TULSA, Okla., Feb. 9, 2009 (GLOBE NEWSWIRE) -- North American Galvanizing & Coatings, Inc. (Nasdaq:NGA) announced today unaudited fourth-quarter 2008 earnings from continuing operations of $3.0 million, or $.18 per share, a 39% increase over the prior year fourth quarter. For the year, income from continuing operations was $12.5 million, or $.74 per share, a 37% increase over the prior year. This year was the highest earnings year in the Company's fifty-three year history.
The Company previously announced a final settlement agreement with the Metropolitan Water District of Greater Chicago, related to the Company's former subsidiary, Lake River Corporation. The loss from discontinued operations of $.7 million, net of tax, was recorded in the fourth quarter of 2008. Net income per share for the fourth quarter was $.14 per share, a 7.7% increase from the prior year fourth quarter net income, including the ($.04) per share result from discontinued operations recorded in 2008.
All per share data are reported on a fully-diluted basis and have been adjusted to reflect the effect of the September 14, 2008 four-for-three stock split effected by a stock dividend.
Commenting on the results, Ronald J. Evans, president and chief executive officer, said, "North American Galvanizing achieved record financial results for the fourth quarter and year. The Company finished the year in a solid financial position, and began 2009 aggressively by announcing the addition of a new plant. With the final resolution of the matters relating to previously discontinued operations, we can now focus our attention on implementing our growth plans."
Results from Operations
Due to an overall increase in demand from existing customers and incremental project work, sales volumes for the year ended December 31, 2008 increased 7% over the prior year. The average selling price for 2008 was 9% lower than the average selling price for 2007 resulting in a 2.6% decrease in annual revenues. A combination of product mix and the lower cost of zinc contributed to the lower average selling price in 2008. Market prices have decreased related to decreases in zinc costs.
The decrease in cost of goods sold from 2007 to 2008 was mainly due to the decrease in zinc costs. Selling, general, and administrative expenses increased $.9 million, or 9.8%, in 2008 compared to the prior year due to increases in personnel costs, primarily non-cash share-based compensation.
Recent New Plant Announcement
On January 27, 2009 the Company announced that it would be constructing a new hot dip galvanizing plant located in Benwood, West Virginia. The new operation, which is expected to be online in late April, will utilize a 30 foot kettle and becomes the Company's eleventh hot dip galvanizing plant. The new plant located three miles south of Wheeling, West Virginia, centrally located in the vicinity of Interstates 77, 70 and 79, will allow the Company to more economically and efficiently service regional customers, others in the tri-state area, as well as in-transit work. This new location is a logical geographic extension, supporting the Company's internal growth plans. The plant will be constructed in an existing building that the Company has leased. The company projects a $3.5 million expenditure for fixed assets.
Share Related Activity during 2008
During fourth quarter 2008, the Company repurchased 487,000 shares of NGA common stock for $1.7 million or approximately $3.52 per share. During 2008, the Company repurchased 1,118,000 shares (adjusted for the four-for-three stock split) of its common stock for $5.1 million. During 2007, the Company repurchased 28,575 shares of its common stock for $.2 million. At December 31, 2008, there was approximately $.5 million remaining under the existing share repurchase authorization plan.
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 Canton, Ohio; Denver, Hurst (Dallas/Forth 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. Results are preliminary and unaudited. 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 SEC filings including the Company's Annual Report on Form 10- K filed with the Securities and Exchange Commission on March 7, 2008. 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)
(In thousands, except per share amounts)
-------------------------------------------------- ------------------
For the
Three Months Ended For the Year Ended
December 31 December 31
------------------- ------------------
2008 2007 2008 2007
SALES $ 21,609 $ 20,235 $ 86,134 $ 88,396
COSTS AND EXPENSES:
Cost of sales 13,563 13,430 53,219 60,329
Selling, general and
administrative expenses 2,491 2,145 10,039 9,143
Depreciation and amortization 973 907 3,529 3,519
-------- -------- -------- --------
Total costs and expenses 17,027 16,482 66,787 72,991
-------- -------- -------- --------
OPERATING INCOME 4,582 3,753 19,347 15,405
Interest expense -- (26) -- (553)
Interest income and other 30 12 247 81
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 4,612 3,739 19,594 14,933
INCOME TAX EXPENSE 1,615 1,572 7,062 5,701
-------- -------- -------- --------
INCOME FROM CONTINUING
OPERATIONS 2,997 2,167 12,532 9,232
-------- -------- -------- --------
LOSS FROM DISCONTINUED
OPERATIONS, net of income
taxes (662) -- (662) --
-------- -------- -------- --------
NET INCOME $ 2,335 $ 2,167 $ 11,870 $ 9,232
======== ======== ======== ========
NET INCOME PER COMMON SHARE:
Continuing Operations
Basic $0.19 $0.14 $0.77 $0.56
Diluted $0.18 $0.13 $0.74 $0.54
Discontinued Operations
Basic ($0.04) -- ($0.04) --
Diluted ($0.04) -- ($0.04) --
Net Income
Basic $0.15 $0.14 $0.73 $0.56
Diluted $0.14 $0.13 $0.70 $0.54
Note: All per share data have been adjusted to reflect the effect of
the September 14, 2008 four-for-three stock split effected by a stock
dividend for all periods presented
North American Galvanizing & Coatings, Inc.
OTHER SELECTED FINANCIAL INFORMATION
(In thousands)
(Unaudited)
Condensed Balance Sheet Information December 31, December 31,
2008 2007
----------- -----------
Cash $ 9,322 $ 2,966
Other current assets 19,673 18,530
Net fixed assets 22,200 22,487
Goodwill and other assets 3,577 3,589
----------- -----------
Total assets $ 54,772 $ 47,572
=========== ===========
Current liabilities $ 9,878 $ 10,831
Deferred tax liability 504 697
Debt -- 15
Equity 44,390 36,029
----------- -----------
Total liabilities and equity $ 54,772 $ 47,572
=========== ===========
Year Ended
December 31,
Other Information 2008 2007
----------- -----------
Capital Expenditures $ 3,228 $ 4,330