FORT WORTH, Texas, April 1 /PRNewswire-FirstCall/ -- AZZ
incorporated (NYSE: AZZ), a manufacturer of electrical products and
a provider of galvanizing services, today announced unaudited
financial results for the three and twelve-month periods ended
February 28, 2010. Revenues for the
fourth quarter were $84.9 million,
compared to $100.3 million, a
decrease of 15 percent from the comparable period last year. Net
income was $8 million, or
$0.64 per diluted share, compared to
net income of $10 million or
$0.81 per diluted share, in last
year's fiscal fourth quarter.
Backlog at the end of the fourth quarter was $109.9 million, compared to $131.8 million at the end of the previous quarter
and $174.8 million for the fourth
quarter of last year. Incoming orders for the fourth quarter
totaled $62.9 million while shipments
for the quarter totaled $84.9
million, resulting in a book to ship ratio of 74 percent for
the quarter. Based upon current customer requested delivery
dates and our planned production schedule, 87 percent of our
backlog is expected to ship in fiscal 2011. Of our
$109.9 million backlog, 47 percent is
to be delivered outside of the U.S.
For the 2010 fiscal year, revenues decreased 13 percent to
$357 million, compared to
$412.4 million for the prior year.
Net income for the year was $37.7
million, or $3.02 per diluted
share, compared to $42.2 million, or
$3.43 per diluted share for the
comparable twelve-month period last year. Incoming orders for the
twelve-month period were $292.1
million, while fiscal year revenues totaled $357 million, resulting in a book to ship ratio
of 82 percent.
Revenues for the Electrical and Industrial Products Segment were
$48.9 million for the fourth quarter,
compared to $59.9 million in the
previous year's fourth quarter, a decrease of 18 percent. Operating
income for this segment was $9.1
million, compared to $10.8
million in the fourth quarter of last year. Operating income
margins for the fourth quarter of 19 percent compare favorably to
the margins of 18 percent in the prior year. For the fiscal
year ended February 28, 2010 revenues
decreased 10 percent to $203.5
million and operating income was $40.8 million, compared to the $225.8 million and $39
million, respectively, in the prior fiscal year.
Operating income margins for the fiscal year improved to 20
percent from the margins of 17 percent in the prior fiscal year.
David H. Dingus, president and
chief executive officer, commented, "Our fourth quarter incoming
orders reflected a continuation of lower release of orders due to
economic and regulatory uncertainty. Additionally our fourth
quarter historically has been a weaker quarter for incoming orders.
While our quotation level continued at a pace that would
historically result in a greater backlog, the release of orders for
new and existing projects remained sluggish. Based upon this
quotation level and discussion with our customers, we do believe
that the backlog has leveled and that we should begin to see some
modest improvements in the new fiscal year. We still believe
that the prospects are somewhat healthier in the second half of our
fiscal year. Operationally we continued to effectively
execute on our orders. This is reflected in the strong
margins for the fourth quarter and the fiscal year just completed.
As we go forward, we continue to monitor closely our market
opportunities and our operating structure due to the changing and
challenging market conditions. Our challenge is to continue
to succeed in our efforts to expand our served markets and increase
our product offerings, while maintaining our strong operating
performance and management of our cost/price ratios consistent with
our historical practices. As we have done in prior cycles, we
believe this is an opportune time to add new products and services,
whether through internal development or acquisition.
Additionally it is an excellent opportunity to further
strengthen our organization and fine tune our operating procedures
in order for us to be extremely well poised to capitalize on the
improving long term demand for our products."
Revenues for the Company's Galvanizing Service Segment were
$36 million for the fourth quarter,
compared to $40.4 million in the
previous year's comparable quarter, a decrease of 11 percent.
Operating income was $9.2 million in
the fourth quarter as compared to $11.2
million in the same quarter last year. Operating
income margins for the fourth quarter were 26 percent versus 28
percent in same period last year. For the fiscal year,
revenues decreased 18 percent to $153.6
million and operating income was $44.8 million, compared to $186.6 million and $53.2
million, respectively, for the prior fiscal year.
Operating margins were 29 percent for fiscal 2010 unchanged
from the 29 percent in the prior fiscal year.
