UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

For the Fiscal Year Ended:fiscal year ended February 29, 200428, 2007

OR

For the transition period from                  to                 

Commission File No.file number: 1-12777

AZZ incorporated

(Exact name of registrant as specified in its charter)

(817) 810-0095

(Registrant’s telephone number, including area code: (817) 810-0095code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to sectionSection 12(b) of the act:Act:

Securities registered pursuant to sectionSection 12(g) of the act:Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes  ¨    No  x

Indicate by check mark whether the Registrantregistrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrantregistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’sregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨                                 Accelerated filer  x                                Non-accelerated filer  ¨

Indicate by check mark whether the registrant is an accelerated filera shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

TheAs of August 31, 2006 (the last business day of its most recently completed second fiscal quarter), the aggregate market value of Common Stockthe registrant’s common stock held by non-affiliates of the registrant was $153,633,396 based on the closing sale price of $30.75 per share as reported on the New York Stock Exchange (For purposes of determining the above stated amount, only the directors, executive officers and 10% or greater shareholders of the registrant have been deemed affiliates; however, this does not represent a conclusion by the registrant that any or all such persons are affiliates of the registrant).

As of February 28, 2007, there were 11,654,164 shares of the registrant’s common Stock ($1.00 par value) outstanding, after giving effect to our two-for-one stock split, effective in the form of a share dividend on May 17, 2004, was approximately $75,406,000. As of May 17, 2004, there were 5,236,496 shares of AZZ incorporated Common Stock $1.00 par value outstanding.

4, 2007.

Documents Incorporated By ReferenceDOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates information by reference from the Proxy Statement for the 2004 Annual Meeting of Shareholders of Registrant.

AZZ incorporated

YEAR ENDED FEBRUARY 28, 2007

INDEX TO FORM 10-K

Forward Looking Statements

This Report may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are generally identified by the use of words such as “anticipate,” “expect,” “estimate,” “intend,” “should,” “may,” “believe,” and terms with similar meanings. Although the Company believes that the current views and expectations reflected in these forward-looking statements are reasonable, those views and expectations, and the related statements, are inherently subject to risks, uncertainties, and other factors, many of which are not under the Company’s control. Those risks, uncertainties, and other factors could cause the actual results to differ materially from thesethose in the forward-looking statements. Those risks, uncertainties, and factors include, but are not limited to: the level of customer demand for and response to products and services offered by the Company, including demand by the power generation markets, electrical transmission and distribution markets, the general industrial market, and the hot dip galvanizing markets; prices and raw material cost, including the cost of zinc and natural gas, which are used in the hot dip galvanizing process; changes in economic conditions of the various markets the Company serves, both foreign and domestic,domestic; customer requested delays of shipments,shipments; acquisition opportunities or lack thereof; adequacy of financing,financing; and availability of experienced management employees to implement the Company’s growth strategy. The Company expressly disclaims any obligationsobligation to release publicly any updates or revisions to these forward-looking statements to reflect any change in its views or expectations. The Company can give no assurances that such forward-looking statements will prove to be correct.

PART I

Item 1. Business

AZZ incorporated (“AZZ”, the “Company” or the “Company”“we”) was established in 1956 and incorporated under the laws of the State of Texas. The Company isWe are an electrical equipment and components manufacturer, serving the global markets of power generation, transmission and distribution, and the general industrial markets, as well asand a leading provider of hot dip galvanizing services to the steel fabrication market nationwide.

The Company offers We offer products through two distinct business segments, the Electrical and Industrial Products Segment and the Galvanizing Services Segment.

Electrical and Industrial Products Segment

TheOur Electrical and Industrial Products Segment produces highly engineered specialty electrical products as well as industrial lighting and tubular products. The Company marketsproducts, all of which we market and sells its products throughout the global market place. Thesell both domestically and in international markets. Our electrical products of this segment are defined as products that are designed, manufactured and configured to distribute electrical power to and from generators, transformers, switching devices orand other electrical configurations. These electrical systemsconfigurations and are supplied to the power generation, power transmission and power distribution markets as well as the general industrial market. While serving many of the same markets, theOur industrial products are defined asinclude industrial lighting and tubular products used for petro-chemical and industrial applications. LightingWe provide lighting products are provided to the petroleum, food processing, and power generation industries and to industrial industries with unique lighting challenges. The principal market forWe also provide tubular products isto the petroleum industry.

The markets for the Company’sour Electrical and Industrial Products Segment are highly competitive and consist of a few large multinationalmulti-national companies, as well as numerous small independents.independent companies. Competition is based primarily on product quality, range of product line, price and service. While some of these companiesour competitors are much larger and better financed than the Company, the Company believesus, we believe that itwe can compete favorably with them.

Copper, aluminum and steel are the primary raw materials used inby this segment andsegment. All of these raw materials are currently readily available. This

We sell this segment’s products are sold through manufacturers’ representatives, distributors, agents and the Company’sour internal sales force. This segment isWe are not dependent on any single customer for this segment, and the loss of any single customer would not have a material adverse effect on our consolidated revenues or net income of the Company. income.

Backlog of orders for the Electrical and Industrial Products Segment was approximately $53.1 million at February 29, 2004, $49.1$120.7 million at February 28, 2003 and

$85.32007, $73.8 million at February 28, 2002. All2006, and $64.8 million at February 28, 2005. The majority of the year-end backlog as of February 28, 2007 should be delivered during the next 18 months. OrdersWe believe that the contracts and purchase orders included in the backlog are represented by contracts and purchase orders that the Company believes to be firm. Total employment

We employ a total of 668 people in this segment is 567 persons.segment.

Galvanizing Services Segment

The Galvanizing Services Segment provides hot dip galvanizing to the steel fabrication industry through facilities located throughout the South, Midwest and Southwest United States. The eleven galvanizing plants of the Company are located in Texas, Louisiana, Alabama, Mississippi, Arkansas, and Arizona. Hot dip galvanizing is a metallurgical process byin which molten zinc is applied to a customer’s material. The zinc bonding providesrenders a corrosion protection ofto fabricated steel for extended periods of up to 50 years. We operate fourteen galvanizing plants, which are located in Texas, Louisiana, Alabama, Mississippi, Arkansas, Arizona, Indiana and Ohio.

Galvanizing is a highly competitive business, and the Company competeswe compete with other galvanizing companies, captive galvanizing facilities operated by manufacturers, and alternate forms of corrosion protection such as paint. The CompanyOur galvanizing market is generally limited to some extent, in its galvanizing market to areas within a relatively close proximity of its existing locationsour galvanizing plants due to freight cost.

Zinc, the principal raw material used in the galvanizing process, is currently readily available, but has volatile pricing. The Company manages itsWe manage our exposure to commodity pricing of zinc by utilizing contractsagreements with zinc suppliers that include protective caps to guard against risingescalating commodity prices. This segment

We typically servesserve fabricators and/or manufacturers involved inwho provide services to the highway construction, electrical utility, transportation, water treatment, agriculture,and telecommunications, bridge and highway, petrochemical and chemical, pulp and paper industries, andgeneral industrial markets, as well as numerous OEM’s. The market in general is broken into two major categories, being large structural steel projects and custom fabrication. This segment isoriginal equipment manufacturers (“OEMs”). We do not dependentdepend on any single customer for our galvanizing services, and the loss of any single customer would not have a material adverse effect on our consolidated revenues or net income of the Company. income.

The backlog of galvanizing orders generally is nominal due to the short time requirement involved in the process. Total employment

We employ a total of 633 people in this segment is 392 persons.

segment.

GeneralRecent Developments—Stock Splits

The Company does not haveOn April 5, 2007, our Board of Directors authorized a material portiontwo-for-one split of business that maycommon stock, to be subject to renegotiations of profits or termination of contracts or subcontracts at the election of the government. There were no material amounts spent on research and development activities during the proceeding three fiscal years.

Environmental

The Company is subject to various environmental protection reviews by state and federal government agencies. The ultimate liability, if any, which might result from such reviews or for additional clean-up and remediation expenses cannot presently be determined; however, as a result of an internal analysis and information developed from prior clean-up efforts, management believes the results of the reviews will not have a material impact on the Company and that the recorded reserves for estimated costs are adequate. The Company has reserved $505,000 and $561,000 as of February 29, 2004 and February 28, 2003, respectively, for estimated costs related to environmental protection and regulatory compliance. In order to maintain permits to operate certain of the Company’s facilities, future capital expenditures for equipment may be required to meet new or existing environmental regulations.

Legal

The Company is involved from time to time in various suits and claims arisingeffected in the normal courseform of business. In management’s opinion,a dividend of one share of Common Stock for every one share of Common Stock outstanding. The dividend will be paid on May 4, 2007 to shareholders of record on April 20, 2007. All share and per share data in this Annual Report on Form 10-K is presented as though the ultimate resolution of these matters will not have a material effect on the Company’s financial position or results of operations.stock split has already been effected.

Executive Officers of the Registrant

Each executive officer was elected by the Board of Directors to hold office until the next Annual Meeting or until his successor is elected. There are no family relationships between Executive Officers of the Registrant.

Available Information

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and its rules and regulations. The Exchange Act requires us to file reports, proxy statements and other information with the SEC. Copies of these reports, proxy statements and other information can be inspected and copied at:

SEC Public Reference Room

450 Fifth100 F Street, N.W.

Room 1024N.E.

Washington, D.C. 20549

You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also obtain copies of any material we have filed with the SEC by mail at prescribed rates from:

Public Reference Section

Securities and Exchange Commission

450 Fifth100 F Street N.W.N.E.

Washington, D.C. 20549-0004

20549

You may obtain these materials electronically by accessing the SEC’s Websitewebsite on the Internet at:

http://www.sec.gov

In addition, we make available, free of charge, on our internet Website,website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file this material with, or furnish it to, the SEC. You may review these documents, under the heading “Investor Relations,” subheading “SEC Filings,” by accessingon our Website:

website at:

http://www.azz.com

Also, reports and other information concerning usour Company are available for inspection and copying at:

New York Stock Exchange

20 Broad Street

New York, New York 10005

Corporate Governance

TheOur Company’s Board of Directors, with the assistance of its Nominating and Corporate Governance Committee, has adopted Corporate Governance Guidelines that set forth the Board’s policies regarding corporate governance. You may review the Corporate Governance Guidelines under the Heading “Investor Relations,” subheading “Corporate Governance,” by accessing our Website:

http://www.azz.com

You may also obtain a copy of the Corporate Governance Guidelines by mailing a request to:

AZZ incorporated

Investor Relations

University Centre I, Suite 200

1300 South University Drive

Fort Worth, TX 76107

In connection with the Board of Directors’ responsibility to oversee our legal compliance and conduct, the board has adopted a Code of Ethics, which applies to the Company’s officers, directors and employees. You may review the Code of Ethics under the heading “Investor Relations,” subheading “Corporate Governance,” by accessing our Website:

http://www.azz.com

You may also obtain a copy of the Code of Ethics by mailing a request to:

AZZ incorporated

Investor Relations

University Centre I, Suite 200

1300 South University Drive

Fort Worth, TX 76107

The Board of Directors has adopted charters for each of its Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. You may review a copythe Corporate Governance Guidelines, our Code of theEthics and our Committee charters of each of these Committees under the headingHeading “Investor Relations,” subheading “Corporate Governance,” by accessingon our Website:

website at:

http://www.azz.com

You may also obtain a copy of the chartersthese documents by mailing a request to:

AZZ incorporated

Investor Relations

University Centre I, Suite 200

1300 South University Drive

Fort Worth, TX 76107

Our business is subject to a variety of risks, including the risks described below. While we believe that the risks and uncertainties described below are the most significant risks and uncertainties facing our business, they are not the only ones facing us. Additional risks and uncertainties not known to us or not described below may also impair our business operations. If any of the following risks actually occur, our business, financial condition and results of operations could be negatively impacted and our future growth would be impacted as well.

