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Azz Incorporated has a market cap of $773.4 million; its shares were traded at around $66.89 with a P/E ratio of 18.4 and P/S ratio of 1.7. The dividend yield of Azz Incorporated stocks is 1.6%. Azz Incorporated had an annual average earning growth of 19.9% over the past 10 years. GuruFocus rated Azz Incorporated the business predictability rank of 3.5-star.
Highlight of Business Operations:For the three-month period ended May 31, 2012, consolidated revenues were $127.1 million, an 11% increase as compared to the same period in fiscal 2012. For the quarter ended May 31, 2012, the Electrical and Industrial Products Segment contributed 35% of the Company’s revenues and the Galvanizing Services Segment accounted for the remaining 65% of the combined revenues. For the three month period ended May 31, 2011, the Electrical and Industrial Products Segment contributed 42% of the Company’s revenues and the Galvanizing Services Segment contributed 58% of the combined revenues.
Revenues in the Galvanizing Services Segment increased $16.4 million, or 25%, for the three-month period ended May 31, 2012, as compared to the same period in fiscal 2012. The volume of steel processed for the three month period ended May 31, 2012 accounted for 32% of the increase in revenues while the selling price decreased 7%. The increased revenues in our Galvanizing Services Segment resulted from improved demand from the renewable energy, industrial and OEM markets. In addition to the improvements in these markets, our acquisition of Galvan Metals in the fourth quarter of fiscal 2012, contributed 20% of the increase in revenues.
Segment operating income in the Electrical and Industrial Products Segment decreased 8% for the three-month period ended May 31, 2012, to $6.8 million as compared to $7.4 million for the same period in fiscal 2012. Operating margins were 15% for both the three month periods ended May 31, 2012 and May 31, 2011. Operating profits were adversely impacted by lower revenues.
General Corporate expenses, (see Note 4 to consolidated financial statements) not specifically identifiable to a segment, for the three-month period ended May 31, 2012, were $6.8 million compared to $6.2 million for the same period in fiscal 2012. As a percentage of sales, General Corporate expenses were 5% for both the three-month period ended May 31, 2012, and 2011. For the first quarter of fiscal 2013, the Company has incurred expensed acquisition costs of $.6 million, related to the acquisition of Nuclear Logistics Incorporated (“NLI”), (see Note 6 to the consolidated financial statements).
Our operating activities generated cash flows of approximately $16.2 million for the three month period ended May 31, 2012 compared to $9.7 million for the same period in the prior fiscal year. Cash flows from operations for the three month period ended May 2012 included net income in the amount of $16.0 million, depreciation and amortization in the amount of $5.8 million, and other adjustments to reconcile net income to net cash in the amount of ($2.4) million. Included in other adjustments were provisions for bad debt in the amount of $.3 million, deferred income taxes in the amount of $1.6 million, net gain on insurance settlement or on sale of property, plant and equipment of $6.0 million and non-cash adjustments in the amount of $1.7 million. Negative cash flow was recognized due to increased inventories, prepaid expenses, and revenue in excess of billings in the amount of $4.7 million, $2.1 million and $1.0 million, respectively, and decreased other accrued liabilities in the amount of $1.1 million. Positive cash flow was recognized due to increased accounts payables in the amount of $1.5 million and decreased accounts receivable and other assets in the amount of $4.1 million and $.01 million, respectively. Accounts receivable average days outstanding were 48 days for the three month period ended May 31, 2012, as compared to 48 days for the same period in the prior fiscal year.
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