FORT WORTH, Texas, April 21, 2016 /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 29,
2016.
Fourth Quarter and Fiscal Year Results
Revenues for the fourth quarter were $217.6 million compared to $182.3 million for the same quarter last year, an
increase of 19.4 percent. Net income for the fourth quarter was
$16.1 million, or $0.62 per diluted share, compared to net income
of $16.3 million, or $0.63 per diluted share, for last year's fourth
fiscal quarter.
For the twelve-month period, the Company reported revenues of
$903.2 million compared to
$816.7 million for the comparable
period last year, an increase of 10.6 percent. Net income for
the twelve months was $76.8 million,
or $2.96 per diluted share, compared
to $64.9 million, or $2.52 per diluted share in the comparable period
of last year.
Earnings for the full year of fiscal 2016 were negatively
impacted by $0.12 per share from the
costs related to attorney fees and the fourth quarter resolution of
a commercial lawsuit, and charges taken in the fourth quarter
related to rectifying incorrect matching payments made to the
employee benefit plans of certain employees in prior years.
Earnings for the fourth quarter of Fiscal 2016 were impacted by
$0.10 per share from the issues
described above. Details are covered in the Non-GAAP
Disclosure Table.
Bookings for fiscal 2016 were $905.1
million, compared to $824.3
million for the prior year, an increase of 9.8
percent. Backlog at the end of the 2016 fiscal year was
$334.5 million compared to backlog at
the end of the prior year of $332.6
million. Incoming orders for the year were
$905.1 million while revenues for the
year totaled $903.2 million,
resulting in a book to bill ratio of 100 percent. Of the backlog of
$334.5 million, 31.8 percent is
expected to be delivered outside of the U.S.
Energy Segment
Revenues for the Energy Segment for the fourth quarter of fiscal
2016 were $117.0 million as compared
to $97.2 million for the same quarter
last year, growing by 20.4 percent. Operating income for the
segmentincreased 29.2 percent to $12.7
million compared to $9.8
million in the same period last year. Operating margins for
the fourth quarter were 10.8 percent for the quarter as compared to
10.1 percent in the prior year period. For full year fiscal 2016,
revenues increased 9.3 percent to $500.8
million and operating income increased 51.1 percent to
$58.5 million compared to
$458.3 million and $38.7 million respectively, in the prior year
period. Operating margins for the 2016 fiscal year were 11.7
percent as compared to 8.4 percent in the prior fiscal year, as a
result of increased net sales, improved pricing, and better
operational execution overall.
Galvanizing Segment
Revenues for the Company's Galvanizing Segment for the fourth
quarter of fiscal 2016 were $100.6
million, compared to the $85.1
million in the same period last year, an increase of 18.2
percent. Operating income was $23.1
million as compared to $20.3
million in the prior period, an increase of 13.5 percent.
Operating margins for the fourth quarter were 22.9 percent,
compared to 23.9 percent in the same period last year and up
sequentially from the third quarter of fiscal 2016 margins of
22.8%. For full year fiscal 2016, revenues increased 12.3 percent
to $402.4 million and operating
income increased 7.0 percent to $94.8
million compared to $358.3
million and $88.6 million
respectively, for the prior fiscal year. Operating margins for the
2016 fiscal year were 23.6 percent compared to 24.7 percent in the
prior fiscal year.
Management Discussion
Tom Ferguson, president and chief
executive officer of AZZ Inc., commented, "I am pleased with the
financial performance achieved during the quarter and the full
fiscal year. Our performance for the year resulted in record annual
revenues, higher consolidated margins and strong cash flow, despite
mixed conditions in our markets during the year. Fiscal Year 2016
was AZZ's 29th consecutive year of profitability, a
testament to all the employees of AZZ."
Mr. Ferguson, continued, "As I noted on the third quarter
earnings call, we saw improving operational performance and
efficiencies in the Energy segment, as well as better deployment of
technology, and good performance from our sales team, all driving
growth in revenue and margins. In Galvanizing, we continue to
see growth from acquisitions as well as from continuing innovations
to our current customer-centered offerings. Although we
continue to see a slight negative impact on a couple of our
businesses due to lower oil prices and reduced rig count, we see a
number of opportunities for growth in many of our served markets,
especially in domestic utilities, and bridge and highway. I
am also happy to report that the recently acquired PEI (Power
Equipment Inc.) and Alpha Galvanizing are both off to a good start,
and that our U.S. Galvanizing plants acquired earlier in the year
tracked nicely during the fourth quarter toward reaching expected
margins during fiscal 2017. We remain focused on
leveraging our sales teams across our Energy businesses in
North America; aggressively
expanding internationally; driving operational excellence and
growing our Galvanizing business, both organically and with
targeted acquisitions."