Our business segments operate in highly competitive markets

Many of our competitors, primarily in our Electrical and Industrial Products Segment, are significantly larger and have substantially more resources than we do. Competition is based on a number of factors, including price. Certain of our competitors may have lower cost structures and may, therefore, be able to provide their products and services at lower rates than we are able to provide. We cannot be certain that our competitors will not develop the expertise, experience and resources to provide services that are superior in both price and quality. Similarly, we cannot be certain that we will be able to maintain or enhance our competitive position within our industries, maintain our customer base at current levels or increase our customer base.

Our business segments are sensitive to economic downturns

If the general level of economic activity deteriorates from current levels, our customers may delay or cancel new projects. If there is a reduction in demand for our products or services, as result of a downturn in the general economy, there could be a material adverse effect on price levels and the quantity of goods and services purchased, therefore adversely impacting revenues and results from operations. A number of factors, including

financing conditions and potential bankruptcies in the industries we serve, could adversely affect our customers and their ability or willingness to fund capital expenditures in the future and pay for past services.

International and political events may adversely affect our Electrical and Industrial Products Segment

A portion of the revenues from our Electrical and Industrial Products Segment are from international markets. The occurrence of any of the risks described below could have an adverse effect on our consolidated results of operations, cash flows and financial condition:

Fluctuations in the price and supply of raw materials and natural gas for our business segments may adversely affect our operations.

We purchase a wide variety of raw materials for our Electrical and Industrial Products Segment to manufacture our products, including steel, aluminum and copper. Unanticipated increases in raw material requirements or price increases could increase production costs and adversely affect profitability. In our Galvanizing Service Segment, zinc and natural gas represent a large portion of our cost of sales. The prices and availability of zinc and natural gas are highly volatile. The following factors, which are beyond our control, affect the price of raw materials and natural gas for our business segments: supply and demand; freight costs and transportation availability; inventory levels; trade duties and taxes; and labor disputes. We seek to maintain operating margins by attempting to increase the price of our products and services in response to increased costs, but may not be successful in passing these price increases through to our customers.

Our dependence upon fixed-price contracts for our Electrical and Industrial Products Segment could adversely affect our business.

We currently generate, and expect to continue to generate, a significant portion of our revenues under fixed price contracts. We must estimate the costs of completing a particular project to bid for fixed-price contracts. The actual cost of labor and materials, however, may vary from the costs we originally estimated. Depending on the size of particular project, variations from estimated cost could have a significant impact on our operating results for any fiscal year.

Our compliance with various governmental regulations and environmental risks may increase our costs.

Our business is subject to numerous federal, state, provincial, local and foreign laws and regulations, including regulations, primarily in our Galvanizing Services Segment, with respect to air emissions, storm water and the generation, handling, storage, transportation, treatment, and disposal of waste materials. Although we believe we are substantially in compliance with all applicable laws and regulations, legal requirements are frequently changed and subject to interpretation, and the presently unpredictable ultimate cost of compliance with these requirements could adversely impact our operations. We may be required to make significant expenditures to comply with governmental laws and regulations. Existing laws or regulations, as currently interpreted or reinterpreted in the future, or future laws or regulations, could have a material adverse effect on our results of operations and financial condition.

Item 2. PropertiesOur acquisition strategy involves a number of risks.

We intend to pursue growth through the pursuit of opportunities to acquire companies or assets that will enable us to expand our product and service offerings. We routinely review potential acquisitions. However, we may be unable to implement this growth strategy if we cannot reach agreement on potential strategic acquisitions on acceptable terms or for other reasons. Moreover, our acquisition strategy involves certain risks, including:

Future acquisitions may require us to obtain additional equity or debt financing, which may not be available on attractive terms.

Our use of percentage-of-completion accounting in the Electrical and Industrial Products Segment could result in a reduction or elimination of previously reported profits.

As discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates” and in the notes to our consolidated financial statements, a portion of our revenues are recognized on a percentage-of-completion method of accounting. The percentage-of-completion accounting practice we use results in our recognizing contract revenues and earnings ratably over the contract term in proportion to our incurrence of contract costs. The earnings or losses recognized on individual contracts are based on estimates of contract revenues, costs and profitability. Contract losses are recognized in full when determined, and contract profit estimates are adjusted based on ongoing reviews of contract profitability. Actual collection of contract amounts or change orders could differ from estimated amounts and could result in a reduction or elimination of previously recognized earnings. In certain circumstances, it is possible that such adjustments could be significant.

We may not be able to fully realize the revenue value reported in our backlog for our Electrical and Industrial Products Segment.

We have a backlog of work in our Electrical and Industrial Products Segment to be completed on contracts. Orders included in our backlog are represented by customer purchase orders and contracts, which we believe to be firm. Backlog develops as a result of new business taken, which represents the revenue value of new project commitments received by us during a given period. Backlog consists of projects which have either (1) not yet been started or (2) are in progress and are not yet complete. In the latter case, the revenue value reported in backlog is the remaining value associated with work that has not yet been completed. From time to time, projects are canceled that appeared to have a high certainty of going forward at the time they were recorded as new business taken. In the event of a project cancellation, we may be reimbursed for certain costs but typically have no contractual right to the total revenue reflected in our backlog. In addition to being unable to recover certain direct costs, we may also incur additional costs resulting from underutilized assets if projects are cancelled.

Our Operating results may vary significantly from quarter to quarter.

Our quarterly results may be materially and adversely affected by:

Accordingly, our operating results in any particular quarter may not be indicative of the results that you can expect for any other quarter or for the entire year.

We may be unsuccessful at generating internal growth.

Our ability to generate internal growth will be affected by, among other factors, our ability to:

Many of the factors affecting our ability to generate internal growth may be beyond our control, and we cannot be certain that our strategies will be successful or that we will be able to generate cash flow sufficient to fund our operations and to support internal growth. If we are unsuccessful, we may not be able to achieve internal growth, expand our operations or grow our business.

The departure of key personnel could disrupt our business.

We depend on the continued efforts of our executive officers and senior management. We cannot be certain that any individual will continue in such capacity for any particular period of time. The loss of key personnel, or the inability to hire and retain qualified employees, could negatively impact our ability to manage our business.

Our business requires skilled labor, and we may be unable to attract and retain qualified employees.

Our ability to maintain our productivity and profitability will be limited by our ability to employ, train and retain skilled personnel necessary to meet our requirements. We may experience shortages of qualified personnel. We cannot be certain that we will be able to maintain an adequately skilled labor force necessary to operate efficiently and to support our growth strategy or that our labor expense will not increase as a result of shortage in the supply of skilled personnel. Labor shortages or increased labor costs could impair our ability to maintain our business or grow our revenues.

No unresolved staff comments were open as of February 28, 2007.

Item 2.

Properties

The following table sets forth information about the Company’s principal facilities, owned or leased, on February 29, 2004:28, 2007:

Item 3. Legal Proceedings

Environmental Proceedings

The Company isWe are subject to various environmental protection reviews by state and federal government agencies. TheWe cannot presently determine the ultimate liability, if any, whichthat might result from suchthese reviews or additional clean-up and remediation expenses cannot presently be determined; however,expenses. However, as a result of an internal analysis and prior clean-up efforts, management believeswe believe that the resultsreviews and any required remediation will not have a material impact on the Company and that the recorded reserves for estimated losses are adequate. The Company hasWe reserved $505,000$350,000 and $561,000$348,000 as of February 29, 200428, 2007 and February 28, 2003,2006, respectively, for estimated costcosts related to environmental compliance. In order to maintain permits to operate certain of the Company’sour facilities, we may need to make future capital expenditures for equipment may be requiredin order to meet new or existing environmental regulations.

Other Proceedings

The Company isWe are involved from time to time in various suits and claims arising in the normal course of business. In management’s opinion, the ultimate resolution of these matters will not have a material effect on the Company’sour financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

No matter was submitted during the fourth quarter of the fiscal year ended February 29, 2004, to a vote of security holders through the solicitation of proxies or otherwise.otherwise during the fourth quarter of the fiscal year ended February 28, 2007.

PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

TheOur common stock, $1.00 par value, of Registrant (“Common Stock”) is traded on the New York Stock Exchange and itsunder the symbol is AZZ. The Company was listed on the New York Stock Exchange and started trading on March 20, 1997. Prior to that date, the Company’s stock traded on the NASDAQ National Market.

“AZZ”. The following table sets forth the high and low sales prices of the Company’sour Common Stock on the New York Stock Exchange on a quarterly basis for each of the Company’s two fiscal years ended February 29, 200428, 2007 and February 28, 2003. No dividends were declared during that period.2006, all of which have been adjusted to reflect our two-for-one stock split, effected in the form of a stock dividend on May 4, 2007.

Effective January 7, 1999,The payment of dividends is within the discretion of our Board of Directors approved a stock rights plan, which authorized and declared a dividend distributionwill depend on our earnings, capital requirements, operating and financial condition and other factors. We expect for the foreseeable future to invest substantially all of one right for each share of common stock outstanding at the close of business on February 4, 1999. The rights are exercisable at an initial exercise price of $60, subject to certain adjustments as definedour earnings in the agreement, if a person or group acquires 15% or moreexpansion of the Company’s common stock or announces a tender offer that would result in ownershipour business and reduction of 15% or more of the common stock. Alternatively, the rights may be redeemed at one cent per right at any time until ten business days following the first public announcement of the acquisition of 15% of the Company’s common stock. The rights expire on January 7, 2009.

debt.

