AZZ incorporated Reports Results for the Third Quarter and
Year-To-Date of Fiscal Year 2013, and Announces the Acquisition of
G3 Galvanizing Limited in Halifax, Nova Scotia
FORT WORTH, Texas, Jan. 9, 2013 /PRNewswire/ -- AZZ incorporated
(NYSE:AZZ), (the "Company" or "AZZ") a manufacturer of electrical
products and a provider of galvanizing services, today announced
unaudited financial results for the three and nine-month periods
ended November 30, 2012. Revenues for
the third quarter were $149.7 million
compared to $116.5 million for the
same quarter last year, an increase of 29 percent. Net income for
the third quarter was $15.4 million,
or $0.60 per diluted share, compared
to net income of $10.0 million, or
$0.39 per diluted share, in last
year's third fiscal quarter.
For the nine-month period, the Company reported revenues of
$430.2 million compared to
$345.5 million for the comparable
period last year, an increase of 25 percent. Net income for
the nine months was $47.2 million, or
$1.85 per diluted share, compared to
$29.1 million, or $1.15 per diluted share in the comparable period
of last year. The net income and earnings per diluted share
for the first nine months reflect a pre-tax gain of approximately
$6 million related to a partial
insurance settlement for assets destroyed in a fire at one of the
Company's galvanizing facilities. While we expect to receive
substantial additional insurance proceeds under the policy in the
future, the ultimate amount that we collect has not yet been
determined. Any future recoveries under this policy will be
recognized in the period in which proceeds are approved by our
insurance carrier. Pro forma earnings per diluted share
exclusive of this non operational income item for the first nine
months were $1.73, a 50 percent gain
over the same period last year.
Backlog at the end of our third quarter was $215.8 million, which includes the favorable
impact of Nuclear Logistics Incorporated's acquired backlog.
Backlog at the end of the third quarter of fiscal year 2012 was
$132.1 million and $138.6 million at February
29, 2012. Incoming orders for the third quarter were
$152.4 million while shipments for
the quarter totaled $149.7 million,
resulting in a book to ship ratio of 102 percent. Of the backlog of
$215.8 million, 29 percent is to be
delivered outside of the U.S.
Revenues for the Electrical and Industrial Products Segment for
the third quarter of fiscal 2013 were $60.4
million as compared to $43.9
million for the same quarter last year, an increase of 38
percent. NLI, acquired June 1,
2012, contributed $16.4
million of this increase. Operating income for the
segment increased 57 percent to $9
million compared to $5.7
million in the same period last year. Operating
margins for the third quarter were 15 percent for the quarter as
compared to 13 percent in the prior year period. For the first nine
months of fiscal 2013, revenues increased 26 percent to
$171.6 million and operating income
increased 38 percent to $25.1 million
compared to $136.5 million and
$18.2 million respectively, in the
prior year period. Operating margin for the first nine months
was 15 percent as compared to 13 percent in the prior year
period.
Revenues for the Company's Galvanizing Service Segment for the
third quarter were $89.3 million,
compared to the $72.6 million in the
same period last year, an increase of 23
percent. Operating income was $24.4 million as compared to $18.6 million in the prior period, an increase of
32 percent. Operating margins for the third quarter were 27
percent, compared to 26 percent in the same period last year. For
the nine months of fiscal 2013, revenues increased 24 percent to
$258.6 million and operating income
increased 30 percent to $70.6 million
compared to $209 million and
$54.4 million respectively, for the
first nine months of the prior year. Year to date operating
margins were 27 percent compared to 26 percent in the prior year
period.
David H. Dingus, president and
chief executive officer of AZZ incorporated, commented, "The third
quarter and first nine months of fiscal 2013 reflects favorable
year over year growth in both segments and effective identification
and execution of our opportunities in a market environment of
continued economic and regulatory uncertainty. We are
extremely pleased with the reported results. We continue our
effort to identify product and market expansion opportunities to
further enhance our strategic position."