Mr. Dingus continued, "Shipments for the fiscal year decreased
11 percent and pricing was down 7 percent, again a reflection of
economic conditions. Demand for galvanizing services in the
fourth quarter varied across our served markets and in addition to
the economic downturn, we were adversely impacted by severe weather
conditions in many of our locations during the fourth quarter.
These weather conditions impacted us and our customers thus
lowering overall demand. Despite the market volatility
margins were extremely strong for both the fourth quarter and
fiscal year. As we look forward we believe that our markets
will reflect modest improvement in our new fiscal year. This
market improvement combined with the benefits from the territory
and customer expansion brought about by the proposed acquisition of
North American Galvanizing, will enhance AZZ's position as the
market leader in this dynamic market. The combined
organizations galvanize in excess of 1 billion pounds of steel in
the first full year of operation. The effective execution of
our business strategies, assimilation of acquisitions, capitalizing
on our market opportunities, and strong margin performance has very
positively contributed to our Fiscal 2010 results and should
continue in the future. The strength of our balance sheet
should facilitate the execution of our business strategies for both
segments of the company."
Mr. Dingus concluded, "On January 15,
2010, the company issued projections for Fiscal 2011 that
revenues would be in the range of $310 to
$330 million and that fully diluted earnings per share would
be in the range of $1.85 to $2.20.
Based upon the evaluation of information currently available
to management, our revenue and earnings guidance remains unchanged
from that issued in January. Should we be successful in the
completion of our proposed acquisition of North American
Galvanizing, we will issue and revise our revenue and earnings
guidance which would reflect the number of months of operation in
the new fiscal year, and one time transaction and assimilation
expenses. The acquisition will be funded from AZZ's cash on
hand and its existing credit facility. Incremental revenues
for the first 12 months of consolidation of North American
Galvanizing are expected to be in the range of $65 million to $75 million and we project that it
will be accretive to earnings immediately. Exclusive of transaction
and assimilation costs, we would anticipate that within the first
twelve months of operation the EBIT would be in the range of
$12 million to $15 million. Our
estimates for our existing business and those projections for North
American Galvanizing assume that we will not have any appreciable
change in our current market conditions, significant delays in the
delivery or timing in the receipt of orders of our electrical and
industrial products, and that the pricing and demand for
galvanizing services will not significantly change from our current
outlook in fiscal 2011."
AZZ incorporated will conduct a conference call to discuss
financial results for the fourth quarter and fiscal 2010, and the
acquisition of North American Galvanizing, at 11:00 A.M. Eastern on Monday
April 5, 2010. Interested parties can access the call
at (800) 860-2442 or (412) 858-4600 (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 #439246, or for 30 days
at www.azz.com/AZZinvest.htm.
Additionally, the Company announced that the Board of Directors,
at its regularly scheduled quarterly meeting, declared 25 cents per share cash dividend on common stock
outstanding. The dividend will be paid at the close of
business on April 30, 2010 to
shareholders of record on April 15,
2010.
AZZ incorporated is a specialty electrical equipment
manufacturer serving the global markets of industrial, power
generation, transmission and distribution, as well as a leading
provider of hot dip galvanizing services to the steel fabrication
market nationwide.