The approximate number of holders of record of our common stock of Registrant at May 17, 200410, 2007 was 690.525. See Item 12 of this Report for information regarding securities authorized for issuance under equity compensation plans.

STOCK PRICE PERFORMANCE GRAPH

The following graph illustrates the five-year cumulative total return on investments in our Common Stock, the CRSP Index for NYSE Stock Market (U.S. Companies) and the CRSP Index for NYSE Stocks (SIC 5000-5099 US Companies). These indices are prepared by the Center for Research in Security Prices of The University of Chicago Graduate School of Business. AZZ is listed on The New York Stock Exchange and is engaged in two industry segments. The shareholder return shown below is not necessarily indicative of future performance. Total return, as shown, assumes $100 invested on February 28, 2002, in shares of AZZ common stock and each index, all with cash dividends reinvested. The calculations exclude trading commissions and taxes.

Comparison of Five Year-Cumulative Total Returns

Value of $100 Invested on February 28, 2002

For Fiscal Year Ended on the Last Day of February

Item 6.

Selected Financial Data

Item 6. Selected Financial Data

Item 7. Management’s Discussion and Analysis of Financial Condition And Results of Operations

Overview

AZZ incorporated (the “Company”) operatesWe operate two distinct business segments, the Electrical and Industrial Products Segment and the Galvanizing Services Segment. The Electrical and Industrial Products Segment serves the power generation, transmission and distribution markets as well as the general industrial market. The Galvanizing Services Segment consists of elevenfourteen hot dip galvanizingdip-galvanizing facilities located throughout the South, Midwest and Southwest United States that provides a value addedprovide galvanizing serviceservices to the steel fabrication industry.

All per share data in this section have been adjusted to reflect our two-for-one stock split effected May 4, 2007.

For the fiscal year-ended February 29, 2004, the Company28, 2007, we recorded revenues of $136.2$260.3 million compared to the prior year’s revenues of $183.4$187.2 million. Approximately 65%58% of the Company’sour revenues were generated from the Electrical and Industrial Products Segment and approximately 35%42% were generated from the Galvanizing Services Segment. Net income for fiscal 20042007 was $4.3$21.6 million compared to $8.6$7.8 million in the fiscal 2003. Net income as a percent of sales was 3.1% for fiscal 2004 as compared to 4.7% for fiscal 2003. The reduction in net2006. Net income as a percentage of sales was primarily due8.3% for fiscal 2007 as compared to lower operating margins in the Electrical and Industrial Products Segment. The lower operating margins4.2% for this segment are a reflection of the markets in which we participate. These markets continue to be very competitive as a result of the capacity expansion that occurred during the strong power generation market and has produced more capacity than can be absorbed by the current market.fiscal 2006. Earnings per share decreasedincreased by 51.5%164% to $.79$1.82 per share for fiscal 20042007 compared to $1.63$.69 per share infor fiscal 2003,2006, on a diluted basis.

Results of Operations

Year ended February 29, 2004 (2004)28, 2007 (2007) compared with year ended February 28, 2003 (2003)2006 (2006)

Management believes that analyzing our revenue and operating income by segment is the most meaningful way to analyze our results of operations. Segment operating income consists of net sales less cost of sales, specifically identifiable selling, general and administrative expenses, and other (income) expense items that are

specifically identifiable to a segment. The other (income) expense items included in segment operating income are generally insignificant. For a reconciliation of segment operating income to pretax income, see Note 11 to Notes to Consolidated Financial Statements.

Backlog

Our operations ended fiscal 2007 with a backlog of $120.7 million, an increase of 64% as compared to fiscal 2006 backlog of $73.8 million. All of our backlog data relates to our Electrical and Industrial Products Segment. Our book-to-ship ratio was 1.18 to 1 for fiscal 2007 as compared to 1.05 to 1 in the prior year. In fiscal 2007, we continued our efforts to improve our market coverage and expand our served markets. The increased backlog reflects improvements in all of our served markets domestically and internationally, particularly in our high voltage transmission products.

The following table reflects bookings and shipments for fiscal 2007 and 2006.

Backlog Table

(In thousands)

Revenues

The following table reflects the breakdown of revenue by segment:

The Company’s

Our consolidated net revenues for fiscal 2004 decreased2007 increased by $47.2$73.2 million or 26%39%, as compared to fiscal 2003.

2006.

The Electrical and Industrial Products Segment produces highly engineered specialty products supplied to the power generation, power transmission, power distribution markets and general industrial markets as well as lighting and tubular products to the industrial and petroleum markets. The segment recorded revenues for fiscal 20042007 of $88.9$150.3 million, a decreasean increase of 34% below the21% above fiscal 20032006 results of $134.9$123.7 million. The reduced revenues resultincreased revenue was generated from continued strong market demand, primarily from lower demandour high voltage transmission and petroleum markets, and improved market conditions from the domestic power generation market, in fiscal 2004 as compared to fiscal 2003. This segmentwhich has worked through the backlog that was related to the domestic power generation projects.been stagnant for several years. In addition to the lackimproved market conditions, several quick turn projects were completed during the third and fourth quarters of new domestic power generation projects, the low capital spending levels in the industrial market in fiscal 2004 had a negative impact on this segment’s2007, which generated increased revenues. The Federal Reserve Industrial Capacity Utilization report, while showing improvement in recent months, still remains below 80% utilization. Factory utilization was at 76.6% at February 29, 2004 an increase frompassage of the 75.7% posted at November 30, 2003. A returnenergy legislation has and we believe will continue to utilization levels experienced between 1992 and 2000, which averaged 82.6%, would have a positive impact on manythis segment. There are incentives, reliability standards, and programs to promote alternative energy sources, which should continue to enhance customer spending. Continued improvements in capital spending and a continuation of this segment’s operations, which are dependant onthe 80% plus industrial utilization levels as reported by the Federal Reserve should sustain improved operating levels from the industrial market. The Company has continued to intensify its efforts to increase its presence in international markets and improve its position in industrial and utility markets through improvements in this segment’s distribution networks. In fiscal 2004, there were some encouraging results from the efforts in the international markets with the consummation of a co-branding and co-operative agreement with Jiangsu Changjiang Electric Group Co., Ltd. of China, and improved representation in the Middle East and Asia. These programs will better position the Company to take advantage of these markets, which are currently experiencing growth.

The Electrical and Industrial Products Segment ended fiscal 2004 with a backlog of $53.1 million, an increase of 8% as compared to fiscal 2003 backlog of $49.1 million. The segment recorded a book-to-ship ratio of 1.03 to 1 for fiscal 2004 as compared to .80 to 1 in the prior year. The backlog continues to be heavily weighted towards the distribution market. The backlog was aided by bookings for this segment’s high voltage bus duct product during the later part of fiscal 2004. Despite some modest improvements in our markets, as

indicated by the book-to-ship ratio, they still remain extremely competitive and price sensitive as the capacity expansion that occurred during the strong power generation market has resulted in much more capacity than can be absorbed by the current market demand. Going into fiscal 2005, the Company’s major concern for the Electrical and Industrial Products Segment remains its ability to sustain the book-to-ship ratio equivalent to the one that was obtained in fiscal 2004.

The Company’sOur Galvanizing Services Segment, which is made up of elevenfourteen hot dip galvanizing facilities, generated revenues of $47.3$110 million, a 3% decrease74% increase from the prior year’s revenues of $48.5$63.4 million. The declineincreased revenue resulted from a 54% improvement in revenuepricing and a 20% increase in the pounds of steel produced in fiscal 2007 as compared to fiscal 2006. Our acquisition of Witt Galvanizing, Inc. on November 1, 2006, accounted for fiscal 2004 was created by33% of the increase in the pounds of steel prices during the fourth quarter, which impacted manyproduced. The remaining 67% increase in volume resulted from improvements in all of our steel fabrication customers and delayed some scheduled projects. Duemarkets. The increase in selling price was the result of price increases implemented to offset the rising commodity cost of zinc. Historically, revenues for this segment’s broad customer base, and multiple locations it was able to minimizesegment have followed closely the impactcondition of the increased steel prices on its operations. As steel prices stabilize, revenues should return to levels experienced in fiscal 2003 and any improvements inindustrial sector of the economy or the industrial market should provide additional opportunities for increased revenues.

general economy.

Segment Operating Income

The following table reflects the breakdown of total operating income by segment:

The Company’s consolidated

Total segment operating income (see note 12Note 11 to NoteNotes to Consolidated Financial Statements) decreased 37%increased 122% to $15$53.2 million in fiscal 20042007 as compared to $23.8$24 million in fiscal 2003.2006. Consolidated operating margins as a percentpercentage of sales declined inimproved to 20% for fiscal 2004 to 11%2007 as compared to 13% for fiscal 20032006. The improvement resulted primarily from leverage obtained from increased revenues and improved pricing levels. We continue to place emphasis on systems and procedures and the sharing of best practices among our operations to further enhance operating margins of 13%. The decline in operating income and margins was the direct result of lower revenues, primarily in the Electrical and Industrial Segment and intense competition in both of the Company’s segments, which again resulted from difficult market conditions. The Company has sized its operations in both of its segments to reflect the extremely competitive conditions facing each of them and has continued to improve operating efficiencies which should result in improved financial performance. While significant progress has been made in this area, the Company continues to search out and seek additional improvements. During the fourth quarter of fiscal 2004, the Company began the implementation of a new ERP system, which is scheduled for completion by the end of fiscal 2005. Once the conversion is completed additional efficiencies should be recognized.efficiency. The Electrical and Industrial Products Segment generated 42%40% of the operating income for fiscal 2004,2007, while the Galvanizing Services Segment produced the remaining 58%60%.

Operating income for the Electrical and Industrial Products Segment declined $8.5increased $9.9 million or 57%87% for fiscal 2004,2007, to $6.4$21.3 million as compared to $14.9$11.4 million for fiscal 2003.2006. Operating margins for this segment declinedwere 14% for fiscal 2007 as compared to 7.2%9% for fiscal 2006. Operating margins and profit resulted from leverage obtained through increased revenues and improved market conditions, which allowed for more aggressive pricing to recover material cost increases for copper, aluminum and steel that occurred over the past two years. We were also able to capitalize on quick turn jobs that carried increased margins during fiscal 2007. Management continues to focus on and emphasize operating efficiency improvement, cost containment, expansion of served markets, and new product opportunities to further enhance our strategic position.