The company today announced that it has acquired G3 Galvanizing,
a galvanizing operation in Halifax, Nova
Scotia on January 2,
2013. This acquisition is part of the stated AZZ strategy to
continue the geographic expansion of its served markets that should
provide a basis for continued growth of the Galvanizing Services
Segment of AZZ. G3, while relatively small in terms of
production and revenue, has a rich heritage of providing superior
level of service and support to the customers in Canadian
Maritimes. Operated with pride and integrity since its
founding, this very successful operation will complement our
existing network of North American plants. Existing operating
management has agreed to remain with the company and the
acquisition is anticipated to be accretive in the first year of
operation.
Based upon the evaluation of information currently available to
management, we are revising our fiscal year 2013 guidance for
revenues to be in the range of $575 to $585
million. Our earnings are anticipated to be in the
range of $2.35 and $2.45 per diluted share. This guidance
reflects the two-for-one-stock split effective July 30, 2012. The previously issued
guidance was for revenues to be in the range of $575 to $600 million and that fully diluted
earnings per share to be in the rage of $2.25 to $2.40 after the effect of the
two-for-one stock split. Our guidance does reflect the
acquisition of NLI during the last nine months of fiscal 2013 and
the acquisition of Galvcast for the last five months of fiscal
2013, and G3 Galvanizing for the last two months of the fiscal
2013.
AZZ incorporated will conduct a conference call to discuss
financial results for the third quarter of fiscal year 2013 at
11:00 A.M. ET on Wednesday, January 9, 2013. Interested
parties can access the conference call by dialing (877) 317-6789 or
(412) 317-6789 (international). The call will be web cast via the
Internet at www.azz.com/azzinvest.htm. A replay of the
call will be available for three days at (877) 344-7529 or (412)
317-0088 (international), confirmation #10022595 or for 30 days at
www.azz.com/azzinvest.htm.
AZZ incorporated is a specialty electrical equipment
manufacturer serving the global markets of power generation,
transmission and distribution and industrial, as well as a leading
provider of hot dip galvanizing services to the North American
steel fabrication market.
Certain statements herein about our expectations of
future events or results constitute forward-looking statements for
purposes of the safe harbor provisions of The Private Securities
Litigation Reform Act of 1995. You can identify forward-looking
statements by terminology such as, "may," "should," "expects,"
"plans," "anticipates," "believes," "estimates," "predicts,"
"potential," "continue," or the negative of these terms or other
comparable terminology. Such forward-looking statements are based
on currently available competitive, financial and economic data and
management's views and assumptions regarding future events. Such
forward-looking statements are inherently uncertain, and investors
must recognize that actual results may differ from those expressed
or implied in the forward-looking statements. This release may
contain forward-looking statements that involve risks and
uncertainties including, but not limited to, changes in customer
demand and response to products and services offered by AZZ,
including demand by the power generation markets, electrical
transmission and distribution markets, the industrial markets, and
the hot dip galvanizing markets; prices and raw material cost,
including zinc and natural gas which are used in the hot dip
galvanizing process; changes in the economic conditions of the
various markets that AZZ serves, foreign and domestic, customer
request delays of shipments, acquisition opportunities, currency
exchange rates, adequacy of financing, and availability of
experienced management employees to implement AZZ's growth
strategy. AZZ has provided additional information regarding risks
associated with the business in AZZ's Annual Report on Form 10-K
for the fiscal year ended February 29,
2012 and other filings with the SEC, available for viewing
on AZZ's website at www.azz.com and on the SEC's website at
