10-K

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United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 2002
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-9102

AMERON INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)

Delaware (State of Incorporation)	77-0100596 (I.R.S. Employer Identification No.)
245 South Los Robles Avenue Pasadena, CA 91101 (Address and Zip Code of principal executive offices)

Registrant's telephone number, including area code: (626) 683-4000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of each class Common Stock $2.50 par value Name of each exchange on which registered New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

        Indicate by check mark whether the registrant (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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        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'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. o

        The Registrant estimates that as of February 11, 2003 the aggregate market value of the shares of its Common Stock, $2.50 par value, held by non-affiliates of the Registrant (that is, shares beneficially owned by other than executive officers and directors) was in excess of $197 million.

        On February 11, 2003 there were 3,950,312 shares of Common Stock, $2.50 par value outstanding. This is the only class of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

1.    PORTIONS OF AMERON'S 2002 ANNUAL REPORT TO STOCKHOLDERS (PARTS I, II AND IV).

        2.    PORTIONS OF AMERON'S PROXY STATEMENT FOR THE 2003 ANNUAL MEETING OF STOCKHOLDERS (PART III).

PART I
AMERON INTERNATIONAL CORPORATION

        AMERON INTERNATIONAL CORPORATION, a Delaware corporation, and its consolidated subsidiaries are collectively referred to herein as "Ameron", the "Company", the "Registrant" or the "Corporation" unless the context clearly indicates otherwise. The business of the Company has been divided into business segments in Item 1(c)(1). Substantially all activities relate to the manufacture of highly engineered products for sale to the industrial, chemical, energy and construction markets. All references to "the year" or "the fiscal year" pertain to the 12 months ended November 30, 2002. All references to the "Annual Report" pertain to the Company's 2002 Annual Report to Stockholders.

ITEM 1—BUSINESS

(a)

GENERAL DEVELOPMENT OF BUSINESS.

Although the Company's antecedents date back to 1907, it evolved directly from the merger of two separate firms in 1929, resulting in the incorporation of American Concrete Pipe Co. on April 22, 1929. Various name changes occurred between that time and 1942, at which time the Company's name became American Pipe and Construction Co. By the late 1960s the Company was almost exclusively engaged in manufacturing and had expanded its product lines to include not only concrete and steel pipe but also high-performance protective coatings, ready-mix concrete, aggregates and reinforced thermosetting resin pipe and fittings.

At the beginning of 1970, the Company's name was changed to Ameron, Inc. In the meantime, other manufactured products had been added to its product lines. These included concrete and steel poles for street and area lighting, and steel poles for traffic signals.

In 1996, the Company's name was changed to Ameron International Corporation in order to better reflect its expanded, global focus. Also in 1996, the Company acquired assets of Centron, a leading manufacturer of fiberglass pipe for the worldwide oilfield market, as well as the worldwide Devoe marine coatings business of Imperial Chemical Industries Plc. In 1998, the Company acquired the protective coatings and light industrial product finishes businesses of Croda International Plc in the United Kingdom, Australia and New Zealand.

Further details or commentary on the year's operations can be found in the Annual Report, which is Exhibit 13 to this report on Form 10-K, and which should be read in conjunction with this report.

(b)

FINANCIAL INFORMATION AS TO INDUSTRY SEGMENTS.

The information contained in Notes (1), (5) and (17) of Notes to Consolidated Financial Statements on pages 32, 33, 34, 35, 42 and 43 of the Annual Report is incorporated herein by reference.

(c)

NARRATIVE DESCRIPTION OF BUSINESS.

(1)

For geographical and operational convenience, the Company is organized into divisions. These divisions are combined into the following groups serving the following-described industry segments.

a)

The Performance Coatings & Finishes Group develops, manufactures and markets high-performance coatings and surfacer systems on a worldwide basis. These products are utilized for the preservation of structures, such as metallic and concrete facilities and equipment, to prevent their degradation by corrosion, abrasion, marine fouling and other forms of chemical and physical attack. The primary markets served include marine, offshore, petrochemical, power generation, petroleum, chemical, steel, pulp and paper, railroad, bridges, mining, metal processing and original equipment manufacturing. These products are marketed

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by direct sales, as well as through manufacturers' representatives, distributors and licensees. Competition is based upon quality, price and service. Manufacture of these products is carried out in the Company's plant in Arkansas, by wholly-owned subsidiaries in The Netherlands, the United Kingdom, Australia and New Zealand, by joint ventures in Mexico and Saudi Arabia and by various third-party licensees.

b)

The Fiberglass-Composite Pipe Group develops, manufactures and markets filament-wound and molded fiberglass pipe and fittings. These products are used by a wide range of process industries, including industrial, petroleum, chemical processing and petrochemical industries, for service station replacement piping systems, aboard marine vessels and on offshore oil platforms, and are marketed as an alternative to metallic piping systems which ultimately fail under corrosive operating conditions. These products are marketed by direct sales, as well as through manufacturers' representatives, distributors and licensees. Competition is based upon quality, price and service. Manufacture of these products is carried out in the Company's plant in Texas, by its wholly-owned domestic subsidiary, Centron International Inc. ("Centron"), at its plant in Texas, by wholly-owned subsidiaries in The Netherlands, Singapore, and Malaysia, by a joint venture in Saudi Arabia and by third-party licensees.



c)

The Water Transmission Group supplies products and services used in the construction of water pipelines. Five pipe manufacturing plants are located in Arizona and California. Also included within this group is American Pipe & Construction International, a wholly-owned subsidiary, with a plant in Colombia. These plants manufacture concrete cylinder pipe, prestressed concrete cylinder pipe, steel pipe and reinforced concrete pipe for water transmission, storm and industrial waste water and sewage collection. These products are marketed by direct selling using the Company's own personnel and by competitive bidding. Customers include local, state and federal agencies, developers and general contractors. Normally no one customer or group of customers will account for sales equal to or greater than 10 percent of the Company's consolidated revenue. However, occasionally, when more than one unusually large project is in progress, combined sales to all U.S. government agencies and/or general contractors for those agencies can reach those proportions. Besides competing with several other welded steel pipe and concrete pipe manufacturers located in the market area, alternative products such as ductile iron, plastic, and clay pipe compete with the Company's concrete and steel pipe products, but ordinarily these other materials do not offer the full diameter range produced by the Company. Principal methods of competition are price, delivery schedule and service. The Company's technology is used in the Middle East through affiliated companies. This segment also includes the manufacturing and marketing on a worldwide basis through direct sales and manufacturing representatives, of polyvinyl chloride and polyethylene sheet lining for the protection of concrete pipe and cast-in-place concrete structures from the corrosive effects of sewer gases, acids and industrial chemicals. Competition is based upon quality, price and service. Manufacture of this product is carried out in the Company's plant in California. This segment also includes engineered design, fabrication and direct sale of specialized proprietary equipment which is outside the regular business of the other segments of the Company's businesses. Competition for such work is based upon quality, price and service. Manufacture of such equipment is carried out in the Company's plant in California.



d)

The Infrastructure Products Group supplies ready-mix concrete, crushed and sized basaltic aggregates, dune sand, concrete pipe and box culverts, primarily to the construction industry in Hawaii, and manufactures and markets concrete and steel poles for highway, street and outdoor area lighting and for traffic signals nationwide. Ample raw materials are available locally in Hawaii. As to rock products, the Company has exclusive rights to a quarry containing many years' reserves. There is only one major source of supply for cement in

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Hawaii. Within the market area there are competitors for each of the segment's products. No single competitor offers the full range of products sold by the Company in Hawaii. An appreciable portion of the segment's business is obtained through competitive bidding. Sales of poles are nationwide, but with a stronger concentration in the western states. Marketing is handled by the Company's own sales force and by outside sales agents for poles. Competition for such products is mainly based on price and quality, but with some consideration for service and delivery. Poles are manufactured in two plants in California, as well as plants in Washington, Oklahoma and Alabama.

e)

Except as individually shown in the above descriptions of industry segments, the following comments or situations apply to all segments:



(i)

Because of the number of manufacturing locations and the variety of raw materials essential to the business, no critical situations exist with respect to supply of materials. The Company has multiple sources for raw materials. The effects of increases in costs of energy are being mitigated to the extent practical through conservation and through addition or substitution of equipment to manage the use and reduce consumption of energy.



(ii)

The Company owns certain patents and trademarks, both U.S. and foreign, related to its products. The Company licenses its patents, trademarks, know-how and technical assistance to various of its subsidiary and affiliated companies and to various third-party licensees. It licenses these proprietary items to some extent in the U.S., and to a greater degree abroad. These patents, trademarks, and licenses do not constitute a material portion of the Company's total business. No franchises or concessions exist.



(iii)

Many of the Company's products are used in connection with capital goods, water and sewage transmission and construction of capital facilities. Favorable or adverse effects on general sales volume and earnings can result from weather conditions. Normally, sales volume and earnings will be lowest in the first fiscal quarter. Seasonal effects simply accelerate or slow the business volume and normally do not bring about severe changes in full-year activity.



(iv)

With respect to working capital items, the Company does not encounter any requirements which are not common to other companies engaged in the same industries. No unusual amounts of inventory are required to meet seasonal delivery requirements. All of the Company's industry segments turn their inventory between three and eight times annually. Average days' sales in accounts receivable range between 35 and 133 for all segments.



(v)

The value of backlog orders at November 30, 2002 and 2001 by industry segment is shown below. A substantial portion of the November 30, 2002 backlog is expected to be billed and recorded as sales during fiscal 2003.

Segment		2002		2001
		(in thousands)
Performance Coatings & Finishes Group		$	5,461	$	3,593
Fiberglass-Composite Pipe Group			32,687		25,334
Water Transmission Group			151,523		92,194
Infrastructure Products Group			26,495		22,815
	Total	$	216,166	$	143,936

(vi)

There was no significant change in competitive conditions or the competitive position of the Company in the industries and localities in which it operates. There is no knowledge of any competitive situation which would be material to an understanding of the business.



(vii)

Sales contracts in all of the Company's business segments normally consist of purchase orders, which in some cases are issued pursuant to master purchase agreements. Longer-term contracts seldom involve commitments of more than one year by the Company, and exceptions are not deemed

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material by management. Payment is normally due from 30 to 60 days after shipment, with progress payments prior to shipment in some circumstances. It is the Company's practice to require letters of credit prior to shipment of foreign orders, subject to limited exceptions. The Company does not typically extend long-term credit to purchasers of its products.

(2)	a)	Approximate expense during each of the last three fiscal years for Research and Development costs is shown under the caption in Note (1) of Notes to Consolidated Financial Statements on page 32 of the Annual Report, and is incorporated herein by reference.
	b)	The Company's business is not dependent on any single customer or few customers, the loss of any one or more of whom would have a material adverse effect on its business.
	c)	For many years the Company has been consistently installing or improving devices to control or eliminate the discharge of pollutants into the environment. Accordingly, compliance with federal, state, and locally enacted provisions relating to protection of the environment is not having, and is not expected to have, a material effect upon the Company's capital expenditures, earnings, or competitive position.
	d)	At year-end the Company and its consolidated subsidiaries employed approximately 2,800 persons. Of those, approximately 700 were covered by labor union contracts. There are four separate bargaining agreements subject to renegotiation in 2003.

(d)

FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES.

The information contained in Notes (1), (5) and (17) of Notes to Consolidated Financial Statements on pages 32, 33, 34, 35, 42 and 43 of the Annual Report is incorporated herein by reference.

        Export sales in the aggregate from U.S. operations during the last three fiscal years were:

	In thousands
2002	$	26,372
2001		35,952
2000		30,665

ITEM 2—PROPERTIES

(a)

The location and general character of principal plants and other materially important physical properties used in the Company's operations are tabulated below. Property is owned in fee simple except where otherwise indicated by footnote. In addition to the property shown, the Company owns vacant land adjacent to or in the proximity of some of its operating locations and holds this property available for use when it may be needed to accommodate expanded or new operations. Property listed does not include any temporary project sites which are generally leased for the duration of the respective projects or leased or owned warehouses that could be easily replaced. With the exception of the Kailua, Oahu property, shown under the Infrastructure Products industry segment, there are no material leases with respect to which expiration or inability to renew would have any material adverse effect on the Company's operations. The lease term on the Kailua property extends to the year 2052. Kailua is the principal source of quarried rock and aggregates for the Company's operations on Oahu, Hawaii; and, in management's opinion, rock reserves are adequate for its requirements during the term of the lease.

(b)

The Company believes that its existing facilities are adequate for current and presently foreseeable operations. Because of the cyclical nature of certain of the Company's operations, and the substantial amounts involved in some individual orders, the level of utilization of particular facilities may vary significantly from time to time in the normal course of operations.

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Industry Segment—Group       Division             Location			Description
PERFORMANCE COATINGS & FINISHES GROUP
	Coatings Division—USA
		Alpharetta, GA	*Office
		Brea, CA	Office, Laboratory, Warehouse
		Little Rock, AR	Office, Plant
		Houston, TX	Warehouse
	Ameron B.V.
		Geldermalsen, The Netherlands	Office, Plant
		Huthwaite, UK	Office, Plant
	Ameron (UK) Limited
		Hull, UK	Office, Plant
	Ameron (Australia) Pty. Limited
		Sydney, Australia	Office, Plant
		Adelaide, Australia	Plant
	Ameron (New Zealand) Limited
		Auckland, New Zealand	Office, Plant
FIBERGLASS-COMPOSITE PIPE GROUP
	Fiberglass Pipe Division—USA
		Houston, TX	*Office
		Burkburnett, TX	Office, Plant
	Centron International, Inc.
		Mineral Wells, TX	Office, Plant
	Ameron B.V.
		Geldermalsen, The Netherlands	Office, Plant
	Ameron (Pte) Ltd.
		Singapore	*Office, Plant
	Ameron Malaysia Sdn. Bhd.
		Malaysia	*Office, Plant
WATER TRANSMISSION GROUP
		Rancho Cucamonga, CA	*Office
		Etiwanda, CA	Office, Plant
		Fontana, CA	Office, Plant
		Lakeside, CA	Office, Plant
		Phoenix, AZ	Office, Plant
		Tracy, CA	Office, Plant
	Protective Linings Division
		Brea, CA	Office, Plant
	Fabrication Plant
		South Gate, CA	Office, Plant
	American Pipe & Construction International

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		Bogota, Colombia	Office, Plant
INFRASTRUCTURE PRODUCTS GROUP
	Hawaii Division
		Honolulu, Oahu, HI	*Office, Plant
		Kailua, Oahu, HI	*Plant, Quarry
		Barbers Point, Oahu, HI	Office, Plant
		Puunene, Maui, HI	*Office, Plant, Quarry
	Pole Products Division
		Ventura, CA	*Office
		Fillmore, CA	Office, Plant
		Oakland, CA	*Plant
		Everett, WA	*Office, Plant
		Tulsa, OK	*Office, Plant
		Anniston, AL	*Office, Plant
CORPORATE
	Corporate Headquarters
		Pasadena, CA	*Office
	Corporate Research & Engineering
		South Gate, CA	Office, Laboratory

*

Leased

ITEM 3—LEGAL PROCEEDINGS

        An action was filed in 1992 in the U.S. District Court for the District of Arizona by the Central Arizona Water Conservation District ("CAWCD") seeking damages against several parties, including the Company and the Company's customer, Peter Kiewit Sons Company ("Kiewit"), in connection with six prestressed concrete pipe siphons furnished and installed in the 1970's as part of the Central Arizona Project ("CAP"), a federal project to bring water from the Colorado River to Arizona. The CAWCD also filed separate actions against the U.S. Bureau of Reclamation ("USBR") in the U.S. Court of Claims and with the Arizona Projects Office of the USBR in connection with the CAP siphons. The CAWCD alleged that the six CAP siphons were defective and that the USBR and the defendants in the U.S. District Court action were liable for damages for the repair or replacement of those siphons. On September 14, 1994, the U.S. District Court granted the Company's motion to dismiss the CAWCD action and entered judgment against the CAWCD and in favor of the Company and its co-defendants.

        Separately, on September 28, 1995, the Contracting Officer for the USBR issued a final decision claiming for the USBR approximately $40 million in damages against Kiewit, based in part on the Contracting Officer's finding that the siphons supplied by the Company were defective. That claim amount was considered by the Company to be duplicative of the damages sought by the CAWCD for the repair or replacement of the siphons in the aforementioned action in the U.S. District Court for the District of Arizona. The Contracting Officer's final decision was appealed by Kiewit to the U.S. Department of the Interior Board of Contract Appeals ("IBCA"). The Company actively cooperated with and assisted Kiewit in the administrative appeal of that final decision before the IBCA. Trial on that appeal commenced in November 2000, however the proceeding was stayed with the concurrence of

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the parties pending efforts aimed at settlement of the entire matter. Settlement efforts were then undertaken, during which the IBCA appeal was suspended.

        As of November 30, 2002, tentative settlements had been reached among the USBR, Kiewit, the Company and various insurance carriers. Since November 30, 2002, those settlements have been finalized and the entire matter, including the aforementioned CAWCD claim, has been resolved on economic terms that did not result in an adverse material effect on the financial position of the Company or its results of operations. The Company will receive sufficient reimbursement from its own and a supplier's insurance companies to fully cover the settlement.

        The Company is one of numerous defendants in various pending lawsuits involving, as of November 30, 2002, some 8,382 individuals or their representatives alleging personal injury from exposure to asbestos-containing products. None of such lawsuits specifies any dollar amount sought as damages by such individuals or their representatives, and at this time the Company is not aware of the extent of injuries allegedly suffered by the individuals or the facts supporting the claim that such injuries were caused by the Company's products. Based upon the information available to it at this time, the Company is not in a position to evaluate its potential exposure, if any, as a result of these claims. The Company intends to vigorously defend all asbestos-related lawsuits.

        In addition to the above, certain other claims, suits and complaints that arise in the ordinary course of business, have been filed or are pending against the Company. Management believes that these matters are either adequately reserved, covered by insurance, or would not have a material effect on the Company's financial position or its results of operations if disposed of unfavorably.