Operating income for the Galvanizing Service Segment increased $19.2 million for fiscal 2007, to $31.9 million as compared to $12.7 million for the prior year. The improved operating results reflect improved market conditions, which generated higher revenues, and improved price realization required to offset the rising cost of zinc. Operating margins improved to 29% for fiscal 2007 as compared to 20% for fiscal 2006. Due to our First In First Out (FIFO) cost basis on our zinc inventory, the higher cost for zinc purchased in fiscal 2007 will not be recognized until subsequent quarters, so we do not believe the margins expressed as a percentage of sales can be maintained for fiscal 2008. If Last In First Out (LIFO) cost basis had been applied, operating profits would have been reduced by $9.2 million and operating margins would have been 21% for fiscal 2007. Operating profit and margins benefited from insurance gains in the amount of $700,000 related to Hurricanes Katrina and Rita. The carrying value of these affected assets was written off during fiscal 2006 when the damage was incurred.

General Corporate Expense

General corporate expenses were $17.1 million for fiscal 2007 and $10.2 million for fiscal 2006. As a percentage of sales, general corporate expenses were 6.6% for fiscal 2007 as compared to 5.5% in fiscal 2006.

The increased general corporate expense for fiscal 2007 resulted from increased compensation expense and employee profit sharing expense. The increased compensation expense of approximately $3.5 million as compared to the same period in fiscal 2006, related primarily to our stock appreciation rights program and the adoption of FASB Statement No. 123R. Our profit sharing program, which covers substantially all our employees, was reinstated for fiscal 2007 to enhance our ability to hire and retain qualified personnel. As a result of reinstating this program, costs increased $2.4 million for fiscal 2007 as compared to fiscal 2006.

Interest

Interest expense for fiscal 2007 was $1.5 million, a decrease of 11% as compared to $1.7 million in fiscal 2006. The decrease in interest expense resulted from significantly reduced levels of debt for the majority of fiscal 2007. Additional debt of approximately $13.4 million was added in November 1, 2006, to fund the acquisition of Witt Galvanizing, Inc. Our total outstanding bank debt was $35.2 million at the end of fiscal 2007, an increase of $20.8 million as compared to $14.4 million at the end of fiscal 2006. In addition to the acquisition of Witt Galvanizing Inc., additional borrowing was required to fund our working capital requirements due to increased business levels. As a result, our long-term debt to equity ratio was .32 to 1 for fiscal 2007 as compared to .16 to 1 for fiscal 2006.

Other (Income) Expense

For fiscal 2007 and 2006, the amounts in other (income) expense (see Note 11 of Notes to Consolidated Financial Statements) were insignificant.

Provision For Income Taxes

The provision for income taxes reflects an effective tax rate of 37% for fiscal 2007 and 35% for fiscal 2006. Benefits in our effective tax rate from the American Jobs Creation Act of 2005 were offset by the higher statutory tax rate of 35% for the current period as compared to 34% in the prior year due to increased income levels, higher state income taxes due to differences in the mix of profits generated from our operating facilities located in varying tax jurisdictions, and an allowance in fiscal 2007 for deferred compensation that we currently believe will not be deductible in future years due to the limitations on deductibility established under Section 162(m) of the Internal Revenue Code.

Year ended February 28, 2006 (2006) compared with year ended February 28, 2005 (2005)

Management believes that analyzing our revenue and operating income by segment is the most meaningful way to analyze our results of operations. Segment operating income consists of net sales less cost of sales, specifically identifiable selling, general and administrative expenses, and other (income) expense items that are specifically identifiable to a segment. The other (income) expense items included in segment operating income are generally insignificant. For a reconciliation of segment operating income to pretax income, see Note 11 to Notes to Consolidated Financial Statements.

Backlog

Our operations ended fiscal 2006 with a backlog of $73.8 million, an increase of 14% as compared to fiscal 2005 backlog of $64.8 million. Our book-to-ship ratio was 1.05 to 1 for fiscal 2006 as compared to 1.08 to 1 in the prior year. In fiscal 2006, we continued our efforts to improve our market coverage and expand our served markets. The increased backlog was the result of increased orders for our high voltage transmission products both domestically and internationally, as well as increased orders from the domestic industrial market. These improvements in our backlog were partially offset by a decline in our distribution products backlog.

The following table reflects bookings and shipments for fiscal 2006 and 2005.

Backlog Table

(In thousands)

Revenues

The following table reflects the breakdown of revenue by segment:

Our consolidated net revenues for fiscal 2006 increased by $34.8 million or 23%, as compared to fiscal 2005.

The Electrical and Industrial Products Segment recorded revenues for fiscal 2006 of $123.7 million, an increase of 23% above the fiscal 2005 results of $100.5 million. The increased revenue resulted primarily from increased demand for our products in the high voltage transmission and industrial markets, particularly the petroleum sector. The increased demand continued to be partially offset by lower demand for the power generation market. The passage of the energy legislation had a positive impact on this segment.

Our Galvanizing Services Segment generated revenues of $63.4 million, a 22% increase from the prior year’s revenues of $51.9 million. The increased revenue resulted from a 6% improvement in pricing and a 16% increase in the pounds of steel produced in fiscal 2006 as compared to fiscal 2005. The increase in volume was due to improvements in all of our markets. During the latter half of fiscal 2006, this segment benefited from increased work related to the rebuilding of the Gulf Coast area due to Hurricanes Katrina and Rita. Revenues for this segment have historically followed the condition of the general industrial economy.

Segment Operating Income

The following table reflects the breakdown of total operating income by segment:

Total segment operating income (see note 11 to Notes to Consolidated Financial Statements) increased 42.7% to $24 million in fiscal 2006 as compared to $16.8 million in fiscal 2005. Consolidated operating margins

as a percentage of sales improved to 13% for fiscal 2006 as compared to 11% for fiscal 2003.2005. The Electrical and Industrial Products Segment generated 47% of the operating profitsincome for fiscal 2006, while the Galvanizing Services Segment produced the remaining 53%.

Operating income for the Electrical and Industrial Products Segment increased $4.1 million or 56% for fiscal 2006, to $11.4 million as compared to $7.3 million for fiscal 2005. Operating margins for this segment were 9.2% for fiscal 2006 as compared to 7.2% for fiscal 2005. Operating margins were significantlyfavorably impacted by a 34% reductions in revenues coupled with continued price competition within the markets in which these products are sold. While the Company continued to implement operationalimproved pricing levels and leverage obtained by increased revenues. Operating efficiencies and cost reductions it could notleverage obtained from increased revenues during fiscal 2006 were partially offset the dramatic reductions in revenues. The Company continuesby increased material costs, primarily copper, aluminum, and steel. Although price levels improved, we were unable to fully recoup these costs through price increases to our customers. We continued to align and consolidate resources to match current market conditions, while still maintaining itsour ability to capitalize on opportunities that arise as market conditions improve.

arise.

Operating income for the Galvanizing Service Segment declined $321,000increased $3.1 million or 4%33% for fiscal 2004,2006, to $8.6$12.7 million as compared to $9$9.6 million for the prior year. Operating margins were consistent at 18% for the compared periods of fiscal 2004 and 2003. The operating income decline isimprovement was attributable to a slight reduction22% increase in revenues and increased costrevenues. Operating margins improved to 20% for natural gas. This segment continuesfiscal 2006 as compared to benefit18.4% for fiscal 2005. The improvement in operating margins resulted from the sizing of its operations to match market conditions. The recent metal commodity pricing including the cost of zinc is of concern. This increase may have an adverse impact on this segment’s operating results in Fiscal 2005. Difficult market conditions may inhibit the ability to fully recover through increased selling prices the anticipated increasesand leverage obtained through increased revenues. During fiscal 2006, this segment sustained significant damage at several operations as a result of hurricanes in the cost of zinc. It is difficult to determine at this time whatGulf Coast area. Property damage associated with the overall customer reaction will be to our attempted recoveryhurricanes resulted in a reduction in carrying value of the increased cost of zinc. This is a critical factor that impacts all participantsaffected assets in the hot dip galvanizing business.

amount of $507,000, which was netted against replacement cost insurance proceeds in the amount of $574,000 after deductibles. This netted a gain in the amount of $67,000, which was included in operating income for the segment. Subsequent to fiscal 2006, we received additional proceeds from our insurance provider in the amount of $385,000, which was recorded in the first quarter of fiscal 2007. We also recognized insurance settlements from business interruption insurance in the amount of $458,000 during the third and fourth quarters of fiscal 2006 to recover a portion of the fixed cost related to lost production days.

General Corporate Expense

General corporate expenses were $5.9$10.2 million for fiscal 20042006 and $7.7 million for fiscal 2003.2005. As a percentpercentage of sales, general corporate expenses were 4.3%5.5% for fiscal 20042006 as compared to 3.2%5.1% in fiscal 2003. The percentage increase

results from a 26% reduction2005. Included in revenues forgeneral corporate expense in fiscal 2004. During fiscal 2004, other income was recorded2006 is $1.8 million related to compliance requirements of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and compensation expense related to Stock Appreciation Rights in the amount of $298,000 for the gain on the sale of vacant land located at two of the Company’s facilities$736,000.

Interest

Interest expense for fiscal 20042006 was $2.4$1.7 million, a decreasean increase of 39%3% as compared to $3.9$1.6 million in fiscal 2003.2005. The decreaseincrease in interest expense resulted from significant reductions of outstanding debt and record lowincreases in interest rates on our variable debt instruments. The Company endedincrease in interest rates was partially offset by debt reduction of $9.5 million during fiscal 2004 with2006. Our total outstanding bank debt was $19.9 million at the end of $30.9 million,2006, a decrease of 31% or $13.7 million32% as compared to the $44.6$29.4 million outstanding at the end of fiscal 2003. The Company’s2005. Our long-term debt to equity ratio improved to .37.16 to 1 for fiscal 20042006 as compared to .60.32 to 1 for fiscal 2003.2005.

Other (Income) Expense

For fiscal 2006 and 2005, the amounts in other (income) expense (see Note 11 of Notes to Consolidated Financial Statements) were insignificant.

Provision For Income Taxes

The provision for income taxes reflects an effective tax rate of 38%35% for fiscal 20042006 and 2003.

Year ended February 28, 2003 (2003) compared with year ended February 28, 2002 (2002)

Revenues

The Company’s consolidated net revenues for fiscal 2003 increased by $30.5 million or 20%, to $183.4 million, as compared to $152.9 million for fiscal 2002. Excluding the acquisitions made in the later part of fiscal 2002, revenues for fiscal 2003 declined 3% to $126.1 million, as compared to $130.5 million in fiscal 2002.

