FORT WORTH, Texas, Jan. 8, 2014 /PRNewswire/ -- AZZ
incorporated (NYSE: AZZ), a global provider of electrical products
and services and a provider of galvanizing services, today
announced unaudited financial results for the three and nine-month
periods ended November 30, 2013.
Revenues for the third quarter were $197.8
million compared to $149.7
million for the same quarter last year, an increase of 32.1
percent. Net income for the third quarter was $18.4 million, or $0.72 per diluted share, compared to net income
of $15.4 million, or $0.60 per diluted share, in last year's third
fiscal quarter.
For the nine-month period, the Company reported revenues of
$570.7 million compared to
$430.2 million for the comparable
period last year, an increase of 32.7 percent. Net income for
the nine months was $49.4 million, or
$1.92 per diluted share, compared to
$47.2 million, or $1.85 per diluted share in the comparable period
of last year.
Non-recurring expenses and income items recorded during the
third quarter are related to the fire at our Joliet facility. While
we expect to receive additional insurance proceeds under our
insurance 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. Included with the
financial tables is a reconciliation of these non-recurring items
for the compared periods.
Our products backlog at the end of our third quarter of fiscal
2014 was $211.8 million, compared to
$215.8 million at the end of the
third quarter of fiscal 2013 and $221.7
million on February 28,
2013. Incoming orders for the third quarter were $198.2 million while shipments for the quarter
totaled $197.8 million, resulting in
a book to ship ratio of 100 percent. Of our products backlog of
$211.8 million, 24.6 percent is to be
delivered outside of the U.S.
Revenues for the Electrical and Industrial Products and Services
Segment for the third quarter of fiscal 2014 were $112.0 million as compared to $60.4 million for the same quarter last year, an
increase of 85.4 percent. Operating income for the segment
increased 32.4 percent to $11.9
million compared to $9.0
million in the same period last year. Operating
margins for the third quarter were 10.6 percent for the quarter as
compared to 14.8 percent in the prior year period. Nuclear
Logistics Incorporated ("NLI"), acquired June 1, 2012 and AZZ WSI LLC (together with its
subsidiaries, "WSI"), acquired March 29,
2013, contributed $73.3
million in revenues and $7.1
million in operating income. Excluding NLI and WSI, margins
for the quarter would have been 12.4 percent. For the first nine
months of fiscal 2014, revenues increased 82.2 percent to
$312.6 million and operating income
increased 42.0 percent to $35.6
million compared to $171.6
million and $25.1 million
respectively, for the first nine months of the prior year.
Operating margins for the first nine months were 11.4 percent as
compared to 14.6 percent in the prior year period. NLI and WSI
contributed $188.0 million in
revenues and $16.3 million in
operating income. Excluding NLI and WSI, year to date margins
would have been 15.5 percent.
Revenues for the Company's Galvanizing Services Segment for the
third quarter were $85.7 million,
compared to the $89.3 million in the
same period last year. Operating income was $21.3 million as compared to $24.4 million in the prior period. Operating
margins for the third quarter were 24.9 percent, compared to 27.4
percent in the same period last year. For the first nine months of
fiscal 2014, revenues were $258.1
million and operating income $73.3
million compared to $258.6
million and $70.6 million,
respectively, for the first nine months of the prior year.
Year to date operating margins were 28.4 percent compared to 27.3
percent in the prior year period. The Galvanizing Services
Segment recorded non-operating expense items during the third
quarter of fiscal 2014 in the amount of $1.3
million resulting from the fire at the Joliet galvanizing
facility. The losses at the Joliet facility are expected to
continue to be offset with insurance proceeds for business
interruption in future quarters, once the claim is settled. Pro
forma operating income without the non-operating items would have
been $22.7 million for the quarter
resulting in an operating margin for the segment of 26.4
percent. The rebuilt Joliet facility began a soft start in
mid-November, and we anticipate that this facility will be in full
production mode by February 2014.
Based upon the evaluation of information currently available to
management, we are revising our fiscal year 2014 guidance for
revenues to be in the range of $760 to $770
million. Our earnings are anticipated to be in the range of
$2.30 and $2.40 per diluted share. Our guidance reflects
the acquisition of WSI during the last eleven months of fiscal
2014.
