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AZZ Inc. Reports Operating Results (10-Q)

January 06, 2012 | About:
10qk

10qk

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AZZ Inc. (AZZ) filed Quarterly Report for the period ended 2011-11-30.

Azz Inc. has a market cap of $575 million; its shares were traded at around $45.75 with a P/E ratio of 15.3 and P/S ratio of 1.5. The dividend yield of Azz Inc. stocks is 2.2%. Azz Inc. had an annual average earning growth of 22.9% over the past 10 years.
This is the annual revenues and earnings per share of AZZ over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of AZZ.


Highlight of Business Operations:

For the three and nine-month periods ended November 30, 2011, consolidated revenues were $116.5 million and $345.5 million, respectively, a 13% and 23% increase, respectively, as compared to the same periods in fiscal 2011. The Electrical and Industrial Products Segment contributed 38% and 40% of the Company’s revenues, respectively, and the Galvanizing Services Segment accounted for the remaining 62% and 60% of the combined revenues, respectively, for the three and nine-month periods ended November 30, 2011.

Revenues for the Electrical and Industrial Products Segment increased $2.8 million, or 7%, for the three-month period ended November 30, 2011, and increased $17.5 million, or 15%, for the nine-month period ended November 30, 2011, as compared to the same periods in fiscal 2011. The increased revenues for the three month and nine month periods ended November 30, 2011, resulted from higher demand from the power generation market as compared to the same periods last year. In addition, in the first quarter of fiscal 2012, we experienced an increase in quick turn jobs that were booked and shipped in the first quarter, which accounted for the additional increase in revenue for the nine month period ended November 30, 2011.

Revenues in the Galvanizing Services Segment increased $10.8 million, or 17%, for the three-month period ended November 30, 2011, as compared to the same period in fiscal 2011 and increased $48.0 million, or 30%, for the nine-month period ended November 30, 2011, as compared to the same period in fiscal 2011. The acquisition of NGA generated $21.2 million and $60.7 million, respectively, of this segment’s revenues for the three and nine months periods ended November 30, 2011, compared to $18.3 million and $33.4 million for the three and nine months, respectively, in the prior year. The volume of steel processed for the three month period ended November 30, 2011 accounted for 16% of the increase in revenues and the remaining 1% was a result of an increase in selling price. The volume of steel processed for the nine month period ended November 30, 2011 accounted for 28% of the increase in revenues and the remaining 2% was a result of an increase in selling price. The acquisition of NGA accounted for 34% and 62% of the increase in volume, respectively, for the three and nine month periods ended November 30, 2011. Excluding the acquisition of NGA, volumes increased 17% and selling price increased 2% for the nine month period ended November 30, 2011. Historically, revenues for this segment have followed closely the condition of the industrial sector of the general economy.

General corporate expenses, (see Note 4 to consolidated financial statements) not specifically identifiable to a segment, for the three-month period ended November 30, 2011, were $4.7 million compared to $4.6 million for the same period in fiscal 2011. For the nine-month period ended November 30, 2011, general corporate expenses were $15.8 million as compared to $16.6 million for the comparable period last year. In the prior year, general corporate expenses included $1.8 million of acquisition expenses related to the NGA acquisition for the nine month period. As a percentage of sales, general corporate expenses were 4% and 5%, respectively, for the three and nine-month periods ended November 30, 2011, as compared to 4% and 6% for the same periods in fiscal 2011. The decrease in General corporate expenses as a percentage of sales for the nine month period ended November 30, 2011, as compared to the same period in the prior year was a result of the NGA acquisition costs that were recorded in the prior year and increased revenues in the current fiscal year.

Our operating activities generated cash flows of approximately $46.8 million for the nine month period ended November 30, 2011, as compared to $25.5 million for the same period in the prior fiscal year. Cash flows from operations for the nine month period ended November 30, 2011 included net income in the amount of $29.1 million, depreciation and amortization in the amount of $16.9 million, and other adjustments to reconcile net income to net cash in the amount of $6.7 million. Included in other adjustments were share-based compensation expense in the amount of $2.7 million, provisions for bad debts in the amount of $.1 million, deferred income taxes in the amount of $3.5 million, gain or loss on the sale of assets in the amount of $.2 million, and other non-cash adjustments in the amount of $.2 million. Negative cash flow was recognized due to increased accounts receivable, inventories and prepaid expenses in the amount of $3.7 million, $5.3 million and $1.2 million, respectively, and decreased other accrued liabilities in the amount of $.5 million. Positive cash flows were recognized due to increased accounts payable in the amount of $2.6 million and decreased revenue in excess of billings in the amount of $2.2 million. Accounts receivable average days outstanding were 48 days for both the nine month period ended November 30, 2011 and the same period in the prior fiscal year.

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