The Electrical and Industrial Products Segment recorded revenues for fiscal 2003 of $134.9 million, an increase of 31% over the fiscal 2002 results of $103.3 million. The full year of revenues received during fiscal 2003 from the Company’s fiscal 2002 acquisitions accounted for the increased revenues for this segment. Revenues from the acquisitions of Central Electric Company and Carter & Crawley, Inc. for the full year of operation in fiscal 2003 as compared to four months of operations in fiscal 2002 increased $34.8 million or 155%. Excluding the acquisitions, revenues for the Electrical and Industrial Products Segment decreased 4% to $77.6 million for fiscal 2003. The decline in revenue resulted from a weak industrial market for all of fiscal 2003 and a significant reduction in the fourth quarter in sales to the power generation market. The Company aggressively attempted to offset the downturn in the power generation market and weak industrial market with an increased presence in the international market place, an increased presence in the power distribution and transmission markets, as well as the industrial markets in general, but was hampered by the overall weak economic conditions and intense competition in all markets served.

The Electrical and Industrial Products Segment ended fiscal 2003 with a backlog of $49.1 million, a decrease of 43% from a backlog of $85.3 million at the end of fiscal 2002. The backlog excluding acquisitions decreased 60% to $18.6 million at the end of fiscal 2003. Activity levels for 2003 for the industry returned to levels prior to the dynamic expansion of the domestic power generation market as a result of deregulation.

The Company’s Galvanizing Services Segment generated revenues of $48.5 million, a 2% decrease from the prior year’s revenues of $49.6 million. The continuation of the weakness in the overall economic environment from fiscal 2002 prevented any internal growth in our Galvanizing Services Segment for fiscal 2003.

Operating Income

The Company’s consolidated operating income (see note 12 to Note to Consolidated Financial Statements) increased 10% to $23.8 million in fiscal 2003 as compared to $21.8 million in fiscal 2002. Improved operating income was the result of increased revenues from our Electrical and Industrial Products Segment and cost containments implemented across all of our operating segments. Consolidated operating margins as a percent of sales declined in fiscal 2003 to 13% from the previous years operating margins of 14.2%. The overall decrease in margins resulted from the softness and intense competition in the Electrical and Industrial Products Segment’s markets, as well as the closure of the Company’s Nashville facility. As a result of the changing market

conditions, the Company implemented stringent cost controls, improved operating efficiencies, accelerated the assimilation of the prior year acquisitions, and aggressively pursued all market opportunities. With these actions, the Company has positioned itself to better manage operations under these market conditions, while maintaining it’s ability to capitalize on future improvements in the economy.

In the Electrical and Industrial Products Segment, operating income for fiscal 2003 increased to $14.9 million, an increase of 2% as compared to $14.6 million in fiscal 2002. These results were aided by the elimination in fiscal 2003 in accordance with SFAS No. 142 of goodwill amortization, which has been taken in the amount of $750,000 in fiscal 2002. Operating margins for this segment were 11% for fiscal 2003 as compared to 14.1% for fiscal 2002. Margins decreased for fiscal 2003 as compared to fiscal 2002 due to the softness in the markets served, the intense competition in our markets, and additional costs that were incurred with the closure of the Company’s facility located in Nashville, Tennessee and its consolidation with other Company operations.. The Company incurred $545,500 in cost associated with closing the Nashville facility. These cost consisted of a $280,000 write-off of the locations leasehold improvements, $207,500 lease termination costs, and $58,000 in severance cost paid. As of February 28, 2003, the operation was totally transferred to two of the Company’s other facilities.

In the Galvanizing Services Segment, operating income increased 25% to $9 million for fiscal 2003 as compared $7.2 million in fiscal 2002. Operating margins were 18% for fiscal 2003 as compared to 14% in fiscal 2002. These results were aided by the elimination in fiscal 2003 in accordance with SFAS No. 142 of goodwill amortization which has been taken in the amount of $490,000 for fiscal 2002.2005. During fiscal 2003, the segment2006, we benefited from the stabilizationAmerican Jobs Creation Act of natural gas and reduced zinc costs. Costs containments implemented in fiscal 2002 and continued in fiscal 2003 contributed to2004, which allowed a deduction from income

tax for qualified domestic production activities. Benefits from the new domestic manufacturing deduction were offset by higher margins experienced.

General Corporate Expense

General corporate expenses for fiscal 2003 were $5.9 million, a decrease of 8% from fiscal 2002. As a percent of sales, general corporate expenses were 3.2% for fiscal 2003 as compared to 4.2% in fiscal 2002. The decrease is attributable to lower cost for professional services and employee benefit programs.

Interest expense for fiscal 2003 was $3.9 million, an increase of 64% as compared to $2.4 million fiscal 2002. The increased interest expense relates to higher levels of debt created by the prior years acquisitions. The Company ended fiscal 2003 with outstanding bank debt of $44.5 million, a decrease of 30% or $19 million as compared to the $63.5 million outstanding at the end of fiscal 2002.

Provision For Income Taxes

The provision forstate income taxes reflects an effectivedue to differences in the mix of profits generated from our operating facilities located in varying tax rate of 38% for fiscal 2003 and 2002.jurisdictions.

Liquidity and Capital Resources

The Company hasWe have historically met its liquidity and capital resourcecash needs through a combination of cash flows from operating activities and bank borrowings. The Company’sOur cash requirements are generally for operating activities, acquisitions, capital improvements, debt repayment and debt repayment. The Company believesacquisitions. We believe that working capital, borrowing capabilities, and funds generated from operations should be sufficient to finance anticipated operational activities, capital improvements, and payment of debt repayment and possible future acquisitions.

The Company’sOur operating activities generated cash flows of approximately $15$6.9 million, $22.9$12.8 million, and $14.2$6.5 million during fiscal 2004, 2003,2007, 2006, and 2002,2005, respectively. Cash flow from operations in fiscal 20042007 included net income in the amount of $4.3$21.6 million, depreciation and amortization of intangibles and interest expense related to debt issue costs in the amount of $6.1$6.8 million, and net changes in operating assets and liabilities and other increases in cash flows from operations of $4.6a negative $21.5 million. DuePositive cash flow was recognized due to reduced business levels, primarilyincreased accounts payables balances and other accrued liabilities in the amount of $8.7 million and $10.3 million, respectively. These positive cash flow items were offset by increased inventories of $17.4 million, accounts receivable balances of $16.1 million, net changes in billings related to costs and estimated earnings on uncompleted contracts of $6.1 million, and prepaid and other assets balances of $.4 million in fiscal 2007 as compared to fiscal 2006.

Our working capital increased by $34.4 million or 123% to $62.3 million at February 28, 2007, as compared to $27.9 million at February 28, 2006. The acquisition of Witt Galvanizing, Inc. added $6.5 million to inventories and receivables, and the escalating cost of zinc has increased our galvanizing inventory carrying value by $10.2 million. Our zinc inventories typically turnover twice yearly. The carrying value of our zinc inventory will move up and down in conjunction with the market price of zinc during the turnover period. Inventories and accounts receivable in our Electrical and Industrial Products Segment inare up as well to support our improved business levels.

During fiscal 2004 as compared to fiscal 2003, the Company’s working2007, capital requirementsimprovements were reduced. By the continued efficient management of working capital, the Company was able to reduce accounts receivable,

inventories, and revenues in excess of billings by $6.6 million, $900,000, and $2.2 million, respectively. Accounts receivable days outstanding for fiscal 2004 were 58 days as compared to 56 days in fiscal 2003 and inventory turns were 6.3 times for fiscal 2004 as compared to 6.4 times in fiscal 2003. The increase in cash flow from decreases in accounts receivable, inventories, and revenue in excess of billings was partially offset by decreases in accounts payable and accrued liabilities, and prepaid and other assetsmade in the amount of $1.5 million, $4$10.7 million and $300,000, respectively. Increases in cash flows from changes in deferred tax liabilities, provisionwe acquired Witt Galvanizing, Inc. for bad debt, and other non-cash transactions accounted for the remaining $700,000 net change in operating assets and liabilities.

During fiscal 2004 cash flow from operations was used to make capital improvementsa purchase price of $3.6 million and to reduce debt by $13.7approximately $13.4 million. The breakdown of capital spending by segment for fiscal 2004, 2003,2007, 2006, and 20022005 can be found in Note 1211 of the Notes to Consolidated Financial Statements. In the fourth quarter of

For fiscal 2004, the Company began the implementation of a new ERP system, which is scheduled for completion in fiscal 2005. The capital expenditures in fiscal 2004 for the ERP system were $860,000 and it is estimated that additional capital outlay of approximately $2 million will be incurred in fiscal 2005 to complete the implementation. The Company2007, long-term debt increased by $15.3 million. We received proceeds from the sale of or insurance settlement on property and equipment consisting mainly of vacant land, in the amount of $725,000$.7 million and proceeds from the exercise of stock options in the amount of $1.1$1.5 million. There were no cash dividends declared or paid in fiscal 20042007, and no resumption of a cash dividend is currently anticipated.

On May 25, 2006, we entered into the Second Amended and Restated Credit Agreement (the “Credit Agreement”), which replaced our Amended and Restated Revolving and Term Credit Agreement dated as of November 1, 2001, the Company entered into2001.

The Credit Agreement provides for a syndicated$60 million revolving line of credit with one lender, Bank of America, N.A., maturing on May 25, 2011. This is an unsecured revolving credit facility, which replaced the previous term notesrefinanced outstanding borrowings and revolving lineis used to provide for working capital needs, capital improvements, future acquisitions, and letter of credit. This agreement included a $40credit needs. At February 28, 2007, we had $35.2 million term facility and a $45 million revolving credit facility. The availability underborrowed against the revolving credit facility is contingent on asset-based collateraland letters of inventories and accounts receivables. The remaining balancecredit outstanding onin the term-loan is payable in quarterly installmentsamount of $1.375$11.2 million, through November 2006, with any remaining balance, which will beleft approximately $8.25$13.6 million in absence of any prepayments due December 2006. At the end of fiscal 2004, the Company had $23.4 million outstanding under the term note and $7.5 outstanding on the revolvingadditional credit facility. The revolving credit facility expires on November 1, 2005. At February 29, 2004, the Company had approximately $10.3 million available under the revolving credit facility.

