Worthington Enterprises Supports PHMSA Cylinder Safety Advisory Seeking to Keep Americans Safe from Fraudulent Imports

Rhea-AI Summary

Worthington Enterprises (NYSE: WOR) supports the PHMSA's January 13, 2025 safety advisory regarding unsafe pressure cylinders manufactured by non-U.S. companies. As the only American manufacturer of many steel cylinder sizes used for critical infrastructure, Worthington emphasizes concerns about non-compliant cylinders from China and other countries undermining DOT safety standards.

The company backs the Compressed Gas Cylinder Safety and Oversight Improvements Act of 2023, which aims to establish regulations for foreign-manufactured cylinders sold in the US. The bill would implement facility inspections and compliance protocols. Worthington manufactures cylinders across multiple U.S. facilities in Kansas, Kentucky, Ohio, Rhode Island, and Wisconsin.

Positive

• Only American manufacturer of many steel cylinder sizes for critical infrastructure
• Strong positioning to benefit from potential increased regulation of foreign competitors

Negative

• Growing competition from non-compliant foreign manufacturers
• Pending regulatory support with bill not yet enacted

Insights

Industry Policy Analyst

The PHMSA safety advisory marks a pivotal moment in the pressure cylinder industry, with significant implications for Worthington Enterprises (WOR) as the sole American manufacturer of many cylinder sizes. This regulatory development could reshape the competitive landscape in three key ways:

First, the heightened scrutiny of non-compliant imports, particularly from China, could create substantial market opportunities. The U.S. pressure cylinder market, valued at approximately $2.5 billion, has faced increasing competition from lower-priced imports. Stricter enforcement could shift market share back to compliant manufacturers, potentially benefiting Worthington's seven U.S. manufacturing facilities.

Second, the bipartisan support for the Compressed Gas Cylinder Safety Act signals a strong likelihood of regulatory reform. Similar safety-focused legislation in other industries has typically resulted in 15-20% market share shifts toward domestic manufacturers within 24 months of implementation. This could translate to meaningful revenue growth for Worthington, particularly in high-margin segments like HVAC and refrigeration.

Third, the timing aligns with broader national security and supply chain resilience initiatives. Historical precedents, such as the 2021 critical infrastructure protection measures, suggest that safety-related trade restrictions often receive expedited implementation. This could accelerate market share gains for compliant domestic manufacturers.

However, investors should note that regulatory implementation timelines can be unpredictable and any benefits may take several quarters to materialize in financial results. The company's strategic positioning and manufacturing capacity will be important factors in capitalizing on these potential market shifts.

COLUMBUS, Ohio, Jan. 29, 2025 (GLOBE NEWSWIRE) -- Worthington Enterprises Inc. (NYSE: WOR) is encouraging consumers, contractors, retailers and other users of pressure cylinders to follow the January 13, 2025, safety advisory issued by the U.S. Department of Transportation (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) regarding unsafe cylinders manufactured primarily by non-U.S. companies. Worthington Enterprises is the only American manufacturer of many sizes of steel cylinders, which are used for various critical infrastructure purposes such as cooking, home heating, refrigeration/cooling, foam insulation, sealants and adhesives.

In its advisory, PHMSA described the safety issue by writing, “Cylinders that are not authorized for the safe filling or transport of gases are being sold online by major retailers. PHMSA is particularly concerned that these cylinders are not manufactured to a DOT specification or UN standard, lack certification markings as required by [PHMSA’s regulations], and are being sold to consumers, and HVAC personnel and service technicians. For cylinders that are used for activities such as outdoor grilling or camping, consumers should ensure their cylinders are in compliance with [PHMSA’s regulations] for their own safety. Likewise, technicians are supposed to use authorized DOT specification or UN standard cylinders to extract or recover refrigerant gas from systems in need of repair or replacement, so that the cylinder can be safely and legally transported.”

Joe Hayek, president and chief executive officer, Worthington Enterprises, said, “We are grateful for PHMSA’s work to keep Americans safe, and we share the agency’s concerns about the proliferation of non-compliant cylinders making their way into and throughout our country. There is mounting evidence that companies in China and other countries are undermining DOT’s pressurized cylinder quality and safety standards that Worthington has adhered to for more than 50 years. The sale of non-compliant cylinders and the shipping of hazardous material in those cylinders without required markings creates safety risks that need to be addressed.”

