North American Galvanizing & Coatings Reports Fourth Quarter and Fiscal 2009 Earnings

TULSA, Okla., Feb. 22, 2010 (GLOBE NEWSWIRE) -- North American Galvanizing & Coatings, Inc. (Nasdaq:NGA) announced today net income for 2009 was $9.7 million ($.58 per share), compared with $11.9 million net income in 2008 ($.70 per share). Cash flow from operating activities was $14.9 million in 2009 compared to $14.2 million in 2008. Fourth quarter 2009 net income was $1.4 million ($.08 per share) compared to fourth quarter 2008 net income of $2.3 million ($.14 per share). 

2009 volume was  approximately the same as in 2008. Although volume was the same year-over-year, there were several offsetting factors that affected 2009. In April 2009, the Company brought online a new galvanizing plant, located in Benwood, West Virginia. In late November 2009, the St. Louis plant ceased operations temporarily due to damage caused by a fire. As of February 22, 2010, the plant had not resumed operations. Fourth quarter 2009 volume was down versus prior quarters during the year, representing 22.7% of the total year volume. The fourth quarter 2009 slowdown in hot dip galvanizing demand is related to the overall slowdown in general economic activity and cannot be attributed to any one geographic area or principal market.

Sales for year ended December 31, 2009 decreased 10.5% over the prior year, due to a 10.5% decline in average selling prices. Prices were affected by the economic downturn and the anticipated drop in overall demand for hot dip galvanizing along with the Company's focus on gaining larger volume work which resulted in lower priced project work during the last half of 2009. This reduction in average prices was the primary cause of the decline in earnings.

While sales were affected by the fire, no losses were recorded as a result of inventory and property damage and extra clean-up expenses due to the anticipated insurance recovery.

Commenting on the results, Ronald J. Evans, president and chief executive officer, said, "Full year 2009 results were strong. Total volume was the same as 2008, which was the highest volume and earnings year in the history of the Company. In 2009, a year of difficult financial and economic markets, a number of milestones were achieved, including the construction and market introduction of the West Virginia facility and the completion of two major capital projects in our Hurst, Texas and Denver, Colorado plants. In addition, we completed a subordinated note offering, entered into a new bank lending agreement, and generated the highest operating cash flow in the Company's history. While in the fourth quarter, we did experience a volume decline associated with the general economic slowdown and the temporary shutdown of the St. Louis plant due to a fire, we enter into 2010 well-capitalized and prepared from both the cost and marketing perspectives. "

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.