AZZ (NYSE:AZZ)
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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/