FORT WORTH, Texas, April 20, 2017 /PRNewswire/ -- AZZ Inc.
(NYSE:AZZ), a global provider of galvanizing services, welding
solutions, specialty electrical equipment and highly engineered
services, today announced financial results for the three and
twelve-month periods ended February 28,
2017.
Management Discussion
Tom Ferguson, president and chief
executive officer of AZZ Inc., commented, "Fiscal 2017 was a
challenging year. Our Galvanizing segment experienced reduced
orders from soft markets in oil and gas, petrochemical, and solar.
We continued to experience reduced refinery turnarounds and
maintenance in our Energy segment during the fourth quarter and
were also impacted by project delays for Westinghouse nuclear
projects. Despite lower sales in both business segments, fiscal
2017 was AZZ's 30th consecutive year of profitability, a
testament to all the employees of AZZ."
"We expect North American galvanizing market conditions to begin
to improve in the second half of fiscal 2018 as infrastructure
spend increases. During fiscal 2017 we were able to capture better
pricing in the market to partially offset the weakness in demand.
We believe this pricing dynamic will serve us well going forward.
We also expect to introduce our new GalvaBarâ„¢ bendable galvanized
rebar and enter the powder coating business in fiscal 2018. These
are new opportunities that we believe will enable us to drive
increased sales growth in fiscal 2018 and future years."
Mr. Ferguson continued, "We believe fiscal 2018 will benefit
from an improvement in refinery turnarounds and nuclear maintenance
outages that have now been deferred for several quarters. We are
well positioned to execute on those projects once they are
scheduled. We are pleased with our solid backlog and improving
demand in other electrical and industrial markets, as incoming
orders are strengthening."
"Given the market dynamics of fiscal 2017, and our potential
exposure to the recent bankruptcy filing by Westinghouse, we are
making an adjustment to our guidance for the fiscal year 2018 and
revising our EPS range from $2.85 -
$3.15 per diluted share to $2.60 – $3.10 per
diluted share. We are also revising our sales guidance for fiscal
2018 from $900 million - $970 million
to $880 million - $950 million."
"As we begin the new fiscal year, we maintain a positive outlook
for fiscal 2018, and are encouraged by a more efficient operating
platform as a result of our realignment efforts and will increase
our focus on procurement and operating efficiencies. We also
are seeing an increase in galvanizing demand and anticipate a
rebound of our galvanizing business during the second half of the
fiscal year. We continue to focus on fiscally responsible growth
through our internal investment in new leading edge products in our
Galvanizing segment; additional technology investments in our
Energy segment; a robust pipeline of potential acquisition
opportunities; and a new credit financing facility that will
support our strategic growth initiatives. Looking forward, we
believe that our businesses are well poised for the resurgence in
infrastructure project spending not only in North America, but across the globe,"
concluded, Mr. Ferguson.
Fourth Quarter and Fiscal Year Results
Revenues for the fourth quarter were $193.8 million compared to $217.6 million for the same quarter last year, a
decrease of 11 percent. Net income for the fourth quarter was
$11.6 million, or $0.44 per diluted share, compared to net income
of $16.1 million, or $0.62 per diluted share, for last year's fourth
fiscal quarter.
For the twelve-month period, the Company reported revenues of
$858.9 million compared to
$903.2 million for the comparable
period last year, a decrease of 4.9 percent. Net income for
the twelve months was $60.9 million,
which included an $8.0 million charge
for realignment taken during the year, or $2.33 per diluted share, compared to $76.8 million, or $2.96 per diluted share compared to the prior
fiscal year.
Bookings for fiscal 2017 were $858.9
million, compared to $905.1
million for the prior year, a decrease of 5.1 percent.
Backlog at the end of the 2017 fiscal year was $346.4 million, an increase of 3.6 percent
compared to backlog at the end of the prior year of $334.5 million. Incoming orders for the
year were $858.9 million while
revenues for the year totaled $858.9
million, resulting in a book to bill ratio of 1.0.
Approximately 36.8% percent of the $346.4
million in backlog is expected to be delivered outside of
the U.S.
