January 2010
2
Except for the statements of historical fact, this report may contain forward-looking
statements that involve risks and uncertainties some of which are detailed from time to
time in documents filed by the company with the SEC. Those risks and uncertainties
include, but are not limited to: changes in customer demand and response to products
and services offered by the company, including demand by the electrical power
generation markets, electrical transmission and distribution markets, the industrial
markets, and the hot dip galvanizing markets; prices and raw material costs, including
zinc and natural gas which are used in the hot dip galvanizing process and steel,
aluminum and copper which are used in the electrical and industrial segment; changes in
the economic conditions of the various markets the company serves, foreign and
domestic, customer requested delays of shipments, acquisition opportunities, currency
exchange rates, adequacy of financing, and availability of experienced management
employees to implement the company's growth strategy, a downturn in market conditions
in any industry relating to the products we sell or the services that we provide; the effects
and duration of continuing economic recession in the U.S. and other markets in which we
operate; and laws and regulations related to environmental matters, including those
addressing the risks of global climate change; and other political developments and laws
and regulations. The company can give no assurance that such forward-looking
statements will prove to be correct. We undertake no obligation to affirm, publicly update
or revise any forward-looking statements, whether as a result of information, future
events or otherwise.
statements that involve risks and uncertainties some of which are detailed from time to
time in documents filed by the company with the SEC. Those risks and uncertainties
include, but are not limited to: changes in customer demand and response to products
and services offered by the company, including demand by the electrical power
generation markets, electrical transmission and distribution markets, the industrial
markets, and the hot dip galvanizing markets; prices and raw material costs, including
zinc and natural gas which are used in the hot dip galvanizing process and steel,
aluminum and copper which are used in the electrical and industrial segment; changes in
the economic conditions of the various markets the company serves, foreign and
domestic, customer requested delays of shipments, acquisition opportunities, currency
exchange rates, adequacy of financing, and availability of experienced management
employees to implement the company's growth strategy, a downturn in market conditions
in any industry relating to the products we sell or the services that we provide; the effects
and duration of continuing economic recession in the U.S. and other markets in which we
operate; and laws and regulations related to environmental matters, including those
addressing the risks of global climate change; and other political developments and laws
and regulations. The company can give no assurance that such forward-looking
statements will prove to be correct. We undertake no obligation to affirm, publicly update
or revise any forward-looking statements, whether as a result of information, future
events or otherwise.
Forward Looking Statement
3
AZZ is a specialty electrical equipment
manufacturer serving the global markets
of power generation, transmission,
distribution and industrial as well as a
leading provider of hot dip galvanizing
services to the steel fabrication market
nationwide.
manufacturer serving the global markets
of power generation, transmission,
distribution and industrial as well as a
leading provider of hot dip galvanizing
services to the steel fabrication market
nationwide.
Company Overview
Total Company
Sales By Segment
Sales By Segment
45%
43%
55%
57%
Actual
FY2009
$412.4
(in millions)
Projected
FY2010
$355 to $365
(in millions)
Projected
FY2011
$310 to $330
(in millions)
51%
49%
Galvanizing
Electrical and Industrial
4
Total Company
Sales By Market Segment
Sales By Market Segment
Actual
FY2009
$412.4
(in millions)
Projected
FY2010
$355 to $365
(in millions)
Projected
FY2011
$310 to $330
(in millions)
5
Electrical and Industrial Products
6
Electrical and Industrial Products
Projected
2011
$150 to $160
(in millions)
7
Power Generation
8
Power Transmission
9
Power Distribution
10
Industrial / Commercial
11
12
Backlog
($ In Millions)
13
Backlog
($ In Millions)
Fiscal 2008 | Fiscal 2009 | 1st Qtr 2010 | 2nd Qtr 2010 | 3rd Qtr 2010 | |
Beginning Backlog | $120.7 | $134.9 | $174.8 | $150.0 | $139.4 |
Bookings | $334.4 | $452.3 | $70.7 | $84.5 | $73.9 |
Shipments | $320.2 | $412.4 | $95.5 | $95.2 | $81.5 |
Ending Backlog | $134.9 | $174.8 | $150.0 | $139.4 | $131.8 |
Book to Ship Ratio | 104% | 106% | 74% | 89% | 91% |
Galvanizing Services
Application: “After-fabrication”
steel corrosion protection
steel corrosion protection
Locations: 22 facilities in 13 states
15
16
Galvanizing Services
Projected
FY2010
$155 to $165
(in millions)
Projected
FY2011
$160 to $170
(in millions)
18
Consolidated Net Sales
($ In Millions)
($ In Millions)
$355 to
$365
$365
$310 to
$330
$330
19
Consolidated Net Sales
First Nine Months FY10
($ In Millions)
First Nine Months FY10
($ In Millions)
20
Earnings Per Share
(Fully Diluted)
(Fully Diluted)
$3.00 to
$3.10
$3.10
$1.85 to
$2.20
$2.20
21
Earnings Per Share
First Nine Months FY10
(Fully Diluted)
First Nine Months FY10
(Fully Diluted)
22
Operating Margins
23
Operating Margins
First Nine Months FY10
First Nine Months FY10
Electrical and Industrial
Products
24
Projected
25
Total Bank Debt / Long Term Debt to Equity
($ In Millions)
($ In Millions)
Projected Debt
Projected Debt to Equity Ratio
Projected Cash
Fiscal Year
26
Capital Expenditures / Depreciation
($ In Millions)
($ In Millions)
$17.0
27
Return On Assets
28
Investment Summary
• Strong Historical Performance
Ø FY10 was 23rd consecutive year of profitability
Ø 5 Yr CAGR - Revenues 19%, Net Income 51%, EPS 38%
Ø Significant Operating Margins (above industry averages)
• Key Growth Drivers
Ø Domestic & international demand for electrical power and energy
Ø U.S. infrastructure investment
• Niche products and value added services with strong market
share position
share position
• Strong Management Team
• Successful acquisition track record and opportunities for further
expansion and growth
expansion and growth
• Strong balance sheet and cash flows
January 2010