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Share Name | Share Symbol | Market | Type |
---|---|---|---|
AZZ Inc | NYSE:AZZ | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.93 | -1.21% | 75.73 | 76.28 | 75.30 | 76.26 | 147,323 | 01:00:00 |
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Texas
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75-0948250
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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One Museum Place, Suite 500
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3100 West 7th Street
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Fort Worth
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,
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Texas
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76107
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock
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AZZ
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller Reporting company
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☐
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Emerging growth company
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☐
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Name
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Age
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Business Experience of Executive Officers for Past Five Years
Position or Office with Registrant or Prior Employer
|
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Held Since
|
|
Thomas E. Ferguson
|
|
63
|
|
|
President and Chief Executive Officer
Chief Executive Officer, FlexSteel Pipeline Technologies, Inc.
President, Flow Solutions Group, Flowserve Corporation
President, Pump Division, Flowserve Corporation
|
|
2013
2013-2013
2009-2012
2003-2009
|
Paul W. Fehlman
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56
|
|
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Senior Vice President of Finance, Chief Financial Officer
Vice President, Finance, Engineered Products Division, Flowserve Corp.
Vice President, Investor Relations and FP&A, Flowserve Corporation
Vice President, Treasurer, Flowserve Corporation
|
|
2014
2011-2013
2009-2011
2004-2009
|
Tara D. Mackey
|
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50
|
|
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Chief Legal Officer and Secretary
Chief Legal Counsel and Corporate Secretary, First Parts, Inc. General Counsel and Corporate Secretary, Silverleaf Resorts Inc. VP, Assistant General Counsel and Corporate Secretary, SuperMedia LLC |
|
2014
2013-2014 2011-2013 2008-2011 |
Matt Emery
|
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53
|
|
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Chief Information and Human Resource Officer
Senior Director of Information Technologies, Hewlett-Packard
|
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2013 2004-2013
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Philip Schlom
|
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55
|
|
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Vice President and Chief Accounting Officer
Vice President - Finance, Audit, Controls and Continuous Improvement, Exterran Corporation
Vice President, Global Compliance and Internal Audit, Parker Drilling Company
Vice President - Finance, Parker Drilling Company
Chief Accounting Officer, Parker Drilling Company
|
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2019
2017-2019
2014-2017
2013-2014
2009-2013
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Chris Bacius
|
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59
|
|
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Vice President, Corporate Development
Vice President Mergers & Acquisition, Flowserve Corporation
Vice President Business Development, Flowserve Corporation
|
|
2014
2012-2014
2009-2012
|
Michael Doucet
|
|
47
|
|
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Senior Vice President - Surface Technologies & Galvabar
Vice President and General Manager - Galvabar
President & Chief Operating Officer - L&M Steel Co., Inc.
Director of Sales, Central Region Mills & Rebar Fabrication - Commercial Metal Company
Vice President & General Manager, PC Wholesale
|
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2018
2017-2018
2013-2018
2002-2013
1998-2001
|
Gary Hill
|
|
55
|
|
|
President and General Manager - AZZ Industrial Group
Vice President and General Manager - AZZ WSI LLC
Managing Director, Aquilex WSI-Europe
Vice President, Marketing, Aquilex
Vice President and General Manager - Crane Co.
|
|
2017
2013-2017
2011-2013
2008-2011
2004-2008
|
Ken Lavelle
|
|
63
|
|
|
President and General Manager - Electrical Platform
President, Lavelle Management Consultant
President, Global Seals & Systems Operation - Flowserve Corporation
Vice President, General Manager, FSG North America - Flowserve Corporation
|
|
2017
2016-2017
2012-2016
2009-2012
|
Bryan Stovall
|
|
55
|
|
|
President - AZZ Galvanizing Solutions
Senior Vice President - Metal Coatings
Vice President, Galvanizing - Central Operations
Vice President, Galvanizing - Southern Operations
|
|
2019
2018-2019
2013-2018
2009-2012
|
•
|
the timing and volume of work under new or existing agreements;
|
•
|
general economic conditions;
|
•
|
fluctuations in the budgetary spending of customers, including seasonality;
|
•
|
variations in the margins of projects performed during any particular quarter;
|
•
|
losses experienced in our operations not otherwise covered by insurance;
|
•
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delays of raw materials or component suppliers;
|
•
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a change in the demand or production of our products and our services caused by severe weather conditions;
|
•
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a change in the mix of our customers, contracts and business;
|
•
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changes in customer delivery schedules;
|
•
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unstable political economic conditions and public health issues delaying customer operations;
|
•
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increases in design, manufacturing or transportation costs; and
|
•
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the ability of customers to pay their invoices when owed to us.
|
•
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attract new customers, internationally and domestically;
|
•
|
integrate regulatory changes;
|
•
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increase the number or size of projects performed for existing customers;
|
•
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hire and retain employees; and
|
•
|
increase volume utilizing our existing facilities.
|
•
|
risks and liabilities from our acquisitions that may not be discovered during the preacquisition due diligence process;
|
•
|
difficulties in the post acquisition integration of operations and systems;
|
•
|
the termination of relationships with key personnel and customers of the acquired company;
|
•
|
the potential failure to add additional employees to manage the increased volume of business;
|
•
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additional post acquisition challenges and complexities in areas such as tax planning, treasury management, financial reporting and legal compliance;
|
•
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a disruption of our ongoing business or an inability of our ongoing business to receive sufficient management attention; and
|
•
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a failure to realize the cost savings or other financial benefits we anticipated or modeled prior to acquisition.
|
•
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political and economic instability in the countries we conduct business;
|
•
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social unrest, acts of war and terrorism, natural disasters, and global outbreaks of contagious diseases;
|
•
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inflation;
|
•
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currency fluctuation, devaluations and conversion restrictions;
|
•
|
governmental activities that limit or disrupt markets, restrict payments or limit the movement of funds;
|
•
|
trade restrictions, tariffs and economic embargoes by the United States or other countries; and
|
•
|
travel restrictions placed upon personnel, limiting travel to install equipment or perform services for our customers
|
|
|
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Square Footage
|
||||||||
Segment
|
|
Location
|
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Facilities
|
|
Total
|
|
Owned
|
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Leased
|
||||
Metal Coatings
|
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United States
|
|
45
|
|
|
2,621,188
|
|
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2,223,463
|
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397,725
|
|
|
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Canada
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3
|
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175,102
|
|
|
175,102
|
|
|
—
|
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Energy
|
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United States
|
|
14
|
|
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1,112,586
|
|
|
260,381
|
|
|
852,205
|
|
|
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Canada
|
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1
|
|
|
21,297
|
|
|
—
|
|
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21,297
|
|
|
|
Europe
|
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2
|
|
|
84,674
|
|
|
—
|
|
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84,674
|
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Total
|
|
|
|
65
|
|
|
4,014,847
|
|
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2,658,946
|
|
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1,355,901
|
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Period
|
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Total Number of Shares Purchased
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Average Price Paid per Share
|
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Total Number of Shares Purchased as Part of Publicly Announced Plan
|
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Maximum Number of Shares that May Yet Be Purchased Under the Plan or Programs
|
|||||
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|
|||||
December 1 - 31
|
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—
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—
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|
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—
|
|
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1,052,800
|
|
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January 1 - 31
|
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130,800
|
|
|
$
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43.34
|
|
|
130,800
|
|
|
922,000
|
|
February 1 - 29
|
|
—
|
|
|
—
|
|
|
—
|
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|
922,000
|
|
|
Total
|
|
130,800
|
|
|
$
|
43.34
|
|
|
130,800
|
|
|
922,000
|
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Symbol
|
|
CRSP Total Returns Index for:
|
|
2/15
|
|
2/16
|
|
2/17
|
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2/18
|
|
2/19
|
|
2/20
|
||||||
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AZZ Inc.
|
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100.00
|
|
|
112.53
|
|
|
132.14
|
|
|
93.32
|
|
|
106.66
|
|
|
86.86
|
|
|
|
Index for NYSE Stock Market (US Companies)
|
|
100.00
|
|
|
90.20
|
|
|
113.59
|
|
|
126.91
|
|
|
133.40
|
|
|
135.14
|
|
|
|
Index for NYSE Stocks (SIC 5000-5099 US
|
|
100.00
|
|
|
96.77
|
|
|
124.24
|
|
|
140.12
|
|
|
132.77
|
|
|
129.24
|
|
|
|
Companies) Wholesale Trade - Durable Goods
|
|
|
|
|
|
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|
|
|
|
|
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A.
|
The lines represent monthly index levels derived from compounded daily returns that include all dividends.
