EX-99.1 2 aa5361124ex991.txt EXHIBIT 99.1 Exhibit 99.1 Ameron Reports Strong First-Quarter Results PASADENA, Calif.--(BUSINESS WIRE)--March 21, 2007--Ameron International Corporation (NYSE:AMN) reported earnings of $.94 per diluted share in the first quarter ended February 25, 2007, compared to $.41 per diluted share in the first quarter ended March 5, 2006. Earnings per diluted share from continuing operations, which excludes the performance coatings and finishes business that was divested in 2006, were $.92 in the first quarter of 2007, compared to $.43 per share in the first quarter of 2006. Income from discontinued operations, after taxes, was $.02 per diluted share in the first quarter of 2007, compared to a net loss of $.02 per diluted share in the first quarter of 2006. Sales totaled $120.4 million in the first quarter of 2007, compared to $126.0 million in the first quarter of 2006. The Fiberglass-Composite Pipe Group and TAMCO had outstanding results, compared to the first quarter of 2006. The Infrastructure Products Group's results were about even, in spite of the shorter quarter in 2007; and the Water Transmission Group had lower sales and a segment loss. "Overall, we are pleased with the solid first-quarter performance," stated James S. Marlen, Ameron's Chairman, President and Chief Executive Officer. "Business conditions remain favorable for most of our operations, and we expect the Water Transmission Group to improve later in the year." The Fiberglass-Composite Pipe Group's sales increased 27% in the first quarter of 2007, compared to the first quarter last year, while segment income improved 55%. The sales increase was driven by the stronger demand in the marine, offshore and chemical and industrial markets worldwide, while the onshore oilfield piping segment remained steady. The increase in segment income was consistent with the higher sales level. The outlook for the Fiberglass-Composite Pipe Group remains favorable. The Infrastructure Products Group had slightly lower sales ($1.1 million) and segment income ($.1 million) in the first quarter of 2007, compared to the first quarter of 2006. Ameron's Hawaiian Division had lower sales and income due to wet weather in Oahu and Maui and fewer shipping days in the first quarter of 2007, compared to the first quarter of 2006. The Pole Products Division had higher sales and segment income in the first quarter of 2007, as market conditions for decorative concrete lighting poles remained favorable in Southern California and the targeted regions in the southeastern U.S. Construction market conditions are stable, with the exception of the residential construction market, which has slowed somewhat. The outlook for the Infrastructure Products Group remains generally favorable. The Water Transmission Group had lower sales in the first quarter of 2007, compared to the first quarter of 2006. The sales decline of $13.6 million was attributable principally to the continued softness of the water infrastructure market in the western U.S., and project delays on active orders for water transmission piping and production delays related to large-diameter wind towers. The Group incurred a segment loss of $3.7 million due to the low sales volume and inefficient plant utilization. The cyclical slowdown in the water infrastructure market is forecasted to turn late in the second quarter with a number of major projects scheduled to bid. In addition, the projects delayed in the first quarter are expected to be rescheduled into later quarters. The outlook for the Water Transmission Group is for a steady recovery during 2007 with improved year-over-year performance. TAMCO had particularly strong sales and net income in the first quarter of 2007, compared to the first quarter of 2006. The demand for steel rebar in California, Nevada and Arizona remained strong due to increased commercial and highway construction. Net income improved due to favorable product mix, increased steel selling prices and improved margins. Ameron's share of TAMCO's net income totaled $5.0 million after taxes, an increase of $4.2 million from the first quarter of 2006. James Marlen concluded, "The first-quarter results represent a good start for 2007. I expect we will continue to achieve strong operating results throughout 2007." Ameron International Corporation is a multinational manufacturer of highly-engineered products and materials for the chemical, industrial, energy, transportation and infrastructure markets. Traded on the New York Stock Exchange (AMN), Ameron is a leading producer of water transmission lines and fabricated steel products, such as wind towers; fiberglass-composite pipe for transporting oil, chemicals and corrosive fluids and specialized materials and products used in infrastructure projects. The Company operates businesses in North America, South America, Europe and Asia. It also participates in several joint-venture companies in the U.S. and the Middle East. Cautionary statement for purposes of the "Safe Harbor" provisions of The Private Securities Litigation Reform Act of 1995: Any statements in this report that refer to the forecasted, estimated or anticipated future results of Ameron International Corporation ("Ameron" or the "Company") 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 situations. Matters affecting the economy generally, including the state of economies worldwide, can affect Ameron's results. Forward-looking statements represent the Company's judgment only as of the date of this report. Since actual results could differ materially, the reader is cautioned not to rely on these forward-looking statements. Moreover, Ameron disclaims any intent or obligation to update these forward-looking statements. AMERON INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended ------------------------ February 25, March 5, (Dollars in thousands, except per share data) 2007 2006 --------------------------------------------- ------------ ----------- Sales $120,355 $125,972 Cost of sales (94,635) (97,390) ------------ ----------- Gross profit 25,720 28,582 Selling, general and administrative expenses (21,900) (22,964) Other income, net 1,018 12 ------------ ----------- Income from continuing operations before interest, income taxes and equity in earnings of joint venture 4,838 5,630 Interest income/(expense), net 366 (950) ------------ ----------- Income from continuing operations before income taxes and equity in earnings of joint venture 5,204 4,680 Provision for income taxes (1,920) (1,685) ------------ ----------- Income from continuing operations before equity in earnings of joint venture 3,284 2,995 Equity in earnings of joint venture, net of taxes 5,028 780 ------------ ----------- Income from continuing operations 8,312 3,775 Income/(loss) from discontinued operations, net of taxes 156 (164) ------------ ----------- Net income $8,468 $3,611 ============ =========== Basic earnings per share: Income from continuing operations $.92 $.44 Income/(loss) from discontinued operations, net of taxes .02 (.02) ------------ ----------- Net income $.94 $.42 ============ =========== Diluted earnings per share: Income from continuing operations $.92 $.43 Income/(loss) from discontinued operations, net of taxes .02 (.02) ------------ ----------- Net income $.94 $.41 ============ =========== Weighted-average shares (basic) 8,994,075 8,614,269 ============ =========== Weighted-average shares (diluted) 9,050,525 8,786,041 ============ =========== Cash dividends per share $.20 $.20 ============ =========== AMERON INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in thousands, except per share February 25, November 30, data) 2007 2006 -------------------------------------------- ------------ ------------ ASSETS Current assets Cash and cash equivalents $127,720 $139,479 Receivables, less allowances of $5,139 in 2007 and $4,912 in 2006 150,627 160,173 Inventories 104,323 77,134 Deferred income taxes 23,861 23,861 Prepaid expenses and other current assets 9,485 15,921 ------------ ------------ Total current assets 416,016 416,568 Investments in joint ventures Equity method 20,169 14,501 Cost method 3,784 3,784 Property, plant and equipment Land 33,122 33,327 Buildings 58,515 57,434 Machinery and equipment 264,503 261,538 Construction in progress 26,910 20,657 ------------ ------------ Total property, plant and equipment at cost 383,050 372,956 Accumulated depreciation (242,258) (238,486) ------------ ------------ Total property, plant and equipment, net 140,792 134,470 Goodwill and Intangible assets, net of accumulated amortization of $3,023 in 2007 and $3,017 in 2006 2,137 2,143 Other assets 63,315 63,198 ------------ ------------ Total assets $646,213 $634,664 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt $10,000 $10,000 Trade payables 53,467 45,650 Accrued liabilities 74,106 68,970 Income taxes payable 3,957 11,481 ------------ ------------ Total current liabilities 141,530 136,101 Long-term debt, less current portion 71,263 72,525 Other long-term liabilities 60,423 62,813 ------------ ------------ Total liabilities 273,216 271,439 Commitments and contingencies Stockholders' equity Common stock, par value $2.50 per share, authorized 24,000,000 shares, outstanding 9,109,678 shares in 2007 and 9,075,094 shares in 2006, net of treasury shares 29,542 29,431 Additional paid-in capital 42,233 39,500 Retained earnings 378,546 371,894 Accumulated other comprehensive loss (25,814) (27,232) Treasury stock (2,707,114 shares in 2007 and 2,697,148 shares in 2006) (51,510) (50,368) ------------ ------------ Total stockholders' equity 372,997 363,225 ------------ ------------ Total liabilities and stockholders' equity $646,213 $634,664 ============ ============ AMERON INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended ------------------------ February 25, March 5, (Dollars in thousands) 2007 2006 --------------------------------------------- ------------ ----------- OPERATING ACTIVITIES Net income $8,468 $3,611 Adjustments to reconcile net income to net cash (used in)/provided by operating activities: Depreciation 3,739 4,646 Amortization 6 51 Net earnings and distributions from joint ventures (5,668) (596) Gain from sale of property, plant and equipment (19) (46) Stock compensation expense 484 1,366 Other 2 (99) Changes in operating assets and liabilities: Receivables, net 9,816 3,278 Inventories (26,515) (5,939) Prepaid expenses and other current assets 6,492 (759) Other assets (105) 741 Trade payables 7,730 (1,110) Accrued liabilities and income taxes payable (2,538) (3,788) Other long-term liabilities (2,422) 58 ------------ ----------- Net cash (used in)/provided by operating activities (530) 1,414 ------------ ----------- INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment 200 154 Additions to property, plant and equipment (9,670) (4,345) ------------ ----------- Net cash used in investing activities (9,470) (4,191) ------------ ----------- FINANCING ACTIVITIES Issuance of debt - 3,888 Repayment of debt (1,417) (22) Dividends on common stock (1,816) (1,749) Issuance of common stock 405 213 Excess tax benefits related to stock-based compensation 1,955 - Purchase of treasury stock (1,142) (710) ------------ ----------- Net cash (used in)/provided by financing activities (2,015) 1,620 ------------ ----------- Effect of exchange rate changes on cash and cash equivalents 256 170 ------------ ----------- Net change in cash and cash equivalents (11,759) (987) Cash and cash equivalents at beginning of period 139,479 44,671 ------------ ----------- Cash and cash equivalents at end of period $127,720 $43,684 ============ =========== CONTACT: Ameron International Corporation James S. Marlen Chairman, President and Chief Executive Officer Gary Wagner Executive Vice President, Chief Operating Officer James R. McLaughlin Senior Vice President, Chief Financial Officer 626-683-4000