Tom Ferguson, president and chief
executive officer of AZZ incorporated, commented, "While we are not
satisfied with our third quarter fiscal 2014 performance, we
continue to see progress in our assimilation efforts at WSI and
NLI, and believe that fiscal 2015 offers numerous opportunities for
growth in these businesses. We continued to face headwinds in
many of our served markets and some customers continued to delay
deliveries on major project orders. The hard work and
dedication of AZZ's employees is appreciated and offers a solid
platform for the future. I am optimistic about our future as
we take our strong product, service and technology offerings to new
geographies, while expanding their penetration in existing
markets. While we continue to control SG&A expenses, we
are investing in expanding our international market presence and
leveraging sales resources across our array of Electrical and
Industrial businesses. While we expect our markets to remain
sluggish during the fourth quarter of fiscal 2014, we are confident
of our opportunities in fiscal 2015 and beyond."
AZZ incorporated will conduct a conference call to discuss
financial results for the third quarter of fiscal year 2014 at
11:00 A.M. ET on Wednesday, January 8, 2014. 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 #10038188, or for 30 days at
www.azz.com/azzinvest.htm.
AZZ incorporated is a global provider of specialty electrical
equipment and highly engineered services to the power generation,
transmission, distributions, and industrial markets 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 28,
2013 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.
AZZ
incorporated
|
Condensed
Consolidated Statement of Income
|
(in thousands except
per share amounts)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
November
30,
2013
|
|
November
30,
2012
|
|
November
30,
2013
|
|
November
30,
2012
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Net sales
|
$197,755
|
|
$149,675
|
|
$570,712
|
|
$430,203
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
Cost of Sales
|
144,395
|
|
104,672
|
|
410,732
|
|
304,022
|
Selling, General and
Administrative
|
28,113
|
|
17,895
|
|
80,978
|
|
49,019
|
Interest Expense
|
4,615
|
|
3,234
|
|
13,744
|
|
9,802
|
Net (Gain) Loss on Sales
or
Insurance
Settlement of Property,
Plant and
Equipment
|
(7,373)
|
|
157
|
|
(8,256)
|
|
(5,794)
|
Other (Income)
|
93
|
|
(454)
|
|
(3,617)
|
|
(700)
|
|
$169,843
|
|
$125,504
|
|
$493,581
|
|
$356,349
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
27,912
|
|
24,171
|
|
77,131
|
|
73,854
|
Income Tax
Expense
|
9,467
|
|
8,807
|
|
27,776
|
|
26,631
|
Net income
|
$18,445
|
|
$15,364
|
|
$49,355
|
|
$47,223
|
Net income per
share
|
|
|
|
|
|
|
|
Basic
|
$0.72
|
|
$0.61
|
|
$1.94
|
|
$1.87
|
Diluted
|
$0.72
|
|
$0.60
|
|
$1.92
|
|
$1.85
|
Diluted average shares
outstanding
|
25,720
|
|
25,603
|
|
25,683
|
|
25,537
|
Segment
Reporting
|
(in
thousands)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
November
30,
2013
|
|
November
30,
2012
|
|
November
30,
2013
|
|
November
30,
2012
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Net Sales:
|
|
|
|
|
|
|
|
|
|
Electrical and Industrial Products
|
$112,035
|
|
$60,421
|
|
$312,635
|
|
$171,633
|
|
|
Galvanizing Services
|
85,720
|
|
89,254
|
|
258,077
|
|
258,570
|
|
|
|
$197,755
|
|
$149,675
|
|
$570,712
|
|
$430,203
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating
Income :
|
|
|
|
|
|
|
|
|
|
Electrical and Industrial Products
|
$11,853
|
|
$8,952
|
|
$35,633
|
|
$25,087
|
|
|
Galvanizing Services
|
21,316
|
|
24,449
|
|
73,260
|
|
70,631
|
|
|
Total
Segment Operating Income
|
$33,169
|
|
$33,401
|
|
$108,893
|
|
$95,718
|
|
|
Condensed
Consolidated Balance Sheet
|
(in
thousands)
|
|
|
|
|
November 30,
2013
|
February 28,
2013
|
|
(unaudited)
|
(audited)
|
|
|
|
Assets:
|
|
|
Current
assets
|
$324,429
|
$262,432
|
Net property, plant
and equipment
|
198,103
|
154,476
|
Other assets,
net
|
466,643