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B.
|
The indexes are reweighted daily, using the market capitalization on the previous trading day.
|
C.
|
If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.
|
D.
|
The index level for all series was set to $100 on February 28, 2015.
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|
|
Fiscal Year
|
||||||||||||||||||
|
|
2020 (a)
|
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2019 (b)
|
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2018 (c)
|
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2017 (d)
|
|
2016 (e)
|
||||||||||
|
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(In thousands, except per share amounts)
|
||||||||||||||||||
Summary of operations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
1,061,817
|
|
|
$
|
927,087
|
|
|
$
|
810,430
|
|
|
$
|
863,538
|
|
|
$
|
889,400
|
|
Net income
|
|
48,234
|
|
|
51,208
|
|
|
45,169
|
|
|
61,264
|
|
|
75,544
|
|
|||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per common share
|
|
1.84
|
|
|
1.97
|
|
|
1.74
|
|
|
2.36
|
|
|
2.93
|
|
|||||
Diluted earnings per common share
|
|
1.84
|
|
|
1.96
|
|
|
1.73
|
|
|
2.35
|
|
|
2.91
|
|
|||||
Total assets
|
|
1,073,831
|
|
|
1,088,570
|
|
|
1,028,209
|
|
|
978,354
|
|
|
988,201
|
|
|||||
Total debt
|
|
203,000
|
|
|
241,000
|
|
|
301,286
|
|
|
272,290
|
|
|
326,982
|
|
|||||
Total liabilities
|
|
439,465
|
|
|
484,842
|
|
|
463,006
|
|
|
445,218
|
|
|
503,831
|
|
|||||
Shareholders’ equity
|
|
634,366
|
|
|
603,728
|
|
|
565,203
|
|
|
533,136
|
|
|
484,370
|
|
|||||
Working capital
|
|
73,949
|
|
|
213,774
|
|
|
197,415
|
|
|
160,282
|
|
|
165,976
|
|
|||||
Cash provided by operating activities
|
|
144,759
|
|
|
111,476
|
|
|
76,810
|
|
|
111,176
|
|
|
143,589
|
|
|||||
Capital expenditures
|
|
35,044
|
|
|
25,616
|
|
|
29,612
|
|
|
41,434
|
|
|
39,861
|
|
|||||
Depreciation & amortization
|
|
50,194
|
|
|
50,245
|
|
|
50,526
|
|
|
50,357
|
|
|
47,417
|
|
|||||
Cash dividend per common share
|
|
0.68
|
|
|
0.68
|
|
|
0.68
|
|
|
0.64
|
|
|
0.60
|
|
|||||
Weighted average shares outstanding - basic
|
|
26,191
|
|
|
26,038
|
|
|
25,970
|
|
|
25,965
|
|
|
25,800
|
|
|||||
Weighted average shares outstanding - diluted
|
|
26,281
|
|
|
26,107
|
|
|
26,036
|
|
|
26,097
|
|
|
25,937
|
|
(a)
|
Includes the acquisitions of K2 Partners, Inc. and Tennessee Galvanizing, Inc. in April 2019, NuZinc, LLC in August 2019, and Preferred Industries, Ltd. in September 2019. In addition, fiscal year 2020 includes a loss on disposal of business of $18.6 million and impairment charges of $9.2 million.
|
(b)
|
Includes the acquisition of Lectrus Corporation in March 2018. Also includes the adoption of ASU 2016-02, Leases (Topic 842) and ASU 2014-09, Revenue from Contracts with Customers (Topic 606) on March 1, 2018.
|
(c)
|
Includes the acquisitions of Enhanced Powder Coating, Ltd. in June 2017, Powergrid Solutions, Inc. in September 2017, and Rogers Brothers Company in February 2018. In addition, fiscal year 2018 includes impairment charges of $10.8 million.
|
(d)
|
Includes the acquisition of Power Electronics, Inc. in March 2016.
|
(e)
|
Includes the acquisitions of US Galvanizing, LLC in June 2015 and Alpha Galvanizing Inc. in February 2016.
|
|
|
Period Ended
|
|
Amount
|
|
Period Ended
|
|
Amount
|
||||
Backlog
|
|
2/28/2019
|
|
$
|
332,894
|
|
|
2/28/2018
|
|
$
|
265,417
|
|
Net bookings
|
|
|
|
972,722
|
|
|
|
|
988,558
|
|
||
Acquired backlog
|
|
|
|
—
|
|
|
|
|
6,006
|
|
||
Revenues recognized
|
|
|
|
(1,061,817
|
)
|
|
|
|
(927,087
|
)
|
||
Backlog
|
|
2/29/2020
|
|
$
|
243,799
|
|
|
2/28/2019
|
|
$
|
332,894
|
|
Book to revenue ratio
|
|
|
|
0.92
|
|
|
|
|
1.07
|
|
|
|
Year Ended
|
||||||
|
|
February 29, 2020
|
|
February 28, 2019
|
||||
Net sales:
|
|
|
|
|
||||
Metal Coatings
|
|
$
|
498,989
|
|
|
$
|
440,264
|
|
Energy
|
|
562,828
|
|
|
486,823
|
|
||
Total net sales
|
|
$
|
1,061,817
|
|
|
$
|
927,087
|
|
|
|
Year Ended
|
||||||
|
|
February 29, 2020
|
|
February 28, 2019
|
||||
Operating income (loss):
|
|
|
|
|
||||
Metal Coatings
|
|
$
|
107,926
|
|
|
$
|
83,591
|
|
Energy
|
|
32,845
|
|
|
31,332
|
|
||
Corporate
|
|
(42,796
|
)
|
|
(37,967
|
)
|
||
Loss on disposal of business
|
|
(18,632
|
)
|
|
—
|
|
||
Total operating income
|
|
$
|
79,343
|
|
|
$
|
76,956
|
|
|
|
Twelve Months Ended
|
||||||
|
|
February 29, 2020
|
|
February 28, 2019
|
||||
Net cash provided by operating activities
|
|
$
|
144,759
|
|
|
$
|
111,476
|
|
Net cash used in investing activities
|
|
(71,748
|
)
|
|
(32,073
|
)
|
||
Net cash used in financing activities
|
|
(59,739
|
)
|
|
(74,812
|
)
|
|
|
Operating Leases
|
|
Purchase Commitments (1)
|
|
Debt |
|
Interest (2)
|
|
Total
|
||||||||||
Fiscal year:
|
|
|
||||||||||||||||||
2021
|
|
$
|
8,311
|
|
|
$
|
43,200
|
|
|
$
|
125,000
|
|
|
$
|
10,035
|
|
|
$
|
186,546
|
|
2022
|
|
7,990
|
|
|
—
|
|
|
—
|
|
|
3,260
|
|
|
11,250
|
|
|||||
2023
|
|
7,505
|
|
|
—
|
|
|
78,000
|
|
|
421
|
|
|
85,926
|
|
|||||
2024
|
|
6,687
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,687
|
|
|||||
2025
|
|
5,755
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,755
|
|
|||||
Thereafter
|
|
17,494
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,494
|
|
|||||
Total
|
|
$
|
53,742
|
|
|
$
|
43,200
|
|
|
$
|
203,000
|
|
|
$
|
13,716
|
|
|
$
|
313,658
|
|
|
|
Page
|
1.
|
Consolidated Financial Statements
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
2.
|
Consolidated Financial Statement Schedule
|
|
|
|
|
|
•
|
We tested the effectiveness of internal controls over management’s review of customer contracts and change orders, to determine whether revenue should be recognized at a point in time or over time as work progresses.
|
•
|
We tested the effectiveness of internal controls over management’s estimation of the amount of revenue to recognize for customer contracts where revenue is recognized over time as work progresses.
|
•
|
We examined a sample of customer contracts to determine if management’s conclusions with respect to contract terms and revenue recognition appeared appropriate in the circumstances.
|
•
|
We evaluated the accuracy of estimates made by management in prior periods by comparing previous estimates to actual results.