        The Company is subject to federal, state and local laws and regulations concerning the environment and is currently participating in administrative proceedings at several sites under these laws. While the Company finds it difficult to estimate with any certainty the total cost of remediation at the several sites, on the basis of currently available information and reserves provided, the Company believes that the outcome of such environmental regulatory proceedings will not have a material effect on the Company's financial position or its results of operations.

ITEM 4—SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        (Not Applicable)

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ITEM 4A—EXECUTIVE OFFICERS OF THE REGISTRANT

        The following sets forth information with respect to individuals who served as executive officers as of November 30, 2002 and who are not directors of the Company. All executive officers are appointed by the Board of Directors to serve at the discretion of the Board of Directors.

Name	Age	Title and Year Elected as Officer
Thomas P. Giese	58	Vice President; Group President Water Transmission Group	1997
James R. McLaughlin	55	Vice President-Treasurer & Controller	1997
Gordon G. Robertson	63	Vice President; Group President Fiberglass-Composite Pipe Group	1997
Javier Solis	56	Senior Vice President of Administration, Secretary & General Counsel	1984
Gary Wagner	51	Senior Vice President & Chief Financial Officer	1990

        All of the executive officers named above have held high level managerial or executive positions with the Company for more than the past five years. Gordon Robertson retired in December 2002.

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PART II

ITEM 5—MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        The Common Stock, $2.50 Par Value, of the Company, its only outstanding class of common equity, is traded on the New York Stock Exchange, the only exchange on which it is presently listed. On February 11, 2003, there were 1,172 stockholders of record of such stock. Information regarding stock compensation plans is contained in Note (12) on page 37 and 38 of the Annual Report, and is incorporated herein by reference.

        Dividends have been paid each quarter during the prior two years. Information as to the amount of dividends paid during the reporting period and the high and low prices of the Company's Common Stock during that period are set out in Note (16) on page 42 of the Annual Report, which information is incorporated herein by reference.

        Terms of lending agreements which place restrictions on cash dividends are discussed in Note (10) on pages 36 and 37 of the Annual Report, and is incorporated herein by reference.

ITEM 6—SELECTED FINANCIAL DATA

        The information required by this item is contained in the Selected Consolidated Financial Information shown on page 20 of the Annual Report, and is incorporated herein by reference.

ITEM 7—MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The information required by this item is contained in Management's Discussion and Analysis of Financial Condition and Results of Operations section shown on pages 21 through 26 and Note (1) pages 32, 33 and 34 of the Annual Report, and is incorporated herein by reference.

ITEM 7A—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The information required by this Item is contained on page 25 of the Annual Report under the caption Market Risks, and is incorporated herein by reference. At November 30, 2002, the Company had foreign currency forward contracts with an aggregate face value of $6,623,000. In January 2003, the Company finalized a three-year, floating rate, revolving credit facility which permits borrowings up to

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$100,000,000, and issued seven-year notes payable totaling $50,000,000 at a fixed rate of 5.36%. Future debt maturities are as follows, adjusted to reflect the refinancing that occurred in January 2003:

																			Total Outstanding As of November 30, 2002
	Expected Maturity Date
																			Recorded Value			Fair Value
	2003			2004			2005			2006			2007			Thereafter
Liabilities (US$ in thousands)
Long Term Debt:
Fixed-rate notes, payable in US$	$	8,333		$	8,333		$	8,333		$	8,334		$	—		$	—		$	33,333		$	35,577
Average interest rate		7.92	%		7.92	%		7.92	%		7.92	%		—			—			7.92	%
Fixed-rate notes, payable in US$		—			—			10,000			10,000			10,000			20,000			50,000			50,000
Average interest rate		—			—			5.36	%		5.36	%		5.36	%		5.36	%		5.36	%
Variable-rate bank revolving credit facilities, payable in US$		—			—			—			12,123			—			—			12,123			12,123
Average interest rate																				2.00	%
Variable-rate industrial development bonds, payable in US$		—			—			—			—			—			7,200			7,200			7,200
Average interest rate																				1.25	%
Variable-rate industrial development bonds, payable in US$		—			—			—			—			—			8,500			8,500			8,500
Average interest rate																				1.40	%

ITEM 8—FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The Consolidated Financial Statements as of November 30, 2002 and 2001 and for each of the three years in the period ended November 30, 2002 and the report thereon of Deloitte & Touche LLP dated February 3, 2003, comprising pages 27 through 44 of the Annual Report, are incorporated herein by reference.

ITEM 9—CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        (Not applicable)

PART III

ITEM 10—DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        Information with respect to the directors is contained under the section entitled, "Election of Directors" in the Company's Proxy Statement which was filed on February 21, 2003 in connection with the Annual Meeting of Stockholders to be held on March 26, 2003. Such information is incorporated herein by reference.

        Information with respect to the executive officers who are not directors of the Company is located in Part I, Item 4A of this report.

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ITEM 11—EXECUTIVE COMPENSATION*

ITEM 12—SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS*

ITEM 13—CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS*

*

The information required by Items 11, 12 and 13 is contained in the Company's Proxy Statement which was filed on February 21, 2003 in connection with the 2003 Annual Meeting of Stockholders to be held on March 26, 2003. Such information is incorporated herein by reference.

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PART IV

ITEM 14—CONTROLS AND PROCEDURES

        The consolidated financial statements included in the Annual Report and incorporated by reference herein were prepared by management, which is responsible for their fairness, integrity, and objectivity. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, and include amounts based on management's reasonable estimates and judgments. The other financial information contained in this report has been prepared in a manner consistent with the preparation of the consolidated financial statements.

        Management has established, maintains and necessarily relies on the Company's system of internal controls and disclosure controls. This system is designed to provide reasonable, but not absolute, assurance that a) the Company's transactions are properly authorized, b) the Company's assets are safeguarded against unauthorized or improper use, and c) the Company's transactions are properly recorded and reported. The concept of reasonable assurance is based on the recognition that in any system of controls there are certain inherent limitations and that the cost of such systems should not exceed the benefits to be derived.

        A control system, no matter how well conceived and operated, cannot provide absolute assurance that the objectives of the control system will be met. No evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company will be detected. Judgments in decision-making can be faulty, and breakdowns can occur because of simple error or mistake. Additionally, any control can be circumvented by the individual acts of some persons, by collusion, or by management override of the control. Any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any system of controls will succeed under all potential future conditions. Controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

        The Company's disclosure controls and procedures are designed to ensure that information required to be disclosed in the Company's periodic filings made in accordance with the rules and regulations promulgated by the U.S. Securities and Exchange Commission (the "Commission") is (a) recorded, processed, accumulated and summarized within the time periods specified by the Commission, (b) communicated to the Company's management, including its chief executive and financial officers, as appropriate to allow timely decisions regarding required disclosure, and (c) presented in the Company's periodic filings in a manner that fairly portrays the information being presented (i) in light of all available facts and circumstances relating to the matters disclosed, and (ii) in conformity with the disclosure requirements promulgated by the Commission.

        Within 90 days prior to the filing of the Annual Report and this Form 10-K, an evaluation of the Company's disclosure controls and procedures was performed under the supervision and with the participation of the Company's management, including the chief executive and financial officers. Based on that evaluation, management, including the Company's chief executive and financial officers, concluded that (a) the Company's disclosure controls and procedures were effective in timely alerting management to material information relating to the Company that is required to be included in the Company's periodic filings and (b) the Company's system of internal controls was effective in providing reasonable assurance that the Company's financial statements are fairly presented in conformity with accounting principles generally accepted in the United States of America. Since the date of the evaluation, there have been no significant changes in the Company's system of disclosure or internal controls or in other factors that could significantly affect those controls.

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ITEM 15—EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) FINANCIAL STATEMENTS:

        The financial statements to be filed hereunder are cross-referenced, in the index immediately following, to the Annual Report, as to sections incorporated herein by reference.

INDEX TO FINANCIAL STATEMENTS

Statement	Page Reference To Annual Report
Consolidated Statements of Income for the years ended November 30, 2002, 2001 and 2000	27
Consolidated Balance Sheets as of November 30, 2002 and 2001	28-29
Consolidated Statements of Cash Flows for the years ended November 30, 2002, 2001 and 2000	30
Consolidated Statements of Stockholders' Equity for the years ended November 30, 2002, 2001 and 2000	31
Consolidated Statements of Comprehensive Income for the years ended November 30, 2002, 2001 and 2000	31
Notes to Consolidated Financial Statements	32-43

(i) Summarized information as to the financial condition and results of operations for Ameron Saudi Arabia, Ltd., Bondstrand, Ltd, Oasis-Ameron, Ltd. and TAMCO is presented in Note (5) of Notes to Consolidated Financial Statements on page 34 and 35 of the Annual Report, and is incorporated herein by reference.

(a)(2) FINANCIAL STATEMENT SCHEDULES:

        The following additional financial data should be read in conjunction with the consolidated financial statements in the Annual Report. Schedules not included with this additional financial data

13

have been omitted because they are either not applicable, not required, not significant, or the required information is provided in the consolidated financial statements in the Annual Report.

	Schedule		Schedules of Ameron
		II	Independent Auditors' Report Valuation and Qualifying Accounts and Reserves
(a)	(3)	Exhibits
			Certification of Principal Executive Officer
			Certification of Principal Financial Officer
		3(i)	Certificate of Incorporation
		3(ii)	Bylaws
		4	Instruments Defining the Rights of Security Holders, Including Indentures
		10	Material Contracts
		13	Annual Report
		21	Subsidiaries of the Registrant
		23	Independent Auditors' Consent
(b)	Reports on Form 8-K
	One report on Form 8-K was filed by the Company during the last quarter of the fiscal year ended November 30, 2002 as follows:
	September 27, 2002 reporting under Item 9, Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

14

INDEPENDENT AUDITORS' REPORT

        To the Board of Directors and Stockholders of Ameron International Corporation:

        We have audited the consolidated financial statements of Ameron International Corporation and subsidiaries (the "Company") as of November 30, 2002 and 2001, and for each of the three years in the period ended November 30, 2002, and have issued our report thereon dated February 3, 2003. Such financial statements and report are included in your 2002 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the financial statement schedule listed in Item 15(a)2. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Deloitte & Touche LLP
Los Angeles, California
February 3, 2003

15

AMERON INTERNATIONAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEAR ENDED NOVEMBER 30, 2002
(In thousands)

Classification	Balance at Beginning of Year		Additions Charged to Costs and Expense			Deductions, Payments and Write-offs			Reclassifications and Other		Balance at End of Year
DEDUCTED FROM ASSET ACCOUNTS
Allowance for doubtful accounts	$	6,699	$	1,300		$	(1,496	)	$	149	$	6,652
Reserve for realization of investments in joint ventures		18,190		(1,282	)		—			—		16,908
Reserve for write-down of assets related to certain foreign joint ventures		2,360		—			—			—		2,360
INCLUDED IN CURRENT LIABILITIES
Reserve for pending claims and litigation	$	8,227	$	210		$	(3,170	)	$	41	$	5,308
Other reserves		292		—			(66	)		10		236
Reserve for self-insured programs		14,223		3,833			(3,834	)		—		14,222

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AMERON INTERNATIONAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEAR ENDED NOVEMBER 30, 2001
(In thousands)

Classification	Balance at Beginning of Year		Additions Charged to Costs and Expense		Deductions, Payments and Write-offs			Reclassifications and Other			Balance at End of Year
DEDUCTED FROM ASSET ACCOUNTS
Allowance for doubtful accounts	$	6,616	$	1,738	$	(1,649	)	$	(6	)	$	6,699
Reserve for realization of investments in joint ventures		16,358		1,832		—			—			18,190
Reserve for write-down of assets related to certain foreign joint ventures		2,649		—		(289	)		—			2,360
INCLUDED IN CURRENT LIABILITIES
Reserve for pending claims and litigation	$	13,744	$	1,362	$	(6,864	)	$	(15	)	$	8,227
Other reserves		217		151		(75	)		(1	)		292
Reserve for self-insured programs		12,620		5,047		(3,438	)		(6	)		14,223

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AMERON INTERNATIONAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEAR ENDED NOVEMBER 30, 2000
(In thousands)

Classification	Balance at Beginning of Year		Additions Charged to Costs and Expense		Deductions, Payments and Write-offs			Reclassifications and Other			Balance at End of Year
DEDUCTED FROM ASSET ACCOUNTS
Allowance for doubtful accounts	$	6,937	$	1,953	$	(2,143	)	$	(131	)	$	6,616
Reserve for realization of investments in joint ventures		14,183		2,175		—			—			16,358
Reserve for write-down of assets related to certain foreign joint ventures		2,698		—		(49	)		—			2,649
INCLUDED IN CURRENT LIABILITIES
Reserve for pending claims and litigation	$	16,370	$	8,259	$	(10,745	)	$	(140	)	$	13,744
Other reserves		252		89		(97	)		(27	)		217
Reserve for self-insured programs		11,239		4,256		(2,694	)		(181	)		12,620
INCLUDED IN LONG-TERM LIABILITIES
Other reserves	$	650	$	126	$	(47	)	$	(729	)	$	—

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

AMERON INTERNATIONAL CORPORATION
By:	/s/  JAVIER SOLIS Javier Solis, Senior Vice President & Secretary

Date: February 24, 2003

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

Date: February 18, 2003	/s/  JAMES MARLEN James Marlen	Director, Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)
Date: February 18, 2003	/s/  GARY WAGNER Gary Wagner	Senior Vice President & Chief Financial Officer (Principal Financial & Accounting Officer)
Date: February 19, 2003	/s/  PETER BARKER Peter K. Barker	Director
Date: February 16, 2003	/s/  DAVID DAVENPORT David Davenport	Director
Date: February 17, 2003	/s/  MICHAEL HAGAN J. Michael Hagan	Director
Date: February 19, 2003	/s/  TERRY HAINES Terry L. Haines	Director
Date: February 18, 2003	/s/  JOHN KING John F. King	Director
Date: February 18, 2003	/s/  THOMAS LEE Thomas L. Lee	Director
Date: February 17, 2003	/s/  JOHN PEPPERCORN John E. Peppercorn	Director
Date:	Dennis C. Poulsen	Director

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CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, James S. Marlen, certify that:

1.

I have reviewed this annual report on Form 10-K of Ameron International Corporation;

2.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this annual report;

4.

The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:

a)

designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)

evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report ("the Evaluation Date"); and

c)

presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weakness in internal controls; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and

6.

The Registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

February 24, 2003 /s/  JAMES S. MARLEN James S. Marlen
Director, Chairman of the Board,
President & Chief Executive Officer

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CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Gary Wagner, certify that:

1.

I have reviewed this annual report on Form 10-K of Ameron International Corporation;

2.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this annual report;

4.

The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:

a)

designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)

evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report ("the Evaluation Date"); and

c)

presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weakness in internal controls; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and

6.

The Registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

February 24, 2003 /s/  GARY WAGNER Gary Wagner
Senior Vice President & Chief Financial Officer

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QuickLinks

FORM 10-K
PART I AMERON INTERNATIONAL CORPORATION
ITEM 1—BUSINESS
ITEM 2—PROPERTIES
ITEM 3—LEGAL PROCEEDINGS
ITEM 4—SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 4A—EXECUTIVE OFFICERS OF THE REGISTRANT
PART II
ITEM 5—MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
ITEM 6—SELECTED FINANCIAL DATA
ITEM 7—MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 7A—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8—FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9—CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
PART III
ITEM 10—DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11—EXECUTIVE COMPENSATION
ITEM 12—SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
ITEM 13—CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PART IV
ITEM 14—CONTROLS AND PROCEDURES
ITEM 15—EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
INDEPENDENT AUDITORS' REPORT
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

EX-3.(I)

CERTIFICATE OF INCORPORATION

        Exhibit 3(i) is the Certificate of Incorporation as amended through April 16, 1996, which document is incorporated by reference to Annual Report on Form 10-K filed with the Commission for Registrant's fiscal year ended November 30, 1996.

EXHIBIT 3(i)

EX-3.(II)

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BYLAWS

        Exhibit 3(ii) is the Corporation's Bylaws as amended through December 1, 2002.

EXHIBIT 3(ii)

Exhibit 3(ii)

AMERON INTERNATIONAL CORPORATION
(a Delaware corporation)

BYLAWS


(Restated with amendments
through December 1, 2002)

ARTICLE I

Offices

        SECTION 1.01. Registered Office. The registered office of AMERON INTERNATIONAL CORPORATION (hereinafter called the Corporation) in the State of Delaware shall be at 1209 Orange Street, City of Wilmington, County of New Castle, and the name of the registered agent in charge thereof shall be The Corporation Trust Company.

        SECTION 1.02. Other Offices. The Corporation may also have an office or offices at such other place or places, either within or without the State of Delaware, as the Board of Directors (hereinafter called the Board) may from time to time determine or as the business of the Corporation may require.

ARTICLE II

Meetings of Stockholders

        SECTION 2.01. Annual Meetings. Annual Meetings of the stockholders of the Corporation for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings may be held at such time, date and place as the Board shall determine by resolution.

        SECTION 2.02. Special Meetings. Special meetings of the stockholders of the Corporation for any purpose may only be called in accordance with the provisions of the Certificate of Incorporation.

        SECTION 2.03. Place of Meetings. All meetings of the stockholders shall be held at such places, within or without the State of Delaware, as may be designated by the Board.

        SECTION 2.04. Notice of Meetings. Except as otherwise required by law, notice of each meeting of the stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him personally, or by depositing such notice in the United States mail, in a postage prepaid envelope, directed to him at his post office address furnished by him to the Secretary of the Corporation for such purpose or, if he shall not have furnished to the Secretary his address for such purpose, then at his post office address last known to the Secretary, or by transmitting a notice thereof to him at such address by telegraph, cable, or wireless. Except as otherwise expressly required by law, no publication of any notice of a meeting of the stockholders shall be required. Every notice of a meeting of the stockholders shall state the place, date and hour of the meeting, and, in the case of a special meeting, shall also state the purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder to whom notice may be omitted pursuant to applicable Delaware law or who shall have waived such notice and such notice shall be deemed waived by any stockholder who shall attend such meeting in person or by proxy, except as a stockholder who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken.

