AZZ Inc. reports decreased net income for fiscal full-year 2020 and Q4

Wednesday, 29 April 2020 19:40:58 (GMT+3)   |   San Diego

AZZ Inc., a global provider of metal coating solutions, welding solutions, specialty electrical equipment and highly engineered services, issued its 2020 audited consolidated financial statements contained in the Company's Fiscal Year 2020 Annual Report on Form 10-K for the year ended February 29, 2020.

For the 12-month period, the company reported revenues of $1.06 billion compared to $927.1 million for the comparable period last year, an increase of 14.5 percent. Reported operating income increased 3.1 percent to $79.3 million compared to $77.0 million in last year's comparable 12-month period.

Net income for the 12 months decreased 5.8 percent to $48.2 million, compared to $51.2 million in the prior fiscal year.

Revenues for the fourth quarter were $245.4 million compared to $202.5 million for the same quarter last year, an increase of 21.1 percent. Reported net loss for the fourth quarter was $10.6 million, compared to net income of $8.8 million for last year's fourth fiscal quarter. 

For full year fiscal 2020, Metal Coatings segment revenues increased 13.3 percent to $499 million and operating income increased 29.1 percent to $107.9 million compared to $440.3 million and $83.6 million respectively, for the prior fiscal year. The increased revenue was attributable to higher volumes of steel processed, higher selling prices and contribution from acquisitions. 

For full year fiscal 2020, Energy segment revenues increased 15.6 percent to $562.8 million and the operating income of $32.8 million was a 4.8 percent improvement over the prior year. The increase in net sales for fiscal 2020 was attributable to several factors including increased turnaround activity in the US and international refinery market, completion of a large high voltage bus project in China and increases in the company’s electrical switchgear and e-house business. 

Revenues for the Energy segment for the fourth quarter of fiscal 2020 were $122.6 million as compared to $101.3 million for the same quarter last year, an increase of 21 percent. Operating income for the segment decreased to a loss of $1.4 million compared to $5.6 million in the same period last year, a decrease of 124.9 percent.

Tom Ferguson, president and chief executive officer of AZZ, stated, "Due to the worldwide COVID-19 pandemic, our Metal Coatings Segment has seen a modest drop in business in Q1 from some Galvanizing fabrication customers, and Surface Technologies has several large customers that have closed or reduced shifts into May. Within our Energy Platform, we are continuing to process backlog for switchgear, e-houses, and bus duct, while the hazardous duty lighting and tubular products are seeing less demand due to lower rig counts and less activity in the oil patch.  Our industrial field services platform is seeing a shift in most of its work, originally scheduled for Q1 move to both Q2 and Q3 as refiners defer turnarounds amid travel restrictions."

Ferguson added, "Due to uncertainty associated with the recent COVID-19 pandemic on many of our end markets, we are discontinuing our previously issued fiscal 2021 sales and earnings per fully diluted share guidance range. We continue to operate as an 'essential business' in supporting critical infrastructure needs during these unprecedented times.  Our low debt level and ample borrowing capacity, combined with our consistent ability to generate cash, gives us the confidence that we can manage both debt and liquidity satisfactorily throughout fiscal year 2021.  We are conserving cash by moderately reducing capital expenditures, suspending share repurchases and taking selected staffing reductions in businesses with low demand. Additionally, we have not experienced any unusual slowdown in customer payments."   

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