|
•
|
We tested a sample of customer contracts for which management concluded that it was appropriate to recognize revenue over time as work progressed by evaluating key inputs and assumptions which impacted the amount of revenue recognized for each contract tested. The key inputs and assumptions included:
|
◦
|
The accumulation of historical costs incurred for the project,
|
◦
|
Management’s estimate of the total expected costs for the entire project, including costs yet to be incurred to complete the project, and
|
◦
|
Management’s estimate of the total expected gross margin to be realized upon completion of the project.
|
•
|
We tested the effectiveness of internal controls over the accounting for the sale, including controls over the preparation and review of key inputs, data, and assumptions that had material impact on the Company’s fair value measurements used to determine how much goodwill to include in the measurement of the of loss to record upon the sale of NLI.
|
•
|
We tested key inputs, data, and assumptions that had a material impact on the Company’s fair value measurements used to measure the amount of loss to record upon the sale of NLI by examining audit evidence for key inputs, data, and assumptions and comparing such information to historical results, where applicable. We utilized our Firm’s valuation specialists to assist the audit engagement team in evaluating the competency of the Company engaged valuation specialist and to evaluate the appropriateness of the valuation approaches used by management’s valuation specialist.
|
•
|
We recomputed the adjusted carrying value of NLI based on information contained in the Company’s accounting records and the outcome of the goodwill allocation process described above.
|
•
|
We examined supporting evidence for the consideration exchanged in the transaction, which included inspecting applicable bank records.
|
•
|
We read the applicable transaction documents to ensure management’s accounting for the divestiture was consistent with the substance of the transaction.
|
•
|
We tested the effectiveness of internal controls over the accounting for income taxes. Due to the ineffective control environment, as noted above, we increased the nature and extent of our substantive testing.
|
•
|
We utilized our Firm’s income tax specialists to assist the audit engagement team in evaluating the qualifications of the Company’s tax specialists and testing the Company’s income tax provision, including evaluating key areas of judgement related to assessing the realizability of the Company’s deferred tax assets and conclusions regarding uncertain tax positions.
|
•
|
We examined supporting evidence for the book and tax bases of the Company’s assets and liabilities on a sample basis and for the income tax rates applied to the bases differences to measure the Company’s deferred tax assets and liabilities.
|
•
|
We examined supporting evidence for current taxes payable, including inspecting income tax returns and testing the Company’s adjustments recorded upon the filing of those returns, on a sample basis.
|
•
|
We inquired about the status of any recent income tax audits and related findings, if any.
|
•
|
We tested the tax adjustments recorded for the Company’s current period business combinations and divestitures, including the use of our Firm’s valuation specialists when applicable.
|
|
|
Year Ended
|
||||||||||
|
|
February 29, 2020
|
|
February 28, 2019
|
|
February 28, 2018
|
||||||
Net sales
|
|
$
|
1,061,817
|
|
|
$
|
927,087
|
|
|
$
|
810,430
|
|
Cost of sales
|
|
824,589
|
|
|
728,466
|
|
|
650,121
|
|
|||
Gross profit
|
|
237,228
|
|
|
198,621
|
|
|
160,309
|
|
|||
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
|
139,253
|
|
|
121,665
|
|
|
112,061
|
|
|||
Loss on disposal of business
|
|
18,632
|
|
|
—
|
|
|
—
|
|
|||
Operating income
|
|
79,343
|
|
|
76,956
|
|
|
48,248
|
|
|||
|
|
|
|
|
|
|
||||||
Interest expense
|
|
13,463
|
|
|
14,971
|
|
|
13,860
|
|
|||
Other expense (income), net
|
|
990
|
|
|
(1,020
|
)
|
|
3,489
|
|
|||
Income before income taxes
|
|
64,890
|
|
|
63,005
|
|
|
30,899
|
|
|||
Income tax expense (benefit)
|
|
16,656
|
|
|
11,797
|
|
|
(14,270
|
)
|
|||
Net income
|
|
$
|
48,234
|
|
|
$
|
51,208
|
|
|
$
|
45,169
|
|
Earnings per common share
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
$
|
1.84
|
|
|
$
|
1.97
|
|
|
$
|
1.74
|
|
Diluted earnings per share
|
|
$
|
1.84
|
|
|
$
|
1.96
|
|
|
$
|
1.73
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
||||||
Basic
|
|
26,191
|
|
|
26,038
|
|
|
25,970
|
|
|||
Diluted
|
|
26,281
|
|
|
26,107
|
|
|
26,036
|
|
|||
|
|
|
|
|
|
|
||||||
Cash dividends declared per common share
|
|
$
|
0.68
|
|
|
$
|
0.68
|
|
|
$
|
0.68
|
|
|
|
Year Ended
|
||||||||||
|
|
February 29, 2020
|
|
February 28, 2019
|
|
February 28, 2018
|
||||||
Net income
|
|
$
|
48,234
|
|
|
$
|
51,208
|
|
|
$
|
45,169
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Change in foreign currency translation (net of tax of $0, $0 and $0)
|
|
(2,093
|
)
|
|
(3,478
|
)
|
|
3,928
|
|
|||
Interest rate swap (net of tax of $29, $29 and $29)
|
|
(54
|
)
|
|
(54
|
)
|
|
(54
|
)
|
|||
Other comprehensive income (loss)
|
|
(2,147
|
)
|
|
(3,532
|
)
|
|
3,874
|
|
|||
Comprehensive income
|
|
$
|
46,087
|
|
|
$
|
47,676
|
|
|
$
|
49,043
|
|
|
|
February 29, 2020
|
|
February 28, 2019
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
36,687
|
|
|
$
|
24,005
|
|
Accounts receivable, net of allowance for doubtful accounts of $4,951 and $2,267 at February 29, 2020 and February 28, 2019, respectively
|
|
139,214
|
|
|
144,887
|
|
||
Inventories, net
|
|
99,841
|
|
|
124,847
|
|
||
Contract assets
|
|
70,093
|
|
|
75,561
|
|
||
Prepaid expenses and other
|
|
8,727
|
|
|
9,245
|
|
||
Total current assets
|
|
354,562
|
|
|
378,545
|
|
||
Property, plant, and equipment, net
|
|
213,104
|
|
|
210,227
|
|
||
Operating lease right-of-use assets
|
|
43,208
|
|
|
45,870
|
|
||
Goodwill
|
|
356,225
|
|
|
323,756
|
|
||
Intangibles and other assets
|
|
106,732
|
|
|
130,172
|
|
||
Total assets
|
|
$
|
1,073,831
|
|
|
$
|
1,088,570
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
61,987
|
|
|
$
|
53,047
|
|
Income tax payable
|
|
2,876
|
|
|
632
|
|
||
Accrued salaries and wages
|
|
38,882
|
|
|
30,395
|
|
||
Other accrued liabilities
|
|
26,868
|
|
|
17,631
|
|
||
Customer deposits
