AZZ incorporated (AZZ) has reported net sales of $108.9 million for the third quarter of fiscal 2009, up 26%, compared with the net sales of $86.6 million in the year-ago quarter. It has also reported a net income of $10.8 million, or $0.88 per diluted share, for the third quarter of fiscal 2009, up 34%, compared with the net income of $8.1 million, or $0.66 per diluted share, in the year-ago quarter.
For the nine-month period, the company reported revenues of $312.1 million, an increase of 28% compared to $243.6 million for the comparable period last year. Net income for the nine months rose 58% to $32.2 million, or $2.62 per diluted share, compared to $20.4 million, or $1.67 per diluted share for the comparable nine-month period last year.
The unaudited financial results for the three and nine month periods ended November 30, 2008, were favorably impacted by the acquisition of AAA Galvanizing, Inc. acquired on March 31, 2008 and the acquisition of Blenkhorn & Sawle Ltd. on June 30, 2008.
Backlog at the end of the third quarter was a record setting $195.3 million versus $147.1 million at November 30, 2007, an increase of 33%. Backlog at the end of the second quarter was $190.8 million. Incoming orders for the third quarter totaled $113.3 million while shipments totaled $108.9 million resulting in a book to ship ratio of 104%. For the first nine months, orders totaled $359.2 million while shipments totaled $312.1 million, resulting in a year-to-date book to ship ratio of 115%. Incoming orders for the first nine months increased 33% when compared to the same period a year ago. Based upon current customer requested delivery dates and our planned production schedule, 34% of our backlog is expected to ship in the current fiscal year. Of our $195.3 million backlog, 35% is to be delivered outside of the US.
Revenues for the Electrical and Industrial Products Segment increased 20% to $62 million for the third quarter, compared to $51.5 million in the previous year’s third quarter. Operating income for this segment was $10.4 million, compared to $8.0 million in the third quarter of last year, an increase of 30%. For the first nine months, revenues increased 21% to $165.9 million and operating income increased 26% to $28.1 million compared to $137.5 and $22.3 million, respectively, for the first nine months of the prior year.
David H. Dingus, president and chief executive officer, said, ‘The results of the third quarter for this segment closely mirror those of the excellent results of the first and second quarters of FY 2009. Strong order levels for our Electrical and Industrial Products Segment continued in the third quarter. New orders were balanced across our power generation, transmission and distribution, and industrial products. While there is future potential for some order delays due to the economic and credit conditions, to date we have seen only isolated cases domestically where delays have been implemented. The leverage gained from improved volumes and improved operating efficiency and pricing is reflected in our operating margins. Operating margins for the first nine months are 17% versus 16% for the same period last year. Our challenge remains to continue to achieve growth by expanding our served markets and increasing our product offerings while maintaining our targeted margin levels.’
Revenues for the company’s Galvanizing Services Segment increased 34% to $46.9 million for the third quarter, compared to $35.1 million in the previous year’s comparable quarter. Operating income for this segment was $13.1 million, an increase of 58%, compared to $8.3 million in the same quarter last year. For the first nine months of fiscal 2009, revenues increased 38% to $146.2 million, and operating income increased 60% to $42 million, compared to $106.1 and $26.2 million, respectively, for the first nine months of the prior year. AAA Galvanizing acquired on March 31, 2008, contributed $33.7 million to our total nine months revenue. Our revenues generated from our historical operations prior to the acquisition of AAA for the first nine month period increased 6%. While our volume of steel processed increased, our average selling price decreased 2% as compared to the same nine month period in the prior year.
Dingus added, ‘Strong market demand throughout most of our markets, combined with superior levels of quality and service, positively impact our ability in the third quarter to maintain strong pricing and margins despite changes in the cost of zinc. We achieved excellent operating margins for the quarter of 28%. We are most pleased that our tonnage processed for the first nine months of the current fiscal year reflected double digit growth due primarily to acquisitions. Margins remained solidly ahead of prior years. We will continue to closely monitor U.S. industrial market indicators to determine the potential impact upon our markets. During the third quarter decreased demand was limited to markets in our upper Midwest U.S. operations. We are extremely pleased with the assimilation of AAA galvanizing into our operations and their year to date results show improvement over historical levels.’
Dingus concluded, ‘Based upon the evaluation of information currently available to management, we are increasing our previously issued earnings guidance for fiscal year 2009. Our earnings are estimated to be within the range of $3.35 and $3.45 per diluted share. Revenues are estimated to be within the range of $420 and $430 million, which is unchanged from the previously issued guidance. Our estimates assume that we will not have any significant delays in the delivery of our electrical and industrial products, and that the demand for galvanizing services and pricing will not significantly change from current levels during the balance of the fiscal year.’