Mr. Ferguson, continued, "The continued success of AZZ is due to
the hard work, dedication, and the operational excellence displayed
by our employees every day. I greatly appreciate their ongoing
efforts. The Energy leadership team has made significant
progress in accomplishing a number of strategic initiatives, which
bolsters our confidence for continued growth in the coming years.
The Galvanizing leadership team continues to excel and demonstrates
both discipline and focus on providing our customers with industry
leading service and support. We have a solid and balanced portfolio
of products and innovative technologies; a respected position
within our core markets; and loyal customers due to our commitment
to superior service and quality products."
Announces Fiscal Year 2017 Guidance
Mr. Ferguson, concluded, " I am confident that fiscal 2017
will be a solid year and we are issuing management's guidance for
fiscal 2017 EPS in the range of $3.15 to
$3.45 per diluted share and revenues to be in the range of
$930 million to $970 million. Our
guidance reflects our estimates given the current challenging
global market conditions, quarterly seasonality, our expected
increase in realized tax rates, and our plans for organic growth
through product innovation, and growth provided by our recently
acquired businesses" said Mr. Ferguson.
Conference Call
AZZ Inc. will conduct a conference call to review the financial
results for the fourth quarter and fiscal year 2016 at 11:00 A.M. ET on Thursday,
April 21, 2016. 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 at (877) 344-7529 or (412)
317-0088 (international), confirmation #10083713, 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 29, 2016 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 incorporated
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 29,
2016
|
|
February 28,
2015
|
|
February 29,
2016
|
|
February 28,
2015
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
$
|
217,611
|
|
|
$
|
182,311
|
|
|
$
|
903,192
|
|
|
$
|
816,687
|
|
Costs of
Sales
|
162,757
|
|
|
134,879
|
|
|
673,081
|
|
|
610,991
|
|
Gross Margin
|
54,854
|
|
|
47,432
|
|
|
230,111
|
|
|
205,696
|
|
|
|
|
|
|
|
|
|
Selling, General and
Administrative
|
28,278
|
|
|
24,339
|
|
|
107,823
|
|
|
98,871
|
|
Operating Income
|
26,576
|
|
|
23,093
|
|
|
122,288
|
|
|
106,825
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
3,543
|
|
|
4,030
|
|
|
15,155
|
|
|
16,561
|
|
Net (Gain) Loss on
Sales or Insurance Settlement of Property, Plant and
Equipment
|
138
|
|
|
(1,330)
|
|
|
(327)
|
|
|
(2,525)
|
|
Other (Income)
expense, net
|
2,264
|
|
|
1,350
|
|
|
3,092
|
|
|
2,659
|
|
Income before income
taxes
|
20,631
|
|
|
19,043
|
|
|
104,368
|
|
|
90,130
|
|
Income Tax
Expense
|
4,555
|
|
|
2,759
|
|
|
27,578
|
|
|
25,187
|
|
Net Income
|
$
|
16,076
|
|
|
$
|
16,284
|
|
|
$
|
76,790
|
|
|
$
|
64,943
|
|
Net Income Per
Share
|
|
|
|
|
|
|
|
Basic
|
$
|
0.62
|
|
|
$
|
0.63
|
|
|
$
|
2.98
|
|
|
$
|
2.53
|
|
Diluted
|
$
|
0.62
|
|
|
$
|
0.63
|
|
|
$
|
2.96
|
|
|
$
|
2.52
|
|
Diluted average
shares outstanding
|
25,988
|
|
|
25,794
|
|
|
25,937
|
|
|
25,778
|
|
Segment
Reporting
(in
thousands)
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
February 29,
2016
|
|
February 28,
2015
|
|
February 29,
2016
|
|
February 28,