|
|
255
|
|
|
481
|
|
||
Contract liabilities
|
|
18,418
|
|
|
56,928
|
|
||
Lease liability, short-term
|
|
6,327
|
|
|
5,657
|
|
||
Debt due within one year
|
|
125,000
|
|
|
—
|
|
||
Total current liabilities
|
|
280,613
|
|
|
164,771
|
|
||
Other long-term liabilities
|
|
4,934
|
|
|
1,513
|
|
||
Lease liability, long-term
|
|
38,114
|
|
|
41,190
|
|
||
Debt due after one year, net
|
|
77,878
|
|
|
240,745
|
|
||
Deferred income tax liabilities
|
|
37,926
|
|
|
36,623
|
|
||
Total liabilities
|
|
439,465
|
|
|
484,842
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
|
||||
Common Stock, $1.00 par value; 100,000 shares authorized; 26,148 and 26,115 shares issued and outstanding at February 29, 2020 and February 28, 2019, respectively
|
|
26,148
|
|
|
26,115
|
|
||
Capital in excess of par value
|
|
66,703
|
|
|
58,695
|
|
||
Retained earnings
|
|
572,414
|
|
|
547,670
|
|
||
Accumulated other comprehensive loss
|
|
(30,899
|
)
|
|
(28,752
|
)
|
||
Total shareholders’ equity
|
|
634,366
|
|
|
603,728
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
1,073,831
|
|
|
$
|
1,088,570
|
|
|
|
Year Ended
|
||||||||||
|
|
February 29, 2020
|
|
February 28, 2019
|
|
February 28, 2018
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
48,234
|
|
|
$
|
51,208
|
|
|
$
|
45,169
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
50,194
|
|
|
50,245
|
|
|
50,526
|
|
|||
Deferred income taxes
|
|
(2,617
|
)
|
|
3,731
|
|
|
(20,637
|
)
|
|||
Loss on disposal of business
|
|
18,632
|
|
|
—
|
|
|
—
|
|
|||
Impairment loss on long lived assets
|
|
9,157
|
|
|
810
|
|
|
10,834
|
|
|||
Loss on sale of property, plant & equipment
|
|
(71
|
)
|
|
9
|
|
|
765
|
|
|||
Share-based compensation expense
|
|
6,290
|
|
|
4,659
|
|
|
6,121
|
|
|||
Amortization of deferred debt issuance costs
|
|
538
|
|
|
541
|
|
|
595
|
|
|||
Provision for doubtful accounts
|
|
2,734
|
|
|
2,153
|
|
|
3,007
|
|
|||
Effects of changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(1,006
|
)
|
|
(8,131
|
)
|
|
3,492
|
|
|||
Inventories
|
|
25,875
|
|
|
(595
|
)
|
|
(9,927
|
)
|
|||
Prepaid expenses and other assets
|
|
(291
|
)
|
|
(4,883
|
)
|
|
(2,376
|
)
|
|||
Net change in contract assets and liabilities
|
|
(47,040
|
)
|
|
3,091
|
|
|
984
|
|
|||
Accounts payable
|
|
10,594
|
|
|
(171
|
)
|
|
1,540
|
|
|||
Other accrued liabilities and income taxes payable
|
|
23,536
|
|
|
8,809
|
|
|
(13,283
|
)
|
|||
Net cash provided by operating activities:
|
|
144,759
|
|
|
111,476
|
|
|
76,810
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Proceeds from the sale or insurance settlement of property, plant, and equipment
|
|
340
|
|
|
1,543
|
|
|
458
|
|
|||
Proceeds from sale of subsidiary, net
|
|
23,584
|
|
|
—
|
|
|
—
|
|
|||
Acquisition of subsidiaries, net of cash acquired
|
|
(60,628
|
)
|
|
(8,000
|
)
|
|
(44,785
|
)
|
|||
Purchases of property, plant and equipment
|
|
(35,044
|
)
|
|
(25,616
|
)
|
|
(29,612
|
)
|
|||
Net cash used in investing activities:
|
|
(71,748
|
)
|
|
(32,073
|
)
|
|
(73,939
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock
|
|
3,113
|
|
|
3,765
|
|
|
3,317
|
|
|||
Payments for taxes related to net share settlement of equity awards
|
|
(1,231
|
)
|
|
(573
|
)
|
|
(1,218
|
)
|
|||
Proceeds from revolving loan
|
|
428,500
|
|
|
264,000
|
|
|
349,000
|
|
|||
Payments on revolving loan
|
|
(466,500
|
)
|
|
(310,000
|
)
|
|
(256,500
|
)
|
|||
Payments on long-term debt
|
|
—
|
|
|
(14,286
|
)
|
|
(63,504
|
)
|
|||
Purchases of treasury shares
|
|
(5,799
|
)
|
|
—
|
|
|
(7,518
|
)
|
|||
Payment of dividends
|
|
(17,822
|
)
|
|
(17,718
|
)
|
|
(17,678
|
)
|
|||
Net cash provided by (used in) financing activities:
|
|
(59,739
|
)
|
|
(74,812
|
)
|
|
5,899
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(590
|
)
|
|
(1,439
|
)
|
|
781
|
|
|||
Net change in cash and cash equivalents
|
|
12,682
|
|
|
3,152
|
|
|
9,551
|
|
|||
Cash and cash equivalents, beginning of year
|
|
24,005
|
|
|
20,853
|
|
|
11,302
|
|
|||
Cash and cash equivalents, end of year
|
|
$
|
36,687
|
|
|
$
|
24,005
|
|
|
$
|
20,853
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid for interest
|
|
$
|
13,023
|
|
|
$
|
14,880
|
|
|
$
|
13,593
|
|
Cash paid for income taxes
|
|
$
|
18,802
|
|
|
$
|
3,291
|
|
|
$
|
8,701
|
|
|
|
Common Stock
|
|
Capital In
Excess Of Par
Value
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at February 28, 2017
|
|
25,964
|
|
|
$
|
25,964
|
|
|
$
|
42,922
|
|
|
$
|
493,344
|
|
|
$
|
(29,094
|
)
|
|
$
|
533,136
|
|
Share-based compensation
|
|
—
|
|
|
—
|
|
|
6,121
|
|
|
—
|
|
|
—
|
|
|
6,121
|
|
|||||
Common stock issued from stock plans, net of shares withheld for employee taxes
|
|
65
|
|
|
65
|
|
|
(1,283
|
)
|
|
—
|
|
|
—
|
|
|
(1,218
|
)
|
|||||
Common stock issued under employee stock purchase plan
|
|
77
|
|
|
77
|
|
|
3,240
|
|
|
—
|
|
|
—
|
|
|
3,317
|
|
|||||
Retirement of treasury shares
|
|
(147
|
)
|
|
(147
|
)
|
|
—
|
|
|
(7,371
|
)
|
|
—
|
|
|
(7,518
|
)
|
|||||
Cash dividend paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,678
|
)
|
|
—
|
|
|
(17,678
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,169
|
|
|
—
|
|
|
45,169
|
|
|||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,928
|
|
|
3,928
|
|
|||||
Interest rate swap
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
(54
|
)
|
|||||
Balance at February 28, 2018
|
|
25,959
|
|
|
$
|
25,959
|
|
|
$
|
51,000
|
|
|
$
|
513,464
|
|
|
$
|
(25,220
|
)
|
|
$
|
565,203
|
|
Impact of ASC 606 Adoption
|
|
—
|
|
|
—
|
|
|
—
|
|
|
716
|
|
|
—
|
|
|
716
|
|
|||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
4,659
|
|
|
—
|
|
|
—
|
|
|
4,659
|
|
|||||
Common stock issued from stock plans, net of shares withheld for employee taxes
|
|
55
|
|
|
55
|
|
|
(628
|
)
|
|
—
|
|
|
—
|
|
|
(573
|
)
|
|||||
Common stock issued under employee stock purchase plan
|
|
101
|
|
|
101
|
|
|
3,664
|
|
|
—
|
|
|
—
|
|
|
3,765
|
|
|||||
Cash dividend paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,718
|
)
|
|
—
|
|
|
(17,718
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,208
|
|
|
—
|
|
|
51,208
|
|
|||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,478
|
)
|
|
(3,478
|
)
|
|||||
Interest rate swap
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
(54
|
)
|
|||||
Balance at February 28, 2019
|
|
26,115
|
|
|
$
|
26,115
|
|
|
$
|
58,695
|
|
|
$
|
547,670
|
|