        SECTION 2.05. Quorum. Except as otherwise required by law, the holders of record of a majority in voting interest of the shares of stock of the Corporation entitled to be voted thereat, present in

person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the stockholders of the Corporation or any adjournment thereof. In the absence of a quorum at any meeting or any adjournment thereof, a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat or, in the absence therefrom of all the stockholders, any officer entitled to preside at, or to act as secretary of, such meeting may adjourn such meeting from time to time. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called.

        SECTION 2.06. Voting.

        (a) Each stockholder shall, at each meeting of the stockholders, be entitled to vote in person or by proxy each share or fractional share of the stock of the Corporation having voting rights on the matter in question and which shall have been held by him and registered in his name on the books of the Corporation:

        (i) on the date fixed pursuant to Section 6.05 of these Bylaws as the record date for the determination of stockholders entitled to notice of and to vote at such meeting, or

        (ii) if no such record date shall have been so fixed, then (a) at the close of business on the day next preceding the day on which notice of the meeting shall be given or (b) if notice of the meeting shall be waived, at the close of business on the day next preceding the day on which the meeting shall be held.

        (b) Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors in such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Persons holding stock of the Corporation in a fiduciary capacity shall be entitled to vote such stock. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation he shall have expressly empowered the pledges to vote thereon, in which case only the pledges, or his proxy, may represent such stock and vote thereon. Stock having voting power standing of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants in common, tenants by entirety or otherwise, or with respect to which two or more persons have the same fiduciary relationship, shall be voted in accordance with the provisions of the General Corporation Law of the State of Delaware.

        (c) Any such voting rights may be exercised by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized and delivered to the secretary of the meeting; provided, however, that no proxy shall be voted or acted upon after three years from its date unless said proxy shall provide for a longer period. The attendance at any meeting of a stockholder who may theretofore have given a proxy shall not have the effect of revoking the same unless he shall in writing so notify the secretary of the meeting prior to the voting of the proxy. At any meeting of the stockholders all matters, except as otherwise provided in the Certificate of Incorporation, in these Bylaws or by law, shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat and thereon, a quorum being present. The vote at any meeting of the stockholders on any question need not be by ballot, unless so directed by the chairman of the meeting. On a vote by ballot each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and it shall state the number of shares voted.

        SECTION 2.07. List of Stockholders. The Secretary of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business

2

hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

        SECTION 2.08. Judges. If at any meeting of the stockholders a vote by written ballot shall be taken on any question, the chairman of such meeting may appoint a judge or judges to act with respect to such vote. Each judge so appointed shall first subscribe an oath faithfully to execute the duties of a judge at such meeting with strict impartiality and according to the best of his ability. Such judges shall decide upon the qualifications of the voters and shall report the number of shares represented at the meeting and entitled to vote on such question, shall conduct and accept the votes, and, when the voting is completed, shall ascertain and report the number of shares voted respectively for and against the question. Reports of judges shall be in writing and subscribed and delivered by them to the Secretary of the Corporation. The judges need not be stockholders of the Corporation, and any officer of the Corporation may be a judge on any question other than a vote for or against a proposal in which he shall have a material interest.

        SECTION 2.09. Action Without Meeting. No action shall be taken by the stockholders except at an annual or special meeting of stockholders. No action shall be taken by stockholders by written consent.

        SECTION 2.10 Notice of Stockholder Business. At any annual stockholders' meeting, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual stockholders' meeting, business must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors; (ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors; or (iii) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be received at the principal office of the Corporation not less than sixty (60) days nor more than one hundred and twenty (120) days prior to the meeting; provided, however, that in the event that the first public disclosure (whether by mailing of a notice to shareholders, press release or otherwise) of the date of the meeting is made less than sixty-five (65) days prior to the date of the meeting, notice by the stockholder will be timely if received not later than the close of business on the tenth day following the day on which such first public disclosure was made. A stockholder's notice to the Secretary shall set forth, as to each matter the stockholder proposes to bring before the annual meeting, (i) the reasons for conducting such business at the annual meeting; (ii) the name and address as they appear on the Corporation's stock register, of the stockholder proposing such business; (iii) the number of shares of capital stock of the Corporation which are beneficially owned by the stockholder; and (iv) any material interest of the stockholder in such business. Notwithstanding any other provision of these Bylaws, no business shall be conducted at an annual stockholders' meeting except in accordance with the procedures set forth in this Section 2.10. If the presiding officer of an annual stockholders' meeting determines and declares that business was not properly brought before the meeting in accordance with this Section 2.10, any such business shall not be transacted.

ARTICLE III

Board of Directors

        SECTION 3.01. General Powers. The property, business and affairs of the Corporation shall be managed by the Board.

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        SECTION 3.02. Number and Term of Office. The number of directors shall not be less than six (6) nor more than eleven (11), the exact number of which shall be fixed by Bylaw duly adopted by the Board. The number of directors of the Corporation shall be nine (9). The Board shall be divided into three classes, Class I, Class II and Class III. Such classes shall be as nearly equal in number of directors as possible. Each director shall serve for a term ending on the third annual meeting following the annual meeting at which such director was elected; provided, however, that the directors first elected to Class I shall serve for a term ending at the annual meeting to be held in 1987, the directors first elected to Class II shall serve for a term ending at the annual meeting to be held in 1988 and the directors first elected to Class III shall serve for a term ending at the annual meeting to be held in 1989. Directors need not be stockholders. Each of the directors of the Corporation shall hold office until his successor shall have been duly elected and shall qualify or until he shall resign or shall have been removed in the manner hereinafter provided.

        SECTION 3.03. Election of Directors. In any election of directors of the Corporation, a holder of any class or series of stock then entitled to vote in such election shall be entitled to as many votes as shall equal (i) the number of votes which (except for this Section as to cumulative voting) he would be entitled to cast for the election of directors with respect to his shares of stock multiplied by (ii) the number of directors to be elected in the election in which his class or series of shares is entitled to vote, and each stockholder may cast all of such votes for a single director or for any two or more of them as he may see fit.

        SECTION 3.04. Resignations. Any director of the Corporation may resign at any time by giving written notice to the Board or to the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time be not specified, it shall take effect immediately upon its receipt; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

        SECTION 3.05. Vacancies. Except as otherwise provided in the Certificate of Incorporation, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, or any other cause, may be filled by vote of the majority of the remaining directors, although less than a quorum. Each director so chosen to fill a vacancy shall hold office for the unexpired term of his predecessor or until his successor shall have been elected and shall qualify or until he shall resign or shall have been removed in the manner hereinafter provided.

        SECTION 3.06. Place of Meeting, Etc. The Board may hold any of its meetings at such place or places within or without the State of Delaware as the Board may from time to time by resolution designate or as shall be designated by the person or persons calling the meeting or in the notice or a waiver of notice of any such meeting. Directors may participate in any regular or special meeting of the Board by means of conference telephone or similar communications equipment pursuant to which all persons participating in the meeting of the Board can hear each other, and such participation shall constitute presence in person at such meeting.

        SECTION 3.07. First Meeting. The Board shall meet as soon as practicable after each annual election of directors and notice of such first meeting shall not be required.

        SECTION 3.08. Regular Meetings. Regular meetings of the Board may be held at such times as the Board shall from time to time by resolution determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting shall be held at the same hour and place on the next succeeding business day not a legal holiday. Except as provided by law, notice of regular meetings need not be given.

        SECTION 3.09. Special Meetings. Special meetings of the Board shall be held whenever called by the Chairman of the Board, the President or a majority of the authorized number of directors. Except as otherwise provided by law or by these Bylaws, notice of the time and place of each such special

4

meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least five (5) days before the day on which the meeting is to be held, or shall be sent to him at such place by telegraph or cable or be delivered personally not less than twenty-four (24) hours before the time at which the meeting is to be held. Except where otherwise required by law or by these Bylaws, notice of the purpose of a special meeting need not be given. Notice of any meeting of the Board shall not be required to be given to any director who is present at such meeting, except a director who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

        SECTION 3.10. Quorum and Manner of Acting. Except as otherwise provided in these Bylaws or by law, the presence of a majority of the number of directors then currently specified as the size of the Board pursuant to Section 3.02 of these Bylaws shall be required to constitute a quorum for the transaction of business at any meeting of the Board, and all matters shall be decided at any such meeting, a quorum being present, by the affirmative votes of a majority of the directors present. In the absence of a quorum, a majority of directors present at any meeting may adjourn the same from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. The directors shall act only as a Board, and the individual directors shall have no power as such.

        SECTION 3.11. Action by Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee.

        SECTION 3.12. Removal of Directors. Subject to the provisions of the Certificate of Incorporation, a director may be removed at any time, for cause only.

        SECTION 3.13. Compensation. The directors shall receive only such compensation for their services as directors as may be allowed by resolution of the Board. The Board may also provide that the Corporation shall reimburse each such director for any expense incurred by him on account of his attendance at any meetings of the Board or Committees of the Board. Neither the payment of such compensation nor the reimbursement of such expenses shall be construed to preclude any director from serving the Corporation or its subsidiaries in any other capacity and receiving compensation therefor.

        SECTION 3.14. Committees. The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Any such committee, to the extent provided in the resolution of the Board and except as otherwise limited by law, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Any such committee shall keep written minutes of its meetings and report the same to the Board at the next regular meeting of the Board. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of such absent or disqualified member.

        SECTION 3.15. Notice of Director Nominations. Only persons who are nominated in accordance with the procedures set forth in this Section 3.15 shall be eligible for election as Director at annual meeting of the stockholders. Nominations of candidates for election to the Board of Directors of the Corporation at any annual meeting may be made only by or at the direction of the Board of Directors or by a stockholder entitled to vote at such annual meeting. All such nominations, except those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation of the stockholder's intention to make such nomination. To be timely, any such notice must be received at the principal office of the Corporation not less than sixty (60) no more than one hundred twenty (120) days prior to the date of such annual meeting; provided, however, that in the event that the first public disclosure (whether by mailing of a notice to stockholders, press

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release or otherwise) of the date of such annual meeting is made less than sixty-five (65) days prior to the date of such annual meeting, notice by the stockholder will be timely if received not later than the close of business on the tenth day following the day on which such first public disclosure was made. Such stockholder's notice with respect to a proposed nomination shall set forth (i) the name, age, business and residence address and principal occupation or employment of each nominee proposed in such notice; (ii) the name and address of the stockholder giving the notice as the same appears in the Corporation's stock register; (iii) the number of shares of capital stock of the Corporation which are beneficially owned by each such nominee and by such stockholder; and (iv) such other information concerning each such nominee as would be required, under the rules of the Securities and Exchange Commission, in a proxy statement soliciting proxies for the election of such nominee. Such notice must also include a signed consent of each such nominee to serve as a director of the Corporation, if elected.

        In the event that a person is validly designated as a nominee in accordance with the procedures specified above and shall thereafter become unable or unwilling to stand for election to the Board of Directors, the Board of Directors or the stockholder who proposed such nominee, as the case may be, may designate a substitute nominee; provided, however, that in the case of persons not nominated by the Board of Directors, such a substitution may only be made if notice as provided above in this Section 3.15 is received at the principal office of the Corporation not later than the later of (i) thirty (30) days prior to the date of the annual meeting or (ii) five (5) days after the stockholder proposing the original nominee first learned that such original nominee has become unable or unwilling to stand for election.

ARTICLE IV

Officers

        SECTION 4.01. Officers, Election and Removal. The officers of the Corporation shall be a President, a Vice President, a Secretary, and a Treasurer. The Corporation may also have at the discretion of the Board of Directors an Executive Vice President, one or more additional Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers as may be elected by the Board of Directors. Any two or more offices may be held by the same person except that the office of President and the office of Secretary may not be held by the same person.

        The officers of the Corporation shall be elected annually by the Board of Directors at their first meeting after the annual meeting of the stockholders and, unless they shall sooner resign, be removed or become disqualified, shall hold office until their respective successors shall be elected and qualify.

        The Chairman of the Board and the President shall be elected from among the Directors but the other officers need not be Directors.

        Any officer may be removed either with or without cause by a majority of the Directors at the time in office at any regular or special meeting of the Board of Directors.

        SECTION 4.02. Chairman of the Board. The Chairman of the Board, if there shall be one, shall preside at all meetings of the stockholders and of the Board of Directors. He shall, ex officio, be a member of all committees appointed or constituted by the Board of Directors, including the Executive Committee.

        SECTION 4.03. President, Executive Vice President and Vice President. The President shall be responsible to the Board of Directors for all actions and activities of the Corporation.

        The Executive Vice President, if there shall be one, shall act for the President in the President's absence. He shall have such other powers and be required to perform such other duties as the President and the Board of Directors shall prescribe.

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        The Vice President, or if there shall be more than one such officer elected, shall have such powers and perform such duties as may be delegated to him or them by the President or the Board of Directors.

        SECTION 4.04. Secretary. The Secretary shall issue notices for all meetings, shall keep their minutes, shall have charge of the seal and the Corporate books, and shall make such reports and perform such other duties as are incident to his office, or are properly required of him by the Board of Directors. He shall also keep at the principal office of the corporation or cause to be kept at the office of the Corporation's transfer agent, a stock transfer book, and he shall keep or cause to be kept by the Corporation's registrar, a share registry book. The Secretary may be required to perform such duties of the Treasurer as may be assigned to him from time to time.

        SECTION 4.05. Treasurer. The Treasurer shall have the custody of all moneys and securities of the Corporation and shall keep regular books of account. He shall disburse the funds of the Corporation in payment of the just demands against the Corporation or as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and to the Board of Directors from time to time as may be required of him, an account of all his transactions as Treasurer and of the financial condition of the Corporation. He shall perform all other duties incident to his office or that are properly required of him by the Board. He shall give the Corporation a bond, if required by the Board of Directors, in a sum, and with one or more sureties, satisfactory to the Board of Directors, for the faithful performance of the duties of his office, and for the restoration to the Corporation, in case of his death, resignation, retirement, or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

        SECTION 4.06. Incapacity. In case of the absence or inability of any officer of the Corporation to act and of any person herein authorized to act in his place, the Board of Directors may from time to time delegate the powers or duties of such officer to any other officer or any Director or other person whom they may select.

        SECTION 4.07. Vacancies. Vacancies in any office arising from any cause may be filled by the Directors at any regular or special meeting.

        SECTION 4.08. Other officers. The Board of Directors may appoint such other officers and agents as it shall deem necessary or expedient, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.

        SECTION 4.09. Salaries. The salaries of all officers and agents of the Corporation shall be fixed by the Board of Directors. Nothing contained herein shall preclude any officer from serving the Corporation, or any subsidiary corporation, in any other capacity and receiving proper compensation therefor.

ARTICLE V

Contracts, Checks, Drafts, Bank Accounts, Etc.

        SECTION 5.01. Execution of Contracts. The Board, except as in these Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board or by these Bylaws, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount.

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        SECTION 5.02. Checks, Drafts, Etc. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board. Each such officer, assistant, agent or attorney shall give such bond, if any, as the Board may require.

        SECTION 5.03. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select, or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board and shall be drawn out only by check signed by persons designated, from time to time, by resolution of the Board of Directors.

        SECTION 5.04. General and Special Bank Accounts. The Board may from time to time authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositories as the Board may select or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these Bylaws, as it may deem expedient.

ARTICLE VI

Shares and Their Transfer

        SECTION 6.01. Certificates for Stock. Every owner of stock of the Corporation shall be entitled to have a certificate or certificates, to be in such form as the Board shall prescribe, certifying the number and class of shares of the stock of the Corporation owned by him. The certificates representing shares of such stock shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the President or a Vice President, and by the Secretary or an Assistant Secretary or by the Treasurer or an Assistant Treasurer. Any of or all of the signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon, any such certificate, shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the Corporation with the same effect as though the person who signed such certificate, or whose facsimile signature shall have been placed thereupon, were such officer, transfer agent or registrar at the date of issue. A record shall be kept of the respective names of the persons, firms or corporations owning the stock represented by such certificates, the number and class of shares represented by such certificates, respectively, and the respective dates thereof, and in case of cancellation, the respective dates of cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be cancelled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 6.04.

        SECTION 6.02. Transfers of Stock. Transfers of shares of stock of the Corporation shall be made only on the books of the Corporation by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary, or with a transfer clerk or a transfer agent appointed as provided in Section 6.03, and upon surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact shall be so expressed in the entry of transfer if, when the certificate or certificates shall be presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so.

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        SECTION 6.03. Regulations. The Board may make such rules and regulations as it may deem expedient, not inconsistent with these Bylaws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. It may appoint, or authorize any officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them.

        SECTION 6.04. Lost, Stolen, Destroyed, and Mutilated Certificates. In any case of loss, theft, destruction, or mutilation of any certificate of stock, another may be issued in its place upon proof of such loss, theft, destruction, or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sum as the Board may direct; provided, however, that a new certificate may be issued without requiring any bond when, in the judgment of the Board, it is proper so to do.

        SECTION 6.05. Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any other change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If in any case involving the determination of stockholders for any purpose other than notice of or voting at a meeting of stockholders, the Board shall not fix such a record date, the record date for determining stockholders for such purpose shall be the close of business on the day on which the Board shall adopt the resolution relating thereto. A determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

ARTICLE VII

Indemnification

        SECTION 7.01. (DELETED MARCH 30, 1987)

ARTICLE VIII

Executive Committee

        SECTION 8.01. Members and Powers. The Board, by resolution adopted by majority of its total number, may annually elect three or more of its number to constitute an Executive Committee of the Board to have authority to exercise to the extent permitted by law, in the intervals between meetings of the Board, all powers of the Board, except to amend or repeal these Bylaws, or to fill vacancies in its own membership or in the Board, or to declare dividends. The actions of the Executive Committee shall be ratified at the next succeeding meeting of the Board.