On March 7, 2003, the Company amended its credit facility to reduce the amortization on the term note to $5.5 million annually from $10 million annually, extend the maturity of the term note and revolving note by one year to November 2006 and November 2005, respectively, and revise the provisions of various financial covenants. On October 15, 2003, the Company amended its credit facility to reduce the number of banks participating in the facility from five banks to three banks, reduced the Company’s Revolving

The Credit Commitment from $45 million to $20 million, and revised the provisions of various financial covenants. The Company’s credit facility currentlyAgreement provides for various financial covenants. These financial covenants consistconsisting of 1)a) Minimum Consolidated Net Worth 2)Worth—maintain on a consolidated basis net worth equal to at least the sum of $69.8 million, representing 80% of net worth at February 28, 2006 plus 75% of future net income, b) Maximum Leverage Ratio- maintain on a consolidated basis a Leverage Ratio and 3) Minimum(as defined in the Credit Agreement) not to exceed 3.0:1.0, c) Fixed Charge Coverage Ratio- maintain on a consolidated basis a Fixed Charge Coverage Ratio of at least 1.5:1.0 and d) Capital Expenditures- not to make Capital Expenditures on a consolidated basis in an amount in excess of $14 million during any fiscal year.

The Credit Agreement provides for an applicable margin ranging from .75% to 1.25% over the Eurodollar Rate and Commitment Fees ranging from .175% to .25% depending on our Leverage Ratio. The Company is in compliance with all of its bank covenants. With the reduction of the revolving Credit Commitment from $45 million to $20 million, the Company will save approximately $94,000 annually in unused line fees.applicable margin was .75% at February 28, 2007. The reduction in the Revolving Loan commitment created a $108,000 write-off of previously incurred loan origination fees associated with the revolving line of credit. A fee of $67,000 was paid for this amendment.

The Company utilizesvariable interest rate swapincluding the applicable margin was 6.11% as of February 28, 2007.

We utilize interest rate protection agreements (interest rate swap) to protect against volatilemoderate the effects of increases, if any, in interest rates and manageby swapping a variable rate to a fixed rate. Presently, we have one outstanding interest rate expense. At February 29, 2004, the Company had a $2.9 million interest rate swap agreement that was entered into in February 1999 at a fixed rate of 6.8%.swap. On November 1, 2001, the CompanyMarch 31, 2005, we entered into an interest rate swapprotection agreement covering an additional $40 million of debt at(the “2005 Swap Agreement”) which matures in March 2008, whereby we pay a fixed rate of 5.68%5.20% in exchange for a variable 30-day LIBOR rate plus .75% (6.07% at February 28, 2007). At February 29, 2004,28, 2007, the remaining notional amount ofis $6,875,000. Prior to May 2006, this swap was $17.5 million. In conjunction withtreated as a cash flow hedge of our variable interest rate exposure. However, when we refinanced our Credit Agreement in May 2006, we chose to cease the Company’s new financing agreement the Company discontinued hedge accountingdesignation for the February 1999 interest rate2005 Swap Agreement while not terminating the swap effective November 1, 2001. At February 29, 2004,agreement. Since that time, we began recognizing changes in the fair value of this swap was a liabilitydirectly into earnings, while amortizing the pretax amount included in accumulated other comprehensive income as additional interest income. For fiscal 2007, we amortized $37,000 of $121,000. Theinterest income and recognized mark-to-market loss of $53,000 for subsequent changes in the fair value of this swap. At February 28, 2007, the fair value of the November 20012005 Swap Agreement was an asset of $28,000, and a gain of $29,000, net of tax, remains in accumulated other comprehensive income to be amortized as additional interest income. Given the maturity date of this interest rate swap, which was designated as a hedge of the Company’s variable rate interest payments, was a liability of $382,000 as of February 29, 2004. Theall amounts in accumulated balance in other comprehensive income is $325,000, net of tax of $199,000, as of February 29, 2004. This amount will be chargedare expected to interest expense over the respective terms of the two swaps.

The Company’sOur current ratio (current assets/current liabilities) was 1.862.25 to 1 at the end of fiscal 2004,2007, as compared to 1.761.79 to 1 at the end of fiscal 2003.2006. Shareholder equity grew 9%27% during fiscal 20042007 to $69.3 million or $12.96 per share.$111.1 million. Long-term debt as a percentpercentage of shareholdersshareholders’ equity ratio was 37%.32 to 1 at the end of fiscal 20042007 as compared to 60%.16 to 1 at the end of fiscal 2003.2006. The decreaseincrease in long-term debt as a percent of shareholdersto shareholders’ equity at the end of fiscal 2004ratio was the result of a reductionan increase in debt to fund our recent acquisition of $13.7 million. The funds usedWitt Galvanizing Inc. and increased working capital requirements.

We have not experienced significant impacts on our operations from increases in general inflation other than for debt repayment came from cash flows generated from operations.

Inflation has not had a significant impactspecific commodities and employee health care costs. We have exposure to commodity price increases in both segments of our business, primarily copper, aluminum and steel in the Electrical and Industrial Products Segment, and zinc and natural gas in the Galvanizing Services Segment. We attempt to minimize these increases through protective caps purchased on the Company’s operationszinc and escalation clauses in recent years; however, the Company attemptscustomer contracts for copper, aluminum and steel, when market conditions allow. In addition to these measures, we attempt to recover anyother cost increases through improvements to itsour manufacturing process and through increases in priceprices where competitively feasible.

Off Balance Sheet Transactions and Related Matters

There are no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships of the Company with unconsolidated entities or other persons that have, or may have, a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources of the Company.resources.

Contractual Commitments

Leases

The Company leases various facilities under non-cancelable operating leases with an initial term in excess of one year. As of February 29, 2004,28, 2007, the future minimum payments required under these operating leases are summarized as follows:

Long-term debt and letters of credit

As if February 29, 2004 the Company had outstanding debt in the amount of $30.9 million, which consisted of a $23.4 million term notebelow table. Rental expense for real estate and $7.5 million outstanding under the revolving credit facility. Projected interest payments based on current interest rates equate to $1.8 millionpersonal property was approximately $2,517,000, $2,211,000, and $2,071,000 for 2005, $1.5 million forfiscal years ended 2007, 2006 and $1.3 million for 2007. Maturities of2005, respectively, and includes all short-term as well as long-term debt are as follows (In thousands):

At February 29, 2004, the Company had outstanding letters of credit in the amount of $2.2 million. These letters of credit are issued to a portion of the Company’s customers to cover any potential warranty costs that the customer might incur. In addition, a warranty reserve in the amount of $879,000 million has been established to offset any future warranty claims.

Purchase Commitments

The Company’s capital budget for Fiscal 2005 is approximately $6 million. Approximately $3 million will be spent in the Company’s Galvanizing Services Segment for routine capital improvements to maintain, upgrade and enhance the operational efficiencies of this Segment’s facilities and approximately $2 million will be spent on the installation of a new enterprise resource planning system.

rental agreements.

Commodity pricing

The Company manages its exposureexposures to commodity prices primarily zinc used in its Galvanizing Services Segment, by utilizing contracts with its zinc suppliers that include protective caps that reducethrough the Company’s exposure to rising commodity prices. The Company utilizes these contracts for approximately 90%use of its zinc requirements. The contracts are normally negotiated in December of each year and normally are for a twelve-month period of time. Management believes these contractual agreements ensure adequate supplies and partially offset exposure to commodity price swings. the following:

In the Electrical and Industrial Products Segment, the Company has exposure to commodity pricing for copper, aluminum, and steel. IncreasesBecause the Electrical and Industrial Products Segment does not commit contractually to minimum volumes, increases in price for these items are normally managed through escalation clauses to the customer’s contracts, although during difficult market conditions these escalation clauses may be difficult to obtain.

In the Galvanizing Services Segment, the Company utilizes contracts with its zinc suppliers that include protective caps to guard against escalating commodity prices. The Company also secures firm pricing for natural gas supplies with individual utilities when possible. There are no contracted volume purchase commitments associated with our zinc or natural gas agreements. Management believes these contractual agreements ensure adequate supplies and partially offset exposure to commodity price swings.

There are no contracted purchase commitments for any other commodity items including steel, aluminum, natural gas, copper, zinc or any other commodity.

Other

At February 28, 2007, the Company had outstanding letters of credit in the amount of $11.2 million. These letters of credit are issued to a portion of the Company’s customers to cover any potential warranty costs that the customer might incur and are in lieu of performance and bid bonds. In addition, as of February 28, 2007, a warranty reserve in the amount of $1.6 million has been established to offset any future warranty claims.

The following summarizes the Company’s operating leases, and long-term debt and interest expense for the next five years.

Critical Accounting Policies and Estimates

The preparation of the consolidated financial statements requires the Companyus to make estimates that affect the reported value of assets, liabilities, revenues and expenses. The Company’sOur estimates are based on historical experience and various other factors that we believe are believed to be reasonable under the circumstances, and form the basis for the Company’s our

conclusions. The CompanyWe continually evaluatesevaluate the information used to make these estimates as the business and the economic conditions change. Accounting policies and estimates considered most critical are allowances for doubtful accounts, accruals for contingent liabilities, revenue recognition, and impairment of long-lived assets, identifiable intangible assets and goodwill.goodwill, accounting for income taxes, and stock options and stock appreciation rights. Actual results may differ from these estimates under different assumptions or conditions. The development and selection of the critical accounting policies and the related disclosures below have been reviewed with the Audit Committee of the Board of Directors. More information regarding significant accounting policies can be found in Note 1 of the Notes to Consolidated Financial Statements

Statements.

Allowance for Doubtful Accounts- The carrying value of theour accounts receivablesreceivable is continually evaluated based on the likelihood of collection. An allowance is maintained for estimated losses resulting from our customer’s inability to make required payments. The allowance is determined by historical experience of uncollected accounts, the level of past due accounts, overall level of outstanding accounts receivables,receivable, information about specific customers with respect of their inability to make payments and future expectations of conditions that might impact the collectibility of accounts receivables.receivable. If the financial condition of the Company’sour customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Accruals for Contingent Liabilities- Liabilities—The amounts the Company recordswe record for estimated claims, such as self insurance programs, warranty, environmental, and other contingent liabilities, requires the Companyus to make judgments regarding the amount of expenses that will ultimately be incurred. The Company usesWe use past history and experience, as well as other specific circumstances surrounding these claims in evaluating the amount of liability that should be recorded. Actual results may be different than the Company’s estimates.

what we estimate.

Revenue Recognition – Revenue is recognized for the Galvanizing Services Segment upon completion of the galvanizing services or shipment of product. Recognition—Revenue is recognized for the Electrical and Industrial Products Segment upon transfer of title and risk to customers, or based upon the percentage of completion method of accounting as contract servicesfor electrical products built to customer specifications under long term contracts. We recognize revenue for the Galvanizing Services Segment upon completion of the galvanizing process performed on the customers’ material or shipment of this material. Customer advanced payments presented in the balance sheet arises from advanced payments received from our customers prior to shipment of the product and are performed.not related to revenue recognized under the percentage of completion method. The extent of progress for revenue recognized using the percentage of completion method is measured by the ratio of contract costs incurred to date to total estimated total

contract costs at completion. Contract costs include direct labor and material, and certain indirect costs. Selling, general and administrative costs are charged to expense as incurred. Provisions for estimated losses, if any, on uncompleted contracts are made in the period in which such losses are able to be determined. The assumptions made in determining the estimated cost could differ from actual performance resulting in a different outcome for profits or losses than anticipated.

