EX-99.1 3 a5497786ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Ameron Reports Improved Third-Quarter Earnings PASADENA, Calif.--(BUSINESS WIRE)--Sept. 20, 2007--Ameron International Corporation (NYSE:AMN) reported earnings of $21.1 million, or $2.32 per diluted share, in the third quarter ended August 26, 2007, compared with net income of $18.0 million, or $2.02 per diluted share, in the third quarter ended September 3, 2006. Earnings per diluted share from continuing operations, which excludes the Performance Coatings & Finishes business that was divested in 2006, were $2.27 in the third quarter of 2007, compared to $1.91 per share in the third quarter of 2006. Earnings from discontinued operations, after taxes, were $.05 per diluted share in the third quarter of 2007, compared to $.11 per diluted share in the third quarter of 2006. Sales totaled $165.0 million in the third quarter of 2007, compared to $139.9 million in the third quarter of 2006. For the nine months ended August 26, 2007, earnings per diluted share totaled $5.01, compared to earnings per diluted share of $4.56 in the nine months ended September 3, 2006. Earnings per diluted share from continuing operations were $4.83 in the nine months ended August 26, 2007, compared to earnings per diluted share of $4.29 in the nine months ended September 3, 2006. Income from discontinued operations, after taxes, totaled $.18 per diluted share in the nine months ended August 26, 2007, compared to $.27 per diluted share in the nine months ended September 3, 2006. Sales in the nine months ended August 26, 2007 totaled $442.2 million, compared to $398.6 million in the nine months ended September 3, 2006. The improved earnings performance in the third quarter of 2007 was attributable principally to the record growth of the Fiberglass-Composite Pipe Group. The Infrastructure Products Group continued to perform at a high level as the strong earnings of the Hawaiian Division more than offset a decline by the Pole Products Division. The Water Transmission Group and TAMCO, Ameron's 50%-owned steel mini-mill, had lower earnings, although TAMCO continues to perform at a high level. Results in the third quarter of 2007 benefited from lower taxes due primarily to recognition of tax benefits totaling $5.3 million associated with the anticipated liquidation of the Company's wholly-owned subsidiary in the U.K. The operating results in the third quarter of 2006 included the recognition of tax benefits totaling $2.7 million associated with settlement of research and development tax credit refunds and settlement of U.S. tax audits. James S. Marlen, Ameron's Chairman, President and Chief Executive Officer, stated, "The growth in third-quarter and year-to-date earnings demonstrates the strength of the Company's diversified operations. The Fiberglass-Composite Pipe business and Hawaiian operations made major contributions to offset the water-pipe market slowdown that affected the Water Transmission Group throughout the year and the soft residential housing market that recently started to impact the Pole Products business. TAMCO's earnings for the year increased significantly, and the business continues to experience favorable market conditions despite a slower third quarter." The Fiberglass-Composite Pipe Group had higher sales and segment income in the third quarter of 2007, compared to the third quarter of 2006. Sales improved 29%, as all operations worldwide experienced increased demand due to the continued strength in core markets, primarily the marine, offshore, chemical and industrial segments. Onshore oilfield piping sales softened due to a temporary slowdown in Canadian and South American markets. The quarterly increase in segment income totaled $8.0 million, or 74%, reflecting the higher sales volume, plant efficiencies, favorable product/market mix and the receipt of dividends from Ameron's Saudi Arabian joint venture. The outlook for the Fiberglass-Composite Pipe Group remains positive. The Water Transmission Group had higher sales of $12.0 million, or 32%, in the third quarter of 2007, compared to the third quarter of last year. The sales increase was driven by Ameron's entry into the market for large-diameter wind towers, partially offset by lower sales of water pipe and protective linings. The Group incurred a loss of $3.0 million in the third quarter of 2007, compared with earnings of $.7 million in the third quarter of 2006. The continued softness of the water infrastructure market in the western U.S. and delays of ongoing pipe projects were the primary reasons for lower water pipe sales. Additionally, delays