        SECTION 8.02. Meetings. The Executive Committee may adopt rules governing the method of the notice of the time and place of its meetings and the conduct of the proceedings thereat; but, in the absence of such rules, meetings of the Executive Committee may be called by any member of the Committee. Notice to each member, regarding the time and place of holding the proposed meeting, shall be given to each member verbally or by mail at least twenty-four (24) hours before the time of the meeting. No notice of a meeting will be required if all members of the Committee are in attendance, or if notice is waived. The Executive Committee shall keep a record of its acts and proceedings.

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        SECTION 8.03. Quorum. To constitute a quorum of the Executive Committee for the transaction of business at any meeting, a majority shall be present and the act of a majority of the whole Committee shall be necessary to constitute the act of the Committee.

        SECTION 8.04. Removal of Members. Any member of the Executive Committee may be removed with or without cause by resolution of the Board, adopted by a majority of its total number then in office.

        SECTION 8.05. Vacancies. Vacancies in the Executive Committee shall be filled in the same manner as for the original appointment to membership.

ARTICLE IX

Miscellaneous

        SECTION 9.01. Seal. The Corporate seal of the Corporation shall consist of two concentric circles, between which is the name of the Corporation, and in the center shall be inscribed the year of its incorporation and the words, "Corporate Seal, Delaware."

        SECTION 9.02. Waiver of Notices. Whenever notice is required to be given by these Bylaws or the Certificate of Incorporation or by law, the person entitled to said notice may waive such notice in writing, either before or after the time stated therein, and such waiver shall be deemed equivalent to notice.

        SECTION 9.03. Amendments. Except as otherwise provided herein or in the Certificate of Incorporation, these Bylaws or any of them, may be altered, amended, repealed or rescinded and new Bylaws may be adopted, (i) by the Board, or (ii) by the stockholders, at any annual meeting of stockholders, or at any special meeting of stockholders, provided that notice of such proposed alteration, amendment, repeal, rescission or adoption is given in the notice of meeting.

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BYLAWS (Restated with amendments through December 1, 2002)

EX-4

INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES

Exhibit 4 is:

Amended and Restated Note Purchase Agreement dated January 24, 2003, re: $50,000,000 7.92% Senior Secured Notes due September 1, 2006.

Amended and Restated Rights Agreement dated December 16, 1996, which document is incorporated by reference to Form 8-A/A, Amendment No. 3 filed with the Commission on February 5, 1997.

Industrial Development Revenue Bonds dated April 1, 2001, maturing April 1, 2021.

Industrial Development Revenue Bonds dated May 1, 1996, maturing May 1, 2016.

Note Purchase Agreement dated January 24, 2003, re: $50,000,000 5.36% Senior Secured Notes due November 30, 2009.

The Company agrees to provide to the Securities and Exchange Commission, on request, copies of instruments defining the rights of security holders of long-term debt of the Company.

EXHIBIT 4

EX-10

MATERIAL CONTRACTS

Exhibit 10 is:

        (1)  Employment Agreement between James S. Marlen and the Company.

        (2)  First Amendment to Employment Agreement between James S. Marlen and the Company.

        (3)  Second Amendment to Employment Agreement between James S. Marlen and the Company:

        (4)  Change of Control Agreement between Javier Solis and the Company.

        (5)  Change of Control Agreement between Gary Wagner and the Company.

        (6)  Change of Control Agreement between James R. McLaughlin and the Company.

        (7)  2001 Stock Incentive Plan.

Exhibit 10, Item (1) is incorporated by reference to Annual Report on Form 10-K filed with the Commission for Registrant's fiscal year ended November 30, 1997.

Exhibit 10, Items (2), (4) and (5) are incorporated by reference to Annual Report on Form 10-K filed with the Commission for Registrant's fiscal year ended November 30, 1998.

Exhibit 10, Item (3) is incorporated by reference to Annual Report on Form 10-K filed with the Commission for Registrant's fiscal year ended November 30, 2001.

Exhibit 10, Item (6) is incorporated by reference to Annual Report on Form 10-K filed with the Commission for Registrant's fiscal year ended November 30, 2000.

Exhibit 10, Item (7) is incorporated by reference to Registration Statement No. 333-61816 on Form S-8 filed with the Commission on May 29, 2001.

EXHIBIT 10

EX-13

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ANNUAL REPORT

Exhibit 13 is the Corporation's 2002 Annual Report to Stockholders.

This 10-K Report should be read only in conjunction with that Annual Report.

In the event you do not already have a copy of the Annual Report, one may be obtained by contacting Ameron, attention; Corporate Secretary, Post Office Box 7007, Pasadena, California 91109-7007. The telephone number is (626) 683-4000.

Exhibit 13

2002 FINANCIAL SECTION

Selected Consolidated Financial Information	20
Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Consolidated Statements of Income	27
Consolidated Balance Sheets	28
Consolidated Statements of Cash Flows	30
Consolidated Statements of Stockholders' Equity	31
Consolidated Statements of Comprehensive Income	31
Notes to Consolidated Financial Statements	32
Independent Auditors' Report	44
Management's Letter	44

AMERON INTERNATIONAL

SELECTED CONSOLIDATED FINANCIAL INFORMATION

		Year ended November 30,
		2002			2001			2000			1999			1998
		(Dollars in thousands, except per share data)
Per Common Share Data
	Net income—basic	$	7.22		$	7.17		$	6.42		$	5.57		$	5.17	(1)
	Net income—diluted		6.97			6.89			6.41			5.54			5.08	(1)
	Dividends		1.28			1.28			1.28			1.28			1.28
	Weighted average shares (basic)		3,886,016			3,871,345			3,946,566			3,996,237			4,016,852
	Weighted average shares (diluted)		4,026,082			4,024,294			3,952,513			4,023,248			4,084,377
	Stock price—high		77.47			77.87			43.00			47.75			64.63
	Stock price—low		44.52			34.06			32.19			34.69			33.38
	Price/earnings ratio (range)		11-6			11-5			7-5			9-7			13-7
Operating Results
	Sales	$	539,473		$	551,396		$	550,661		$	545,081		$	552,146
	Gross profit		141,883			138,084			139,792			142,982			139,212
	Interest expense, net		(6,836	)		(10,213	)		(12,244	)		(12,938	)		(15,077	)
	Provision for income taxes		(14,454	)		(10,850	)		(8,448	)		(10,482	)		(11,171	)
	Net income		28,059			27,741			25,345			22,273			20,746	(1)
	Net income/sales		5.2%			5.0%			4.6%			4.1%			3.8%
	Return on equity		13.5%			14.3%			14.1%			12.9%			13.0%
Financial Condition at Year-end
	Working capital	$	149,205		$	155,356		$	135,626		$	123,748		$	146,860
	Property, plant and equipment, net		145,242			145,801			145,196			149,597			157,918
	Investments, advances and equity in undistributed earnings of joint ventures		18,927			18,780			21,773			23,046			22,712
	Total assets		462,942			485,080			478,449			470,569			500,219
	Long-term debt, less current portion		102,823			137,197			140,718			135,237			165,308
Cash Flow
	Expenditures for property, plant and equipment	$	14,514		$	19,297		$	21,050		$	19,672		$	32,744
	Depreciation and amortization		18,572			18,633			18,022			18,986			18,699
	Business acquisitions		—			—			—			—			46,419

(1)

Includes $17.5 million gain, net of income taxes, on sales of assets and $14.1 million charges, net of income taxes, on asset write-downs and other charges.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

        Management's Discussion and Analysis of Liquidity and Capital Resources and Results of Operations are based upon the Company's Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities during the reporting periods. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

        The Company's significant accounting policies are disclosed in Note 1 of Notes to Consolidated Financial Statements in the Company's 2002 Annual Report. Management believes the following accounting policies affect the more significant estimates used in preparing the consolidated financial statements.

        The consolidated financial statements include the accounts of Ameron International Corporation and all wholly-owned subsidiaries ("Ameron" or the "Company"). All material intercompany accounts and transactions have been eliminated. The functional currencies for the Company's foreign operations are the applicable local currencies. The translation from the applicable foreign currencies to U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. The resulting translation adjustments are recorded in accumulated other comprehensive loss. The Company advances funds to certain foreign subsidiaries that are not expected to be repaid in the foreseeable future. Translation adjustments arising from these advances are also included in accumulated other comprehensive loss. Gains or losses resulting from foreign currency transactions are included in other income.

        Revenue for the Performance Coatings & Finishes, Fiberglass-Composite Pipe and Infrastructure Products Groups is recognized primarily at the time goods are shipped. Revenue is recognized for the Water Transmission Group primarily under the percentage of completion method, typically based on completed units of production, or in some cases at shipment. Revenue under the percentage of completion method is subject to a greater level of estimation, which affects the timing of revenue, costs and profits. Estimates are reviewed on a consistent basis and are adjusted periodically to reflect current expectations.

        The Company expenses environmental clean-up costs related to existing conditions resulting from past or current operations and from which no current or future benefit is anticipated. The Company determines its liability on a site-by-site basis and records a liability at the time when it is probable and can be reasonably estimated. The estimated liability is not discounted or reduced for possible recoveries from insurance carriers.

        Inventories are stated at the lower of cost or market with cost determined principally on the first-in, first-out (FIFO) method. Certain steel inventories used by the Water Transmission Group are valued using the last-in, first-out (LIFO) method. Reserves are established for excess, obsolete and rework inventories based on age, estimates of salability and forecasted demand. Management records an allowance for doubtful accounts receivable based on historical experience and expected trends. Property, plant and equipment is stated on the basis of cost and depreciated principally on a straight-line method based on the estimated useful lives of the related assets, generally 3 to 40 years.

        Investments in joint ventures or affiliates ("joint ventures") over which the Company has significant influence are accounted for under the equity method of accounting, whereby the investment is carried at the cost of acquisition, plus the Company's equity in undistributed earnings or losses since

acquisition. Reserves are provided where management determines that a portion of the investment or earnings may not be realizable.

        All long-lived assets, including property, plant and equipment, long-term investments, goodwill and other intangible assets are reviewed by the Company for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If the estimated future, undiscounted cash flows from the use of an asset are less than its carrying value, a write-down is recorded to reduce the related assets to estimated fair value.

        The Company is self insured for a portion of losses and liabilities primarily associated with workers compensation claims and general, product and vehicle liability. Losses are accrued based upon the Company's estimates of the aggregate liability for claims incurred using historical experience and certain actuarial assumptions followed in the insurance industry.

        Defined benefit pension plans and postretirement health care and life insurance benefit plans require estimating the cost of benefits to be provided well into the future and attributing that cost to the time period each covered employee works. To record these net assets and obligations, management uses estimates relating to assumed inflation, investment returns, mortality, employee turnover, rate of compensation increases, medical costs and discount rates. Management along with third-party actuaries review all of these assumptions on an ongoing basis.

        Management incentive compensation is accrued based on current estimates of the Company's ability to achieve short-term and long-term performance targets.

        Deferred income tax assets and liabilities are computed for differences between the financial statement and income tax bases of assets and liabilities. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized. Quarterly income taxes are estimated based on the mix of income by jurisdiction forecasted for the full fiscal year.

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LIQUIDITY AND CAPITAL RESOURCES

        During 2002, the Company generated $54.6 million of cash from operating activities, compared to $27.7 million in 2001. The increase is primarily attributable to a net positive change in operating assets and liabilities.

        In 2002, capital expenditures totaled $14.5 million, compared to $19.3 million in 2001. Capital expenditures in 2002 were primarily for replacement and refurbishment of machinery and equipment at existing facilities. During the fiscal year ending November 30, 2003, the Company anticipates spending approximately $15 million to $25 million for capital expenditures, which will be funded from existing cash balances and lines of credit, as well as funds generated from operations.

        Net debt repayments totaled $38.1 million in 2002, compared to $4.6 million in 2001. Common stock dividends totaled $5.0 million in 2002 and 2001.

        Cash and cash equivalents at November 30, 2002 totaled $10.4 million, compared to $11.3 million as of November 30, 2001. At November 30, 2002, the Company had total debt outstanding of $112.2 million and $118.1 million is unused credit lines were available to fund operating and investing activities worldwide. In January 2003, the Company finalized a three-year, floating-rate, revolving credit facility with several banks, which permits borrowings up to $100.0 million, and issued seven-year notes payable totaling $50.0 million to an insurance company as a fixed rate of 5.36%. The new revolving credit facility and notes payable replaced the Company's principal revolving credit facility which permitted borrowings up to $150.0 million.

        Management believes that cash flows from operations and current cash balances, together with currently available lines of credit, will be sufficient to meet operating requirements in 2003. Cash available from operations could be affected by any general economic downturn or any downturn or adverse changes in the Company's business, such as loss of customers or significant raw material price increases.

        The Company's contractual obligations and commercial commitments at November 30, 2002 are summarized as follows, adjusted to reflect the refinancing that occurred in January 2003 (in thousands):

	Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Long-Term Debt(a)	$	111,156	$	8,333	$	26,666	$	40,457	$	35,700
Operating Leases		39,050		4,645		6,845		3,962		23,598
Total Contractual Obligations(b)	$	150,206	$	12,978	$	33,511	$	44,419	$	59,298

	Amount of Commitment Expiration Per Period
Commercial Commitments	Total Amounts Committed		Less than 1 year		1-3 years		4-5 years		After 5 years
Lines of Credit(a)	$	1,009	$	1,009	$	—	$	—	$	—
Standby Letters of Credit(c)		1,629		1,629		—		—		—
Guarantees(d)		1,707		1,707		—		—		—
Total Commercial Commitments(b)	$	4,345	$	4,345	$	—	$	—	$	—

(a)

Included in long-term debt is $12,123 outstanding under a revolving credit facility, due in 2006, and bank lines supported by the revolving credit facility. Lines of credit represent short-term borrowings by the Company's foreign subsidiaries.

(b)

The Company has no capitalized lease obligations, unconditional purchase obligations, or standby repurchase obligations.

(c)

Not included are standby letters of credit supporting industrial development bonds that have principal of $15,700.

(d)

The Company guarantees a bank credit facility for a joint venture, Bondstrand, Ltd.

22

RESULTS OF OPERATIONS: 2002 COMPARED WITH 2001

General

        Net income totaled $28.1 million, or $6.97 per diluted share, on sales of $539.5 million for the year ended November 30, 2002, compared to net income of $27.7 million, or $6.89 per diluted share, on sales of $551.4 million for the same period in 2001. Higher segment income from the Infrastructure Products Group more than offset lower segment income from the other three groups. The overall improvement in net income came primarily from higher operating margins, higher equity income and lower interest expense.

Sales

        Sales decreased by $11.9 million in 2002 primarily due to the sluggishness in U.S. and European chemical and industrial markets, as well as, softening in worldwide oilfield markets, that negatively impacted the Company's Fiberglass-Composite Pipe and Performance Coatings & Finishes Groups. The strong U.S. housing market and continued infrastructure spending helped boost sales of the Water Transmission and Infrastructure Products Groups.

        Performance Coatings & Finishes' sales decreased by $5.4 million because of the decline in sales of high-performance protective coatings by the Company's U.S. and European operations. Market demand remained weak throughout 2002. Sales of light-industrial finishes in Australia and New Zealand were higher. The near-term outlook for the Performance Coatings & Finishes Group remains uncertain, given worldwide economic conditions. Recovery remains dependent on increased industrial, marine and oilfield demand for high-performance coatings.

        Fiberglass-Composite Pipe Group's sales decreased by $18.5 million in 2002, compared to 2001, due to sluggishness in domestic and European industrial and fuel-handling markets, as well as softening in the worldwide oilfield market. Demand for oilfield piping remained lower throughout the year because of lower spending associated with uncertainty regarding the sustainability of oil prices. Additionally, Ameron's U.S. industrial business completed deliveries of a large water pipeline for a project in California during 2001 that did not recur in 2002. The near-term outlook for the Fiberglass-Composite Pipe Group remains cautious and is dependent on higher oilfield spending.

        Water Transmission Group's sales increased by $1.8 million in 2002, primarily a result of a major sewer pipe project in Southern California and demand for water piping to meet the needs of population growth, infrastructure rehabilitation and the energy markets. Revenue is recognized in the Water Transmission Group primarily under the percentage of completion method and is subject to a certain level of estimation, which affects the timing of revenue, costs and profit. Estimates are reviewed on a consistent basis and are adjusted when actual results are expected to significantly differ from those estimates. The outlook for Water Transmission remains positive for the near term. During 2002, the Water Transmission Group received a $57 million contract to provide bridge pilings for the renovation of the San Francisco / Oakland Bay Bridge. Ameron's portion of the project is expected to run into 2004. The project did not materially impact 2002.

        The Infrastructure Products Group completed 2002 with a $9.8 million increase in sales. Ameron's Hawaiian operations benefited from the continued strength of residential, military and road construction in Hawaii. Sales of poles increased as low interest rates continued to drive the strong U.S. housing market. The outlook for the Infrastructure Products Group remains positive.

Gross Profit

        Gross profit in 2002 was $141.9 million or 26.3% of sales, compared to gross profit of $138.1 million or 25.0% of sales in 2001. Gross profit would have declined an estimated $3.0 million due to lower sales; however, the decline was more than offset by profits associated with higher margins, totaling about $6.8 million. Gross margins increased due a to change in product and project mix, lower raw material costs and improved plant utilization.

        Performance Coatings & Finishes benefited from productivity enhancements, as well as favorable raw material costs. Likewise, margins of the Fiberglass-Composite Pipe Group improved as a result of profitability enhancements, favorable product and project mix and lower raw material costs. Margins of the Water Transmission Group declined due to unfavorable product and project mix and production delays associated with the San Francisco/Oakland Bay Bridge project. Infrastructure Products had higher margins as a result of better product mix, increased plant utilization and more consistent production by the new concrete pole plant in Alabama.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses totaled $105.9 million or 19.6% of sales in 2002, compared to $101.8 million or 18.5% in 2001. The $4.1 million increase in expenses was due primarily to higher pension costs of approximately $4.9 million, and severance and productivity enhancement costs for the U.S. and European Fiberglass-Composite Pipe operations and the U.S. Performance Coatings & Finishes operation of $2.1 million, offset by a reduction of reserves previously established for estimated losses on the Central Arizona Project lawsuit of $1.7 million. A settlement was finalized in early 2003.