2015
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales:
|
|
|
|
|
|
|
|
Energy
|
$
|
117,043
|
|
|
$
|
97,206
|
|
|
$
|
500,830
|
|
|
$
|
458,339
|
|
Galvanizing
|
100,568
|
|
|
85,105
|
|
|
402,362
|
|
|
358,348
|
|
|
$
|
217,611
|
|
|
$
|
182,311
|
|
|
$
|
903,192
|
|
|
$
|
816,687
|
|
|
|
|
|
|
|
|
|
Segment Operating
Income (Loss):
|
|
|
|
|
|
|
|
Energy
|
$
|
12,664
|
|
|
$
|
9,805
|
|
|
$
|
58,471
|
|
|
$
|
38,703
|
|
Galvanizing
|
23,077
|
|
|
20,337
|
|
|
94,766
|
|
|
88,562
|
|
Corporate
|
(9,165)
|
|
|
(7,049)
|
|
|
(30,949)
|
|
|
(20,440)
|
|
Total Segment
Operating Income
|
$
|
26,576
|
|
|
$
|
23,093
|
|
|
$
|
122,288
|
|
|
$
|
106,825
|
|
Condensed
Consolidated Balance Sheet
(in
thousands)
|
|
|
|
|
|
February 29,
2016
|
|
February 28,
2015
|
|
|
|
|
Assets:
|
|
|
|
Current
Assets
|
$
|
309,334
|
|
|
$
|
298,634
|
|
Net Property, Plant
and Equipment
|
226,333
|
|
|
196,583
|
|
Other Assets,
Net
|
447,704
|
|
|
441,697
|
|
Total
Assets
|
$
|
983,371
|
|
|
$
|
936,914
|
|
|
|
|
|
Liabilities and
Shareholders' Equity:
|
|
|
|
Current
Liabilities
|
$
|
148,405
|
|
|
$
|
149,142
|
|
Long Term Debt Due
After One Year
|
303,790
|
|
|
315,982
|
|
Other
Liabilities
|
49,960
|
|
|
51,738
|
|
Shareholders'
Equity
|
481,216
|
|
|
420,052
|
|
Total Liabilities and
Shareholders' Equity
|
$
|
983,371
|
|
|
$
|
936,914
|
|
Condensed
Consolidated Statements of Cash Flows
(in
thousands)
|
|
|
|
Twelve Months
Ended
|
|
February 29,
2016
|
|
February 28,
2015
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
143,589
|
|
|
$
|
118,157
|
|
Net cash used in
investing activities
|
(99,308)
|
|
|
(39,565)
|
|
Net cash used in
financing activities
|
(25,323)
|
|
|
(82,414)
|
|
Effect of exchange
rate changes on cash
|
(1,294)
|
|
|
(1,216)
|
|
Net increase
(decrease) in cash and cash equivalents
|
$
|
17,664
|
|
|
$
|
(5,038)
|
|
Cash and cash
equivalents at beginning of period
|
22,527
|
|
|
27,565
|
|
Cash and cash
equivalents at end of period
|
$
|
40,191
|
|
|
$
|
22,527
|
|
Non-GAAP Disclosure
Adjusted
Earnings Per Share
Adjusted Earnings Per Share
In addition to reporting financial results in accordance with
GAAP, AZZ has provided adjusted earnings per share, which is a
non-GAAP measures. Management believes that the presentation
of these measures provides investors with greater transparency
comparison of operating results across reporting periods.
The following table provides a reconciliation for the three and
twelve-month periods ended February 29,
2016 between adjusted earnings per diluted share and
earnings per diluted share calculated in accordance with GAAP which
is shown net of tax:
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
February 29,
2016
|
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share (GAAP)
|
|
$
|
0.62
|
|
|
$
|
2.96
|
|
|
|
|
|
|
Adjustments (Net of
Tax):
|
|
|
|
|
Commercial Lawsuit -
Remove costs incurred related to defending and resolving a
commercial lawsuit
|
|
0.08
|
|
|
0.10
|
|
401K Matching -
Remove costs incurred to rectify 401K matching error in prior
years
|
|
0.02
|
|
|
0.02
|
|
Adjusted Diluted
Earnings Per Share (Non-GAAP)
|
|
$
|
0.72
|
|
|
$
|
3.08
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/azz-inc-reports-record-financial-results-for-fiscal-year-2016-300255163.html
SOURCE AZZ Inc.