|
$
|
(28,752
|
)
|
|
$
|
603,728
|
|
Share-based compensation
|
|
—
|
|
|
—
|
|
|
6,290
|
|
|
—
|
|
|
—
|
|
|
6,290
|
|
|||||
Common stock issued from stock plans, net of shares withheld for employee taxes
|
|
74
|
|
|
74
|
|
|
(1,305
|
)
|
|
—
|
|
|
—
|
|
|
(1,231
|
)
|
|||||
Common stock issued under employee stock purchase plan
|
|
90
|
|
|
90
|
|
|
3,023
|
|
|
—
|
|
|
—
|
|
|
3,113
|
|
|||||
Retirement of treasury shares
|
|
(131
|
)
|
|
(131
|
)
|
|
—
|
|
|
(5,668
|
)
|
|
—
|
|
|
(5,799
|
)
|
|||||
Cash dividend paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,822
|
)
|
|
—
|
|
|
(17,822
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,234
|
|
|
—
|
|
|
48,234
|
|
|||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,093
|
)
|
|
(2,093
|
)
|
|||||
Interest rate swap
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
(54
|
)
|
|||||
Balance at February 29, 2020
|
|
26,148
|
|
|
$
|
26,148
|
|
|
$
|
66,703
|
|
|
$
|
572,414
|
|
|
$
|
(30,899
|
)
|
|
$
|
634,366
|
|
|
|
2020
|
|
2019
|
||||
Balance at beginning of period
|
|
$
|
56,928
|
|
|
$
|
22,698
|
|
Contract liabilities added during the period
|
|
14,292
|
|
|
54,331
|
|
||
Revenue recognized during the period
|
|
(52,802
|
)
|
|
(20,101
|
)
|
||
Balance at end of period
|
|
$
|
18,418
|
|
|
$
|
56,928
|
|
|
|
2020
|
|
2019
|
|
2018
|
||||||
Net sales:
|
|
|
|
|
|
|
||||||
Industrial - oil and gas, construction, and general
|
|
$
|
605,236
|
|
|
$
|
526,465
|
|
|
$
|
461,945
|
|
Transmission and distribution
|
|
254,836
|
|
|
212,433
|
|
|
194,503
|
|
|||
Power generation
|
|
201,745
|
|
|
188,189
|
|
|
153,982
|
|
|||
Total net sales
|
|
$
|
1,061,817
|
|
|
$
|
927,087
|
|
|
$
|
810,430
|
|
Buildings and structures
|
10-25 years
|
Machinery and equipment
|
3-15 years
|
Furniture and fixtures
|
3-15 years
|
Automotive equipment
|
3 years
|
Computers and software
|
3-7 years
|
|
2020
|
|
2019
|
|
2018
|
||||||
Balance at beginning of period
|
$
|
1,751
|
|
|
$
|
2,013
|
|
|
$
|
2,098
|
|
Warranty costs incurred
|
(2,118
|
)
|
|
(2,195
|
)
|
|
(2,225
|
)
|
|||
Additions charged to income
|
4,069
|
|
|
1,933
|
|
|
2,140
|
|
|||
Balance at end of period
|
$
|
3,702
|
|
|
$
|
1,751
|
|
|
$
|
2,013
|
|
|
|
2020
|
|
2019
|
||||
Foreign currency translation adjustments
|
|
$
|
(30,949
|
)
|
|
$
|
(28,856
|
)
|
Interest rate swap
|
|
50
|
|
|
104
|
|
||
Accumulated other comprehensive loss
|
|
$
|
(30,899
|
)
|
|
$
|
(28,752
|
)
|
|
|
2020
|
|
2019
|
||||
Raw materials
|
|
$
|
88,837
|
|
|
$
|
94,410
|
|
Work-in-process
|
|
5,543
|
|
|
19,067
|
|
||
Finished goods
|
|
5,461
|
|
|
11,370
|
|
||
|
|
$
|
99,841
|
|
|
$
|
124,847
|
|
|
|
2020
|
|
2019
|
||||
Land
|
|
$
|
21,826
|
|
|
$
|
21,677
|
|
Building and structures
|
|
162,851
|
|
|
156,447
|
|
||
Machinery and equipment
|
|
252,726
|
|
|
245,588
|
|
||
Furniture, fixtures, software and computers
|
|
28,938
|
|
|
27,075
|
|
||
Automotive equipment
|
|
4,394
|
|
|
3,766
|
|
||
Construction in progress
|
|
16,466
|
|
|
13,065
|
|
||
|
|
487,201
|
|
|
467,618
|
|
||
Less accumulated depreciation
|
|
(274,097
|
)
|
|
(257,391
|
)
|
||
Net property, plant, and equipment
|
|
$
|
213,104
|
|
|
$
|
210,227
|
|
|
|
2020
|
|
2019
|
||||
Accrued interest
|
|
$
|
1,042
|
|
|
$
|
1,196
|
|
Accrued warranty
|
|
3,702
|
|
|
1,751
|
|
||
Commissions
|
|
4,180
|
|
|
3,370
|
|
||
Personnel expenses
|
|
8,646
|
|
|
6,282
|
|
||
Group medical insurance
|
|
3,083
|
|
|
2,024
|
|
||
Sales and other taxes payable
|
|
3,098
|
|
|
1,301
|
|
||
Other
|
|
3,117
|
|
|
1,707
|
|
||
Total
|
|
$
|
26,868
|
|
|
$
|
17,631
|
|
|
|
EIN/Pension Plan Number
|
|
Pension Protection Act Reported Status (1)
|
|
FIP/RP
Status (2)
|
|
Company Contributions (3)
|
|
Surcharge Imposed (4)
|
|
Expiration Date of Collective Bargaining Agreements
|
||||||||||||
|
|
|
|
|
Fiscal Year
|
|
|
|||||||||||||||||
Pension Fund
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
||||||||||
Boilermaker-Blacksmith National Pension Trust
|
|
EIN:48-6168020
Plan: 001 |
|
Critical
|
|
Endangered
|
|
Implemented
|
|
$
|
5,337
|
|
|
$
|
5,651
|
|
|
$
|
4,070
|
|
|
Yes
|
|
Various through 12/31/2020
|
Contributions to other multiemployer pension plans
|
|
|
|
|
|
|
|
|
|
366
|
|
|
627
|
|
|
470
|
|
|
|
|
|
|||
Total contributions
|
|
|
|
|
|
|
|
|
|
$
|
5,703
|
|
|
$
|
6,278
|
|
|
$
|
4,540
|
|
|
|
|
|
(1)
|
The most recent Pension Protection Act zone status available for fiscal 2020 and 2019 is for the plan’s year-end as of December 31, 2019 and 2018, respectively. The zone status is based on information that the Company received from the plan and is certified by the plan’s actuary. A plan is generally classified in critical status if a funding deficiency is projected within four years or five years, depending on other criteria. A plan in critical status is classified in critical and declining status if it is projected to become insolvent in the next 15 or 20 years, depending on other criteria. A plan is classified in endangered status if its funded percentage is less than 80% or a funding deficiency is projected within seven years. If the plan satisfies both of these triggers, it is classified in seriously endangered status. A plan not classified in any other status is classified in the green zone. As of the date the financial statements were issued, Form 5500, which is filed by employee benefit plans to satisfy annual reporting requirements under the Employee Retirement Income Security Act and under the Internal Revenue Code, was not available for the plan year ended in 2019.
|
(2)
|
The “FIP/RP Status” column indicates plans for which a Funding Improvement Plan (“FIP”) or a Rehabilitation Plan (“RP”) has been implemented.
|
(3)
|
For the multiemployer pension plan considered to be individually significant, the Company was not listed in the Form 5500 as providing more than 5% of the total contributions for plan years ending December 31, 2018 and 2017.
|
(4)
|
A multiemployer pension plan that has been certified as endangered, seriously endangered or critical may begin to levy a statutory surcharge on contribution rates. Once authorized, the surcharge is at the rate of 5% for the first 12 months and 10% for any periods thereafter. Contributing employers, however, may eliminate the surcharge by entering into a collective bargaining agreement that meets the requirements of the applicable FIP or RP.
