003 from 15.2% in fiscal 2002.

          Selling, general and administrative (“SG&A”) costs decreased as a percentage of net sales to 8.2% in fiscal 2003 from 9.5% in fiscal 2002. In total, SG&A expenses increased 10%, or $16.8 million, to $182.7 million in fiscal 2003 from $165.9 million in fiscal 2002. The main reason for the increase was the $14.7 million in additional SG&A expenses due to the acquisition of Unimast. Most of this increase was attributable to compensation and benefits costs. In addition, the prior year results included the favorable impact of $3.7 million in legal settlements. A $10.2 million decrease in bad debt expense partially offset the overall increase.

          During the second quarter ended November 30, 2002 (the “second quarter”) of fiscal 2003, we recorded a $5.6 million favorable pre-tax adjustment to the original restructuring charge mentioned above. This credit was the result of higher-than-estimated proceeds from the sale of real estate at our former facility in Malvern, Pennsylvania, and the net reduction of previously established reserves, partially offset by estimated charges for the announced closure of three additional facilities. See “Item 8. – Financial Statements and Supplementary Data – Note N – Restructuring Expense” for more information.

          As part of our sale of Buckeye Steel Castings Company (“Buckeye Steel”) in the fiscal year ended May 31, 1999, the acquirer assumed certain workers’ compensation liabilities which arose while our workers’ compensation guarantee was in place. The acquirer agreed to indemnify us against claims made on our guarantee related to the assumed workers’ compensation claims. During the second quarter of fiscal 2003, economic conditions caused Buckeye Steel to cease operations and file for bankruptcy thereby raising the issue of the acquirer’s ability to fulfill its obligations. As a result, we recorded a $5.4 million reserve for the estimated potential liability relating to these workers’ compensation claims.

          Interest expense increased 9%, or $2.1 million, to $24.8 million in fiscal 2003 from $22.7 million in fiscal 2002 due to higher average short-term debt balances, partially offset by lower average interest rates.

          Equity in net income of unconsolidated affiliates increased 30%, or $6.9 million, to $30.0 million in fiscal 2003 from $23.1 million in fiscal 2002. The main reasons for the increase were higher net sales at each unconsolidated affiliate and improved margins at Worthington Armstrong Venture, Worthington Specialty Processing (“WSP”) and TWB Company, LLC (“TWB”). In addition, during fiscal 2003, TWB acquired the ownership interests of Rouge Steel, LTV Steel and Bethlehem Steel, thereby increasing our ownership interest from 33% to 50% and resulting in an increase in equity in net income of unconsolidated affiliates of $0.8 million.

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          Our effective tax rate of 36.5% in fiscal 2003 was unchanged from fiscal 2002.

Segment Operations

Processed Steel Products

          The following table presents a summary of operating results for the fiscal years indicated:

          Operating income increased $67.4 million, to $81.0 million in fiscal 2003 from $13.6 million in fiscal 2002. Most of the improvement was due to the $52.1 million restructuring expense included in the fiscal 2002 results and the $8.7 million restructuring credit recorded in the second quarter of fiscal 2003. In addition, SG&A expense as a percentage of net sales declined to 6.0% in fiscal 2003 from 7.6% in fiscal 2002. This decrease of $5.7 million primarily was due to the reduction of $5.5 million in bad debt expense. However, despite higher net sales, the decline in the spread between selling prices and material costs decreased gross margin as a percentage of net sales to 11.4% in fiscal 2003 from 13.4% in fiscal 2002. Net sales rose 19%, or $210.7 million, to $1,343.4 million in fiscal 2003 from $1,132.7 million in fiscal 2002. Higher direct average selling prices, reflecting the rising cost of steel, increased net sales by $114.3 million. Increased shipments to most markets, particularly the automotive industry, contributed $86.7 million in additional net sales. Additionally, higher toll processing average selling prices increased net sales by $9.7 million. Direct shipments include sales of material with a value-added processing charge, while toll shipments contain only a value-added processing charge on customer-owned material. The net result of the factors mentioned above was an increase in operating income as a percentage of net sales to 6.0% in fiscal 2003 from 1.2% in fiscal 2002.

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Metal Framing

          The following table presents a summary of operating results for the fiscal years indicated:

          Operating income increased 18%, or $3.4 million, to $22.5 million in fiscal 2003 from $19.1 million in fiscal 2002 due to higher net sales. The combined impact of increased volumes, attributable to the Unimast acquisition, and higher average selling prices, which were instituted in response to rising raw material costs, resulted in an increase in net sales of 76%, or $233.4 million, to $539.4 million in fiscal 2003 from $306.0 million in fiscal 2002. Excluding Unimast, volumes actually decreased due to a weak commercial construction market. This volume decline, combined with the aforementioned increase in raw material costs, decreased gross margin as a percentage of net sales to 16.1% in fiscal 2003 from 19.5% in fiscal 2002. SG&A costs decreased as a percentage of net sales to 11.7% in fiscal 2003 from 12.9% in fiscal 2002. Overall, SG&A costs increased primarily due to the Unimast acquisition which added $14.7 million, comprised mainly of compensation and benefits expenses. In addition, a $1.6 million restructuring expense was recorded during the second quarter of fiscal 2003. These items partially offset the overall improvement in operating income. The combined impact of the factors discussed above was a decrease in operating income as a percentage of net sales to 4.2% in fiscal 2003 from 6.3% in fiscal 2002.