        Pension and insurance costs are expected to increase almost $10.0 million before taxes in 2003.

Equity and Other Income

        Equity in earnings of joint ventures increased to $9.2 million in 2002 from $8.0 million in 2001. Equity income improved primarily due to TAMCO, Ameron's 50%-owned mini-mill in California. Ameron's equity in TAMCO's earnings increased as TAMCO benefited from continued demand for rebar in the western U.S. and stable energy supplies.

        Other income included royalties and fees from joint ventures and licensees, currency gains and losses, and other miscellaneous income. Royalties and fees totaled $3.3 million in 2002 compared to $5.0 million in 2001.

Interest

        Interest expense totaled $7.0 million in 2002, compared to $10.5 million in 2001. The decrease reflected lower rates and lower average borrowing levels in 2002.

23

Provision for Income Taxes

        The effective tax rate increased to 34% in 2002 from 28% in 2001. The provision for income taxes in 2002 was $14.5 million, an increase of $3.6 million from 2001. In 2001, the Company recorded benefits from research and development credits related to the 1990 through 2000 tax years, which were $3.4 million higher than the credits taken in 2002. Credits taken in 2002 related to current year research and development activities.

RESULTS OF OPERATIONS: 2001 COMPARED WITH 2000

General

        Net income per diluted share for the year ended November 30, 2001 was $6.89 on sales of $551.4 million, compared to $6.41 per share on sales of $550.7 million in 2000. The performance of consolidated operations, principally the Water Transmission and the Performance Coatings & Finishes Groups, offset the lower levels of equity income from joint-venture companies.

Sales

        Sales increased $0.7 million in 2001. Each of Ameron's four operating segments, except for the Water Transmission Group, had higher sales in 2001 than in the prior year. Additionally, total sales from Ameron's foreign operations would have been $8 million higher in 2001 if foreign exchange rates had remained at 2000 levels.

        Performance Coatings & Finishes' sales increased by $2.0 million because of higher sales of protective coatings by the Company's U.S. and European operations. Sales of product finishes declined, reflecting the difficult market conditions in the British and Australian manufacturing sectors. U.S. operations had slightly higher sales despite soft conditions in the chemical processing and general industrial markets. Sales into U.S. marine and offshore markets improved, and distributor sales, principally for commercial and industrial facilities, also strengthened. European operations benefited from higher sales of fire-protection coatings, sales into Eastern Europe and the former Soviet Union and strong demand for pipe coatings in the Middle East. Worldwide coatings markets began to slow in the fourth quarter of 2001.

        Fiberglass-Composite Pipe Group's sales increased $3.8 million in 2001, compared to 2000, due to deliveries of water distribution piping for a large project in California. Other U.S. markets, such as fuel handling and offshore, continued at lower levels, while industrial demand softened. Centron International, a wholly-owned subsidiary in Texas which supplies fiberglass pipe for downhole applications and high-pressure oilfield recovery lines, benefited from increased demand due to strong oilfield markets worldwide. Operations in Europe and Asia had lower sales, reflecting declining industrial and marine markets. The Fiberglass-Composite Pipe Group benefited in 2001 from strong demand for oilfield piping.

        The Water Transmission Group had $6.2 million lower sales in 2001 than in 2000, primarily as a result of completion of a sizable project in Colombia in 2000. U.S. sales increased approximately $9 million in 2001, because of demand for water piping to meet the needs of population growth, infrastructure rehabilitation and the energy markets. Sales were particularly strong in Northern California.

        The Infrastructure Products Group completed 2001 with $1.7 million higher sales. Ameron's Hawaiian operations were adversely impacted by soft construction markets on Oahu and Maui. Residential and military construction markets were strong, but commercial building remained weak. Sales of poles increased as demand for both concrete and steel lighting poles and traffic poles grew.

Gross Profit

        Gross profit in 2001 was $138.1 million or 25.0% of sales, compared to gross profit of $139.8 million or 25.4% of sales in 2000. Gross margins declined due to change in product and project mix, competitive pressures, and differences in plant utilization.

        Performance Coatings & Finishes' margins benefited from productivity enhancements, as well as favorable raw material costs. Likewise, margins of the Water Transmission Group improved as a result of completion of the lower-profit project in Colombia in 2000, improved project and product mix and improved manufacturing efficiencies. Margins of the Fiberglass-Composite Pipe Group declined due to product development costs, unfavorable product mix and uneven plant capacity utilization caused by the lagging industrial, marine and fuel-handling markets throughout the world. Infrastructure Products also had lower margins as a result of the start-up costs of the new concrete pole plant in Alabama and higher costs in Hawaii. Profits from Hawaiian operations were lower because of higher maintenance costs, higher labor expenses and development costs related to the expansion of Ameron's quarry on Oahu.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses totaled $101.8 million or 18.5% of sales in 2001, compared to $113.8 million or 20.7% in 2000. The decline in expenses was due in part to profit enhancement programs implemented in the Performance Coatings & Finishes Group. Additionally, lower insurance and benefit costs were required throughout the Company in 2001 due to an improved safety experience and lower costs related to product warranties and other legal claims.

Equity and Other Income

        Equity in earnings of joint ventures declined to $8.0 million in 2001 from $12.7 million in 2000. Equity income of each joint venture declined, with the largest decrease from TAMCO. Ameron's equity in TAMCO's earnings dropped as TAMCO suffered from competitive pressures caused by imports of foreign steel into the U.S. Additionally, TAMCO was impacted by dramatic energy increases in California during 2001.

        Other income included royalties and fees from joint ventures and licenses, currency gains and losses, and other miscellaneous income. Royalties and fees totaled $5.0 million in 2001 compared to $5.9 million in 2000. In 2000, the Company sold an idle property for a pretax gain of $0.9 million.

Interest

        Interest expense totaled $10.5 million in 2001, compared to $12.8 million in 2000. The decrease reflected lower rates and lower average borrowing levels in 2001.

24

Provision for Income Taxes

        The effective tax rate increased to 28% in 2001 from 25% in 2000. Income from certain foreign and joint venture operations is taxed at rates substantially lower than U.S. statutory tax rates. The domestic-sourced income was substantially greater in 2001 than in 2000. The provisions for income taxes in 2001 was $10.9 million, an increase of $2.4 million from 2000. The increase in the provisions for income taxes resulted primarily from: an increase of $1.7 million due to higher pretax income at statutory rates, an increase of $4.6 million related to the mix of income from domestic and foreign operations and joint ventures and a $4.0 million benefit from research and development credits related to the 1990 through 2000 tax years and filed in 2001.

OFF-BALANCE SHEET FINANCING

        The Company does not have any off-balance sheet financing arrangements, other than those listed in the liquidity and capital resources section herein. All of the Company's subsidiaries are appropriately accounted for in the consolidated financial statements. The Company has no interests in or relationships with special purpose entities. The Company has presented herein in tabular format its future payments required under contractual obligations and commitments.

MARKET RISKS

Foreign Currency Risk

        The Company operates internationally, giving rise to exposure to market risks from changes in foreign exchange rates. From time to time, the Company borrows in various currencies to reduce the level of net assets subject to changes in foreign exchange rates. In addition, the Company purchases foreign exchange forward and option contracts to hedge firm commitments, such as receivables and payables, denominated in foreign currencies. The Company does not use the contracts for speculative or trading purposes. At November 30, 2002, the Company had 16 foreign currency forward contracts expiring at various dates through April 2003, with an aggregate face value of $6.6 million.

Debt Risk

        The Company has variable-rate, short-term and long-term debt as well as fixed-rate, long-term debt. The fair value of the Company's fixed-rate debt is subject to changes in interest rates. The estimated fair value of the Company's variable-rate debt approximates the carrying value of the debt since the variable interest rates are market-based, and the Company believes such debt could be refinanced on materially similar terms. The Company is subject to the availability of credit to support new requirements, to refinance amortizing long-term debt and to refinance short-term debt.

        As of November 30, 2002, the estimated fair value of notes payable by the Company totaling $33.3 million, with a fixed rate of 7.92% was $35.6 million. The Company is required to repay these notes in annual installments of $8.3 million from 2003 to 2006, inclusive. As of November 30, 2002, the Company borrowed $62.1 million under a revolving credit facility and bank lines supported by the revolving credit facility which permitted borrowings up to $150.0 million. The average interest rate under such lines was 2.00% as of November 30, 2002. In January 2003, the Company finalized a three-year, floating-rate, revolving credit facility with several banks, which permits borrowings up to $100.0 million, and issued seven-year notes payable, totalling $50.0 million, to an insurance company at a fixed rate of 5.36%. The new revolving credit facility and notes payable replaced the Company's principal revolving credit facility that was maintained on November 30, 2002. The Company had $7.2 million of variable-rate industrial development bonds at a rate of 1.25% as of November 30, 2002, payable in 2016. The Company had $8.5 million of variable-rate industrial development bonds at a rate of 1.40% as of November 30, 2002, payable in 2021.

CONTINGENCIES

        An action was filed in 1992 in the U.S. District Court for the District of Arizona by the Central Arizona Water Conservation District ("CAWCD") seeking damages against several parties, including the Company and the Company's customer, Peter Kiewit Sons Company ("Kiewit"), in connection with six prestressed concrete pipe siphons furnished and installed in the 1970s as part of the Central Arizona Project ("CAP"), a federal project to bring water from the Colorado River to Arizona. The CAWCD also filed separate actions against the U.S. Bureau of Reclamation ("USBR") in the U.S. Court of Claims and with the Arizona Projects Office of the USBR in connection with the CAP siphons. The CAWCD alleged that the six CAP siphons were defective and that the USBR and the defendants in the U.S. District Court action were liable for damages for the repair or replacement of those siphons. On September 14, 1994, the U.S. District Court granted the Company's motion to dismiss the CAWCD action and entered judgment against the CAWCD and in favor of the Company and its co-defendants.

        Separately, on September 28, 1995, the Contracting Officer for the USBR issued a final decision claiming for the USBR approximately $40 million in damages against Kiewit, based in part on the Contracting Officer's finding that the siphons supplied by the Company were defective. That claim amount was considered by the Company to be duplicative of the damages sought by the CAWCD for the repair or replacement of the siphon in the aforementioned action in the U.S. District Court for the District of Arizona. The Contracting Officer's final decision was appealed by Kiewit to the U.S. Department of the Interior Board of Contract Appeals ("IBCA"). The Company actively cooperated with and assisted Kiewit in the administrative appeal of that final decision before the IBCA. Trial on that appeal commenced in November 2000, however the proceeding was stayed with the concurrence of the parties pending efforts aimed at settlement of the entire matter. Settlement efforts were then undertaken, during which the IBCA appeal was suspended.

        As of November 30, 2002, tentative settlements had been reached among the USBR, Kiewit, the Company and various insurance carriers. Since November 30, 2002, those settlements have been finalized and the entire matter, including the aforementioned CAWCD claim, has been resolved on economic terms that did not result in an adverse material effect on the financial position of the Company or its results of operations. The Company will receive sufficient reimbursement from its own and a supplier's insurance companies to fully cover the settlement.

        The Company is one of numerous defendants in various pending lawsuits involving, as of November 30, 2002, some 8,382 individuals or their representatives alleging personal injury from exposure to asbestos-containing products. None of such lawsuits specifies any dollar amount sought

25

as damages by such individuals or their representatives, and at this time the Company is not aware of the extent of injuries allegedly suffered by the individuals or the facts supporting the claim that such injuries were caused by the Company's products. Based upon the information available to it at this time, the Company is not in a position to evaluate its potential exposure, if any, as a result of these claims. The Company intends to vigorously defend all asbestos-related lawsuits.

        In addition to the above, certain other claims, suits and complaints that arise in the ordinary course of business, have been filed or are pending against the Company. Management believes that these matters are either adequately reserved, covered by insurance, or would not have a material effect on the Company's financial position or its results of operations if disposed of unfavorably.

        The Company is subject to federal, state and local laws and regulations concerning the environment and is currently participating in administrative proceedings at several sites under these laws. While the Company finds it difficult to estimate with any certainty the total cost of remediation at the several sites, on the basis of currently available information and reserves provided, the Company believes that the outcome of such environmental regulatory proceedings will not have a material effect on the Company's financial position or its results of operations.

CONTROLS AND PROCEDURES

        Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic Securities and Exchange Commission filings. No significant changes were made in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

        Any of the statements contained in this Annual Report that refer to the Company's estimated or anticipated future results are forward-looking and reflect the Company's current analysis of existing trends and information. Actual results may differ from current expectations based on a number of factors affecting Ameron's businesses, including competitive conditions and changing market conditions. In addition, matters affecting the economy generally, including the state of economies worldwide, can affect the Company's results. These forward-looking statements represent the Company's judgment only as of the date of this Annual Report. Since actual results could differ materially, the reader is cautioned not to rely on these forward-looking statements. Moreover, the Company disclaims any intent or obligation to update these forward-looking statements.

26

CONSOLIDATED STATEMENTS OF INCOME

	Year ended November 30,
	2002			2001			2000
	(Dollars in thousands, except per share data)
Sales	$	539,473		$	551,396		$	550,661
Cost of sales		(397,590	)		(413,312	)		(410,869	)
Gross profit		141,883			138,084			139,792
Selling, general and administrative expenses		(105,898	)		(101,828	)		(113,844	)
Equity in earnings of joint ventures		9,170			7,994			12,664
Other income, net		4,194			4,554			7,425
Income before interest and income taxes		49,349			48,804			46,037
Interest expense, net		(6,836	)		(10,213	)		(12,244	)
Income before income taxes		42,513			38,591			33,793
Provision for income taxes		(14,454	)		(10,850	)		(8,448	)
Net income	$	28,059		$	27,741		$	25,345
Net income per share (basic)	$	7.22		$	7.17		$	6.42
Net income per share (diluted)	$	6.97		$	6.89		$	6.41
Weighted average shares (basic)		3,886,016			3,871,345			3,946,566
Weighted average shares (diluted)		4,026,082			4,024,294			3,952,513

The accompanying notes are an integral part of these consolidated financial statements.

27

CONSOLIDATED BALANCE SHEETS

				As of November 30,
				2002			2001
				(Dollars in thousands)
Assets
	Current assets
		Cash and cash equivalents		$	10,360		$	11,315
		Receivables, less allowances of $6,652 in 2002 and $6,699 in 2001			131,283			135,963
		Inventories			88,020			92,534
		Deferred income taxes			16,528			19,242
		Prepaid expenses and other current assets			6,671			6,654
			Total current assets		252,862			265,708
	Investments, advances and equity in undistributed earnings of joint ventures				18,927			18,780
	Property, plant and equipment
		Land			35,730			34,826
		Buildings			75,147			71,477
		Machinery and equipment			267,607			254,274
		Construction in progress			4,400			3,590
			Total property, plant and equipment at cost		382,884			364,167
		Accumulated depreciation			(237,642	)		(218,366	)
			Total property, plant and equipment, net		145,242			145,801
	Intangible assets, net of accumulated amortization of $8,551 in 2002 and $7,623 in 2001				13,013			13,158
	Other assets				32,898			41,633
		Total assets		$	462,942		$	485,080

The accompanying notes are an integral part of these consolidated financial statements.

28

				As of November 30,
				2002			2001
				(Dollars in thousands, except per share data)
Liabilities and Stockholders' Equity
	Current liabilities
		Short-term borrowings		$	1,009		$	4,080
		Current portion of long-term debt			8,333			8,597
		Trade payables			46,295			46,703
		Accrued liabilities			45,994			48,620
		Income taxes payable			2,026			2,352
			Total current liabilities		103,657			110,352
	Long-term debt, less current portion				102,823			137,197
	Other long-term liabilities				44,636			33,284
			Total liabilities		251,116			280,833
Commitments and contingencies
Stockholders' equity
		Common stock, par value $2.50 a share, authorized 12,000,000 shares, outstanding 3,945,662 shares in 2002 and 3,873,007 shares in 2001, net of treasury shares			13,198			13,017
		Additional paid-in capital			23,950			19,457
		Unearned restricted stock			(2,164	)		—
		Retained earnings			270,449			247,406
		Accumulated other comprehensive loss			(44,948	)		(26,974	)
		Treasury stock (1,333,655 shares in 2002 and in 2001)			(48,659	)		(48,659	)
			Total stockholders' equity		211,826			204,247
		Total liabilities and stockholders' equity		$	462,942		$	485,080

29

CONSOLIDATED STATEMENTS OF CASH FLOWS

			Year ended November 30,
			2002			2001			2000
			(Dollars in thousands)
Operating Activities
	Net income		$	28,059		$	27,741		$	25,345
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation		18,032			17,820			17,185
		Amortization		540			813			837
		Provision for deferred income taxes		5,960			8,865			3,730
		Equity in earnings of joint ventures		(9,170	)		(7,994	)		(12,664	)
		Dividends from joint ventures		9,038			8,300			15,105
		(Gain) loss from sale of property, plant and equipment		(71	)		56			(851	)
		Stock compensation expense		1,283			1,480			—
	Changes in operating assets and liabilities:
		Receivables		8,194			3,905			(27,991	)
		Inventories		6,249			(10,312	)		9,990
		Prepaid expenses and other current assets		105			(352	)		123
		Other assets		(1,635	)		(8,103	)		(7,157	)
		Trade payables		(2,147	)		5,573			6,403
		Accrued liabilities and income taxes payable		(3,134	)		(22,029	)		(4,791	)
		Other long-term liabilities		(6,669	)		1,969			536
	Net cash provided by operating activities			54,634			27,732			25,800
Investing Activities
	Proceeds from sale of property, plant and equipment			504			867			1,593
	Additions to property, plant and equipment			(14,514	)		(19,297	)		(21,050	)
		Net cash used in investing activities		(14,010	)		(18,430	)		(19,457	)
Financing Activities
	Net change in short-term borrowings			(3,298	)		(954	)		2,071
	Issuance of debt			4,123			11,808			17,000
	Repayment of debt			(38,918	)		(15,492	)		(13,826	)
	Dividends on common stock			(5,016	)		(4,955	)		(5,061	)
	Issuance of common stock			1,227			130			—
	Purchase of treasury stock			—			13			(4,478	)
		Net cash used in financing activities		(41,882	)		(9,450	)		(4,294	)
	Effect of exchange rate changes on cash and cash equivalents			303			(51	)		(1,056	)
		Net change in cash and cash equivalents		(955	)		(199	)		993
	Cash and cash equivalents at beginning of year			11,315			11,514			10,521
	Cash and cash equivalents at end of year		$	10,360		$	11,315		$	11,514

The accompanying notes are an integral part of these consolidated financial statements.