Energy Segment
Revenues for the Energy segment for the fourth quarter of fiscal
2017 were $112.1 million as compared
to $117.0 million for the same
quarter last year, decreasing by 4.2 percent. Operating income for
the segment fell 23.8 percent to $9.6
million compared to $12.7
million in the same period last year. Operating margins for
the fourth quarter were 8.6 percent as compared to 10.8 percent in
the prior year period. For full year fiscal 2017, Energy segment
revenues decreased 3.5 percent to $483.4
million and operating income decreased 11.0 percent to
$52.0 million compared to
$500.8 million and $58.5 million respectively, in the prior year
period. Operating margins for the 2017 fiscal year were 10.8
percent as compared to 11.7 percent in the prior fiscal year, as a
result of decreased sales volume.
Galvanizing Segment
Revenues for the Company's Galvanizing segment for the fourth
quarter of fiscal 2017 were $81.6
million, compared to the $100.6
million in the same period last year, a decrease of 18.8
percent. Operating income was $18.4
million as compared to $23.1
million in the prior period, a decrease of 20.5 percent.
Operating margins for the fourth quarter were 22.5 percent,
compared to 22.9 percent in the same period last year. For
full year fiscal 2017, Galvanizing segment revenues decreased 6.7
percent to $375.5 million and
operating income decreased 16.6 percent to $79.0 million compared to $402.4 million and $94.8
million respectively, for the prior fiscal year, and were
negatively affected by $7.3 million
of realignment charges taken during fiscal 2017. As a result,
operating margins for the 2017 fiscal year were 21.0 percent
compared to 23.6 percent in the prior fiscal year.
Conference Call
AZZ Inc. will conduct a conference call to discuss financial
results for the fourth quarter and fiscal year 2017 at 11:00 A.M. ET on Thursday,
April 20, 2017. Interested parties can access the
conference call by dialing (844) 855-9499 or (412) 317-5497
(international). The call will be webcast via the Internet at
http://www.azz.com/investor-relations. A replay of the call
will be available for three days following the call at (877)
344-7529 or (412) 317-0088 (international), confirmation #10104959,
or for 30 days at http://www.azz.com/investor-relations.
About AZZ Inc.
AZZ Inc. is a global provider of galvanizing services, welding
solutions, specialty electrical equipment and highly engineered
services to the markets of power generation, transmission,
distribution and industrial in protecting metal and electrical
systems used to build and enhance the world's infrastructure. AZZ
Galvanizing is a leading provider of metal finishing solutions for
corrosion protection, including hot dip galvanizing to the North
American steel fabrication industry. AZZ Energy is dedicated to
delivering safe and reliable transmission of power from generation
sources to end customers, and automated weld overlay solutions for
corrosion and erosion mitigation to critical infrastructure in the
energy markets worldwide.
Safe Harbor Statement
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 political stability and
economic conditions of the various markets that AZZ serves, foreign
and domestic, customer requested delays of shipments, acquisition
opportunities, currency exchange rates, adequacy of financing, and
availability of experienced management and 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 28, 2017 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:
|
Paul Fehlman, Senior
Vice President - Finance and CFO
|
|
AZZ Inc.
817-810-0095
|
|
Internet:
www.azz.com
|
|
|
|
Lytham Partners
602-889-9700
|
|
Joe Dorame, Robert
Blum or Joe Diaz
|
|
Internet:
www.lythampartners.com
|
---Financial tables on the following
page---
AZZ
Inc.