Impairment of long-lived assets, identifiable intangible assetsLong-Lived Assets, Identifiable Intangible Assets and goodwill – The Company recordsGoodwill—We record impairment losses on long-lived assets, including identifiable intangible assets, when events and circumstances indicate that the assets might be impaired and the undiscounted projected cash flows associated with those assets are less than the carrying amounts of those assets. In those situations, impairment losslosses on a long-lived asset isassets are measured based on the excess of the carrying amount ofover the asset’s fair value, generally determined based upon discounted estimates of future cash flows. A significant change in events, circumstances or projected cash flows could result in an impairment of long-lived assets, including identifiable intangible assets.

An annual impairment test of goodwill will beis performed in Decemberthe fourth quarter of each futurefiscal year. The test is calculated using the anticipated future cash flows after tax from the Company’sour operating segments. Based on the present value of the future cash flow, the Companywe will determine whether impairment will be recorded.may exist. A significant change in projected cash flows or cost of capital for future years could result in an impairment of goodwill in future years.

On March 1, 2002, the Company adopted SFAS No. 142. (See Recent Accounting Pronouncements below.) The Company completed its annual impairment analysis for its two operating segments and determined that there was no impairment of goodwill as of December 31, 2003. An annual impairment test will be performed in December of each year. The test is calculated using the anticipated Variables impacting future cash flows frominclude, but are not limited to, the Company’s operating segments. Alevel of customer demand for and response to products and services we offer to the power generation market, the electrical transmission and distribution markets, the general industrial market and the hot dip galvanizing market; changes in economic conditions of these various markets; raw material and natural gas costs; and availability of experienced labor and management to implement our growth strategies.

Accounting for Income Taxes—We account for income taxes under the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Developing our provision for income taxes requires significant changejudgment and expertise in projected cash flowsdeferral and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets. Our judgments and tax strategies are subject to audit by various taxing authorities.

Stock Options and Stock Appreciation Rights—Our employees are periodically granted stock options or Stock Appreciation Rights by the Compensation Committee of the Board of Directors. In fiscal 2007, we adopted the provisions of SFAS No. 123R,Share-Based Payment. Under the provisions of SFAS No. 123R, the compensation cost of capitalall employee stock-based compensation awards is measured based on the grant-date fair value of those awards and that cost is recorded as compensation expense over the period during which the employee is required to perform service in exchange for future years couldthe award (generally over the vesting period of the award). The valuation of stock based compensation awards is complex in that there are a number of variables included in the calculation of the value of the award:

We have elected to use a Black-Scholes pricing model in the valuation of our stock options and stock appreciation rights.

These variables are developed using a combination of our internal data with respect to stock price volatility and exercise behavior of option holders and information from outside sources. The development of each of these variables requires a significant amount of judgment. Changes in the values of the above variables will result in an impairmentdifferent option valuations and, therefore, different amounts of goodwill in future years.

compensation cost.

Recent Accounting Pronouncements

Effective January 1, 2002,In July 2006, the Company adopted SFAS No. 142,Goodwill and Other Intangible Assets. Under the new rules, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment testsFASB issued FASB Interpretation 48, “Accounting for Uncertainty in accordance with the Statement. Other intangible assets continue to be amortized over their useful lives. Application of the non-amortization provisions of the Statement increased the Company’s income before income taxes by approximately $1.2 million in 2004 and 2003. For more information on the adoption of SFAS No. 142, see Note 7 of the Notes to the Consolidated Financial Statements

In January 2003, the Financial Accounting Standards Board issued FIN No. 46 (FIN 46),Consolidation of Variable Entities,Income Taxes”: an interpretation of Accounting Research BulletinFASB Statement No. 51. 109 (“FIN 46 requires48”). FIN 48 clarifies Statement 109, “Accounting for Income Taxes”, to indicate the criteria that variable interest entities be consolidated by a company if that company is subjectan individual tax position would have to a majoritymeet for some or all of the riskbenefit of loss from the variable interestthat position to be recognized in an entity’s activities or is entitled to receive a majority of the entity’s residual returns or both.financial statements. FIN 46 also requires disclosures about variable interest entities that companies are not required to consolidate but in which a company has a significant variable interest. The consolidation requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003. In December 2003, the FASB revised FIN 46 through the release of FIN 46R, which clarifies certain aspects of FIN 46 and contains certain provisions that defer the effective date of FIN 46 to periods ending after March 15, 2004. The Company does not expect FIN 46 to have a material effect on the Company’s financial statements.

In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150 (SFAS 150),Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This statement establishes standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some

circumstances) because that financial instrument embodies an obligation of the issuer. This statement48 is effective for financial instruments entered into or modifiedfiscal years beginning after May 31, 2003.December 15, 2006, and we will adopt the new requirements in our first quarter of fiscal 2008. The adoptioncumulative effects if any, of SFAS 150 didadopting FIN 48 will be recorded as an adjustment to retained earnings as of the beginning of the period of adoption. We continue to evaluate the impact of adopting FIN 48, but we do not have a materialexpect the impact on our consolidated financial statements to be material.

In September 2006, the FASB issued Statement 157 (“SFAS 157”),Fair Value Measurements. This Statement establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. While SFAS 157 does not require any new value measurements, it may change the application of fair value measurements embodied in other accounting standards. SFAS 157 will be effective at the beginning of the Company’s results2008 fiscal year. The Company is currently assessing the effect of operations,this pronouncement, but we do not expect the impact on our consolidated financial position or cash flows.statements to be material.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market risk relating to the Company’saffecting our operations results primarily from changes in interest rates and commodity prices. The Company hasWe have only limited involvement with derivative financial instruments and isare not a party to any leveraged derivatives.

The Company manages its exposuresWe manage our exposure to changes in interest rates by optimizingthrough the use of variable and fixed rate debt. The Company had approximately $13.4 million of variable rate borrowings at February 29, 2004 after its hedges. On the Company’s variable interest rate borrowings, a one percent upward or downward change in interest rates would equate to an approximate $134,000 increase or decrease to interest expense. In November 2001, the Company entered into andebt and interest rate protection agreement with its lender to modifyagreements. Reference the interest characteristics of $40 million of debt from variable rate to a fixed rate. In conjunction with the Company’s financing agreement the Company discontinued hedge accounting for the February 1999 interest rate swap effective November 1, 2001. Due to the discontinuance of hedge accounting on this swap, the Company recorded $56,000 to interest income during fiscal 2004. At February 29, 2004 the fair valueLiquidity and Capital Resources of the February 1999 swap wasMD&A sections of this report for a liability of $121,000. The November 2001 interest rate swap, which was designated as a hedge of the Company’s variable rate interest, has an unrealized loss of $382,000 as of February 29, 2004. The accumulated balance in other comprehensive income is $325,000, net of tax of $199,000, as of February 29, 2004. This amount will be charged to interest expense over the respective terms of the two swaps. The Company believes it has adequately protected itself from increased interest cost under these financial arrangements.full discussion on our 2005 Swap agreement.

The Company manages its exposures to commodity prices, primarily zinc used in its Galvanizing Services Segment, by utilizing contracts with its zinc suppliers that include protective caps to guard against rising commodity prices. Management believes these contractual agreements ensure adequate supplies and partial offset against exposure to commodity price swings. In the Electrical and Industrial Products Segment, the Company haswe have exposure to commodity pricing for copper, aluminum, and steel. Increases in price for these items are normally managed through escalation clauses to thein our customer’s contracts, although during difficult market conditions these escalation clauses may not be difficultreadily obtainable. We manage our exposures to obtain.commodity prices, primarily zinc used in its Galvanizing Services Segment, by utilizing agreements with zinc suppliers that include protective caps to guard against escalating commodity prices. We believe these agreements ensure adequate supplies and partially offset exposure to commodity price swings.

The Company doesWe do not believe that a hypothetical change of 10% of the interest rate currently in effect or a change of 10% of commodity prices would have a significantly adverse effect on the Company’sour results of operations, financial position, or cash flows.flows as long as we are able to pass along the increases in commodity prices to our customers. To date, we have been successful in passing along the rising cost of zinc without an adverse effect on our results of operations. However, there can be no assurance that either interest rates or commodity prices will not change in excess of thatthe 10% hypothetical amount.amount, which could have an adverse effect on our results of operations, financial position, and cash flows if we are unable to pass along these increases to our customers.

Item 8. Financial Statements and Supplementary Data

The indexIndex to the Company’sour Consolidated Financial Statements is found on page 20. The Company’s27. Our Financial Statements and Notes to these Consolidated Financial Statements follow the index.

Item 9.

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

Information concerning a change in accountants is included in the Company’s Form 8-K filed with the Securities and Financial DisclosureExchange Commission of August 2, 2006.

No changes in accountants or disagreements with accountants on accounting and/or financial disclosure have arisen.

Item 9a.Evaluation of Disclosure Controls and Procedures

As of the last day of the period coveredrequired by this report,Exchange Act Rules 13a-15 and 15d-15, an evaluation was performed by managementconducted under the supervision and with the participation of the Company’smanagement, including our Chief Executive Officer (“CEO”) and Chief

Financial Officer, (“CFO”) of the effectiveness of the Company’sdesign and operation of our disclosure controls and procedures. Management necessarily applied its judgement in assessing the costs and benefits of such controls and procedures which, by their nature, can provide only reasonable assurance regarding management’s control objectives. Based onto ensure that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosures controls and procedures were effective in timely alerting them to material information required to be disclosed by us in our reports filed or submitted under the CompanyExchange Act is (a) accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure and (b) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K to ensure that information required to be disclosed by us in the reports that it fileswe file or submitssubmit under the Exchange Act and in assuring the Company that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. There were no material changes in the Company’s internal controls over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

While the Company believes that its existing disclosure controls and procedures have been effective to accomplish their objectives, the Company intends to continue to examine, refine and document its disclosuresdisclosure controls and procedures and to monitor ongoing developments in this area.

Management’s Report on Internal Control Over Financial Reporting

See management’s report on page 28.

Changes in Internal Controls

There has not been any change in our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

None

PART III

Item 10. Directors and Executive Officers

The information required by this item with regard to executive officers is included in Part I, Item 1 of this report under the heading “Executive Officers of the Registrant.”