in constructing Ameron's new wind-tower manufacturing facility impacted productivity and earnings. While there are some indications that the expected recovery of the water transmission pipe market has started, the recovery has been slower than anticipated. Overall, the outlook is for a continued robust wind-tower market, with the water-pipe markets remaining soft in the near term. The Infrastructure Products Group had slightly lower sales and slightly higher segment income in the third quarter of 2007, compared to the third quarter of 2006. Sales declined $1.1 million, or 2%, while segment income totaled $9.3 million in the third quarter of 2007, compared to $9.1 million in the third quarter of last year. The sales increase in Hawaii was attributable to continued strength in all construction sectors with the exception of residential. Pole Products had lower sales due to softening of the residential housing market that reduced demand for decorative concrete lighting poles. The steel-pole market, which is driven by highway construction, remained strong. The outlook for the Infrastructure Products Group is mixed, as the construction markets served by the Hawaiian Division are forecasted to remain steady, while the Pole Products Division is expected to be confronted by the softening residential market. TAMCO had lower sales and earnings in the third quarter of 2007, compared to the third quarter of 2006. The lower sales were attributable to key customers adjusting inventory levels during the quarter due to project timing. Ameron's share of TAMCO's net income totaled $3.1 million after taxes, compared to $4.9 million in the third quarter of 2006. For the nine months ended August 26, 2007, Ameron's share of TAMCO's earnings increased $2.8 million, or 30%. The demand for steel rebar in the western U.S. has been strong, due to a high level of commercial and highway construction. The outlook for TAMCO remains favorable, although the slowdown in the residential construction market could also impact commercial construction activity. James Marlen concluded, "As anticipated, our businesses are delivering, and should continue to deliver, strong results in 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 Nine Months Ended ---------------------- ---------------------- (Dollars in thousands, except per share Aug. 26, Sept. 3, Aug. 26, Sept. 3, data) 2007 2006 2007 2006 ---------------------- ---------- ---------- ---------- ---------- Sales $ 165,048 $ 139,941 $ 442,159 $ 398,570 Cost of sales (128,047) (103,859) (339,076) (299,135) ---------- ---------- ---------- ---------- Gross profit 37,001 36,082 103,083 99,435 Selling, general and administrative expenses (21,669) (22,302) (69,128) (68,811) Other income, net 1,760 1,458 3,715 10,822 ---------- ---------- ---------- ---------- Income from continuing operations before interest, income taxes and equity in earnings of joint venture 17,092 15,238 37,670 41,446 Interest income/(expense), net 62 (628) 410 (2,547) ---------- ---------- ---------- ---------- Income from continuing operations before income taxes and equity in earnings of joint venture 17,154 14,610 38,080 38,899 Provision for income taxes 426 (2,538) (6,631) (10,450) ---------- ---------- ---------- ---------- Income from continuing operations before equity in earnings of joint venture 17,580 12,072 31,449 28,449 Equity in earnings of joint venture, net of taxes 3,079 4,910 12,335 9,493 ---------- ---------- ---------- ---------- Income from continuing operations 20,659 16,982 43,784 37,942 Income from discontinued operations, net of taxes 463 997 1,609 2,350 ---------- ---------- ---------- ---------- Net income $ 21,122 $ 17,979 $ 45,393 $ 40,292 ========== ========== ========== ========== Basic earnings per share: Income from continuing operations $ 2.28 $ 1.94 $ 4.85 $ 4.37 Income from discontinued operations, net of taxes .05 .11 .18 .27 ---------- ---------- ---------- ---------- Net income $ 2.33 $ 2.05 $ 5.03 $ 4.64 ========== ========== ========== ========== Diluted earnings per share: Income from continuing operations $ 2.27 $ 1.91 $ 4.83 $ 4.29 Income from discontinued operations, net of taxes .05 .11 .18 .27 ---------- ---------- ---------- ---------- Net income $ 2.32 $ 2.02 $ 5.01 $ 4.56 ========== ========== ========== ========== Weighted-average shares (basic) 9,044,129 8,748,617 9,020,798 8,677,515 ========== ========== ========== ========== Weighted-average shares (diluted) 9,089,574 8,890,919 9,068,593 8,840,106 ========== ========== ========== ========== Cash dividends per share $ .25 $ .20 $ .65 $ .60 ========== ========== ========== ========== AMERON INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - ASSETS (UNAUDITED) Aug. 26, Nov. 30, (Dollars in thousands) 2007 2006 ------------------------------------------------ --------- --------- ASSETS Current assets Cash and cash equivalents $ 126,563 $ 139,479 Receivables, less allowances of $5,881 in 2007 and $4,912 in 2006 159,980 160,173 Inventories 112,260 77,134 Deferred income taxes 24,029 23,861 Prepaid expenses and other current assets 13,473 15,921 --------- --------- Total current assets 436,305 416,568 Investments in joint ventures Equity method 17,428 14,501 Cost method 3,784 3,784 Property, plant and equipment Land 32,944 33,327 Buildings 67,089 57,434 Machinery and equipment 277,336 261,538 Construction in progress 28,559 20,657 --------- --------- Total property, plant and equipment at cost 405,928 372,956 Accumulated depreciation (249,589) (238,486) --------- --------- Total property, plant and equipment, net 156,339 134,470 Goodwill and intangible assets, net of accumulated amortization of $1,106 in 2007 and $3,017 in 2006 2,124 2,143 Other assets 61,821 63,198 --------- --------- Total assets $ 677,801 $ 634,664 ========= ========= AMERON INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - LIABILITIES AND STOCKHOLDERS' EQUITY (UNAUDITED) Aug. 26, Nov. 30, (Dollars in thousands, except per share data) 2007 2006 -------------------------------------------------- -------- -------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 10,000 $ 10,000 Trade payables 40,271 45,650 Accrued liabilities 88,448 68,970 Income taxes payable - 11,481 -------- -------- Total current liabilities 138,719 136,101 Long-term debt, less current portion 71,338 72,525 Other long-term liabilities 58,825 62,813 -------- -------- Total liabilities 268,882 271,439 -------- -------- Commitments and contingencies Stockholders' equity Common stock, par value $2.50 per share, authorized 24,000,000 shares, outstanding 9,138,721 shares in 2007 and 9,075,094 shares in 2006, net of treasury shares 29,623 29,431 Additional paid-in capital 44,192 39,500 Retained earnings 411,363 371,894 Accumulated other comprehensive loss (24,296) (27,232) Treasury stock (2,710,321 shares in 2007 and 2,697,148 shares in 2006) (51,963) (50,368) -------- -------- Total stockholders' equity 408,919 363,225 -------- -------- Total liabilities and stockholders' equity $677,801 $634,664 ======== ======== AMERON INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended ------------------ Aug. 26, Sept. 3, (Dollars in thousands) 2007 2006 -------------------------------------------------- -------- -------- OPERATING ACTIVITIES Net income $ 45,393 $ 40,292 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 11,958 13,894 Amortization 19 134 Net earnings in excess of distributions from joint ventures (2,927) (3,308) Gain from sale of property, plant and equipment (44) (9,118) Gain from sale of discontinued operations (1,453) (215) Stock compensation expense 1,793 2,829 Other (166) (38) Changes in operating assets and liabilities: Receivables, net 1,032 (6,926) Inventories (34,191) (30,737) Prepaid expenses and other current assets 2,455 (7,126) Other assets (2,674) 457 Trade payables (5,721) 1,459 Accrued liabilities and income taxes payable 7,936 18,660 Other long-term liabilities (4,045) (17,863) Net cash provided by operating activities 19,365 2,394 INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment 385 590 Proceeds from sale of discontinued operations 5,910 115,000 Additions to property, plant and equipment (33,301) (18,128) -------- -------- Net cash (used in)/provided by investing activities (27,006) 97,462 -------- -------- FINANCING ACTIVITIES Net change in short-term borrowings - (8,333) Issuance of debt 1,036 6,670 Repayment of debt (2,665) (529) Dividends on common stock (5,924) (5,286) Issuance of common stock 1,136 4,186 Excess tax benefits related to stock-based compensation 1,955 - Purchase of treasury stock (1,595) (1,203) -------- -------- Net cash used in financing activities (6,057) (4,495) -------- -------- Effect of exchange rate changes on cash and cash equivalents 782 923 -------- -------- Net change in cash and cash equivalents (12,916) 96,284 Cash and cash equivalents at beginning of period 139,479 44,671 -------- -------- Cash and cash equivalents at end of period $126,563 $140,955 ======== ======== CONTACT: Ameron International Corporation James S. Marlen Chairman, President and Chief Executive Officer or Gary Wagner Executive Vice President, Chief Operating Officer or James R. McLaughlin Senior Vice President, Chief Financial Officer 626-683-4000