Condensed
Consolidated Statement of Income
(in thousands, except
per share data)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
February
28, 2017
|
|
February
29, 2016
|
|
February
28, 2017
|
|
February
29, 2016
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
193,759
|
|
|
$
|
217,611
|
|
|
$
|
858,930
|
|
|
$
|
903,192
|
|
Costs of
sales
|
148,055
|
|
|
162,757
|
|
|
654,146
|
|
|
673,081
|
|
Gross margin
|
45,704
|
|
|
54,854
|
|
|
204,784
|
|
|
230,111
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
25,526
|
|
|
28,278
|
|
|
106,424
|
|
|
107,823
|
|
Operating income
|
20,178
|
|
|
26,576
|
|
|
98,360
|
|
|
122,288
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
3,573
|
|
|
3,543
|
|
|
14,732
|
|
|
15,155
|
|
Net (gain) loss on
sale property, plant and
equipment and insurance proceeds
|
50
|
|
|
138
|
|
|
76
|
|
|
(327)
|
|
Other (income)
expense, net
|
(248)
|
|
|
2,264
|
|
|
(1,197)
|
|
|
3,092
|
|
Income before income
taxes
|
16,803
|
|
|
20,631
|
|
|
84,749
|
|
|
104,368
|
|
Income tax
expense
|
5,219
|
|
|
4,555
|
|
|
23,828
|
|
|
27,578
|
|
Net income
|
$
|
11,584
|
|
|
$
|
16,076
|
|
|
$
|
60,921
|
|
|
$
|
76,790
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
Basic
|
$
|
0.45
|
|
|
$
|
0.62
|
|
|
$
|
2.35
|
|
|
$
|
2.98
|
|
Diluted
|
$
|
0.44
|
|
|
$
|
0.62
|
|
|
$
|
2.33
|
|
|
$
|
2.96
|
|
Diluted average shares
outstanding
|
26,110
|
|
|
25,988
|
|
|
26,097
|
|
|
25,937
|
|
Segment
Reporting
(in
thousands)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
February
28, 2017
|
|
February
29, 2016
|
|
February
28, 2017
|
|
February
29, 2016
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
Energy
|
$
|
112,138
|
|
|
$
|
117,043
|
|
|
$
|
483,394
|
|
|
$
|
500,830
|
|
Galvanizing
|
81,621
|
|
|
100,568
|
|
|
375,536
|
|
|
402,362
|
|
|
$
|
193,759
|
|
|
$
|
217,611
|
|
|
$
|
858,930
|
|
|
$
|
903,192
|
|
|
|
|
|
|
|
|
|
Segment operating
income :
|
|
|
|
|
|
|
|
Energy
|
$
|
9,646
|
|
|
$
|
12,664
|
|
|
$
|
52,029
|
|
|
$
|
58,471
|
|
Galvanizing
|
18,354
|
|
|
23,077
|
|
|
79,033
|
|
|
94,766
|
|
Corporate
|
(7,822)
|
|
|
(9,165)
|
|
|
(32,702)
|
|
|
(30,949)
|
|
Total
segment operating income
|
$
|
20,178
|
|
|
$
|
26,576
|
|
|
$
|
98,360
|
|
|
$
|
122,288
|
|
Condensed
Consolidated Balance Sheet
(in
thousands)
|
|
|
February 28,
2017
|
|
February 29,
2016
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
Current
assets
|
$
|
296,537
|
|
|
$
|
309,334
|
|
Net property, plant
and equipment
|
228,610
|
|
|
226,333
|
|
Other assets,
net
|
452,692
|
|
|
446,343
|
|
Total
assets
|
$
|
977,839
|
|
|
$
|
982,010
|
|
|
|
|
|
Liabilities and
shareholders' equity:
|
|
|
|
Current
liabilities
|
$
|
141,850
|
|
|
$
|
148,405
|
|
Long term debt due
after one year, net
|
254,800
|
|
|
302,429
|
|
Other
liabilities
|
51,550
|
|
|
49,960
|
|
Shareholders'
equity
|
529,639
|
|
|
481,216
|
|
Total liabilities and
shareholders' equity
|
$
|
977,839
|
|
|
$
|
982,010
|
|
Condensed
Consolidated Statements of Cash Flows
(in
thousands)
|
|
|
Twelve Months
Ended
|
|
February 28,
2017
|
|
February 29,
2016
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
111,176
|
|
|
$
|
143,589
|
|
Net cash used in
investing activities
|
(63,344)
|
|
|
(99,308)
|
|
Net cash used in
financing activities
|
(76,619)
|
|
|
(25,323)
|
|
Effect of exchange
rate changes on cash
|
(102)
|
|
|
(1,294)
|
|
Net decrease in cash
and cash equivalents
|
$
|
(28,889)
|
|
|
$
|
17,664
|
|
Cash and cash
equivalents at beginning of period
|
40,191
|
|
|
22,527
|
|
Cash and cash
equivalents at end of period
|
$
|
11,302
|
|
|
$
|
40,191
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/azz-inc-reports-financial-results-for-fiscal-year-2017-300442488.html
SOURCE AZZ Inc.