30

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

		Common Stock
														Accumulated Other Comprehensive Loss
		Shares Outstanding		Amount		Additional Paid-in Capital		Unearned Restricted Stock			Retained Earnings						Treasury Stock			Total
		(Dollars in thousands, except per share data)
Balance, December 1, 1999		3,991,912		$	13,007	$	17,857	$	—		$	204,336		$	(12,886	)	$	(44,194	)	$	178,120
	Net income—2000											25,345									25,345
	Foreign currency translation adjustment														(11,496	)					(11,496	)
	Dividends on common stock of $1.28 per share											(5,061	)								(5,061	)
	Treasury stock purchase	(122,555	)															(4,478	)		(4,478	)
Balance, November 30, 2000		3,869,357			13,007		17,857		—			224,620			(24,382	)		(48,672	)		182,430
	Net income—2001											27,741									27,741
	Exercise of stock options	3,650			10		120														130
	Foreign currency translation adjustment														95						95
	Comprehensive loss from joint venture														(2,687	)					(2,687	)
	Dividends on common stock of $1.28 per share											(4,955	)								(4,955	)
	Treasury stock adjustment																	13			13
	Stock compensation expense						1,480														1,480
Balance, November 30, 2001		3,873,007			13,017		19,457		—			247,406			(26,974	)		(48,659	)		204,247
	Net income—2002											28,059									28,059
	Exercise of stock options	32,655			81		1,146														1,227
	Foreign currency translation adjustment														7,182						7,182
	Minimum pension liability adjustment, net of tax														(25,171	)					(25,171	)
	Comprehensive income from joint venture														15						15
	Dividends on common stock of $1.28 per share											(5,016	)								(5,016	)
	Stock compensation expense						713														713
	Issuance of restricted stock	40,000			100		2,634		(2,734	)											—
	Amortization of restricted stock								570												570
Balance, November 30, 2002		3,945,662		$	13,198	$	23,950	$	(2,164	)	$	270,449		$	(44,948	)	$	(48,659	)	$	211,806

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Year ended November 30,
	2002			2001			2000
	(Dollars in thousands)
Net income	$	28,059		$	27,741		$	25,345
Foreign currency translation adjustment		7,182			95			(11,496	)
Minimum pension liability adjustment, net of tax		(25,171	)		—			—
Comprehensive income (loss) from joint venture		15			(2,687	)		—
Comprehensive income	$	10,085		$	25,149		$	13,849

The accompanying notes are an integral part of these consolidated financial statements.

31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

        The consolidated financial statements include the accounts of Ameron International Corporation and all wholly-owned subsidiaries ("Ameron" or the "Company"). All material intercompany accounts and transactions have been eliminated.

Reclassifications

        Certain prior year balances have been reclassified to conform with the current year presentation.

Use of Estimates

        The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include revenue and costs recorded under percentage of completion accounting, assumptions related to benefit plans, and reserves associated with management incentives, receivables, inventories, investments in joint ventures, income taxes, self insurance, and environmental and legal contingencies. Actual results could differ from those estimates.

Revenue Recognition

        Revenue from sales of coatings, fiberglass-composite pipe, construction products and certain other products is recorded at the time the goods are shipped. Revenue from sales of concrete and steel pipe is primarily recognized under the percentage of completion method, typically based on completed units of production, or in certain cases at shipment.

Research and Development Costs

        Research and development costs, related primarily to the development, design and testing of products, are expensed as incurred. Such costs, which are included in selling, general and administrative expenses, were approximately $4,356,000 in 2002, $5,550,000 in 2001, and $4,996,000 in 2000.

Environmental Clean-up Costs

        The Company expenses environmental clean-up costs related to existing conditions resulting from past or current operations and from which no current or future benefit is anticipated. The Company determines its liability on a site-by-site basis and records a liability at the time when it is probable and can be reasonably estimated. The estimated liability of the Company is not discounted or reduced for possible recoveries from insurance carriers.

Income Taxes

        Deferred income tax assets and liabilities are computed for differences between the financial statement and income tax bases of assets and liabilities. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized.

Net Income Per Share

        Basic net income per share is computed on the basis of the weighted average number of common shares outstanding during the periods presented. Diluted net income per share is computed on the

basis of the weighted average number of common shares outstanding plus the effect of outstanding stock options and restricted stock, using the treasury stock method.

Cash and Cash Equivalents

        Cash equivalents represent liquid investments with maturities of three months or less when purchased.

Inventory Valuation

        Inventories are valued at the lower of cost or market. Cost is principally determined under the first-in, first-out method. Certain steel inventories are valued using the last-in, first-out method.

Equity Method of Accounting

        Investments in joint ventures or affiliates ("joint ventures") over which the Company has significant influence are accounted for under the equity method of accounting, whereby the investment is carried at the cost of acquisition, plus the Company's equity in undistributed earnings or losses since acquisition. Reserves are provided when management determines that a portion of the investment or earnings may not be realizable.

Property, Plant and Equipment

        Items capitalized as property, plant and equipment, including improvements to existing facilities, are recorded at cost. Construction in progress represents capital expenditures incurred for assets not yet placed in service. Capitalized interest was not material for the periods presented.

        Depreciation is computed principally using the straight-line method based on the estimated useful lives of the related assets, generally 3 to 40 years. Leasehold improvements are amortized over the shorter of the life of the improvement or the term of the lease.

Amortization of Intangible Assets

        Costs in excess of net assets acquired of $15,356,000 are amortized on a straight-line basis over periods ranging up to 40 years. Other intangible assets are amortized on a straight-line basis over periods ranging from 3 to 15 years.

Long-Lived Assets

        The Company reviews the recoverability of intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If the estimated future, undiscounted cash flows from the use of an asset are less than its carrying value, a write-down is recorded to reduce the related asset to estimated fair value.

Self Insurance

        The Company utilizes third-party insurance subject to varying retention levels or self insurance. Such self insurance relates to losses and liabilities primarily associated with workers compensation claims and general, product and vehicle liability. Losses are accrued based upon the Company's estimates of the aggregate liability for claims incurred using certain actuarial assumptions followed in the insurance industry and based on the Company's experience.

Foreign Currency Translation

        The functional currencies for the Company's foreign operations are the applicable local currencies. The translation from the applicable foreign currencies to U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. The resulting translation

32

adjustments are recorded in accumulated other comprehensive loss. The Company advances funds to certain foreign subsidiaries that are not expected to be repaid in the foreseeable future. Translation adjustments arising from these advances are also included in accumulated other comprehensive loss. Gains or losses resulting from foreign currency transactions are included in other income.

Derivative Financial Instruments and Risk Management

        The Company operates internationally, giving rise to exposure to market risks from changes in foreign exchange rates. Derivative financial instruments, primarily foreign exchange contracts, are used by the Company to reduce those risks. The Company does not hold or issue financial or derivative financial instruments for trading or speculative purposes. As of November 30, 2002 and 2001 the Company had foreign currency forward contracts with an aggregate face value of approximately $6,623,000 and $4,682,000, respectively.

Fair Value of Financial Instruments

        The fair value of financial instruments, other than long-term debt, approximates the carrying value because of the short-term nature of such instruments.

Concentration of Credit Risk

        Financial instruments that subject the Company to credit risk consist primarily of cash equivalents, trade accounts receivable, and forward foreign exchange contracts. Credit risk with respect to trade accounts receivable is generally distributed over a large number of entities comprising the Company's customer base and geographically dispersed. The Company performs ongoing credit evaluations of its customers, maintains an allowance for potential credit losses and, in certain instances, maintains credit insurance. The Company actively evaluates the creditworthiness of the financial institutions with which it conducts business.

New Accounting Pronouncements

        In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142 requires, among other things, the discontinuance of goodwill amortization. In addition, the standard includes provisions for the reclassification of certain existing recognized intangibles as goodwill, reassessment of the useful lives of existing recognized intangibles, reclassification of certain intangibles out of previously reported goodwill and the identification of reporting units for purposes of assessing potential future impairments of goodwill. SFAS No. 142 is effective for the Company beginning December 1, 2002. SFAS No. 142 requires the Company to complete a transitional goodwill impairment test six months from the date of adoption. The Company is currently evaluating the impact of adopting SFAS No. 142. In accordance with SFAS No. 142, goodwill was amortized through November 30, 2002. Upon adoption, amortization of goodwill will cease. Amortization of goodwill was $190,000 in 2002, $336,000 in 2001, and $305,000 in 2000.

        SFAS No. 143, "Accounting for Asset Retirement Obligations," which is effective for the Company on December 1, 2002, addresses the obligations and asset retirement costs associated with the retirement of tangible long-lived assets. It requires that the fair value of the liability for an asset retirement obligation be recorded when incurred. The asset retirement costs must be capitalized as part of the carrying value of the long-lived asset. If the liability is settled for an amount other than the recorded balance, either a gain or loss will be recognized at settlement. The Company is currently assessing the impact of adopting SFAS No. 143.

        SFAS No. 144, "Impairment or Disposal of Long-Lived Assets," is effective for the Company on December 1, 2002. SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets and provides guidance on implementation issues related to SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and addresses the accounting for a segment of a business accounted for as a discontinued operation. The Company is currently assessing the impact of adopting SFAS No. 144.

        In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 rescinds both SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt" and SFAS No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements." In so doing, SFAS No. 145 eliminates the requirement that gains and losses from the extinguishment of debt be aggregated, and if material, classified as an extraordinary item, net of the related income tax effect, unless the criteria in Accounting Principles Board Opinion No. 30, "Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions" are met. SFAS No. 145 amends SFAS No. 13, "Accounting for Leases", to require that certain lease modifications that have economic effects similar to sale-leaseback transactions are accounted for in the same manner as sale-leaseback transactions. SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings or describe their applicability under changed conditions. The provisions of SFAS No. 145 related to the rescission of SFAS No. 4 are effective for the Company beginning December 1, 2002. The provisions of SFAS No. 145 related to the amendment of SFAS No. 13 are effective for transactions occurring after May 15, 2002. All other provisions of SFAS No. 145 are effective for financial statements issued on or after May 15, 2002. The adoption of SFAS No. 145 is not expected to have a material impact on the Company's consolidated financial statements.

        SFAS No. 146, "Accounting for Exit or Disposal Activities," was issued in June 2002. SFAS No. 146 addresses significant issues regarding the recognition, measurement and reporting of costs that are associated with exit and disposal activities, including restructuring activities that are currently accounted for pursuant to the guidance that the Emerging Issues Task Force has set forth in Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." The provisions of SFAS No. 146 are effective for exit or disposal activities that are initiated after December 31, 2002. The adoption of SFAS No. 146 is not expected to have a material impact on the Company's consolidated financial statements.

        In November 2002, the FASB issued FASB Interpretation ("FIN") No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." FIN No. 45 elaborates on the disclosures to be made by a guarantor about its obligations under certain guarantees. FIN No. 45 also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. FIN No. 45 specifically identifies

33

certain obligations that are excluded from the provisions related to recognizing a liability at inception, however, these guarantees are subject to the disclosure requirements of FIN No. 45. The initial recognition and measurement provisions of FIN No. 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements are effective for the Company for the fiscal year ending November 30, 2003. The Company is currently assessing the impact of adopting FIN No. 45.

        In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest Entities." This standard clarifies the application of Accounting Research Bulletin No. 51, "Consolidated Financial Statements," and addresses consolidation by business enterprises of variable interest entities (more commonly known as Special Purpose Entities or SPE's). FIN No. 46 requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risk among the parties involved. FIN No. 46 also significantly enhances the disclosure requirements related to variable interest entities. This statement is effective to variable interest entities created or in which an enterprise obtains an interest after January 31, 2003. It will be effective for the Company beginning September 1, 2003 for all interests in variable interest entities acquired before February 1, 2003. The adoption of FIN No. 46 is not expected to have a material impact on the Company's consolidated financial statements.

Supplemental Cash Flow Information

	2002		2001		2000
	(In thousands)
Interest paid	$	6,996	$	10,810	$	13,778
Income taxes paid		8,457		15,939		8,187

NOTE 2 OTHER INCOME

        Other income was as follows for the years ended November 30:

	2002			2001			2000
	(In thousands)
Royalties, fees and other income	$	3,289		$	4,972		$	5,908
Gain (loss) on sale of property, plant and equipment		71			(56	)		851
Foreign currency loss		(539	)		(927	)		(566	)
Miscellaneous		1,373			565			1,232
	$	4,194		$	4,554		$	7,425

        The Company provides technical services and receives fees, royalties and other income from licensees and certain of its joint ventures which are included above. Income from joint ventures totaled $1,582,000 in 2002, $2,498,000 in 2001, and $2,647,000 in 2000.

NOTE 3 RECEIVABLES

        Receivables were as follows at November 30:

	2002			2001
	(In thousands)
Trade	$	127,874		$	133,594
Joint ventures		2,653			1,393
Other		7,408			7,675
Allowances		(6,652	)		(6,699	)
	$	131,283		$	135,963

        The Company's provision for bad debts was $1,300,000 in 2002, $1,738,000 in 2001, and $1,953,000 in 2000. Trade receivables included unbilled receivables related to percentage of completion revenue recognition of $11,928,000 and $19,458,000 at November 30, 2002 and 2001, respectively.

NOTE 4 INVENTORIES

        Inventories were as follows at November 30:

	2002		2001
	(In thousands)
Finished products	$	52,359	$	58,397
Materials and supplies		20,373		22,084
Products in process		15,288		12,053
	$	88,020	$	92,534

        Certain steel inventories are valued using the last-in, first-out method. These items comprised 2.7% and 4.6% of consolidated inventories at November 30, 2002 and 2001, respectively. If such inventories had been valued using the first-in, first-out method, total inventories would have increased by $1,164,000 and $832,000 at November 30, 2002 and 2001, respectively.

NOTE 5 JOINT VENTURES

        Investments, advances and equity in undistributed earnings of joint ventures were as follows at November 30:

	2002		2001
	(In thousands)
Investments—equity method	$	18,419	$	18,272
Investments—cost method		508		508
	$	18,927	$	18,780

        The Company's investments which were accounted for by the equity method are summarized below:

Products	Joint Ventures	Ownership Interest
Concrete pipe	Ameron Saudi Arabia, Ltd. ("ASAL")	30%
Steel products	TAMCO	50%
Fiberglass pipe	Bondstrand, Ltd.	40%
Coatings	Oasis-Ameron, Ltd.	40%

        Investments in joint ventures and the amount of undistributed earnings were as follows:

	Concrete pipe		Steel products			Fiberglass pipe		Coatings		Total
	(In thousands)
Cost	$	—	$	8,482		$	2,182	$	1,054	$	11,718
Comprehensive loss from joint venture				(2,672	)						(2,672	)
Accumulated equity in undistributed earnings, net of reserves		—		7,130			1,602		641		9,373
Investment, November 30, 2002	$	—	$	12,940		$	3,784	$	1,695	$	18,419
Dividends received in 2002	$	3,310	$	3,465		$	2,263	$	—	$	9,038
Cost	$	—	$	8,482		$	2,182	$	1,054	$	11,718
Comprehensive loss from joint venture				(2,687	)						(2,687	)
Accumulated equity in undistributed earnings, net of reserves		—		6,998			1,602		641		9,241
Investment, November 30, 2001	$	—	$	12,793		$	3,784	$	1,695	$	18,272
Dividends received in 2001	$	3,325	$	2,585		$	2,070	$	320	$	8,300

        During 1998, the Company recorded an impairment charge of $10,505,000 to adjust its net investment in ASAL to zero.

        The Company has provided for income taxes on the undistributed earnings of its joint ventures, to the extent such earnings have been included in the consolidated statements of income.

        The Company's investments in ASAL, Bondstrand, Ltd. and Oasis-Ameron, Ltd. were recorded based on audited financial statements as of December 31, 2001, and unaudited financial statements as of

34

September 30, 2002. The investment in TAMCO was recorded based on audited financial statements as of November 30, 2002.

        Summarized and combined financial information for joint ventures follows:

Financial Condition	2002		2001
	(In thousands)
Current assets	$	168,345	$	173,466
Noncurrent assets		73,563		74,431
	$	241,908	$	247,897
Current liabilities	$	105,862	$	101,307
Noncurrent liabilities		20,496		15,540
Stockholders equity		115,550		131,050
	$	241,908	$	247,897

Results of Operations	2002		2001		2000
	(In thousands)
Net sales	$	208,361	$	219,864	$	244,118
Gross profit		47,382		51,968		69,263
Net income		21,937		24,525		32,101

        In 2001, TAMCO entered into a swap agreement intended to hedge expected cash flows related to the purchase of natural gas used in its manufacturing process. The Company has recognized $2,672,000 and $2,687,000 in accumulated other comprehensive loss at November 30, 2002 and 2001, respectively, which represents its proportionate share of amounts recognized by TAMCO to record the fair value of the swap agreement.

        The amount of investments and accumulated equity in the undistributed earnings net of reserves in the Middle Eastern joint ventures was $5,479,000 at November 30, 2002 and 2001.

        Sales to joint ventures totaled $4,848,000 in 2002, $7,747,000 in 2001 and $7,487,000 in 2000.

        The Company has 25% ownership in Amercoat Mexicana, which has been accounted for by the cost method since the Company does not have the ability to exert significant influence over the investee's operating and financing activities.

        The Company guaranteed a $1,707,000 bank credit facility for Bondstrand, Ltd. at November 30, 2002.

