AZZ incorporated Reports Results for the Third Quarter of Fiscal 2004
January 08 2004 - 7:00AM
PR Newswire (US)
AZZ incorporated Reports Results for the Third Quarter of Fiscal
2004 FORT WORTH, Texas, Jan. 8 /PRNewswire-FirstCall/ -- AZZ
incorporated , 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, 2003.
Revenues for the third quarter were $33.3 million, compared to
$45.1 million for the comparable period last year. Net income for
the third quarter was $1.2 million, or $0.21 per diluted share,
compared to net income of $2.0 million, or $0.37 per diluted share,
in last year's fiscal third quarter. Backlog at the end of the
third quarter was $52.5 million, compared to $48.5 million at the
end of the second quarter and $49.1 million at end of the prior
fiscal year. Incoming orders for the third quarter totaled $37.3
million for a book to ship ratio of 112 percent for the quarter.
Outstanding bank debt at the end of the quarter was $30.8 million,
a decrease of $13.8 million from the year ended February 28, 2003,
and a decrease of $19.3 million compared to the same period of
fiscal 2003. AZZ's long-term debt to equity ratio of .37 to 1 at
the end of the third quarter compares favorably to .64 to l for the
same period last year. For the nine-month period, the Company
reported revenues of $103.7 million, compared to $143.6 million for
the comparable period last year. Net income for the nine months was
$3.0 million, or $0.57 per diluted share, compared to $7.2 million,
or $1.36 per diluted share for the comparable nine- month period
last year. Incoming orders for the nine-month period ended November
30, 2003 were $107.1 million for a year to date book to ship ratio
of 103 percent. Revenues for the Electrical and Industrial Products
Segment were $21.1 million, compared to $33.2 million in the
previous year's third quarter. Operating income for this segment
was $1.6 million, compared to $3.4 million in the third quarter of
last year. For the nine month period ended November 2003, revenues
were $67.4 million and operating income was $4.6 million compared
to $106.5 million and $12.1 million, respectively, for the first
nine months of the prior year. David H. Dingus, president and chief
executive officer of AZZ incorporated commented, "Consistent with
what we reported at the end of the second quarter, we believe that
recent market indicators suggest that our markets have stabilized.
Our book to ship ratio exceeded 100 percent during the last two
quarters. Prior to the two most recent quarters, our last time to
achieve a book to ship ratio in excess of 100 percent was in August
2001. Our markets continue to be extremely competitive, as the
capacity expansion that occurred during the strong power generation
market has resulted in much more capacity than can be absorbed by
the current markets. We will continue our emphasis on our
improvement projects to help mitigate some of the pricing pressures
that we are under. We continue to see softness in some of our
domestic industrial markets as well as deferred spending in the
transmission grid. Additionally, AZZ is putting increased emphasis
on our need to increase our international market share. With the
reductions that we have made in our cost structure to better match
our volume levels, and the improvement in our operating efficiency,
we believe we are well positioned to benefit from any recovery we
may see in our markets." Revenues for the Company's Galvanizing
Service Segment were $12.2 million for the third quarter, compared
to $11.9 million in the previous year's comparable quarter.
Operating income for the segment was $2.3 million compared to $2.0
million in the same quarter last year. For the first nine months of
fiscal 2004, revenues were $36.3 million, and operating income was
$6.3 million compared to $37.1 and $7.0 million, respectively, for
the first nine months of the prior year. Mr. Dingus continued, "We
are pleased that our revenues and operating income for the third
quarter for this segment were improved over the comparable period
of a year ago. While the revenue increases have been modest, the
operating income for the quarter grew by 12%. The higher revenues,
combined with a lower cost structure, which consisted of favorable
zinc pricing and improvement in productivity, were the main
contributors of this improvement. For the nine-month period, our
operating income reflects a decrease due primarily to a 34%
increase in our natural gas cost. Competitive conditions have
inhibited our ability to pass these increases on. While there is
still uncertainty in our markets, a continuation of the favorable
industrial economic indicators should provide additional volume and
operating income opportunities for this segment." Mr. Dingus
concluded, "Earnings per share has improved on a quarter over
quarter basis for the past two quarters at a rate higher than we
had anticipated in our previously issued guidance. Taking these
factors into consideration, we are revising our guidance upward for
fiscal 2004. The revised guidance is for earnings per diluted share
to be within the range of $0.72 to $0.78, and revenues to be within
the range of $135 to $140 million." AZZ incorporated will conduct a
conference call to discuss financial results for the third quarter
of fiscal 2004 at 4:15 P.M. Eastern on January 8, 2004. Interested
parties can access the call at (913) 981-5507. 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 (719)
457-0820, confirmation #792876, or for 30 days at
http://www.azz.com/AZZinvest.htm . 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. 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 costs, 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 requested 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 amount) Three Months Ended Nine Months
Ended Nov. 30, 2003 Nov. 30, 2002 Nov. 30, 2003 Nov. 30, 2002
(unaudited) (unaudited) (unaudited) (unaudited) Net sales $33,338
$45,117 $103,696 $143,573 Income before taxes $1,865 $3,155 $4,896
$11,538 Net income $1,156 $1,964 $3,035 $7,196 Net income per share
Basic $0.21 $0.37 $0.57 $1.36 Diluted $0.21 $0.37 $0.57 $1.36
Diluted average shares outstanding 5,441 5,296 5,371 5,302
Condensed Consolidated Balance Sheet (in thousands) Nov. 30, 2003
Feb. 28, 2003 (unaudited) (unaudited) Assets: Current assets
$43,620 $55,056 Net property, plant and equipment $33,845 $36,612
Other assets, net $42,231 $42,369 Total assets $119,696 $134,037
Liabilities and shareholders' equity: Current liabilities $25,491
$31,346 Long term debt due after one year $25,250 $37,875 Other
liabilities $1,407 $1,407 Shareholders' equity $67,548 $63,409
Total liabilities and shareholders' equity $119,696 $134,037
Condensed Consolidated Statement of Cash Flow (in thousands) Nine
Months Ended Nine Months Ended Nov. 30, 2003 Nov. 30, 2002
(unaudited) (unaudited) Net cash provided by (used in) operating
activities $13,024 $16,272 Net cash provided by (used in) investing
activities ($1,268) ($3,166) Net cash provided by (used in)
financing activities ($12,956) ($13,205) Net increase (decrease) in
cash and cash equivalents ($1,200) $(99) Cash and cash equivalents
at beginning of year $1,984 $1,738 Cash and cash equivalents at end
of quarter $784 $1,639 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, or Media, Kristen Klein, all of RCG Capital Markets
Group, Inc., +1-480-675-0400, for AZZ incorporated Web site:
http://www.rcgonline.com/ http://www.azz.com/AZZinvest.htm
http://www.azz.com/
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