www.sec.gov. You are urged to consider these factors
carefully in evaluating the forward-looking statements herein and
are cautioned not to place undue reliance on such forward-looking
statements, which are qualified in their entirety by this
cautionary statement. These statements are based on information as
of the date hereof and AZZ assumes no obligation to update any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Contact:
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Dana Perry, Senior
Vice President – Finance and CFO
|
|
AZZ incorporated
817-810-0095
|
|
Internet:
www.azz.com
|
|
|
|
Lytham Partners
602-889-9700
|
|
Joe Dorame or Robert
Blum
|
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Internet:
www.lythampartners.com
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---Financial tables on the following
page---
AZZ
incorporated
Condensed
Consolidated Statement of Income
(in thousands except
per share amounts)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
November 30,
2012
|
|
November 30,
2011
|
|
November 30,
2012
|
|
November 30,
2011
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Net sales
|
$149,675
|
|
$116,493
|
|
$430,203
|
|
$345,487
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
Cost of Sales
|
104,672
|
|
85,686
|
|
304,022
|
|
253,231
|
Selling, General and
Administrative
|
17,895
|
|
11,320
|
|
49,019
|
|
36,110
|
Interest Expense
|
3,234
|
|
3,519
|
|
9,802
|
|
10,453
|
Net (Gain) Loss on Sales
or Insurance Settlement of
Property, Plant and
Equipment
|
157
|
|
(7)
|
|
(5,794)
|
|
164
|
Other (Income)
|
(454)
|
|
(193)
|
|
(700)
|
|
(1,225)
|
|
$125,504
|
|
$100,325
|
|
$356,349
|
|
$298,733
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
24,171
|
|
16,168
|
|
73,854
|
|
46,754
|
Income Tax
Expense
|
8,807
|
|
6,147
|
|
26,631
|
|
17,662
|
Net income
|
$15,364
|
|
$10,021
|
|
$47,223
|
|
$29,092
|
Net income per
share
|
|
|
|
|
|
|
|
Basic
|
$0.61
|
|
$0.40
|
|
$1.87
|
|
$1.16
|
Diluted
|
$0.60
|
|
$0.39
|
|
$1.85
|
|
$1.15
|
Diluted average shares
outstanding
|
25,603
|
|
25,374
|
|
25,537
|
|
25,340
|
|
|
|
|
|
|
|
|
Segment
Reporting
(in
thousands)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
November 30,
2012
|
|
November 30,
2011
|
|
November 30,
2012
|
|
November 30,
2011
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
Net Sales:
|
|
|
|
|
|
|
|
Electrical and Industrial Products
|
$60,421
|
|
$43,849
|
|
$171,633
|
|
$136,518
|
Galvanizing Services
|
89,254
|
|
72,644
|
|
258,570
|
|
208,969
|
|
$149,675
|
|
$116,493
|
|
$430,203
|
|
$345,487
|
|
|
|
|
|
|
|
|
Segment Operating
Income:
|
|
|
|
|
|
|
|
Electrical and Industrial Products
|
$8,952
|
|
$5,719
|
|
$25,087
|
|
$18,214
|
Galvanizing Services
|
24,449
|
|
18,555
|
|
70,631
|
|
54,431
|
Total
Segment Operating Income
|
$33,401
|
|
$24,274
|
|
$95,718
|
|
$72,645
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheet
(in
thousands)
|
|
November
30,
2012
|
February
29,
2012
|
|
(unaudited)
|
(audited)
|
|
|
|
Assets:
|
|
|
Current
assets
|
$252,132
|
$302,736
|
Net property, plant
and equipment
|
$152,006
|
$135,827
|
Other assets,
net
|
$270,327
|
$168,212
|
Total
assets
|
$674,465
|
$606,775
|
|
|
|
Liabilities and
shareholders' equity:
|
|
|
Current
liabilities
|
$109,493
|
$77,979
|
Long term debt due
after one year
|
$196,429
|
$210,714
|
Other
liabilities
|
$41,174
|
$30,473
|
Shareholders'
equity
|
$327,369
|
$287,609
|
Total liabilities and
shareholders' equity
|
$674,465
|
$606,775
|
|
|
|
|
|
|
Condensed
Consolidated Statement of Cash Flows
(in
thousands)
|
|
Nine Months
Ended
|
|
November
30,
2012
|
November
30,
2011
|
|
(unaudited)
|
(unaudited)
|
|
|
|
Net cash provided by
(used in) operating activities
|
$66,587
|
$46,832
|
Net cash provided by
(used in) investing activities
|
($133,602)
|
($16,070)
|
Net cash provided by
(used in) financing activities
|
($26,807)
|
($9,221)
|
Effect of exchange
rate changes on cash
|
$27
|
$168
|
Net increase
(decrease) in cash and cash equivalents
|
$(93,797)
|
$21,709
|
Cash and cash
equivalents at beginning of period
|
$143,303
|
$138,390
|
Cash and cash
equivalents at end of period
|
$49,506
|
$160,099
|
|
|
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SOURCE AZZ incorporated