|
277,297
|
Total
assets
|
$989,175
|
$694,205
|
|
|
|
Liabilities and
shareholders' equity:
|
|
|
Current
liabilities
|
$146,552
|
$118,899
|
Long term debt due
after one year
|
416,643
|
196,429
|
Other
liabilities
|
51,484
|
44,943
|
Shareholders'
equity
|
374,496
|
333,934
|
Total liabilities and
shareholders' equity
|
$989,175
|
$694,205
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows
|
(in
thousands)
|
|
|
Nine Months
Ended
|
|
November 30,
2013
|
|
November 30,
2012
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
$94,614
|
|
$66,586
|
Net cash provided by
(used in) investing activities
|
(309,740)
|
|
(133,602)
|
Net cash provided by
(used in) financing activities
|
210,466
|
|
(26,807)
|
Effect of exchange
rate changes on cash
|
10
|
|
26
|
Net increase
(decrease) in cash and cash equivalents
|
($4,650)
|
|
($93,797)
|
Cash and cash
equivalents at beginning of period
|
55,597
|
|
143,303
|
Cash and cash
equivalents at end of period
|
$50,947
|
|
$49,506
|
|
|
|
|
AZZ incorporated
Non-GAAP Disclosure
Adjusted Earning and Adjusted
Earnings Per Share
Adjusted Earnings and Adjusted Earnings Per Share
In addition to reporting financial results in accordance with
GAAP, the Company has provided adjusted earnings and adjusted
earnings per share, which are non-GAAP measures. Management
believes that the presentation of these measures provides investors
with greater transparency comparison of operating results across a
broad spectrum of companies , which provides a more complete
understanding of the Company's financial performance, competitive
position and prospects for the future. Management also
believes that investors regularly rely on non-GAAP financial
measures, such as adjusted earnings and adjusted earnings per
share, to assess operating performance and that such measures may
highlight trends in the Company's business that may not otherwise
be apparent when relying on financial measures calculated in
accordance with GAAP.
The following table provides a reconciliation for the three and
nine months ended November 30, 2013
and 2012 between net income and diluted earnings per share
calculated in accordance with GAAP to adjusted earnings and
adjusted per share, respectively, which are shown net of tax
(dollars in thousands, except per share data):
|
|
Three Months Ended
November 30,
|
|
|
2013
|
|
2012
|
|
|
(in
thousands)
|
|
|
|
Per
Diluted
Share
|
|
|
Per
Diluted
Share
|
Net income and
diluted earnings per share
|
|
$18,445
|
$0.72
|
|
$15,364
|
$0.60
|
|
|
|
|
|
|
|
Adjustments (net of
tax)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joliet Facility Fire
Operating Loss
|
|
888
|
0.03
|
|
638
|
0.02
|
Joliet Facility
Fire-Business Interruption Insurance Proceeds
|
|
-
|
-
|
|
-
|
-
|
Joliet Facility
Fire-Gain from Property Insurance Proceeds
|
|
(4,868)
|
(0.19)
|
|
-
|
-
|
Law Suit
Settlement
|
|
-
|
-
|
|
-
|
-
|
Acquisition Related
Expenditures
|
|
766
|
0.03
|
|
280
|
0.02
|
|
|
|
|
|
|
|
Adjusted earnings and
adjusted earnings per share
|
|
$15,231
|
$0.59
|
|
$16,282
|
$0.64
|
|
|
Nine Months Ended
November 30,
|
|
|
2013
|
|
2012
|
|
|
(in
thousands)
|
|
|
|
Per
Diluted
Share
|
|
|
Per
Diluted
Share
|
Net income and
diluted earnings per share
|
|
$49,355
|
$1.92
|
|
$47,223
|
$1.85
|
|
|
|
|
|
|
|
Adjustments (net of
tax)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joliet Facility Fire
Operating Loss
|
|
1,898
|
0.07
|
|
1,734
|
0.07
|
Joliet Facility
Fire-Business Interruption Insurance Proceeds
|
|
(1,713)
|
(0.07)
|
|
-
|
-
|
Joliet Facility
Fire-Gain from Property Insurance Proceeds
|
|
(5,237)
|
(0.20)
|
|
(3,836)
|
(0.16)
|
Law Suit
Settlement
|
|
(2,688)
|
(0.10)
|
|
-
|
-
|
Acquisition Related
Expenditures
|
|
2,781
|
0.11
|
|
663
|
0.03
|
|
|
|
|
|
|
|
Adjusted earnings and
adjusted earnings per share
|
|
$44,396
|
$1.73
|
|
$45,784
|
$1.79
|
Contact:
|
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
|
|
Internet:
www.lythampartners.com
|
SOURCE AZZ incorporated