TULSA, Okla., Oct. 26, 2009 (GLOBE NEWSWIRE) -- North American Galvanizing & Coatings, Inc. (Nasdaq:NGA) announced today third quarter 2009 earnings of $2.6 million ($.16 per share), compared with $3.0 million ($.18 per share), in the third quarter of 2008. The Company's net earnings for the first nine months of 2009 were $8.3 million ($.50 per share), compared with $9.5 million ($.56 per share) in the first nine months of 2008.
Third quarter 2009 volumes were 2.7% higher than volumes in the third quarter of 2008. First nine months' 2009 volumes were 5.6% higher than volumes in the first nine months of 2008. Sales for the three-months and nine-months ended September 30, 2009 decreased 8.2% and 8.9%, respectively, over the prior year. The decrease in third quarter and first nine month revenues was due primarily to a lower average sales price compared to the same periods in 2008. For 2009, average selling prices for galvanizing and related coating services were 10.7% lower than the prior year third quarter and 13.7% lower than the first nine months of 2008.
Commenting on the results, Ronald J. Evans, president and chief executive officer, said "Anticipating a slowdown in hot dip galvanizing demand related to the general economic activity, we shifted our marketing tactics late last year to gain larger volume project work which resulted in reduced average prices. As a result, we have been able to achieve higher volumes for the year and quarter. We will continue to monitor our short term strategy with changes in economic conditions."
Effective August 21, 2009 the Company completed its previously reported private placement of 10% subordinated notes and warrants to purchase shares of common stock. The Company raised $7.3 million in gross subscription proceeds which will be used to facilitate the Company's growth strategy. The private placement was offered to a group of current large shareholders and a limited number of other accredited investors who had expressed an interest in investing in the Company. The Company placed $7.3 million in principal of 10% subordinated notes and warrants to purchase 1,095,000 shares of common stock. The strike price of the warrants was set at $5.20 per share of common stock.
North American Galvanizing is a leading provider of hot-dip galvanizing and coatings for corrosion protection of fabricated steel products. The Company conducts its galvanizing and coating business through a network of plants located in Benwood, West Virginia, Canton, Ohio, Denver, Hurst (Dallas/Fort Worth), Houston, Kansas City, Louisville, Nashville, St. Louis and the Tulsa area. Hot-dip galvanizing provides metals corrosion protection for many product applications used in commercial, construction and industrial markets. Our home page is: www.nagalv.com.
Cautionary Statement. This press release may contain "forward-looking statements" as defined under U.S. securities laws, including, but not limited to, statements concerning the Company's beliefs and expectations of future performance. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from such forward-looking statements and management's present expectations or projections. These risks and uncertainties include the risk factors described in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009. These forward-looking statements are made as of the date of this press release. The Company assumes no obligation to update or revise these statements or to provide reasons why actual results may differ.
NORTH AMERICAN GALVANIZING & COATINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share amounts)
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For the Three For the Nine
Months Ended Months Ended
September 30 September 30
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2009 2008 2009 2008
SALES $20,051 $21,845 $58,803 $64,525
COST AND EXPENSES:
Cost of sales excluding
depreciation and
amortization 12,944 13,879 36,311 39,656
Selling, general and
administrative expenses 2,182 2,699 7,351 7,548
Depreciation and amortization 972 847 2,743 2,556
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Total costs and expenses 16,098 17,425 46,405 49,760
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OPERATING INCOME 3,953 4,420 12,398 14,765
Interest expense (128) -- (128) --
Interest income and other 5 70 24 217
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INCOME BEFORE INCOME TAXES 3,830 4,490 12,294 14,982
INCOME TAX EXPENSE 1,255 1,453 4,038 5,447
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NET INCOME $ 2,575 $ 3,037 $ 8,256 $ 9,535
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NET INCOME PER COMMON SHARE:
Basic $ 0.16 $ 0.19 $ 0.51 $ 0.58
Diluted $ 0.16 $ 0.18 $ 0.50 $ 0.56