|
|
|
2020
|
|
2019
|
|
2018
|
||||||
Income before income taxes:
|
|
|
|
|
|
|||||||
Domestic
|
$
|
44,406
|
|
|
$
|
48,261
|
|
|
$
|
24,282
|
|
|
Foreign
|
20,484
|
|
|
14,744
|
|
|
6,617
|
|
||||
Income before income taxes
|
$
|
64,890
|
|
|
$
|
63,005
|
|
|
$
|
30,899
|
|
|
Current provision:
|
|
|
|
|
|
|||||||
|
Federal
|
$
|
12,563
|
|
|
$
|
4,251
|
|
|
$
|
3,445
|
|
|
Foreign
|
5,259
|
|
|
2,829
|
|
|
1,958
|
|
|||
|
State and local
|
1,451
|
|
|
986
|
|
|
964
|
|
|||
Total current provision for income taxes
|
$
|
19,273
|
|
|
$
|
8,066
|
|
|
$
|
6,367
|
|
|
Deferred provision (benefit):
|
|
|
|
|
|
|||||||
|
Federal
|
$
|
(1,452
|
)
|
|
$
|
2,970
|
|
|
$
|
(20,220
|
)
|
|
Foreign
|
(21
|
)
|
|
539
|
|
|
100
|
|
|||
|
State and local
|
(1,144
|
)
|
|
222
|
|
|
(517
|
)
|
|||
Total deferred provision for (benefit from) income taxes
|
$
|
(2,617
|
)
|
|
$
|
3,731
|
|
|
$
|
(20,637
|
)
|
|
Total provision for (benefit from) income taxes
|
$
|
16,656
|
|
|
$
|
11,797
|
|
|
$
|
(14,270
|
)
|
|
|
2020
|
|
2019
|
|
2018
|
|||
Statutory federal income tax rate
|
|
21.0
|
%
|
|
21.0
|
%
|
|
32.7
|
%
|
Permanent differences
|
|
0.1
|
|
|
0.5
|
|
|
1.6
|
|
State income taxes, net of federal income tax benefit
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
Benefit of Section 199 of the Code, manufacturing deduction
|
|
—
|
|
|
—
|
|
|
(2.2
|
)
|
Valuation allowance
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
Stock compensation
|
|
—
|
|
|
0.5
|
|
|
(0.5
|
)
|
Tax credits
|
|
2.0
|
|
|
(4.1
|
)
|
|
(7.7
|
)
|
Foreign tax rate differential
|
|
1.4
|
|
|
1.1
|
|
|
(0.4
|
)
|
Deferred tax remeasurements
|
|
—
|
|
|
—
|
|
|
(78.9
|
)
|
Uncertain tax positions
|
|
1.4
|
|
|
—
|
|
|
—
|
|
Transition tax
|
|
—
|
|
|
—
|
|
|
8.6
|
|
Other
|
|
(0.2
|
)
|
|
—
|
|
|
0.2
|
|
Effective income tax rate
|
|
25.7
|
%
|
|
18.7
|
%
|
|
(46.2
|
)%
|
|
|
2020
|
|
2019
|
||||
Deferred income tax assets:
|
|
|
|
|
||||
Employee related items
|
|
$
|
3,194
|
|
|
$
|
4,177
|
|
Inventories
|
|
823
|
|
|
758
|
|
||
Accrued warranty
|
|
548
|
|
|
369
|
|
||
Accounts receivable
|
|
1,379
|
|
|
(2,092
|
)
|
||
Lease liabilities
|
|
10,601
|
|
|
—
|
|
||
Net operating loss carry forward
|
|
5,845
|
|
|
7,173
|
|
||
|
|
22,390
|
|
|
10,385
|
|
||
Less: valuation allowance
|
|
(725
|
)
|
|
(3,015
|
)
|
||
Total deferred income tax assets
|
|
21,665
|
|
|
7,370
|
|
||
Deferred income tax liabilities:
|
|
|
|
|
||||
Depreciation methods and property basis differences
|
|
(21,447
|
)
|
|
(19,066
|
)
|
||
Right-of-use lease assets
|
|
(10,299
|
)
|
|
—
|
|
||
Other assets and tax-deductible goodwill
|
|
(27,845
|
)
|
|
(24,927
|
)
|
||
Total deferred income tax liabilities
|
|
(59,591
|
)
|
|
(43,993
|
)
|
||
Net deferred income tax liabilities
|
|
$
|
(37,926
|
)
|
|
$
|
(36,623
|
)
|
|
|
2020
|
|
2019
|
||||
Federal
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
|
$
|
5,120
|
|
|
$
|
6,352
|
|
Foreign
|
|
$
|
725
|
|
|
$
|
821
|
|
|
|
2020
|
||
Balance at beginning of period
|
|
$
|
—
|
|
Increase for tax positions related to prior periods:
|
|
|
||
Gross increases
|
|
2,531
|
|
|
Balance at end of period
|
|
$
|
2,531
|
|
2020
|
||||||||||||||||||||||||
Segment
|
|
Opening Balance
|
|
Acquisitions
|
|
Divestiture
|
|
Other
|
|
Currency Translation Adjustment
|
|
Closing Balance
|
||||||||||||
Metal Coatings
|
|
$
|
116,691
|
|
|
$
|
39,419
|
|
|
$
|
—
|
|
|
$
|
1,413
|
|
|
$
|
(475
|
)
|
|
$
|
157,048
|
|
Energy
|
|
207,065
|
|
|
—
|
|
|
(7,888
|
)
|
|
|
|
—
|
|
|
199,177
|
|
|||||||
Total
|
|
$
|
323,756
|
|
|
$
|
39,419
|
|
|
$
|
(7,888
|
)
|
|
$
|
1,413
|
|
|
$
|
(475
|
)
|
|
$
|
356,225
|
|
2019
|
||||||||||||||||
Segment
|
|
Opening Balance
|
|
Acquisitions
|
|
Currency Translation Adjustment
|
|
Closing Balance
|
||||||||
Metal Coatings
|
|
$
|
117,232
|
|
|
$
|
73
|
|
|
$
|
(614
|
)
|
|
$
|
116,691
|
|
Energy
|
|
204,075
|
|
|
2,990
|
|
|
—
|
|
|
207,065
|
|
||||
Total
|
|
$
|
321,307
|
|
|
$
|
3,063
|
|
|
$
|
(614
|
)
|
|
$
|
323,756
|
|
|
|
2020
|
|
2019
|
||||
Customer related intangibles
|
|
$
|
177,090
|
|
|
$
|
191,460
|
|
Non-compete agreements
|
|
8,659
|
|
|
8,546
|
|
||
Trademarks
|
|
1,469
|
|
|
4,569
|
|
||
Technology
|
|
2,554
|
|
|
7,400
|
|
||
Engineering drawings
|
|
—
|
|
|
24,600
|
|
||
Backlog
|
|
—
|
|
|
7,600
|
|
||
Gross intangible assets
|
|
189,772
|
|
|
244,175
|
|
||
Less accumulated amortization
|
|
(91,298
|
)
|
|
(122,199
|
)
|
||
Total, net
|
|
$
|
98,474
|
|
|
$
|
121,976
|
|
2021
|
|
$
|
12,497
|
|
2022
|
|
12,462
|
|
|
2023
|
|
12,086
|
|
|
2024
|
|
10,151
|
|
|
2025
|
|
9,307
|
|
|
Thereafter
|
|
41,971
|
|
|
Total
|
|
$
|
98,474
|
|
|
|
2020
|
|
2019
|
|
2018
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income for basic and diluted earnings per common share
|
|
$
|
48,234
|
|
|
$
|
51,208
|
|
|
$
|
45,169
|
|
Denominator:
|
|
|
|
|
|
|
||||||
Denominator for basic earnings per common share–weighted average shares
|
|
26,191
|
|
|
26,038
|
|
|
25,970
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
||||||
Employee and director stock awards
|
|
90
|
|
|
69
|
|
|
66
|
|
|||
Denominator for diluted earnings per common share
|
|
26,281
|
|
|
26,107
|
|
|
26,036
|
|
|||
Earnings per share basic and diluted:
|
|
|
|
|
|
|
||||||
Basic earnings per common share
|
|
$
|
1.84
|
|
|
$
|
1.97
|
|
|
$
|
1.74
|
|
Diluted earnings per common share
|
|
$
|
1.84
|
|
|
$
|
1.96
|
|
|
$
|
1.73
|
|
|
|
Restricted
Stock Units |
|
Weighted
Average Grant Date Fair Value |
|||
Outstanding at beginning of year
|
|
146,532
|
|
|
$
|
48.93
|
|
Granted
|
|
140,070
|
|
|
43.86
|
|
|
Vested
|
|
(84,595
|
)
|
|
54.63
|
|
|
Forfeited
|
|
(7,061
|
)
|
|
45.30
|
|
|
Outstanding at end of year
|
|
194,946
|
|
|
$
|
44.34
|
|
|
|
Performance
Stock Units
|
|
Weighted
Average Grant
Date Fair Value
|
|||
Outstanding at beginning of year
|
|
83,125
|
|
|
$
|
50.62
|
|
Granted
|
|
49,000
|
|
|
46.19
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
(22,189
|
)
|
|
55.08
|
|
|
Outstanding at end of year
|
|
109,936
|
|
|
$
|
47.75
|
|
|
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
|
SARs
|
|
Weighted
Average
Exercise
Price
|
|
SARs
|
|
Weighted
Average
Exercise
Price
|
|
SARs
|
|
Weighted
Average
Exercise
Price
|
|||||||||
Outstanding at beginning of year
|
|
98,184
|
|
|
$
|
44.46
|
|
|
148,513
|
|
|
$
|
43.29
|
|
|
170,139
|
|
|
$
|
42.02
|
|
Exercised
|
|
(2,965
|
)
|
|
44.58
|
|
|
(47,484
|
)
|
|
40.84
|
|
|
(19,481
|
)
|
|
31.94
|
|
|||
Forfeited
|
|
(393
|
)
|
|
43.92
|
|
|
(2,845
|
)
|
|
43.92
|
|
|
(2,145
|
)
|
|
45.36
|
|
|||
Outstanding at end of year
|
|
94,826
|
|
|
$
|
44.58
|
|
|
98,184
|
|
|
$
|
44.46
|
|
|
148,513
|
|
|
$
|
43.29
|
|
Exercisable at end of year
|
|
94,826
|
|
|
$
|
44.58
|
|
|
98,184
|
|
|
$
|
44.46
|
|
|
148,513
|
|
|
$
|
43.29
|
|
Range of
Exercise Prices |
|
SARs Outstanding and Exercisable
|
|
Average
Remaining Life |
|
Weighted
Average Exercise Price |
|||
$39.65 - $44.15
|
|
48,061
|
|
|
1.00
|
|
$
|
43.85
|
|
$44.72 - 46.34
|
|
46,765
|
|
|
0.73
|
|
$
|
45.33
|
|
$39.65 - $46.34
|
|
94,826
|
|
|
0.88
|
|
$
|
44.58
|
|
|
|
2020
|
|
2019
|
|
2018
|
||||||
Compensation expense
|
|
$
|
6,290
|
|
|
$
|
4,659
|
|
|
$
|
6,121
|
|
Income tax benefits
|
|
$
|
1,321
|
|
|
$
|
978
|
|
|
$
|
2,122
|
|
|
|
2020
|
|
2019
|
||||
2017 Revolving Line of Credit
|
|
$
|
78,000
|
|
|
$
|
116,000
|
|
2011 Senior Notes
|
|
125,000
|
|
|
125,000
|
|
||
Total debt
|
|
203,000
|
|
|
241,000
|
|
||
Unamortized debt issuance costs
|
|
(122
|
)
|
|
(255
|
)
|
||
Total debt, net
|
|
202,878
|
|
|
240,745
|
|
||
Less amount due within one year
|
|
(125,000
|
)
|
|
—
|
|
||
Debt due after one year, net
|
|
$
|
77,878
|
|
|
$
|
240,745
|
|
Fiscal year:
|
|
Future Debt Maturities
|
||
2021
|
|
$
|
125,000
|
|
2022
|
|
—
|
|
|
2023
|
|
78,000
|
|
|
2024
|
|
—
|
|
|
2025
|
|
—
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
203,000
|
|
|
|
2020
|
|
2019
|
|
2018
|
||||||
Net sales:
|
|
|
||||||||||
Metal Coatings
|
|
$
|
498,989
|
|
|
$
|
440,264
|
|
|
$
|
389,397
|
|
Energy
|
|
562,828
|
|
|
486,823
|
|
|
421,033
|
|
|||
Total net sales
|
|
$
|
1,061,817
|
|
|
$
|
927,087
|
|
|
$
|
810,430
|
|
|
|
|
|
|
|
|
||||||
Operating income (loss):
|
|
|
|
|
|
|
||||||
Metal Coatings
|
|
$
|
107,926
|
|
|
$
|
83,591
|
|
|
$
|
84,332
|
|
Energy
|
|
32,845
|
|
|
31,332
|
|
|
(1,766
|
)
|
|||
Corporate
|
|
(42,796
|
)
|
|
(37,967
|
)
|
|
(34,318
|
)
|
|||
Loss on disposal of business
|
|
(18,632
|
)
|
|
—
|
|
|
—
|
|
|||
Total operating income
|
|
$
|
79,343
|
|
|
$
|
76,956
|
|
|
$
|
48,248
|
|
|
|
2020
|
|
2019
|
|
2018
|
||||||
Depreciation and amortization:
|
|
|
|
|
|
|
||||||
Metal Coatings
|
|
$
|
30,042
|
|
|
$
|
29,124
|
|
|
$
|
28,617
|
|
Energy
|
|
18,414
|
|
|
19,405
|
|
|
19,996
|
|
|||
Corporate
|
|
1,738
|
|
|
1,716
|
|
|
1,913
|
|
|||
Total
|
|
$
|
50,194
|
|
|
$
|
50,245
|
|
|
$
|
50,526
|
|
|
|
2020
|
|
2019
|
|
2018
|
||||||
Expenditures for acquisitions, net of cash, and property, plant and equipment:
|
|
|
|
|
|
|
||||||
Metal Coatings
|
|
$
|
82,972
|
|
|
$
|
16,046
|
|
|
$
|
39,474
|
|
Energy
|
|
9,588
|
|
|
14,608
|
|
|
32,903
|
|
|||
Corporate
|
|
3,112
|
|
|
2,962
|
|
|
2,020
|
|
|||
Total
|
|
$
|
95,672
|
|
|
$
|
33,616
|
|
|
$
|
74,397
|
|
|
|
2020
|
|
2019
|
||||
Assets:
|
|
|
|
|
||||
Metal Coatings
|
|
$
|
504,632
|
|
|
$
|
440,090
|
|
Energy
|
|
548,032
|
|
|
630,134
|
|
||
Corporate
|
|
21,167
|
|
|
18,346
|
|
||
Total assets
|
|
$
|
1,073,831
|
|
|
$
|
1,088,570
|
|
|
|
2020
|
|
2019
|
||||
Property, plant and equipment, net:
|
|
|
|
|
||||
United States
|
|
$
|
190,365
|
|
|
$
|
189,281
|
|
Canada
|
|
16,385
|
|
|
16,961
|
|
||
Other Countries
|
|
6,354
|
|
|
3,985
|
|
||
Total
|
|
$
|
213,104
|
|
|
$
|
210,227
|
|
Fiscal year:
|
Operating Leases
|
||
2021
|
$
|
8,311
|
|
2022
|
7,990
|
|
|
2023
|
7,505
|
|
|
2024
|
6,687
|
|
|
2025
|
5,755
|
|
|
Thereafter
|
17,494
|
|
|
Total lease payments
|
53,742
|
|
|
Less imputed interest
|
(9,301
|
)
|
|
Total
|
$
|
44,441
|
|
|
|
2020
|
|
2019
|
||||
Operating cash flows from operating leases included in lease liabilities
|
|
$
|
8,918
|
|
|
$
|
8,454
|
|
ROU assets obtained in exchange for new operating lease liabilities
|
|
$
|
7,867
|
|
|
$
|
10,948
|
|
Weighted-average remaining lease term - operating leases
|
|
7.94 years
|
|
|
9.23 years
|
|
||
Weighted-average discount rate - operating leases
|
|
4.89
|
%
|
|
5.13
|
%
|
Assets
|
|
|
||
Accounts receivable
|
|
$
|
4,591
|
|
Inventories
|
|
1,830
|
|
|
Prepaid expenses and other
|
|
22
|
|
|
Property, plant and equipment
|
|
5,336
|
|
|
Intangibles
|
|
15,512
|
|
|
Goodwill
|
|
39,419
|
|
|
Liabilities
|
|
|
||
Accounts payable and other accrued liabilities
|
|
(1,575
|
)
|
|
Contingent consideration
|
|
(2,000
|
)
|
|
Deferred income taxes
|
|
(2,507
|
)
|
|
Total purchase price
|
|
$
|
60,628
|
|
|
|
Fair Value
|
|
Useful Life
|
||
Customer relationships
|
|
15,360
|
|
|
15 years
|
|
Non-compete agreements
|
|
152
|
|
|
3 years
|
|
Total intangible assets
|
|
$
|
15,512
|
|
|
|
|
|
2020
|
|
2019
|
||||
Revenues
|
|
$
|
1,072,633
|
|
|
$
|
966,007
|
|
Net income
|
|
49,702
|
|
|
57,693
|
|
|
|
Quarter ended
|
||||||||||||||
|
|
May 31,
2019 |
|
August 31,
2019 |
|
November 30,
2019 |
|
February 29,
2020 (2) |
||||||||
|
|
(in thousands, except per share data)
|
||||||||||||||
Net sales
|
|
$
|
289,123
|
|
|
$
|
236,190
|
|
|
$
|
291,139
|
|
|
$
|
245,365
|
|
Gross profit
|
|
66,107
|
|
|
52,686
|
|
|
67,331
|
|
|
51,104
|
|
||||
Net income (loss)
|
|
21,284
|
|
|
15,558
|
|
|
22,035
|
|
|
(10,643
|
)
|
||||
Basic net income (loss) per share (1)
|
|
0.81
|
|
|
0.59
|
|
|
0.84
|
|
|
(0.41
|
)
|
||||
Diluted net income (loss) per share (1)
|
|
0.81
|
|
|
0.59
|
|
|
0.84
|
|
|
(0.41
|
)
|
|
|
Quarter ended
|
||||||||||||||
|
|
May 31,
2018 |
|
August 31,
2018 |
|
November 30,
2018 |
|
February 28,
2019 |
||||||||
|
|
(in thousands, except per share data)
|
||||||||||||||
Net sales
|
|
$
|
262,236
|
|
|
$
|
222,787
|
|
|
$
|
239,516
|
|
|
$
|
202,548
|
|
Gross profit
|
|
58,705
|
|
|
46,904
|
|
|
49,755
|
|
|
43,257
|
|
||||
Net income
|
|
15,718
|
|
|
11,244
|
|
|
15,395
|
|
|
8,851
|
|
||||
Basic net income per share (1)
|
|
0.60
|
|
|
0.43
|
|
|
0.59
|
|
|
0.34
|
|
||||
Diluted net income per share (1)
|
|
0.60
|
|
|
0.43
|
|
|
0.59
|
|
|
0.34
|
|
|
|
2020
|
|
2019
|
|
2018
|
||||||
Allowance for Doubtful Accounts
|
|
|
|
|
|
|
||||||
Balance at beginning of year
|
|
$
|
2,267
|
|
|
$
|
569
|
|
|
$
|
347
|
|
Additions charged to income
|
|
2,734
|
|
|
2,153
|
|
|
3,290
|
|
|||
Write-offs, net
|
|
(129
|
)
|
|
(451
|
)
|
|
(3,084
|
)
|
|||
Other
|
|
106
|
|
|
—
|
|
|
16
|
|
|||
Effect of exchange rate changes
|
|
(27
|
)
|
|
(4
|
)
|
|
—
|
|
|||
Balance at end of year
|
|
$
|
4,951
|
|
|
$
|
2,267
|
|
|
$
|
569
|
|
i)
|
new controls were implemented over recording revenue transactions and reviewing revenue reconciliations; and
|
ii)
|
additional training was provided to impacted employees.
|
|
|
(a)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
|
|
(b)
Weighted average
exercise price of
outstanding
options, warrants
and rights
|
|
(c)
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding shares
reflected in column (a))
|
Equity compensation plans approved by shareholders(1)
|
|
399,708(2)
|
|
$44.58(3)
|
|
2,355,937(4)
|
(1)
|
Consists of the Amended and Restated 2005 Long-Term Incentive Plan ("2005 Plan"), the 2014 Long-Term Incentive Plan ("2014 Plan") and the 2018 Employee Stock Purchase Plan ("2018 ESPP"). See Note 10 to our “Notes to Consolidated Financial Statements” for further information.
|
(2)
|
Consists of outstanding awards, including 194,946 RSUs and 109,936 PSUs granted under the 2014 Plan and 94,826 SARs granted under the 2005 Plan.
|
(3)
|
The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding SARs and does not reflect the shares that will be issued upon the vesting of outstanding awards of RSUs or PSUs, which have no exercise price.
|
(4)
|
Consists of (i) 972,366 shares remaining available for future issuance under the 2014 Plan and (ii) 1,383,571 shares remaining available for issuance under the 2018 ESPP.
|
1.
|
Consolidated Financial Statements
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit Number
|
|
Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
3.1
|
|
|
8-K
|
|
3.1
|
|
7/14/15
|
|
3.2
|
|
|
8-K
|
|
3.2
|
|
7/14/15
|
|
4.1
|
|
|
10-Q
|
|
4.1
|
|
10/13/00
|
|
10.1
|
|
|
8-K
|
|
10.1
|
|
3/24/17
|
|
10.2
|
|
|
8-K
|
|
10.1
|
|
1/21/11
|
|
10.3
|
*
|
|
DEF 14A
|
|
Appendix A
|
|
6/4/08
|
|
10.4
|
*
|
|
10-Q
|
|
10.53
|
|
9/28/04
|
|
10.5
|
*
|
|
10-Q
|
|
10.54
|
|
9/28/04
|
|
10.6
|
*
|
|
DEF 14A
|
|
Appendix A
|
|
5/29/14
|
|
10.7
|
*
|
|
8-K
|
|
10.2
|
|
1/21/16
|
|
10.8
|
*
|
|
8-K
|
|
10.4
|
|
1/21/16
|
|
10.9
|
*
|
|
8-K
|
|
10.5
|
|
1/21/16
|
|
10.10
|
*
|
|
8-K
|
|
10.6
|
|
1/21/16
|
|
10.11
|
*
|
|
DEF 14A
|
|
Appendix B
|
|
5/28/15
|
|
10.12
|
*
|
|
8-K
|
|
10.3
|
|
1/21/16
|
|
10.13
|
*
|
|
DEF 14A
|
|
Appendix A
|
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5/25/18
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Incorporated by Reference
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Exhibit Number
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Description
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Form
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Exhibit
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Filing Date
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10.14
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*
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8-K
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10.1
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10/7/19
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10.15
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*
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8-K
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10.2
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11/7/13
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10.16
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*
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8-K
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10.1
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2/27/14
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10.17
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*
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8-K
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10.2
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2/27/14
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10.18
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*
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8-K
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10.1
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1/10/20
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10.19
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*
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10-K
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10.18
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5/24/02
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10.20
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*
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8-K
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10.1
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1/21/16
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10.21
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*
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8-K
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10.1
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10/3/17
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10.22
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*
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8-K
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10.1
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1/18/19
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14.1
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Code of Conduct. AZZ Inc. Code of Conduct may be accessed via the Company’s Website at www.azz.com.
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21.1
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+
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23.1
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+
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23.2
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+
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31.1
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+
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31.2
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+
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32.1
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+
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32.2
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+
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101.INS
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+
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XBRL Instance Document
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101.SCH
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+
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XBRL Taxonomy Extension Schema Document
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101.CAL
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+
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
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+
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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+
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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+
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XBRL Taxonomy Extension Presentation Linkbase Document
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104
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XBRL Taxonomy Extension Presentation Linkbase Document
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AZZ Inc.
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(Registrant)
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April 29, 2020
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By: /s/ Thomas E. Ferguson
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Thomas E. Ferguson,
President and Chief Executive Officer
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April 29, 2020
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/s/ Daniel R. Feehan
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Daniel R. Feehan
Chairman of the Board of Directors |
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April 29, 2020
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/s/ Thomas E. Ferguson
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Thomas E. Ferguson
President, Chief Executive Officer and Director (Principal Executive Officer)
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April 29, 2020
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/s/ Paul W. Fehlman
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Paul W. Fehlman,
Senior Vice President and Chief Financial Officer (Principal Financial Officer)
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April 29, 2020
|
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/s/ Philip A. Schlom
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Philip A. Schlom
Vice President and Chief Accounting Officer
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April 29, 2020
|
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/s/ Kevern R. Joyce
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Kevern R. Joyce
Director
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April 29, 2020
|
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/s/ Daniel E. Berce
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Daniel E. Berce
Director |
|
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April 29, 2020
|
|
/s/ Paul Eisman
|
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Paul Eisman
Director |
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April 29, 2020
|
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/s/ Venita McCellon-Allen
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Venita McCellon-Allen
Director |
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April 29, 2020
|
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/s/ Ed McGough
|
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Ed McGough
Director |
|
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April 29, 2020
|
|
/s/ Steven R. Purvis
|
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|
Steven R. Purvis
Director
|
1 Year AZZ Chart |
1 Month AZZ Chart |
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