Information regarding directors of AZZ required by this Item is incorporated by reference to the section entitled “Election of Directors” set forth in the Proxy Statement for our 2007 Annual Meeting of Shareholders.

The information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 required by this Item is incorporated by reference to the section entitled “Section 16(a) Beneficial Ownership Reporting Compliance” set forth in the Proxy Statement for our 2007 Annual Meeting of Shareholders.

Information regarding our audit committee financial experts and code of ethics and business conduct required by this item is incorporated by reference to the section entitled “Matters Relating to Corporate Governance, Board Structure, Director Compensation and Stock Ownership” set forth in the Proxy Statement for our 2007 Annual Meeting of Shareholders.

No director or nominee for director has any family relationship with any other director or nominee or with any executive officer of our company.

The information required by this itemItem is incorporated herein by reference to the Registrant’ssection entitled “Executive Compensation” and the section entitled “Matters Relating to Corporate Governance, Board Structure, Director Compensation and Stock Ownership—Fees Paid to Directors” set forth in our Proxy Statement for the 2004our 2007 Annual Meeting of Shareholders.

Item 11. Executive Compensation

The information required by this itemItem is incorporated herein by reference to the Registrant’ssection entitled “Executive Compensation” and the section entitled “Matters Relating to Corporate Governance, Board Structure, Director Compensation and Stock Ownership—Security Ownership of Management” set forth in the Proxy Statement for the 2004our 2007 Annual Meeting of Shareholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The information required by this item is incorporated herein by reference to the Registrant’s Proxy Statement for the 2004 Annual Meeting of Shareholders.

Equity Compensation Plans

The following table provides a summary of information as of February 29, 2004,28, 2007, relating to our equity compensation plans in which the Company’sour common stock is authorized for issuance. All shares and price data have been adjusted to reflect our two-for-one stock split, effected in the form of a share dividend on May 4, 2007.

Equity Compensation Plan Information

		(a)			(b)			(c)
		Number of securities to be issued upon exercise of outstanding options, warrants and rights			Weighted average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a))
Equity compensation plans approved by shareholders (1)		825,590	(3)		$	8.92		499,984	(2)
Total		825,590			$	8.92		499,984

Description of Plan Not Approved by the Shareholders

Grant to Consultant

The Grant to Consultant was approved by the Board of Directors on February 22, 2000. These 70,000 options, granted to the Company’s financial public relations firm, were to vest contingent upon the achievement of certain performance measures. Subsequently the grant was amended to allow additional time, which has now expired, for the firm to meet revised measures. As of February 29, 2004, 57,750 options had vested, of which 7,000 have been exercised. The remaining 12,250 terminated without vesting.

Description of Other Plans for the Grant of Equity Compensation

The following are plans under which shares of the Company’sour Common Stock have been reserved for issuance as compensation to the Company’sour Independent Directors and Advisory Directors. The shares covered by those plans are not included in the table above on equity compensation plans because they do not provide for options, warrants or rights.

All shares and price data have been adjusted to reflect our two-for-one stock split, effected in the form of a share dividend on May 4, 2007.

1999 Independent Director Share Ownership Plan

On January 19, 1999, the Board of Directors established the 1999 Independent Director Share Ownership Plan (as amended, the “Independent Director Plan”). Each independent memberDirector was granted 1,000 shares of the Board of Directors is granted 500 shares ofour Common Stock after each annual meeting of the shareholders, after which he continues to serve as Director. Also, under the Plan, each newly elected independent Director who has not previously served ondirector continued in office, beginning with the Board is granted such number of shares as1999 Annual Meeting and continuing until the Board of Directors may deem appropriate, but not less than 1,000 shares of Common Stock or, if less, Common Stock having a value of $15,000. Grants under the Independent Director Plan terminate as to each Independent Director when a total of 5,000 shares have been granted to him or her. During their tenure on the Board of Directors, each Director is to retain a number of shares equal to2005 Annual Meeting, at least one-halfwhich time the number of shares granted pursuantincreased to the Independent Director Plan.2,000 shares. A total of 50,000100,000 shares were covered by the Plan, of which 29,00016,000 shares remain available under the Plan at February 29, 2004.

28, 2007.

2000 Advisory Director Share Ownership Plan

On March 28, 2000, the Board of Directors established the 2000 Advisory Director Share Ownership Plan (the “Advisory Director Plan”). Under that Plan, Advisory Directors receive a grant of 5001,000 shares of Common Stock of the Company after each annual shareholders meeting after which they continue to serve as an Advisory Director until they receive a total of 5,00010,000 shares, including shares received while serving as an active member of the Board of Directors. A total of 10,00020,000 shares were covered by the Plan, of which, 6,50013,000 shares remain available under the Plan at February 29, 2004.28, 2007. The Board has no Advisory Directors at the present time and has no current plans to add Advisory Directors in the future.

Item 13. Certain Relationships and Related Transactions

The information required by this itemItem is incorporated herein by reference to the Registrant’ssection entitled “Certain Relationships and Related Party Transactions” and “Director Independence” set forth in the Proxy Statement for the 2004our 2007 Annual Meeting of Shareholders.

PART IV

Item 14. Principal Accounting Fees and Services

The informationInformation required by this itemItem is incorporated herein by reference to the Registrantssections entitled “Other Business—Independent Auditor Fees” and “Other Business—Pre-approval of Non-audit Fees” set forth in our Proxy Statement for the 2004our 2007 Annual Meeting of Shareholders.

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

A. Financial Statements

1. The financial statements filed as a part of this report are listed in the “Index to Consolidated Financial Statements” on page 20.

2. Financial Statements Schedules

Schedule II – II—Valuation and Qualifying Accounts and Reserves filed as a part of this report is listed in the “Index to Consolidated Financial Statements” on page 20.

27.

Schedules and compliance information other than those referred to above have been omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and the notes thereto.

B. Reports on Form 8-K

The Registrant filed no reports on Form 8-K during the fourth quarter of the fiscal year ended February 29, 2004.

C. Exhibits Required by Item 601 of Regulation S-K

A list of the exhibits required by Item 601 of Regulation S-K and filed as part of this report is set forth in the Index to Exhibits beginning on page 43,53, which immediately precedes such exhibits.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrantthe registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of RegistrantAZZ and in the capacities and on the dates indicated.

Index to Consolidated Financial Statements and Schedules

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control—Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission, (COSO). Based on our evaluation under the framework in “COSO,” our management concluded that our internal control over financial reporting was effective as of February 28, 2007. Our management’s assessment of the effectiveness of our internal control over financial reporting as of February 28, 2007, has been audited by BDO Seidman LLP, an independent registered public accounting firm, as stated in their report included herein. Management’s assessment of and conclusion of the effectiveness of internal control over financial reporting did not include the internal controls of Witt Galvanizing, which was acquired on November 1, 2006, and which is included in the consolidated balance sheet of AZZ incorporated as of February 28, 2007, and related consolidated statements of income, shareholders’ equity, and cash flows for the year then ended. Witt Galvanizing constituted less than 10% of revenues and net income for the year then ended. Management did not assess the effectiveness of internal controls over financial reporting of Witt Galvanizing because of the timing of the acquisition, which was completed on November 1, 2007.

Report of Ernst & Young LLP, Independent Registered Public Accounting Firm

Board of Directors and Shareholders

AZZ incorporated

Fort Worth, Texas

We have audited the accompanying consolidated balance sheetssheet of AZZ incorporated as of February 29, 2004 and February 28, 2003,2007 and the related consolidated statements of income, shareholders’ equity, and cash flows for eachthe year ended February 28, 2007 and the schedule listed in Item 15 of this Form 10-K. We have also audited management’s assessment, included in the accompanying Management’s Report on Internal Control over Financial Reporting, that AZZ incorporated maintained effective internal control over financial reporting as of February 28, 2007, based on criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the three years in the period ended February 29, 2004. Our audits also included theTreadway Commission (the COSO criteria). AZZ incorporated’s management is responsible for these financial statements, financial statement schedule, listed in the Index at Item 15(a). Theseand for maintaining effective internal control over financial statements are the responsibilityreporting and for its assessment of the Company’s management.effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on these financial statements, financial statement schedule, management’s assessment and on the effectiveness of the company’s internal control over financial reporting based on our audits.

audit.

We conducted our auditsaudit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the schedule are free of material misstatement.misstatement and whether effective internal control over financial reporting was maintained in all material respects. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includesstatements and schedule, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.and schedule. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audits provideaudit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As discussed in Note 1 to the consolidated financial statements, AZZ incorporated changed its method of accounting for share-based payment arrangements in accordance with the provisions of Statement of Financial Accounting Standards No. 123(R),Share-based Payment, effective March 1, 2006.

In our opinion, the consolidated financial statements and financial statement schedule referred to above present fairly, in all material respects, the consolidated financial position of AZZ incorporated at February 29, 200428, 2007 and February 28, 2003, and the consolidated

results of its operations and its cash flows for each of the three years in the period ended February 29, 2004,28, 2007, in conformity with U.S.accounting principles generally accepted accounting principles.in the United States of America. Also in our opinion, the relatedmanagement’s assessment that AZZ incorporated maintained effective internal control over financial statement schedule, when considered in relation to the basic financial statements takenreporting as a whole, presentsof February 28, 2007, is fairly stated, in all material respects, based on the information set forth therein.COSO criteria. Furthermore in our opinion, AZZ incorporated maintained, in all material respects, effective internal control over financial reporting as of February 28, 2007, based on the COSO criteria.

As describedindicated in Notethe accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Witt Galvanizing, which was acquired on November 1, to2006, and which is included in the consolidated financial statements, effective March 1, 2002, the Company adopted Statementbalance sheets of Financial Accounting Standards No. 142,Goodwill and Other Intangible Assets.

AZZ incorporated

CONSOLIDATED STATEMENTS OF INCOME

Years ended February 29, 2004, as of February 28, 20032007, and 2002the related consolidated statements of income, shareholders’ equity, and cash flows for the year then ended. Witt Galvanizing constituted less than 10% of total assets as of February 28, 2007, and less than 10% of revenues and net income, respectively, for the year then ended. Management did not assess the effectiveness of internal control over financial reporting of Witt Galvanizing because of the timing of the acquisition which was completed on November 1, 2006. Our audit of internal control over financial reporting of AZZ incorporated also did not include an evaluation of the internal control over financial reporting of Witt Galvanizing.

/s/ BDO SEIDMAN, LLP

BDO SEIDMAN, LLP

Dallas, Texas

See accompanying notes.May 10, 2007

AZZ incorporated

CONSOLIDATED BALANCE SHEETSSTATEMENTS OF INCOME

Years ended February 29, 200428, 2007, February 28, 2006 and February 28, 20032005