AZZ (NYSE:AZZ)
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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/