NOTE 6 OTHER ASSETS

        Other assets were as follows at November 30:

	2002		2001
	(In thousands)
Cash surrender value of insurance policies	$	26,415	$	24,734
Prepaid pension cost		—		14,967
Other		6,483		1,932
	$	32,898	$	41,633

NOTE 7 ACCRUED LIABILITIES

        Accrued liabilities were as follows at November 30:

	2002		2001
	(In thousands)
Compensation and benefits	$	18,907	$	16,998
Self insurance reserves		14,222		14,223
Reserves for pending claims and litigation		5,308		8,227
Taxes (other than income taxes)		2,450		3,434
Commissions and royalties		1,250		1,190
Interest		826		1,007
Advances from customers		464		181
Other		2,567		3,360
	$	45,994	$	48,620

NOTE 8 OTHER LONG-TERM LIABILITIES

        Other long-term liabilities were as follows at November 30:

	2002		2001
	(In thousands)
Accrued pension cost	$	39,128	$	7,191
Compensation and benefits		4,422		11,970
Deferred income tax liabilities		662		13,690
Other		424		433
	$	44,636	$	33,284

NOTE 9 INCOME TAXES

        The provision for income taxes included the following for the years ended November 30:

		2002			2001			2000
		(In thousands)
Current
	Federal	$	4,587		$	67		$	1,231
	Foreign		3,508			2,402			2,730
	State		399			(484	)		757
			8,494			1,985			4,718
Deferred
	Federal		5,104			7,436			2,650
	Foreign		(99	)		36			583
	State		955			1,393			497
			5,960			8,865			3,730
		$	14,454		$	10,850		$	8,448

Deferred income tax assets consisted of the following as of November 30:

		2002			2001
		(In thousands)
Noncurrent deferred income taxes
	Net operating loss carryovers	$	11,293		$	7,418
	Accrued (prepaid) pension cost		10,415			(5,836	)
	Employee benefits		4,382			6,536
	Investments		3,220			3,243
	Valuation allowance		(12,101	)		(8,107	)
	Property, plant and equipment		(17,572	)		(16,373	)
	Other		(299	)		(571	)
Net noncurrent deferred income tax liabilities			(662	)		(13,690	)
Current deferred income taxes
	Self-insurance/claims reserves		10,377			11,373
	Inventories		4,784			4,432
	Employee benefits		2,554			2,969
	Accounts receivable		1,722			1,762
	Valuation allowance		(1,359	)		(1,261	)
	Other		(1,550	)		(33	)
Net current deferred income tax assets			16,528			19,242
Net deferred income tax assets		$	15,866		$	5,552

        As of November 30, 2002, the Company had foreign net operating loss carryovers of approximately $34,400,000. The valuation allowance for deferred income tax assets, which relates primarily to foreign net operating loss carryovers and net deductible temporary differences, increased by $4,092,000 in 2002 and by $3,884,000 in 2001.

35

        The tax provision represents effective tax rates of 34%, 28% and 25% of income before income taxes for the years ended November 30, 2002, 2001 and 2000, respectively. A reconciliation of income taxes provided at the effective income tax rate and the amount computed at the federal statutory income tax rate of 35% is as follows for the years ended November 30:

	2002			2001			2000
	(In thousands)
Domestic pretax income	$	37,708		$	39,146		$	24,734
Foreign pretax income		4,805			(555	)		9,059
	$	42,513		$	38,591		$	33,793
Taxes at federal statutory rate	$	14,880		$	13,507		$	11,828
State taxes (net of federal tax benefit)		1,335			1,701			1,031
Foreign losses with no federal benefit		3,306			3,669			2,454
Foreign income taxed at lower rates		(2,414	)		(1,575	)		(2,338	)
Foreign tax credit		(1,432	)		(2,004	)		(2,400	)
Foreign branch and withholding taxes		833			999			896
Equity in earnings of joint ventures		(996	)		(638	)		(2,235	)
Percentage depletion		(364	)		(382	)		(331	)
Research and development credits		(598	)		(4,008	)		—
Other, net		(96	)		(419	)		(457	)
	$	14,454		$	10,850		$	8,448

        In 2001, the IRS completed the examination of the Company's 1993 through 1995 federal income tax returns and issued an assessment. The Company agreed with the IRS regarding the assessment. The assessment was not material to the Company's financial statements and was paid in 2002.

        The 1996 through 1998 federal income tax returns are currently under examination by the IRS. No assessments have been issued to date. Although it cannot predict with certainty the ultimate outcome of this examination, the Company believes it has adequately provided for any potential liabilities that may result.

        In 2001, the Company filed federal and state income tax claims for research and development credits for tax years 1990 through 2000. The claims are currently under IRS examination.

NOTE 10 DEBT

        Short-term borrowings consisted of loans payable under bank credit lines totaling $1,009,000 and $4,080,000 as of November 30, 2002 and 2001, respectively. At November 30, 2002, the equivalent of $13,599,000 was available under these short-term credit lines. The effective interest rate on these loans was approximately 5.90% at November 30, 2002 and 13.35% at November 30, 2001. The higher interest rate in 2001 related to borrowings by the Company's Colombian subsidiary.

        Domestically, as of November 30, 2002, the Company maintained a $150,000,000 revolving credit facility. At November 30, 2002, $58,000,000 was borrowed under this facility. In January 2003, the Company finalized a three-year, $100,000,000 revolving credit facility with six banks (the "Revolver"). Under the Revolver, the Company may, at its option, borrow at floating interest rates based on specified margins over money market rates, at anytime until January 2006, when all borrowings under the Revolver must be repaid. Also in January 2003, the Company issued $50,000,000 of notes payable to an insurance company at a fixed rate of 5.36%. These fixed-rate notes payable amortize $10,000,000 per year beginning in November 2005, with a final maturity in November 2009. The Revolver and the 5.36% notes payable replace the $150,000,000 revolving credit facility that was maintained at November 30, 2002.

        The Company and its foreign subsidiaries also maintain unsecured revolving credit facilities and short-term facilities with banks. The Company and its foreign subsidiaries may borrow in various currencies, at interest rates based upon specified margins over money market rates. The equivalent of

$6,000,000 may be borrowed at any time through March 2005 under one facility. Other short-term lines permit borrowings up to $10,690,000. At November 30, 2002, $4,123,000 was borrowed under these facilities.

        Borrowings under certain bank facilities by the Company and its foreign subsidiaries are supported by the Revolver and, accordingly, have been classified as long-term debt and are considered payable when the Revolver is due.

        Long-term debt consisted of the following as of November 30:

		2002			2001
		(In thousands)
Fixed-rate notes payable:
	7.92%, payable in annual principal installments of $8,333	$	33,333		$	41,666
Variable-rate industrial development bonds,
	payable in 2016 (1.25% at November 30, 2002)		7,200			7,200
	payable in 2021 (1.40% at November 30, 2002)		8,500			8,500
Variable-rate bank revolving credit facilities (2.00% at November 30, 2002)			62,123			84,910
Variable-rate bank loan, paid in 2002			—			3,254
Variable-rate bank loan, payable in Dutch guilders, paid in 2002			—			264
			111,156			145,794
Less current portion			(8,333	)		(8,597	)
		$	102,823		$	137,197

        Future maturities of long-term debt are as follows as of November 30, 2002, adjusted to reflect the refinancing in January 2003:

Year ending November 30,	Amount
	(In thousands)
2003	$	8,333
2004		8,333
2005		18,333
2006		30,457
2007		10,000
Thereafter		35,700
	$	111,156

        The lending agreements contain various restrictive covenants, including the requirement to maintain specified amounts of net worth and restrictions on cash dividends, borrowings, liens, investments and guarantees. Under the most restrictive provisions of the Company's lending agreements, approximately $8,734,000 of retained earnings was not restricted as of November 30, 2002, as to the declaration of cash dividends or the repurchase of Company stock. At November 30, 2002, the Company was in compliance with all covenants.

        The Revolver, the 5.36% notes payable and the 7.92% notes payable, beginning in January 2003, are secured by substantially all of the assets of the Company. The industrial revenue bonds are supported by standby letters of credit that are issued under the Revolver. Certain note agreements contain provisions regarding the Company's ability to grant additional security interests or liens in association with other debt instruments. If the Company grants such a security interest or lien, then such notes will be secured equally and ratably as long as such other debt shall be secured.

36

        Interest income and expense were as follows for the years ended November 30:

	2002			2001			2000
	(In thousands)
Interest expense	$	7,024		$	10,471		$	12,814
Interest income		(188	)		(258	)		(570	)
Interest expense, net	$	6,836		$	10,213		$	12,244

        The following disclosure of the estimated fair value of the Company's debt is made in accordance with the requirements of SFAS No. 107, "Disclosures about Fair Value of Financial Instruments." The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required to develop the estimated fair value, thus the estimates provided herein are not necessarily indicative of the amounts that could be realized in a current market exchange.

	Carrying Amount		Fair Value
	(In thousands)
November 30, 2002
Short-term borrowings	$	1,009	$	1,009
Fixed-rate, long-term debt		33,333		35,577
Variable-rate, long-term debt		77,823		77,823
November 30, 2001
Short-term borrowings		4,080		4,080
Fixed-rate, long-term debt		41,666		43,656
Variable-rate, long-term debt		104,128		104,128

        The estimated fair value of the Company's variable-rate debt approximates the carrying value of the debt since the variable interest rates are market-based, and the Company believes such debt could be refinanced on materially similar terms. The estimated fair value of the Company's fixed-rate, long-term debt is based on U.S. government notes at November 30, 2002 plus an estimated spread for similar securities with similar remaining maturities.

NOTE 11 LEASE COMMITMENTS

        The Company leases facilities and equipment under non-cancelable operating leases. Rental expense under long-term operating leases of real property, vehicles and other equipment was $5,071,000 in 2002, $5,687,000 in 2001 and $5,635,000 in 2000. At November 30, 2002, future rental commitments under these leases totaled $39,050,000. Future rental commitments were as follows as of November 30, 2002:

Year ending November 30,	Amount
	(In thousands)
2003	$	4,645
2004		3,744
2005		3,101
2006		1,984
2007		1,978
Thereafter		23,598
	$	39,050

        Future rental commitments for leases are not reduced by minimum non-cancelable sublease rentals aggregating $2,613,000 at November 30, 2002.

NOTE 12 INCENTIVE STOCK COMPENSATION PLANS

        The Company applies Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for its various stock option plans. The Company has adopted the disclosure only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation."

        In 2001, the 2001 Stock Incentive Plan ("2001 Plan") was approved by the stockholders of the Company. The 2001 Plan serves as the successor to both the 1992 Incentive Stock Compensation Plan and the 1994 Non-Employee Director Stock Option Plan and superceded those plans. Under the terms of the 2001 Plan, 190,000 new shares of common stock were made available for awards both to non-employee directors and to key employees of the Company. Awards to key employees may include, but are not limited to, stock options, restricted stock, performance shares or performance unit awards; however, no more than 40,000 of such shares were made available for issuance as either restricted stock, performance stock, performance shares or performance units. Restrictions may limit the sale, transfer, voting rights and dividends on these shares. At November 30, 2002, 40,000 restricted shares were outstanding. With respect to non-employee directors, on the first business day following the date of the annual meeting of stockholders of the Company, each non-employee director will receive an option to purchase 1,500 shares of common stock.

        At November 30, 2002, the Company had 575,104 non-qualified stock options outstanding with terms of from 10 to 15 years from the date of grant, and 129,000 shares available for future grants under the 2001 plan. The exercise price for such outstanding stock options is generally the fair market value of the Company's stock on the date of the original grant. Such options vest in equal annual installments over four years. Certain options have a cashless exercise feature and are subject to variable plan accounting. In 2002, the Company recognized stock compensation expense of $1,283,000, including $570,000 related to restricted stock and $713,000 related to an extension of the life of certain options and to options with a cashless exercise feature. In 2001, the Company recognized stock compensation expense of $1,480,000, including $843,000 related to options with the cashless exercise feature and $637,000 related to an extension of the life of certain stock options.

        SFAS No. 123 requires pro forma information regarding net income and earnings per share as if compensation cost for stock options had been determined based on the fair value of the options on the grant date. The Company estimates the fair value of stock options at the grant date by using the Black Scholes option pricing model with the following weighted average assumptions used for grants in 2000, 2001 and 2002, respectively: dividend yields of 3.02%, 3.47% and 2.01%; an expected volatility of 30.2%, 25.5% and 35.08%; risk-free rates of 6.61%, 4.90% and 4.84% and an expected life of five years for all years.

        Under the accounting provisions of SFAS No. 123, the Company's net income and earnings per share would have been as indicated below for the years ended November 30:

		2002		2001		2000
		(in thousands except per share data)
Net income
	As reported	$	28,059	$	27,741	$	25,345
	Pro forma		27,981		27,520		24,684
Earnings per share (diluted)
	As reported		6.97		6.89		6.41
	Pro forma		6.95		6.84		6.25

37

        A summary of the Company's stock options as of November 30, 2000, 2001 and 2002, and changes during the years then ended, follows:

		Number of Options		Weighted Average Exercise Price
Outstanding at December 1, 1999		420,409		$	42.57
	Granted	84,500			38.44
	Forfeited	(1,000	)		39.13
Outstanding at November 30, 2000		503,909			41.89
Options exercisable at November 30, 2000		325,784			41.29
Weighted average fair value of options granted during 2000					11.11
Outstanding at November 30, 2000		503,909			41.89
	Granted	102,500			41.10
	Exercised	(3,650	)		35.50
	Forfeited	(5,500	)		50.27
Outstanding at November 30, 2001		597,259			41.72
Options exercisable at November 30, 2001		385,009			41.96
Weighted average fair value of options granted during 2001					8.70
Outstanding at November 30, 2001		597,259			41.72
	Granted	10,500			70.55
	Exercised	(32,655	)		37.60
Outstanding at November 30, 2002		575,104			42.48
Options exercisable at November 30, 2002		431,854			42.58
Weighted average fair value of options granted during 2002					22.62

        The following summarizes information about stock options outstanding as of November 30, 2002:

Range of Exercise Prices			Options Outstanding at November 30, 2002	Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price
$30.00	to	$40.00	334,734	8.84	$	37.94
40.00	to	50.00	156,370	8.01		43.45
50.00	to	60.00	73,500	10.02		57.06
60.00	to	75.00	10,500	9.30		70.55
30.00	to	75.00	575,104	8.77		42.48

Range of Exercise Prices			Options Exercisable at November 30, 2002	Weighted Average Exercise Price
$30.00	to	$40.00	278,859	$	37.88
40.00	to	50.00	79,495		45.72
50.00	to	60.00	73,500		57.06
60.00	to	75.00	—		—
30.00	to	75.00	431,854		42.58

38

NOTE 13 COMMITMENTS AND CONTINGENCIES

        An action was filed in 1992 in the U.S. District Court for the District of Arizona by the Central Arizona Water Conservation District ("CAWCD") seeking damages against several parties, including the Company and the Company's customer, Peter Kiewit Sons Company ("Kiewit"), in connection with six prestressed concrete pipe siphons furnished and installed in the 1970's as part of the Central Arizona Project ("CAP"), a federal project to bring water from the Colorado River to Arizona. The CAWCD also filed separate actions against the U.S. Bureau of Reclamation ("USBR") in the U.S. Court of Claims and with the Arizona Projects Office of the USBR in connection with the CAP siphons. The CAWCD alleged that the six CAP siphons were defective and that the USBR and the defendants in the U.S. District Court action were liable for damages for the repair or replacement of those siphons. On September 14, 1994, the U.S. District Court granted the Company's motion to dismiss the CAWCD action and entered judgment against the CAWCD and in favor of the Company and its co-defendants.

        Separately, on September 28, 1995, the Contracting Officer for the USBR issued a final decision claiming for the USBR approximately $40 million in damages against Kiewit, based in part on the Contracting Officer's finding that the siphons supplied by the Company were defective. That claim amount was considered by the Company to be duplicative of the damages sought by the CAWCD for the repair or replacement of the siphons in the aforementioned action in the U.S. District Court for the District of Arizona. The Contracting Officer's final decision was appealed by Kiewit to the U.S. Department of the Interior Board of Contract Appeals ("IBCA"). The Company actively cooperated with and assisted Kiewit in the administrative appeal of that final decision before the IBCA. Trial on that appeal commenced in November 2000, however the proceeding was stayed with the concurrence of the parties pending efforts aimed at settlement of the entire matter. Settlement efforts were then undertaken, during which the IBCA appeal was suspended.

        As of November 30, 2002, tentative settlements had been reached among the USBR, Kiewit, the Company and various insurance carriers. Since November 30, 2002, those settlements have been finalized and the entire matter, including the aforementioned CAWCD claim, has been resolved on economic terms that did not result in an adverse material effect on the financial position of the Company or its results of operations. The Company will receive sufficient reimbursement from its own and a supplier's insurance companies to fully cover the settlement.

        The Company is one of numerous defendants in various pending lawsuits involving, as of November 30, 2002, some 8,382 individuals or their representatives alleging personal injury from exposure to asbestos-containing products. None of such lawsuits specifies any dollar amount sought as damages by such individuals or their representatives, and at this time the Company is not aware of the extent of injuries allegedly suffered by the individuals or the facts supporting the claim that such injuries were caused by the Company's products. Based upon the information available to it at this time, the Company is not in a position to evaluate its potential exposure, if any, as a result of these claims. The Company intends to vigorously defend all asbestos-related lawsuits.

        In addition to the above, certain other claims, suits and complaints that arise in the ordinary course of business, have been filed or are pending against the Company. Management believes that these matters are either adequately reserved, covered by insurance, or would not have a material effect on the Company's financial position or its results of operations if disposed of unfavorably.

        The Company is subject to federal, state and local laws and regulations concerning the environment and is currently participating in administrative proceedings at several sites under these laws. While the Company finds it difficult to estimate with any certainty the total cost of remediation at the several sites, on the basis of currently available information and reserves provided, the Company believes that the outcome of such environmental regulatory proceedings will not have a material effect on the Company's financial position or its results of operations.

39

NOTE 14 EMPLOYEE BENEFIT PLANS

        The Company has a qualified, defined benefit, noncontributory pension plan for U.S. employees not covered by union pension plans. Benefits paid to retirees are based upon age at retirement, years of credited service and average compensation or negotiated benefit rates. The Company's funding policy is to make contributions to the plan sufficient to meet the minimum funding requirements of applicable laws and regulations, plus such additional amounts, if any, as the Company's actuarial consultants recommend.

        Assets of the Company's U.S. defined benefit plan are invested in a directed trust. Assets in the trust are invested in domestic and foreign equity securities of corporations (including $4,623,000 of the Company's common stock at November 30, 2002), U.S. government obligations, derivative securities, corporate bonds and money market funds.

        The Company has a supplemental non-qualified, non-funded retirement plan for certain U.S. executives, for which the Company has purchased cost recovery life insurance on the lives of the participants. The Company is the sole owner and beneficiary of such policies. As of November 30, 2002 and 2001, the cash surrender value of these policies was $8,510,000 and $8,339,000, respectively. The Company also provides health and life insurance to a limited number of eligible retirees and eligible survivors of retirees.

        The following sets forth the change in benefit obligations, change in plan assets, funded status and amounts recognized in the balance sheet as of November 30, 2002 and 2001 for the Company's defined benefit retirement plans and postretirement health care and life insurance benefits:

	Defined Benefit Retirement Plans						Other Postretirement Benefits
	2002			2001			2002			2001
	(In thousands)
Change in Benefit Obligation
Projected benefit obligation—beginning of year	$	146,174		$	133,889		$	2,765		$	2,332
Service cost		2,506			2,289			98			93
Interest cost		10,353			10,168			191			184
Benefit adjustments		393			1,562			—			206
Actuarial loss (gain)		9,127			7,671			(5	)		91
Benefit payments		(9,845	)		(9,405	)		(147	)		(141	)
Projected benefit obligation—end of year	$	158,708		$	146,174		$	2,903		$	2,765
Change in Plan Assets
Plan assets at fair value—beginning of year	$	135,171		$	161,930		$	338		$	335
Actual return on plan assets		(11,834	)		(17,630	)		19			19
Employer contribution		246			276			144			125
Benefit payments		(9,845	)		(9,405	)		(147	)		(141	)
Plan assets at fair value—end of year	$	113,738		$	135,171		$	354		$	338
Funded Status
Funded status	$	(44,970	)	$	(11,003	)	$	(2,549	)	$	(2,427	)
Unrecognized actuarial loss		51,081			18,080			374			390
Unrecognized transition (asset) obligation		—			(36	)		785			856
Unrecognized prior service cost		1,540			1,668			(134	)		(148	)
Net amount recognized	$	7,651		$	8,709		$	(1,524	)	$	(1,329	)
Balance Sheet Amounts
Prepaid cost	$	—		$	14,967		$	35		$	—
Accrued cost		(34,855	)		(7,191	)		(1,559	)		(1,329	)
Intangible asset		1,242			933			—			—
Accumulated other comprehensive loss, pretax		41,264			—			—			—
Net amount recognized	$	7,651		$	8,709		$	(1,524	)	$	(1,329	)

40

        Net periodic benefit costs for the Company's defined benefit retirement plans and postretirement health care and life insurance benefits for 2002, 2001 and 2000 included the following components:

	Defined Benefit Retirement Plans									Other Postretirement Benefits
	2002			2001			2000			2002			2001		2000
	(In thousands)
Service cost	$	2,506		$	2,289		$	2,402		$	98		$	93	$	77
Interest cost		10,353			10,168			9,702			192			184		169
Expected return on plan assets		(12,711	)		(15,343	)		(14,910	)		(33	)		—		—
Amortization of unrecognized prior service cost		520			382			273			(14	)		—		—
Amortization of unrecognized net transition (asset) obligation		(35	)		(115	)		(115	)		71			71		71
Amortization of accumulated loss (gain)		671			(971	)		(1,134	)		25			15		13
Net periodic cost (benefit)	$	1,304		$	(3,590	)	$	(3,782	)	$	339		$	363	$	330

        The following table provides the weighted average assumptions used to compute the actuarial present value of projected benefit obligations:

	Defined Benefit Retirement Plans						Other Postretirement Benefits
	2002		2001		2000		2002		2001		2000
Weighted average discount rate	6.75	%	7.25	%	7.75	%	6.75	%	7.25	%	7.75	%
Expected long-term rate of return on plan assets	9.75	%	9.75	%	9.75	%	N/A		N/A		N/A
Rate of increase in compensation levels	4.25	%	4.75	%	5.25	%	4.25	%	4.75	%	5.25	%

        Approximately 18% of the Company's employees are covered by union-sponsored, collectively bargained, multi-employer pension plans. Related to these plans, the Company contributed and charged to expense $2,242,000, $4,009,000 and $2,800,000 in 2002, 2001 and 2000, respectively. These contributions are determined in accordance with the provisions of negotiated labor contracts and generally are based on the number of hours worked. The Company has no intention of withdrawing from any of these plans, nor is there any intention to terminate such plans.

        The assumed health care cost trend was 9% in 2002; it is assumed that the rate will decline gradually to 5% by 2006. The effect of a one-percentage-point change in the assumed health care cost trend would have altered the amounts of the benefit obligation and the sum of the service cost and interest cost components of postretirement benefit expense for 2002, as follows:

	Increase	Decrease
	(In thousands)
Effect on total of service and interest cost components of net periodic expense	$  16	$(13	)
Effect on postretirement benefit obligation	111	(96	)

        The Company's subsidiary in the Netherlands provides retirement benefits to employees. The projected benefit obligation and plan assets at November 30, 2002 were $24,428,000 and $18,123,000, respectively. Accrued pension cost of $4,723,000 was recorded at November 30, 2002 related to this plan. Net periodic costs for this plan were not material for the periods presented.

        The Company has a deferred compensation plan providing eligible executives with the opportunity to participate in an unfunded, deferred compensation program. Under the program, participants may defer base compensation and bonuses and earn interest on their deferred amounts. The program is not qualified under Section 401 of the Internal Revenue Code. The total of participant deferrals and earnings thereon was $2,331,000 at November 30, 2002 and $8,776,000 at November 30, 2001.

The participant deferrals earn interest at a rate based on U.S. government rates. The interest expense related to this plan was $302,000 in 2002, $667,000 in 2001 and $616,000 in 2000.

        The Company has a life insurance plan which provides eligible executives with life insurance protection equal to three times base salary. Upon retirement, the executive is provided with life insurance protection equal to final base salary. Benefits may be paid as a lump sum or as an annual income to the identified survivor over ten years. The expense related to this plan was $148,000 in 2002, $230,000 in 2001 and $287,000 in 2000.

        In connection with the above two plans, whole life insurance contracts were purchased on the related participants. At November 30, 2002 and 2001, the cash surrender value of these policies was $17,905,000 and $16,395,000, respectively net of loans of $1,000,000 each year.

        The Company has severance agreements with certain key employees that could provide benefits upon termination of up to 3.5 times total annual compensation of such employees.

        The Company provides to certain employees a savings plan under Section 401(k) of the Internal Revenue Code. The savings plan allows for deferral of income up to a certain percentage through contributions to the plan and within certain restrictions. Company matching contributions are in the form of cash. In 2002, 2001 and 2000, the Company recorded expense for matching contributions of $602,000, $883,000 and $833,000, respectively.

41

NOTE 15 CAPITAL STOCK

        The Company is incorporated in Delaware. The articles of incorporation authorize 12,000,000 shares of $2.50 par value common stock, 1,000,000 shares of $1.00 par value preferred stock and 100,000 shares of $1.00 par value series A junior participating cumulative preferred stock. The preferred stock may be issued in series, with the rights and preferences of each series to be established by the Board of Directors. As of November 30, 2002, no shares of preferred stock or series A junior participating cumulative preferred stock were outstanding.

        As of November 30, 2002, 3,945,662 shares of common stock were issued and outstanding, including 40,000 restricted shares which were granted on January 23, 2002. Restrictions limit the sale and transfer on these shares. On each of the first four anniversaries of the grant date, 25% of the shares become unrestricted.

        The Company also has a Stockholders' Rights Plan, which, among other things, entitles stockholders to purchase common stock at a significant discount if a party acquires 15% or more of the Company's common stock or announces a tender offer for at least 15% of its common stock outstanding.

NOTE 16 QUARTERLY FINANCIAL DATA (UNAUDITED)

        Summarized quarterly financial data for the years ended November 30, 2002 and 2001, follow:

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(In thousands, except per share data)
2002
Sales	$	120,702	$	138,099	$	138,813	$	141,859
Gross profit		30,439		35,564		36,553		39,327
Net income		1,771		7,562		8,711		10,015
Diluted net income per share		0.43		1.82		2.12		2.53
Stock price per share-high		71.57		77.47		72.90		57.01
Stock price per share-low		62.60		67.05		49.25		44.52
Dividends per share		0.32		0.32		0.32		0.32
2001
Sales	$	121,605	$	143,670	$	144,864	$	141,257
Gross profit		29,899		34,766		36,510		36,909
Net income		1,580		7,074		8,370		10,717
Diluted net income per share		0.41		1.78		2.09		2.62
Stock price per share-high		46.85		73.49		77.87		74.20
Stock price per share-low		34.06		45.85		54.25		48.25
Dividends per share		0.32		0.32		0.32		0.32

        The Company traditionally experiences lower sales during the first fiscal quarter because of seasonal patterns associated with weather and contractor schedules.

NOTE 17 SEGMENT INFORMATION

        SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information," requires disclosure of certain information about operating segments, geographic areas in which the Company operates, major customers, and products and services. In accordance with SFAS No. 131, the Company has determined it has four operating segments. The Performance Coatings & Finishes Group manufactures and markets high-performance industrial and marine coatings. The Fiberglass-Composite Pipe Group manufactures and markets filament-wound and molded composite fiberglass pipe, tubing, fittings and well screens. The Water Transmission Group manufactures and supplies concrete and steel pressure pipe, concrete non-pressure pipe, protective linings for pipe, and fabricated products. The Infrastructure Products Group manufactures and sells ready-mix concrete, sand and aggregates,

concrete pipe and culverts, and concrete and steel lighting and traffic poles. Each of these segments has a dedicated management team and is managed separately, primarily because of differences in products, technology, and markets.

        The markets served by the Performance Coatings & Finishes Group and the Fiberglass-Composite Pipe Group are worldwide in scope. The Water Transmission Group serves primarily the western United States. The Infrastructure Products Group operates exclusively in the State of Hawaii and the continental United States. Sales for export or to any individual customer did not exceed 10% of consolidated sales in 2002, 2001, or 2000.

        In accordance with SFAS No. 131, the following table presents information related to each operating segment included in, and in a manner consistent with, internal management reports. The Company allocates certain selling, general and administrative expenses to operating segments utilizing assumptions believed to be appropriate in the circumstances.

        Inter-segment sales were not significant. Income from reportable segments is exclusive of certain unallocated income and expenses, interest expense and income taxes. Total assets by segment are those assets that are used exclusively by such segment. Unallocated assets are principally cash, corporate property and equipment, and investments. Long-lived assets consist of all long-term assets, excluding investments.

42

		Segment Information
		Performance Coatings & Finishes		Fiberglass-Composite Pipe		Water Transmission		Infrastructure Products		Other			Eliminations			Total
		(In thousands)
2002
	Sales	$	183,311	$	88,393	$	145,024	$	123,610	$	—		$	(865	)	$	539,473
	Income before interest and income taxes		9,122		10,862		27,347		17,019		(15,001	)		—			49,349
	Equity in earnings of joint ventures		—		2,263		3,310		—		3,597			—			9,170
	Investments, advances and equity in undistributed earnings of joint ventures		2,203		3,784		—		—		12,940			—			18,927
	Long-lived assets		49,314		28,338		40,966		39,694		32,841			—			191,153
	Total assets		138,616		138,712		115,078		68,272		140,233			(137,969	)		462,942
	Capital expenditures		3,697		1,642		4,331		3,696		1,148			—			14,514
	Depreciation and amortization		5,224		4,002		4,160		4,367		819			—			18,572
2001
	Sales	$	188,759	$	106,872	$	143,226	$	113,824	$	—		$	(1,285	)	$	551,396
	Income before interest and income taxes		9,831		12,125		29,011		13,089		(15,252	)		—			48,804
	Equity in earnings of joint ventures		320		2,070		3,325		—		2,279			—			7,994
	Investments, advances and equity in undistributed earnings of joint ventures		2,203		3,784		—		—		12,793			—			18,780
	Long-lived assets		45,240		28,140		41,146		40,474		45,592			—			200,592
	Total assets		133,332		133,267		123,175		65,518		168,697			(138,909	)		485,080
	Capital expenditures		3,037		5,013		2,047		8,596		604			—			19,297
	Depreciation and amortization		5,448		3,774		4,210		4,298		903			—			18,633
2000
	Sales	$	186,767	$	103,066	$	149,384	$	112,105	$	—		$	(661	)	$	550,661
	Income before interest and income taxes		6,271		15,963		23,083		17,666		(16,946	)		—			46,037
	Equity in earnings of joint ventures		531		2,666		3,493		—		5,974			—			12,664
	Investments, advances and equity in undistributed earnings of joint ventures		2,203		3,784		—		—		15,786			—			21,773
	Long-lived assets		46,555		26,825		43,400		36,153		39,773			—			192,706
	Total assets		131,300		127,904		112,254		61,503		169,212			(123,724	)		478,449
	Capital expenditures		6,210		5,551		1,395		6,951		943			—			21,050
	Depreciation and amortization		6,073		3,536		4,650		3,836		(73	)		—			18,022

		Geographic Areas
		United States		Europe		Asia		Other		Eliminations			Total
		(In thousands)
2002
	Sales to external customers	$	396,668	$	77,429	$	34,309	$	31,067	$	—		$	539,473
	Long-lived assets		136,712		31,690		10,715		12,036		—			191,153
	Total assets		415,709		88,547		69,358		27,297		(137,969	)		462,942
2001
	Sales to external customers	$	413,112	$	80,277	$	28,451	$	29,556	$	—		$	551,396
	Long-lived assets		151,290		26,617		10,986		11,699		—			200,592
	Total assets		456,171		81,148		59,196		27,474		(138,909	)		485,080
2000
	Sales to external customers	$	387,494	$	79,855	$	36,080	$	47,232	$	—		$	550,661
	Long-lived assets		141,669		26,780		11,823		12,434		—			192,706
	Total assets		420,889		78,371		68,890		34,023		(123,724	)		478,449

43

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of Ameron International Corporation:

We have audited the accompanying consolidated balance sheets of Ameron International Corporation and subsidiaries (the "Company") as of November 30, 2002 and 2001, and the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended November 30, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of November 30, 2002 and 2001, and the results of its operations and its cash flows for each of the three years in the period ended November 30, 2002, in conformity with accounting principles generally accepted in the United States of America.

Los Angeles, California
February 3, 2003

MANAGEMENT'S LETTER

We have prepared the accompanying consolidated financial statements and related financial information of Ameron International Corporation and subsidiaries in conformity with accounting principles generally accepted in the United States of America. Management is responsible for the integrity of the financial information included in this Annual Report. In preparing the financial statements, management makes estimates as necessary based upon currently available information and judgments of current conditions and circumstances.

Ameron maintains a system of internal controls supported by documentation to provide reasonable assurance that assets are safeguarded and the accounting records reflect the authorized transactions of the Company. We believe the Company's system provides this appropriate balance in accordance with established policies and procedures as implemented by qualified personnel.

The independent auditors, Deloitte & Touche LLP, appointed by the Board of Directors, are responsible for expressing their opinion as to whether the consolidated financial statements present fairly, in all material respects, the financial position, operating results and cash flows of the Company. In this process, they consider the system of internal control, in order to determine their auditing procedures for the purpose of expressing an opinion on the financial statements. Their opinion appears on this page.

The Audit Committee of the Board of Directors is composed of three directors who are not officers or employees of the Company. They meet periodically with management, Deloitte & Touche LLP and the internal auditors to review the audit scope and results, discuss internal controls and financial reporting subjects, and review management actions on these matters. Deloitte & Touche LLP and the internal auditors have full and free access to the members of the Audit Committee.

/s/  JAMES S. MARLEN James S. Marlen
Chairman of the Board, President & Chief Executive Officer
/s/  GARY WAGNER Gary Wagner
Senior Vice President, Chief Financial Officer

44

QuickLinks

2002 FINANCIAL SECTION
AMERON INTERNATIONAL
SELECTED CONSOLIDATED FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EX-21

EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT

Parents

        None

Subsidiaries Consolidated	Jurisdiction of Incorporation	Percent of Stock Owned
Amercoat Japan Company, Limited	Japan	100
American Pipe & Construction International	California	100
Ameron (Australia) Pty. Limited	Australia	100
Ameron B.V.	The Netherlands	100
Ameron Composites Inc.	Delaware	100
Ameron (Hong Kong) Ltd.	Hong Kong	100
Ameron Malaysia Sdn. Bhd.	Malaysia	100
Ameron (New Zealand) Limited	New Zealand	100
Ameron (Pte) Ltd.	Singapore	100
Ameron (UK) Limited	United Kingdom	100
Centron International, Inc.	Delaware	100
Island Ready-Mix Concrete, Inc.	Hawaii	100
Subsidiaries Not Consolidated and Fifty-Percent or Less Owned Companies
TAMCO	California	50
Bondstrand, Ltd.	Saudi Arabia	40
Oasis-Ameron, Ltd.	Saudi Arabia	40
Ameron Saudi Arabia, Ltd.	Saudi Arabia	30

Names of other consolidated subsidiaries and subsidiaries not consolidated and fifty-percent or less owned companies are omitted because when considered in the aggregate as a single subsidiary they do not constitute a significant subsidiary.

EX-23

EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement No. 33-3400, No. 33-57308, No. 33-59697, No. 333-36497 and No. 333-61816 of Ameron International Corporation on Form S-8 of our reports dated February 3, 2003, appearing in and incorporated by reference in this Annual Report on Form 10-K of Ameron International Corporation for the year ended November 30, 2002.

/s/ DELOITTE & TOUCHE LLP
Los Angeles, California
February 24, 2003