Pressure Cylinders

          The following table presents a summary of operating results for the fiscal years indicated:

          Operating income increased 193%, or $21.3 million, to $32.3 million in fiscal 2003 from $11.0 million in fiscal 2002. The improvement primarily was due to higher net sales and the $10.7 million restructuring expense in

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fiscal 2002, partially offset by the $1.4 million restructuring expense from the second quarter of fiscal 2003. Net sales increased 10%, or $29.0 million, to $321.8 million in fiscal 2003 from $292.8 million in fiscal 2002. Higher European net sales due to increased volumes and the strengthening of the Euro against the U.S. dollar contributed $24.6 million to the increase. Strong domestic demand in fiscal 2003 for LPG cylinders increased net sales by $12.4 million and was driven by new regulations in most states that require overfill prevention devices on certain sizes of LPG cylinders. These regulations also positively impacted net sales upon their inception in the fourth quarter of fiscal 2002. Gross margin as a percentage of net sales increased to 20.6% in fiscal 2003 from 19.1% in fiscal 2002. Together, the previously mentioned factors increased operating income as a percentage of net sales to 10.0% in fiscal 2003 from 3.8% in fiscal 2002.

Fiscal 2002 Compared to Fiscal 2001

Consolidated Operations

          The following table presents consolidated operating results for the fiscal years indicated:

          Net earnings decreased 82%, or $29.1 million, to $6.5 million in fiscal 2002 from $35.6 million in the year ended May 31, 2001 (“fiscal 2001”). Diluted earnings per share also decreased 82%, or $0.34 per share, to $0.08 per share in fiscal 2002 from $0.42 per share in fiscal 2001. Our fiscal 2002 net earnings were impacted by two charges: a $64.6 million pre-tax restructuring expense and a $21.2 million pre-tax charge related to the impairment of certain assets. The combined after-tax impact of these two charges reduced our net earnings for fiscal 2002 by $54.5 million. Furthermore, fiscal 2001 was impacted by a $6.5 million pre-tax restructuring charge for the partial shutdown of the Malvern, Pennsylvania facility.

          Net sales decreased 4%, or $81.1 million, to $1,745.0 million in fiscal 2002 from $1,826.1 million in fiscal 2001 due to weaker demand within our Processed Steel Products and Pressure Cylinders segments and lower selling prices in Metal Framing and Processed Steel Products.

          Gross margin increased 8%, or $19.9 million, to $264.8 million in fiscal 2002 from $244.9 million in fiscal 2001 to partially offset the fall in net earnings. Much of the increase was due to higher volumes during the fourth quarter, which improved gross margin by $8.1 million. In addition, direct labor and manufacturing expenses

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declined $15.7 million, including: a $7.5 million reduction in utilities mainly from lower natural gas cost; a $5.2 million decrease in compensation and benefits from headcount reductions; and a $2.8 million decrease in repairs and maintenance expenses. The aforementioned factors resulted in an increase in gross margin as a percentage of net sales to 15.2% in fiscal 2002 from 13.4% in fiscal 2001.

          Even though SG&A expenses decreased 4%, or $7.3 million, to $165.9 million in fiscal 2002 from $173.2 million in fiscal 2001, these costs represented 9.5% of net sales in both years. The dollar reduction was due to numerous factors including: a $5.8 million decrease in professional expenses; a $3.7 million gain related to legal settlements; a $2.5 million decrease in depreciation and amortization due to lower capital spending and the elimination of goodwill amortization; a $1.9 million gain on the sale of an airplane; and a $1.2 million decrease in travel and entertainment expenses. The decline was partially offset by a $6.2 million increase in bad debt expense which, in anticipation of a settlement, included the write-down of a note received from the sale of discontinued operations.

          During the quarter ended February 28, 2002, we recorded a $64.6 million pre-tax restructuring charge as a result of the consolidation plan announced in January 2002. This plan included the reduction of approximately 542 employees, the closing of six of our facilities and the restructuring of two other facilities. The eight facilities impacted by the consolidation plan affected each of our three business segments - Processed Steel Products (4), Metal Framing (1) and Pressure Cylinders (3). In our Processed Steel Products segment, we closed facilities located in Malvern, Pennsylvania, and Jackson, Michigan, and we reduced overhead costs at our facility in Louisville, Kentucky. We converted the Rock Hill, South Carolina, facility into a Metal Framing facility serving both Metal Framing and Processed Steel Products. The Metal Framing facility in Fredericksburg, Virginia, was closed and its operations moved to Rock Hill. In our Pressure Cylinders segment, we discontinued the operations of two partnerships in Itu, Brazil, and we closed a production facility in Claremore, Oklahoma. See “Item 8. – Financial Statements and Supplementary Data – Note N – Restructuring Expense” for more information.

