AZZ incorporated Reports Results for the First Quarter of Fiscal-Year 2005
June 24 2004 - 7:00AM
PR Newswire (US)
AZZ incorporated Reports Results for the First Quarter of
Fiscal-Year 2005 For the First Quarter - Revenues Increase 9%: Net
Income Up 41%; Earnings per Share Increase 35% FORT WORTH, Texas,
June 24 /PRNewswire-FirstCall/ -- AZZ incorporated (NYSE:AZZ), a
manufacturer of electrical products and a provider of galvanizing
services, today announced unaudited financial results for the first
quarter ended May 31, 2004. Revenues for the first quarter
increased 9 percent to $39.7 million compared to $36.3 million for
the same quarter last year. Net income for the quarter increased to
$1.2 million, or $0.23 per diluted share, compared to net income of
$0.9 million, or $0.17 per diluted share, in last year's fiscal
first quarter, an increase of 41 and 35 percent respectively.
Backlog at the end of the first quarter was $51.9 million versus
$45.7 million at May 31, 2003. Backlog at February 29, 2004
year-end was $53.1 million. The Company's incoming orders totaled
$38.5 million for a book to ship ratio of 97 percent. Incoming
orders increased 17 percent over the same period of a year ago, and
compare favorably to incoming orders in the fourth quarter of
fiscal 2004, reflecting a 16 percent increase. Funded debt at the
end of the quarter was $30.0 million, down 25 percent from the same
period last year. AZZ's long-term debt to equity ratio of .35 to 1
compares favorably to the .54 to 1 for the same period last year.
David H. Dingus, president and chief executive officer of AZZ
incorporated, commented, "The continued emphasis on maximizing
operating results in difficult market conditions is reflected in
our first quarter results. The improved profitability does reflect
the favorable leverage that can be achieved from modest increases
in our revenues. The first quarter results were adversely impacted
by the significant rapid increases in the price of steel, aluminum
and copper, which we were unable to fully offset with price
increases. While we have not seen significant increases in market
opportunities, we still believe our markets have stabilized and are
positioned for recovery and improvement. Operating efficiency
improvement, expansion of served markets, particularly
international markets, continues to be the focus and emphasis of
our activities. Despite a double-digit increase in incoming orders,
when compared to the previous year, our book to ship ratio did drop
below the 100 percent level to 97 percent. The first quarter of the
last fiscal year was our lowest book to ship ratio, and we would
hope that we will see the same bookings strength in the subsequent
quarters that we achieved in our last fiscal year." Revenues for
the Electrical and Industrial Products Segment, increased by 14
percent during the first quarter to $27.6 million compared to $24.2
million in the previous year. Operating income for the segment
increased 24 percent to $2.3 million. The increase was due to
improved shipments to the power transmission and distribution
markets and a modest increase in shipments to the industrial
markets. Power generation and industrial automation remained at a
low level. Revenue for the Company's Galvanizing Service Segment
for the first quarter was $12.1 million, unchanged from the same
period last year. Operating income improved 17 percent to $2.3
million. While pounds produced were lower than the pervious year,
favorable mix, cost containment, operational efficiency
improvements, and some easing of pricing pressures led to improved
operating results. Mr. Dingus continued, "The galvanizing services
segment turned in another excellent earnings quarter, again
reflective of managing to optimum results in difficult market
conditions. We will continue to intensely focus on seeking out
additional market opportunities, improving operating efficiencies,
and cost containment and reduction efforts. Any improvement in the
industrial markets served by our electrical products and
galvanizing services should have a favorable impact on our results,
due primarily to the significant cost reductions that we have put
in place and the leverage opportunities we have gained. Based upon
the evaluation of information currently available to management, we
are continuing to estimate FY2005 earnings to be within the range
of $0.75 to $0.85 per diluted share and revenues to be within the
range of $140 to $150 million, which includes the projected cost of
$650,000 in fiscal 2005 associated with the implementation cost of
our ERP system. Approximately $100,000 of this expense was incurred
in the first quarter." AZZ incorporated will conduct a conference
call to discuss financial results for the first quarter of fiscal
year 2005 at 4:15 P.M. ET on Thursday, June 24, 2004. Interested
parties can access the conference call by dialing (877) 356-5706.
The call will be web cast via the Internet at
http://www.azz.com/AZZinvest.htm. A replay of the call will be
available for three days at (800) 642-1687, confirmation #8046247,
or for 30 days at http://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 steel fabrication market
nationwide. Except for the statements of historical fact, this
release may contain forward-looking statements that involve risks
and uncertainties some of which are detailed from time to time in
documents filed by the Company with the SEC. Those risks and
uncertainties include, but are not limited to: changes in customer
demand and response to products and services offered by the
Company, including demand by the electrical 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 the Company serves, foreign and domestic,
customer request delays of shipments, acquisition opportunities,
adequacy of financing, and availability of experienced management
employees to implement the Company's growth strategy. The Company
can give no assurance that such forward-looking statements will
prove to be correct. AZZ incorporated Condensed Consolidated
Statement of Income (in thousands except per share amounts) Three
Months Ended May 31, 2004 May 31, 2003 (unaudited) (unaudited) Net
sales $39,693 $36,348 Income before income taxes $1,977 $1,424 Net
income $1,245 $883 Net income per share Basic $0.23 $0.17 Diluted
$0.23 $0.17 Diluted average shares outstanding 5,505 5,307
Condensed Consolidated Balance Sheet (in thousands) May 31, 2004
February 29, 2004 (unaudited) (audited) Assets: Current assets
$44,872 $43,713 Net property, plant and equipment $34,834 $34,201
Other assets, net $42,025 $42,112 Total assets $121,731 $120,026
Liabilities and shareholders' equity: Current liabilities $24,497
$23,504 Long term debt due after one year $24,500 $25,375 Other
liabilities $1,939 $1,850 Shareholders' equity $70,795 $69,297
Total liabilities and shareholders' equity $121,731 $120,026
Condensed Consolidated Statement of Cash Flows (in thousands) Three
Months Ended May 31, 2004 May 31, 2003 (unaudited) (unaudited) Net
cash provided by (used in) operating activities $2,540 $3,815 Net
cash provided by (used in) investing activities ($2,019) ($441) Net
cash provided by (used in) financing activities ($737) ($4,410) Net
increase (decrease) in cash and cash equivalents ($216) ($1,036)
Cash and cash equivalents at beginning of year $1,445 $1,984 Cash
and cash equivalents at end of quarter $1,229 $948 DATASOURCE: AZZ
incorporated CONTACT: Dana Perry, Vice President - Finance and CFO
of AZZ incorporated, +1-817-810-0095; or Retail, Robert Blum, or
Institutional/Analysts, Joe Dorame, both of RCG Capital Markets
Group, Inc., +1-480-675-0400, AZZ incorporated Web site:
http://www.azz.com/AZZinvest.htm Web site: http://www.azz.com/
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