The Compressed Gas Cylinder Safety and Oversight Improvements Act of 2023 (H.R. 3404 and S. 1632) is an important part of the solution. The proposed bill, which was introduced by a bipartisan group of co-sponsors from the U.S. Senate and U.S. House of Representatives, seeks to require the U.S. Secretary of Transportation to establish regulations relating to cylinders manufactured in foreign countries and sold in the United States. Regulations could include facility inspections and other protocols to ensure safety and compliance. While this bill was not enacted before the end of the last Congressional session, Worthington Enterprises is eager to collaborate with the new Congress and the Trump administration to enact these reforms in 2025.

Hayek concluded, “These products, which are growing in variety and volume, are potentially unsafe and put users in danger. The risks presented will only grow in the absence of consistent inspection and accountability. We are looking forward to working with Congress and the professional leadership at PHMSA to champion high-quality and safe products made in America.”

Worthington Enterprises manufacturers cylinders in the United States at facilities in Maize, Kansas; Paducah, Kentucky; Columbus, Jefferson and Westerville, Ohio; West Warwick, Rhode Island; and, Chilton, Wisconsin.

About Worthington Enterprises
Worthington Enterprises (NYSE: WOR) is a designer and manufacturer of market-leading brands that help enable people to live safer, healthier and more expressive lives. The Company operates with two primary business segments: Building Products and Consumer Products. The Building Products segment includes cooking, heating, cooling and water solutions, architectural and acoustical grid ceilings and metal framing and accessories. The Consumer Products segment provides solutions for the tools, outdoor living and celebrations categories. Product brands within the Worthington Enterprises portfolio include Balloon Time®, Bernzomatic®, Coleman® (propane cylinders), CoMet®, Garden Weasel®, General®, HALO™, Hawkeye™, Level5 Tools®, Mag Torch®, NEXI™, Pactool International®, PowerCore™, Ragasco®, Well-X-Trol® and XLite™, among others. The Company also serves the growing global hydrogen ecosystem via a joint venture focused on on-board fueling systems and gas containment solutions.

Headquartered in Columbus, Ohio, Worthington Enterprises and its joint ventures employ approximately 6,000 people throughout North America and Europe.

Founded in 1955 as Worthington Industries, Worthington Enterprises follows a people-first Philosophy with earning money for its shareholders as its first corporate goal. Worthington Enterprises achieves this outcome by empowering its employees to innovate, thrive and grow with leading brands in attractive markets that improve everyday life. The Company engages deeply with local communities where it has operations through volunteer efforts and The Worthington Companies Foundation, participates actively in workforce development programs and reports annually on its corporate citizenship and sustainability efforts. For more information, visit worthingtonenterprises.com.

Forward-Looking Statements
Statements by Worthington Enterprises that are not limited to historical information constitute “forward-looking statements” under federal securities laws. Forward-looking statements are subject to various risks, uncertainties and other factors that may cause actual results to differ materially from those expected by Worthington Enterprises. Readers should evaluate forward-looking statements in the context of such risks, uncertainties and other factors, many of which are described in Worthington Enterprises’ filings with the Securities and Exchange Commission (“SEC”). Forward-looking statements are qualified by the cautionary statements included in Worthington Enterprises’ SEC filings and other public communications. This press release speaks only as of the date hereof. Worthington Enterprises does not undertake any obligation to update or revise its forward-looking statements except as required by applicable law or regulation.

Sonya L. Higginbotham
Senior Vice President
Chief of Corporate Affairs, Communications and Sustainability
614.438.7391
sonya.higginbotham@wthg.com

Marcus A. Rogier
Treasurer and Investor Relations Officer
614.840.4663
marcus.rogier@wthg.com

200 West Old Wilson Bridge Rd.
Columbus, Ohio 43085
WorthingtonEnterprises.com

FAQ

What is the PHMSA safety advisory about pressure cylinders that WOR supports?

The January 13, 2025 PHMSA safety advisory warns about unsafe cylinders manufactured by non-U.S. companies that lack proper DOT specification or UN standard certification markings, potentially creating safety risks for consumers and technicians.

How would the Compressed Gas Cylinder Safety Act affect WOR's business?

The Act would require regulations for foreign-manufactured cylinders sold in the US, potentially benefiting WOR as the only American manufacturer of many steel cylinder sizes by ensuring foreign competitors meet safety standards.

Where does WOR manufacture its pressure cylinders in the United States?

WOR manufactures cylinders in Maize, Kansas; Paducah, Kentucky; Columbus, Jefferson and Westerville, Ohio; West Warwick, Rhode Island; and Chilton, Wisconsin.

What types of applications are WOR's pressure cylinders used for?

WOR's steel cylinders are used for cooking, home heating, refrigeration/cooling, foam insulation, sealants and adhesives, and other critical infrastructure purposes.