TULSA, Okla., July 20, 2009 (GLOBE NEWSWIRE) -- North American Galvanizing & Coatings, Inc. (Nasdaq:NGA) announced today second quarter 2009 earnings of $2.2 million ($.13 per share), compared with $3.4 million ($.20 per share), in the second quarter of 2008. The Company's net earnings for the first six months of 2009 were $5.7 million ($.35 per share), compared with $6.5 million ($.38 per share) in the first six months of 2008.
Sales for the three-months and six-months ended June 30, 2009 decreased 17.4% and 9.2%, respectively, over the prior year. The decrease in second quarter and first half revenues was due primarily to a lower average sales price compared to the same periods in 2008. The primary reason for the decrease in the average sales price and in cost of goods sold, which declined by 12.9% and 9.3%, respectively, for the three-months and first half ended June 30, 2009 compared to the same prior year periods was a decrease in zinc costs.
Second quarter 2009 volumes were 2.9% lower than volumes in the second quarter of 2008. The current economic downturn has negatively affected overall demand for galvanizing from the Company's customer base, which represent numerous markets including petrochemical, highway and transportation, energy, utilities, communications, irrigation, pulp and paper, waste water treatment, food processing, recreation, and the manufacture of original equipment. First half 2009 volumes were 7.1% higher than volumes in the first half of 2008.
On July 17, 2009 the Company entered into a new Credit Agreement (the "New Credit Agreement") between the Company as borrower and Wells Fargo Bank, N.A. as administrative agent, swing line lender and letter of credit issuer.
The New Credit Agreement provides for a revolving credit facility in the aggregate principal amount of $25 million with future increases of up to an aggregate principal amount of $15 million. The purpose of the new facility is to refinance a former credit agreement, provide for issuance of standby letters of credit, provide funding for acquisitions, and for other general corporate purposes. As of July 20, 2009, the Company has not borrowed under the New Credit Agreement, which has a maturity date of July 17, 2012.
North American Galvanizing is a leading provider of hot-dip galvanizing and coatings for corrosion protection of fabricated steel products. The Company conducts its galvanizing and coating business through a network of plants located in Benwood, West Virginia, Canton, Ohio, Denver, Hurst (Dallas/Fort Worth), Houston, Kansas City, Louisville, Nashville, St. Louis and the Tulsa area. Hot-dip galvanizing provides metals corrosion protection for many product applications used in commercial, construction and industrial markets. Our home page is: www.nagalv.com.
Cautionary Statement. This press release may contain "forward-looking statements" as defined under U.S. securities laws, including, but not limited to, statements concerning the Company's beliefs and expectations of future performance. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from such forward-looking statements and management's present expectations or projections. These risks and uncertainties include the risk factors described in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009. These forward-looking statements are made as of the date of this press release. The Company assumes no obligation to update or revise these statements or to provide reasons why actual results may differ.
NORTH AMERICAN GALVANIZING & COATINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008
(In thousands, except per share amounts)
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Three Months Ended Six Months Ended
June 30 June 30
2009 2008 2009 2008
SALES $ 18,143 $ 21,978 $ 38,752 $ 42,680
COSTS AND EXPENSES:
Cost of sales excluding
depreciation and
amortization 11,284 12,957 23,367 25,777
Selling, general and
administrative expenses 2,476 2,707 5,169 4,849
Depreciation and amortization 884 852 1,771 1,709
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Total costs and expenses 14,644 16,516 30,307 32,335
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OPERATING INCOME 3,499 5,462 8,445 10,345
Interest income and other 6 136 19 147
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INCOME BEFORE INCOME TAXES 3,505 5,598 8,464 10,492
INCOME TAX EXPENSE 1,285 2,175 2,783 3,994
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NET INCOME $ 2,220 $ 3,423 $ 5,681 $ 6,498
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NET INCOME PER COMMON SHARE:
Basic $ 0.14 $ 0.21 $ 0.35 $ 0.40
Diluted $ 0.13 $ 0.20 $ 0.35 $ 0.38
Note: Net income per share adjusted for the four-for-three stock
split on September 14, 2008.