Electrical products manufacturer reports 37 percent revenue increase

CROWLEY, Texas, Dec. 20, 2000 (PRNewswire) à‚– AZZ incorporated (NYSE: AZZ), formerly Aztec Manufacturing Co., a manufacturer of electrical products and a provider of galvanizing services, today announced financial results for the third quarter of fiscal year 2001, ended November 30, 2000. Revenues for the quarter were a record $32.1 million compared to $24.7 million for the comparable quarter last year; an increase of 30%.

Net income for the quarter increased 16% to $2.1 million, or 42 cents per diluted share, compared to net income of $1.8 million, or 37 cents per diluted share, in last year’s fiscal third quarter. Backlog for the Manufactured Products Segment at the end of the quarter was $34.1 million.

For the nine-month period, the Company reported revenues of $90.5 million compared to $66.3 million for the comparable period last year, an increase of 37%. Net income for the nine months increased 26% to $6.0 million, or $1.21 per diluted share, compared to $4.8 million or $1.00 per diluted share for the comparable nine-month period last year. EBITDA (earnings before interest, taxes, depreciation and amortization) reached a record setting level of $15.8 million, an increase of $3.7 million or 31% over the same period for the previous fiscal year.

Revenues for the Manufactured Products Segment increased by 33% during the quarter to $19.1 million compared to $14.4 million in the previous year’s third quarter. Operating income for this Segment was up 54% compared to the third quarter of last year. Revenues for the nine-month period for this segment increased 38% to $50.4 million and operating income increased 63% to $7.9 million.

“The AZZ team continues to do an excellent job of expanding our customer base, improving market penetration, and enhancing our image as a solutions provider,” said David H. Dingus, president and chief operating officer of AZZ incorporated.

“The very dynamic market conditions that exist for our products in the power generation, transmission and distribution industries have allowed for us to keep pace with our internal targets for growth and expansion. We continue to seek out additional products that we can provide to our existing customer base that will further enhance our solutions capabilities.”

Revenues for the Company’s Service Segment, which consists of its galvanizing operations, were up 26% to $13 million compared to $10.3 million in the previous year’s third quarter.

Operating income decreased 16% to $2 million compared to $2.4 million in the same period of last year. For the nine-month period, revenues increased 35% to $40.1 million compared to $29.8 million for the same period in the previous year. This segment reported operating income of $7.6 million, an increase of 8% when compared to the nine-month period of the previous year.

Dingus continued, “The Services Segment revenues continue to be favorably impacted by the dynamics of telecommunications and utility pole and tower markets. The strong name that we are building within the industry as a provider of a superior level of service and support will greatly assist us as we continue to seek out opportunities to expand into new geographic areas.

“We have been unfavorably impacted by substantial cost increases associated with zinc and utilities. While the zinc cost increases were incorporated in our internal targets, the sharp rise in utilities was not. Despite the strong markets, we have not been able to pass on the full cost increases associated with zinc and utilities.

“We have recently introduced a fuel surcharge which should alleviate a portion of the unfavorable impact of increasing utility costs in the coming months. We anticipate that the operating results for fiscal 2001 in this segment will be essentially the same as our last fiscal year.”

AZZ incorporated, formerly Aztec Manufacturing Co. is a specialty electrical equipment manufacturer serving the global growth markets of power generation, transmission and distribution, as well as a leading provider of hot dip galvanizing services to the steel fabrication market nationwide.

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