Certain statements contained in this press release 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. In addition, certain factors could affect the outcome
of the matters described in this press release. These factors
include, but are not limited to, (1) the occurrence of any event,
change or other circumstances that could give rise to the
termination of the merger agreement between AZZ incorporated and
North American Galvanizing and Coatings, Inc. ("NGA") (the "merger
Agreement"), (2) the outcome of any legal proceedings that may be
instituted against us or others following the announcement of the
Merger Agreement, (3) the inability to complete and part of the
transaction due to the failure to satisfy other conditions, (4)
risks that the proposed transaction disrupts current plans and
operations, and (5) the costs, fees and expenses related to the
transaction. In addition, this release may contain forward-looking
statements that involve risks and uncertainties including, but are
not limited to, changes in customer demand and response to products
and services offered by AZZ or NGA, 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 that AZZ
or NGA serve, foreign and domestic, customer request delays of
shipments, acquisition opportunities, 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 the AZZ's Annual Report on
Form 10-K for the fiscal year ended February
28, 2009 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 of this
press release and AZZ assumes no obligation to update any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
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Contact:
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Dana Perry, Senior Vice President – Finance and
CFO
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AZZ incorporated 817-810-0095
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Internet: www.azz.com
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Lytham Partners 602-889-9700
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Joe Dorame or Robert Blum
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Internet: www.lythampartners.com
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AZZ
incorporated
Condensed Consolidated
Statement of Income
(in thousands except per share
amounts)
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Three Months
Ended
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Twelve Months
Ended
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February 28,
2010
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February 28,
2009
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February 28,
2010
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February 28,
2009
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(unaudited)
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(unaudited)
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(unaudited)
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(unaudited)
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Net sales
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$84,863
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$100,286
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$357,030
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$412,364
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Costs and Expenses:
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Cost of Sales
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61,232
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72,167
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247,384
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299,012
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Selling, General
and Administrative
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9,665
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10,676
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43,417
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43,221
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Interest
Expense
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1,692
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1,686
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6,838
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6,170
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Net (Gain) Loss on
Sales or Insurance Settlement of Property, Plant and
Equipment
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25
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(361)
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(93)
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(1,509)
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Other
(Income)
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(435)
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(74)
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(899)
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(1,440)
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$72,179
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$84,094
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$296,647
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$345,454
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Income before income taxes
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$12,684
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$16,192
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$60,383
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$66,910
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Income Tax Expense
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4,718
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6,225
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22,655
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24,704
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Net income
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$7,966
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$9,967
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$37,728
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$42,206
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Net income per share
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Basic
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$.64
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$.82
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$3.07
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$3.48
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Diluted
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$.64
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$.81
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$3.02
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$3.43
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Diluted Average Shares
Outstanding
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12,497
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12,279
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12,476
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12,302
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Segment
Reporting
(in
thousands)
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Three Months
Ended
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Twelve Months
Ended
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February 28,
2010
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February 28,
2009
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February 28,
2010
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February 28,
2009
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(unaudited)
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(unaudited)
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(unaudited)
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(unaudited)
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Net
Sales:
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Electrical
and Industrial Products
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$48,881
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$59,872
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$203,457
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$225,797
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Galvanizing
Services
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35,982
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40,414
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153,573
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186,567
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$84,863
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$100,286
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$357,030
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$412,364
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Segment Operating
Income (a):
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Electrical
and Industrial Products
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$9,088
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$10,811
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$40,803
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$38,952
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Galvanizing
Services
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9,209
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11,223
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44,843
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53,183
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Total
Segment Operating Income
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$18,297
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$22,034
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$85,646
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$92,135
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Condensed
Consolidated Balance Sheets
(in
thousands)
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February 28,
2010
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February 28,
2009
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(unaudited)
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(unaudited)
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Assets:
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Current
assets
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$207,453
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$182,023
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Net property,
plant and equipment
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87,364
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87,667
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Other assets,
net
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87,144
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85,025
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Total
assets
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$381,961
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$354,715
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Liabilities and shareholders’
equity:
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Current
liabilities
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$43,628
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$58,371
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Long term debt due
after one year
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100,000
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100,000
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Other
liabilities
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10,467
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9,232
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Shareholders’
equity
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$227,866
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$187,112
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Total liabilities and shareholders’
equity
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$381,961
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$354,715
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Condensed
Consolidated Statements of Cash Flows
(in
thousands)
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Twelve Months
Ended
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February 28,
2010
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February 28,
2009
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(unaudited)
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(unaudited)
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Net cash provided by (used in)
operating activities
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$
82,630
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$
60,196
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Net cash provided by (used in)
investing activities
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($18,513)
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($112,811)
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Net cash provided by (used in)
financing activities
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($1,014)
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$98,104
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Effect of exchange rate changes on
cash
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($54)
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($158)
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Net increase in cash and cash
equivalents
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$63,049
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$
45,331
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Cash and cash equivalents at beginning
of period
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$47,558
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$
2,227
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Cash and cash equivalents at end of
period
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$110,607
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$
47,558
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SOURCE AZZ incorporated