          We also recorded a $6.5 million pre-tax restructuring charge during the quarter ended February 28, 2001, when we closed a portion of our Malvern, Pennsylvania, facility. The result of this partial closure was a reduction in the workforce of 160 employees and the write-down to fair market value of the affected assets. The after-tax impact of this charge reduced our fiscal 2001 net earnings by $4.1 million. This partial closure was completed by December 31, 2001.

          During the quarter ended February 28, 2002, we recorded a $21.2 million pre-tax charge for the impairment of certain preferred stock and subordinated debt that we received as partial payment from four acquirers when we sold the assets of our Custom Products and Cast Products business segments during the fiscal year ended May 31, 1999. As economic conditions deteriorated, each of the issuers encountered difficulty making scheduled payments under the terms of the preferred stock and subordinated debt.

          Equity in net income of unconsolidated affiliates declined 8%, or $2.1 million, to $23.1 million in fiscal 2002 from $25.2 million in fiscal 2001. Lower sales and higher manufacturing expenses at WSP and increased operating expenses at Acerex S.A. de C.V. led to reduced margins for those joint ventures.

          Interest expense decreased in fiscal 2002 by 32%, or $10.8 million, to $22.7 million from $33.5 million in fiscal 2001. This decline was attributable to lower average debt levels (due to increased use of our accounts receivable securitization facility and lower working capital requirements) and lower average short-term interest rates.

          Our effective tax rate of 36.5% in fiscal 2002 was unchanged from fiscal 2001.

          In February 2002, we formed Aegis, a joint venture with MiTek Industries, Inc. (“MiTek”). Aegis combines the manufacturing and distribution capabilities of our Metal Framing segment with the software, engineering and marketing functions of MiTek’s Metal Framing Systems division. We invested $21.0 million plus certain of our assets for a 60% interest in the joint venture and purchased the rollforming assets of MiTek for $1.1 million. We use the equity method to account for the joint venture, as control of the critical business decisions is equally shared with MiTek. Much of the manufacturing is contracted to our Metal Framing segment, which manufactures and sells product to Aegis.

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          Effective June 1, 2001, we adopted Statement of Financial Accounting Standards (“SFAS”) No. 141,Business Combinations,and SFAS No. 142,Goodwill and Other Intangible Assets. SFAS No. 141 eliminated the pooling method of business combinations, and SFAS No. 142 eliminated the requirement to amortize goodwill and indefinite-lived intangible assets. While there was no impact from adopting SFAS No. 141, the adoption of SFAS No. 142 resulted in the discontinuation of goodwill amortization after fiscal 2001. Amortization expense during fiscal 2001 was $4.2 million. See “Item 8. – Financial Statements and Supplementary Data – Note O – Goodwill” for more information.

Segment Operations

Processed Steel Products

          The following table presents a summary of operating results for the fiscal years indicated:

          Operating income decreased 54%, or $15.7 million, to $13.6 million in fiscal 2002 from $29.3 million in fiscal 2001. The main reason for the decrease was the $52.1 million fiscal 2002 restructuring expense, which lowered operating income as a percentage of net sales to 1.2% in fiscal 2002 from 2.5% in fiscal 2001. Fiscal 2001 included a $6.5 million restructuring charge. In addition, net sales decreased 4%, or $52.2 million, to $1,132.7 million in fiscal 2002 from $1,184.9 million in fiscal 2001. Stronger demand during the third and fourth quarters of fiscal 2002 was not enough to overcome the weakness in the market early in the year that led to reduced volumes for the year. Furthermore, selling prices declined due to lower raw material costs and a shift from direct to toll processing. Lower volumes and higher bad debt expense further reduced operating income by $5.5 million and $2.4 million, respectively. Despite the decrease in operating income, improvement in the spread between direct selling prices and raw material costs increased gross margin by $12.4 million, partially accounting for the increase in gross margin as a percentage of net sales to 13.4% in fiscal 2002 from 10.8% in fiscal 2001. Additional savings were achieved through the following: a $7.5 million decrease in compensation and benefits expense mainly due to a reduction in the number of employees; a $6.5 million decrease in utilities costs primarily due to lower natural gas expenses; a $2.8 million reduction in professional fees; a $1.7 million gain related to a legal settlement; and a $1.5 million reduction in repairs and maintenance expenses. As a result, SG&A expense improved as a percentage of net sales to 7.6% in fiscal 2002 from 7.8% in fiscal 2001.

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Metal Framing

          The following table presents a summary of operating results for the fiscal years indicated: