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AZZ incorporated Reports Results for the Third Quarter and Year-To-Date of Fiscal Year 2013, and Announces the Acquisition of G3



  AZZ incorporated Reports Results for the Third Quarter and Year-To-Date of
 Fiscal Year 2013, and Announces the Acquisition of G3 Galvanizing Limited in
                             Halifax, Nova Scotia

For the nine months - Revenues Increase 25%, Net Income up 62%, Earnings per
Share Increased 61% and Backlog Increased 63% when compared to the same period
last year

PR Newswire

FORT WORTH, Texas, Jan. 9, 2013

FORT WORTH, Texas, Jan. 9, 2013 /PRNewswire/ -- AZZ incorporated (NYSE:AZZ),
(the "Company" or "AZZ") 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, 2012. Revenues for the third
quarter were $149.7 million compared to $116.5 million for the same quarter
last year, an increase of 29 percent. Net income for the third quarter was
$15.4 million, or $0.60 per diluted share, compared to net income of $10.0
million, or $0.39 per diluted share, in last year's third fiscal quarter. 

For the nine-month period, the Company reported revenues of $430.2 million
compared to $345.5 million for the comparable period last year, an increase of
25 percent.  Net income for the nine months was $47.2 million, or $1.85 per
diluted share, compared to $29.1 million, or $1.15 per diluted share in the
comparable period of last year.  The net income and earnings per diluted share
for the first nine months reflect a pre-tax gain of approximately $6 million
related to a partial insurance settlement for assets destroyed in a fire at
one of the Company's galvanizing facilities.  While we expect to receive
substantial additional insurance proceeds under the policy in the future, the
ultimate amount that we collect has not yet been determined.  Any future
recoveries under this policy will be recognized in the period in which
proceeds are approved by our insurance carrier.  Pro forma earnings per
diluted share exclusive of this non operational income item for the first nine
months were $1.73, a 50 percent gain over the same period last year.

Backlog at the end of our third quarter was $215.8 million, which includes the
favorable impact of Nuclear Logistics Incorporated's acquired backlog. Backlog
at the end of the third quarter of fiscal year 2012 was $132.1 million and
$138.6 million at February 29, 2012. Incoming orders for the third quarter
were $152.4 million while shipments for the quarter totaled $149.7 million,
resulting in a book to ship ratio of 102 percent. Of the backlog of $215.8
million, 29 percent is to be delivered outside of the U.S.

Revenues for the Electrical and Industrial Products Segment for the third
quarter of fiscal 2013 were $60.4 million as compared to $43.9 million for the
same quarter last year, an increase of 38 percent.  NLI, acquired June 1,
2012, contributed $16.4 million of this increase.  Operating income for the
segment increased 57 percent to $9 million compared to $5.7 million in the
same period last year.  Operating margins for the third quarter were 15
percent for the quarter as compared to 13 percent in the prior year period.
For the first nine months of fiscal 2013, revenues increased 26 percent to
$171.6 million and operating income increased 38 percent to $25.1 million
compared to $136.5 million and $18.2 million respectively, in the prior year
period.  Operating margin for the first nine months was 15 percent as compared
to 13 percent in the prior year period.

Revenues for the Company's Galvanizing Service Segment for the third quarter
were $89.3 million, compared to the $72.6 million in the same period last
year, an increase of 23 percent.  Operating income was $24.4 million as
compared to $18.6 million in the prior period, an increase of 32 percent.
Operating margins for the third quarter were 27 percent, compared to 26
percent in the same period last year. For the nine months of fiscal 2013,
revenues increased 24 percent to $258.6 million and operating income increased
30 percent to $70.6 million compared to $209 million and $54.4 million
respectively, for the first nine months of the prior year.  Year to date
operating margins were 27 percent compared to 26 percent in the prior year
period. 

David H. Dingus, president and chief executive officer of AZZ incorporated,
commented, "The third quarter and first nine months of fiscal 2013 reflects
favorable year over year growth in both segments and effective identification
and execution of our opportunities in a market environment of continued
economic and regulatory uncertainty.  We are extremely pleased with the
reported results.  We continue our effort to identify product and market
expansion opportunities to further enhance our strategic position."

The company today announced that it has acquired G3 Galvanizing, a galvanizing
operation in Halifax, Nova Scotia on January 2, 2013.  This acquisition is
part of the stated AZZ strategy to continue the geographic expansion of its
served markets that should provide a basis for continued growth of the
Galvanizing Services Segment of AZZ.  G3, while relatively small in terms of
production and revenue, has a rich heritage of providing superior level of
service and support to the customers in Canadian Maritimes.  Operated with
pride and integrity since its founding, this very successful operation will
complement our existing network of North American plants.  Existing operating
management has agreed to remain with the company and the acquisition is
anticipated to be accretive in the first year of operation.

Based upon the evaluation of information currently available to management, we
are revising our fiscal year 2013 guidance for revenues to be in the range of
$575 to $585 million.  Our earnings are anticipated to be in the range of
$2.35 and $2.45 per diluted share.  This guidance reflects the
two-for-one-stock split effective July 30, 2012.  The previously issued
guidance was for revenues to be in the range of $575 to $600 million and that
fully diluted earnings per share to be in the rage of $2.25 to $2.40 after the
effect of the two-for-one stock split.  Our guidance does reflect the
acquisition of NLI during the last nine months of fiscal 2013 and the
acquisition of Galvcast for the last five months of fiscal 2013, and G3
Galvanizing for the last two months of the fiscal 2013.

AZZ incorporated will conduct a conference call to discuss financial results
for the third quarter of fiscal year 2013 at 11:00 A.M. ET on Wednesday,
January 9, 2013.  Interested parties can access the conference call by dialing
(877) 317-6789 or (412) 317-6789 (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 #10022595 or for 30 days at 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 North American steel fabrication market.

Certain statements herein 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. This
release may contain forward-looking statements that involve risks and
uncertainties including, but not limited to, changes in customer demand and
response to products and services offered by AZZ, including demand by the
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 serves, foreign and domestic, customer request delays of shipments,
acquisition opportunities, currency exchange rates, 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 AZZ's Annual Report on Form 10-K for the fiscal year
ended February 29, 2012 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 hereof and AZZ assumes no obligation to update any
forward-looking statements, whether as a result of new information, future
events, or otherwise.

Contact: Dana Perry, Senior Vice President – Finance and CFO
         AZZ incorporated 817-810-0095
         Internet: www.azz.com
         Lytham Partners 602-889-9700
         Joe Dorame or Robert Blum
         Internet: www.lythampartners.com

---Financial tables on the following page---

 

AZZ incorporated

Condensed Consolidated Statement of Income

(in thousands except per share amounts)

 
                        Three Months Ended          Nine Months Ended
                        November 30,  November 30,  November 30,  November 30,
                        2012          2011          2012          2011
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)
Net sales               $149,675      $116,493      $430,203      $345,487
Costs and Expenses:
     Cost of Sales      104,672       85,686        304,022       253,231
     Selling, General   17,895        11,320        49,019        36,110
and Administrative
     Interest Expense   3,234         3,519         9,802         10,453
     Net (Gain) Loss on
Sales or Insurance      157           (7)           (5,794)       164
Settlement of Property,
Plant and Equipment
     Other (Income)     (454)         (193)         (700)         (1,225)
                        $125,504      $100,325      $356,349      $298,733
Income before income    24,171        16,168        73,854        46,754
taxes
Income Tax Expense      8,807         6,147         26,631        17,662
Net income              $15,364       $10,021       $47,223       $29,092
Net income per share
      Basic             $0.61         $0.40         $1.87         $1.16
      Diluted           $0.60         $0.39         $1.85         $1.15
      Diluted average   25,603        25,374        25,537        25,340
shares outstanding

 

Segment Reporting

(in thousands)

 
                       Three Months Ended          Nine Months Ended
                       November 30,  November 30,  November 30,  November 30,
                       2012          2011          2012          2011
                       (unaudited)   (unaudited)   (unaudited)   (unaudited)
Net Sales:
   Electrical and      $60,421       $43,849       $171,633      $136,518
Industrial Products
   Galvanizing         89,254        72,644        258,570       208,969
Services
                       $149,675      $116,493      $430,203      $345,487
Segment Operating
Income:
   Electrical and      $8,952        $5,719        $25,087       $18,214
Industrial Products
   Galvanizing         24,449        18,555        70,631        54,431
Services
   Total Segment       $33,401       $24,274       $95,718       $72,645
Operating Income

 

Condensed Consolidated Balance Sheet

(in thousands)

 
                                           November 30, February 29,

                                           2012         2012
                                           (unaudited)   (audited)
Assets:
      Current assets                       $252,132     $302,736
      Net property, plant and equipment    $152,006     $135,827
      Other assets, net                    $270,327     $168,212
      Total assets                         $674,465     $606,775
Liabilities and shareholders' equity:
      Current liabilities                  $109,493     $77,979
      Long term debt due after one year    $196,429     $210,714
      Other liabilities                    $41,174      $30,473
      Shareholders' equity                 $327,369     $287,609
Total liabilities and shareholders' equity $674,465     $606,775

 

Condensed Consolidated Statement of Cash Flows

(in thousands)

 
                                                     Nine Months Ended
                                                     November 30, November 30,

                                                     2012         2011
                                                     (unaudited)  (unaudited)
Net cash provided by (used in) operating activities  $66,587      $46,832
Net cash provided by (used in) investing activities  ($133,602)   ($16,070)
Net cash provided by (used in) financing activities  ($26,807)    ($9,221)
Effect of exchange rate changes on cash              $27          $168
Net increase (decrease) in cash and cash equivalents $(93,797)    $21,709
Cash and cash equivalents at beginning of period     $143,303     $138,390
Cash and cash equivalents at end of period           $49,506      $160,099

 

SOURCE AZZ incorporated

Website: http://www.azz.com
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