FORT WORTH, Texas, June 27, 2014 /PRNewswire/ -- AZZ
incorporated (NYSE:AZZ), a global provider of electrical products
and highly engineered services and a leading provider of
galvanizing services in North
America, today announced unaudited financial results for the
three month period ended May 31,
2014. Revenues for the first quarter of fiscal year 2015
were $216.1 million compared to
$183.2 million for the same quarter
last year, an increase of 18.0 percent. Net income for the first
quarter was $14.9 million, or
$0.58 per diluted share, compared to
net income of $14.5 million, or
$0.57 per diluted share, for the same
quarter last year.
Earnings during the quarter included a pretax gain of
$2.4 million from an insurance
settlement relating to losses incurred at our Joliet galvanizing
facility. Adjusted earnings without this gain would have been
$0.52 per share for the first quarter
of fiscal 2015. During the prior year's first quarter AZZ
recorded non-recurring items including income related to a
favorable settlement of a lawsuit, expenses from acquisitions, and
operating losses at our Joliet facility. Adjusted earnings
per share for the first quarter of fiscal 2014 without these
non-recurring items would have been $0.56 per share. Included with the attached
financial tables is a reconciliation of these nonrecurring
items.
AZZ's backlog at the end of the first quarter of fiscal 2015 was
$309.0 million, compared to
$270.6 million at the end of the
first quarter of fiscal year 2014. Of the $309.0 million backlog, 27.0 percent will be
delivered outside of the U.S. Incoming orders for the first
quarter of fiscal 2015 were $200.2
million while revenue for the quarter totaled $216.1 million, resulting in a book to ship ratio
of 93.0 percent.
Revenues for AZZ's Energy Segment for the first quarter of
fiscal 2015 were $130.5 million as
compared to $96.5 million for the
same quarter last year, an increase of 35.3 percent. This
increase is mainly attributable to the acquisition of WSI LLC
(together with its subsidiaries, "WSI") on March 29, 2013 which contributed $72.9 million in revenues for the full quarter as
compared to $41.5 million for two
months in the same quarter last year. Operating income for
the segment increased 5.9 percent to $13.8
million compared to $13.0
million for the same period last year. The increase in
year-over-over operating income is also attributable to the
acquisition of WSI which provided $6.9
million in operating income as compared to $3.3 million in the same period last
year. Excluding the WSI acquisition, operating income
decreased $2.7 million.
Operating margins for the first quarter of fiscal 2015 were 10.6
percent as compared to 13.5 percent in the same period last
year. Excluding the acquisition of WSI, first quarter fiscal
year 2015 Energy Segment operating margins would have been 12.1
percent.
Revenues for AZZ's Galvanizing Service Segment for the first
quarter of fiscal year 2015 were $85.6
million, compared to $86.7
million in the same period last year, a decrease of 1.3
percent. Operating income was $22.0 million as compared to $21.5 million in the same period last year, an
increase of 2.3 percent. As mentioned earlier, segment operating
income included a $2.4 million gain
from the settlement of insurance related to the fire at our Joliet
facility. These proceeds were recorded as an offset to cost of
sales during the first quarter of fiscal 2015 as they were related
to reimbursement for business interruption. During the first
quarter of fiscal 2014, a loss was recorded in the amount of
$0.8 million due to the fire at our
Joliet facility. These gains and losses are included in the
Galvanizing Services Segment operating income for segment reporting
purposes. Without these non-recurring items, the Galvanizing
Services Segment operating income would have been $19.6 million for the first quarter of fiscal
2015 and $22.3 million for the same
period last year. Operating margins without these non-recurring
items would have been 22.9% and 25.7%, respectively, for the three
months ended May 31, 2014 and 2013.
Margins were negatively impacted by decreases in the electric
utility market, primarily solar, and higher overhead costs.
Tom Ferguson, president and chief
executive officer of AZZ incorporated, said, "Financial results for
the quarter were as anticipated with revenue hitting record levels
at $216.1 million on the strength of
a full quarterly contribution from WSI compared to just two months
in last year's comparable quarter. Increased quoting activity and
the current backlog in our Energy Segment gives us confidence that
the latter half of the fiscal year continues to look promising.
Within the Energy Segment our Industrial platform gained momentum,
particularly in the petrochemical and refining market; and our
Electrical platform faced mixed markets, but saw growth in
enclosures and switchgear."
"Activity in the Galvanizing Services Segment is approaching
more historical operating levels after experiencing severe winter
conditions. We are also expanding the focus of our Galvanizing
services segment to include other metal finishing technologies that
we expect will create new opportunities and enhance our industry
position as the leading corrosion protection solutions provider in
North America."
Mr. Ferguson concluded, "I am appreciative of the efforts of all
of our employees and their continued commitment to operational
excellence and to the success of AZZ. I am encouraged that we
have a solid portfolio of products and innovative technologies to
successfully compete and attract larger market share. Going forward
we will continue to leverage our sales teams across all of our
Energy segment businesses in North
America; aggressively expand our business internationally;
streamline our platforms and grow our Galvanizing business, both
organically and with targeted acquisitions. We see a large
number of untapped opportunities that will permit us to continue to
grow the Company in the coming years."
As previously noted, the Company's shipments are typically
related to the completion of projects. Because of that, financial
results, on a quarterly basis, are not of a linear nature and that
variability can provide a distorted picture of the Company's
performance on a quarter-over-quarter basis. However, based upon
the evaluation of information currently available, management
continues to anticipate fiscal year 2015 gross revenues to be in
the range of $850 to $900 million and
its earnings to be in the range of $2.40 and $2.80 per
diluted share for the year.
Additionally, the Company announced that the Board of Directors,
at its regularly scheduled quarterly meeting, declared a
$0.14 per share cash dividend on the
Company's common stock outstanding. The dividend will be paid
at the close of business on July 25,
2014, to shareholders of record on July 11, 2014.
AZZ incorporated will conduct a conference call to discuss
financial results for the first quarter of fiscal year 2015 at
11:00 A.M. ET on Friday, June 27, 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 http://www.azz.com/investor-relations. A
replay of the call will be available for three days at (877)
344-7529 or (412) 317-0088 (international), confirmation #10048014
or for 30 days at http://www.azz.com/investor-relations.
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
requested delays of shipments, acquisition opportunities, currency
exchange rates, adequacy of financing, and availability of
experienced management and 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,
2014 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:
|
Paul Fehlman, 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
|
AZZ
incorporated
|
Condensed
Consolidated Statement of Income
|
(in thousands except
per share amounts)
|
|
|
Three Months
Ended
|
|
May 31, 2014
|
|
May 31, 2013
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
Net sales
|
$216,126
|
|
$183,175
|
Cost of
Sales
|
160,738
|
|
132,460
|
Gross Margin
|
55,389
|
|
50,715
|
|
|
|
|
Selling, General and
Administrative
|
27,541
|
|
26,687
|
Operating Income
|
27,847
|
|
24,028
|
|
|
|
|
Interest
Expense
|
4,209
|
|
4,478
|
Net (Gain) Loss on
Sale or Insurance Settlement of Property, Plant and
Equipment
|
(27)
|
|
(23)
|
Other
(Income)
|
(31)
|
|
(3,828)
|
Income before Income Taxes
|
$23,696
|
|
$23,402
|
Income Tax
Expense
|
8,771
|
|
8,855
|
Net income
|
$14,925
|
|
$14,547
|
Earnings Per Common
Share
|
|
|
|
Basic
|
$0.58
|
|
$0.57
|
Diluted
|
$0.58
|
|
$0.57
|
|
|
|
|
Diluted Average
Shares Outstanding
|
25,739
|
|
25,655
|
Segment
Reporting
|
(in
thousands)
|
|
|
Three Months
Ended
|
|
May 31, 2014
|
|
May 31, 2013
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
Net Sales:
|
|
|
|
Energy
|
$130,521
|
|
$96,466
|
Galvanizing Services
|
85,605
|
|
86,709
|
|
$216,126
|
|
$183,175
|
|
|
|
|
Segment Operating
Income:
|
|
|
|
Energy
|
$13,812
|
|
$13,048
|
Galvanizing Services
|
21,990
|
|
25,699
|
Total
Segment Operating Income
|
$35,802
|
|
$38,747
|
|
|
|
|
Condensed
Consolidated Balance Sheet
|
(in
thousands)
|
|
|
May 31, 2014
|
|
February 28,
2014
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
Assets:
|
|
|
|
Current
Assets
|
$329,929
|
|
$296,181
|
Net Property, Plant
and Equipment
|
197,416
|
|
197,639
|
Other Assets,
Net
|
456,194
|
|
459,433
|
Total
Assets
|
$983,539
|
|
$953,253
|
|
|
|
|
Liabilities and
Shareholders' Equity:
|
|
|
|
Current
Liabilities
|
$158,005
|
|
$144,016
|
Long Term Debt Due
After One Year
|
378,607
|
|
384,768
|
Long Term Liabilities
Due After One Year
|
9,121
|
|
9,121
|
Other
Liabilities
|
45,865
|
|
39,435
|
Shareholders'
Equity
|
391,941
|
|
375,913
|
Total Liabilities and
Shareholders' Equity
|
$983,539
|
|
$953,253
|
|
|
|
|
|
|
|
|
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, AZZ 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 AZZ'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 month period ended May 31,
2014 and 2013 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
May 31,
|
|
|
2014
|
|
2013
|
|
|
|
(in thousands,
except EPS)
|
|
|
|
|
Per Diluted
Share
|
|
|
Per Diluted
Share
|
Net Income and Diluted
Earnings Per Share
|
|
$14,925
|
$0.58
|
|
$14,457
|
$0.57
|
|
|
|
|
|
|
|
Adjustments (Net of
Tax)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joliet Facility Fire
Operating Loss
|
|
-
|
-
|
|
495
|
0.02
|
Joliet Facility
Fire-Business Interruption Insurance Proceeds
|
|
(1,505)
|
(0.06)
|
|
-
|
-
|
|
|
|
|
|
|
|
Law Suit
Settlement
|
|
-
|
-
|
|
(2,611)
|
(0.10)
|
|
|
|
|
|
|
|
Acquisition Related
Expense
|
|
-
|
-
|
|
1,981
|
0.07
|
|
|
|
|
|
|
|
Adjusted Earnings and
Adjusted Earnings Per Share
|
|
$13,420
|
$0.52
|
|
$14,322
|
$0.56
|
SOURCE AZZ incorporated