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AZZ > SEC Filings for AZZ > Form 8-K on 16-Oct-2013All Recent SEC Filings

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Form 8-K for AZZ INC


16-Oct-2013

Regulation FD Disclosure, Other Events


ITEM 7.01 REGULATION FD DISCLOSURE.
Attached hereto as Exhibit 99.1 are materials to be used by representatives of AZZ incorporated, a Texas corporation (the "Company"), in future presentations to the financial community.

Pursuant to General Instruction B.2 of Form 8-K, the information in Item 7.01 of this Form 8-K, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in any such filing.

The information contained herein is summary information that is intended to be considered in the context of our SEC filings and other public announcements that we may make, by press release or otherwise, from time to time.

The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although the Company may do so from time to time as management of the Company believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.

In connection with such future presentations to the financial community, reconciliations between EBITDA (as defined below) and net income and between Free Cash Flow (as define below) to cash provided by operating activities are provided as follows. As used by the Company, these terms may differ from similarly captioned measures used by other companies.

"EBITDA", a non-GAAP financial measure, is defined as net income before interest, taxes, depreciation and amortization. The Company presents EBITDA because it considers such information an important supplemental measure of its performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies with comparable market capitalization, many of which present EBITDA when reporting their results. The Company also uses EBITDA for the following purposes: (1) the Company's credit agreement uses EBITDA to measure compliance with covenants, such as fixed charge coverage and debt incurrence; (2) EBITDA is also used by potential lenders to evaluate potential transactions with the Company; and (3) EBITDA is also used by the Company to evaluate and price potential acquisition candidates.

EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Some of these limitations are: (a) EBITDA does not reflect changes in, or cash requirements for, the Company's working capital needs, (b) EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments on the Company's debts; and
(c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA does not reflect any cash requirements for such capital expenditures. Because of these limitations, EBITDA should not be considered as a principal indicator of the Company's performance. The Company compensates for these limitations by relying primarily on the Company's GAAP results and using EBITDA only on a supplemental basis.

Free Cash Flow ("FCF"), also a non-GAAP financial measure, is defined as cash provided by operating activities less cash disbursed for capital expenditures excluding acquisitions. The Company presents FCF because it considers such information an important supplemental measure of performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies with comparable market capitalization to the Company, many of which present FCF when reporting their results.

FCF has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Company's results as reported under GAAP. These limitations include that FCF excludes significant cash flows, such as principal payments on debt. Because of these limitations, FCF should not be considered as a principal indicator of the Company's performance. The Company compensates for these limitations by relying primarily on the Company's GAAP results and using FCF only on a supplemental basis.

(Financial tables follow.)


EBITDA Reconciliation

The reconciliation of EBITDA with net income is as follows (in thousands):

                                                                           Actual Year Ended       Projected Year Ended 2/28/14
                               2/28/2010         2/28/2011      2/29/2012      2/28/2013                      (Range)
Net Income                  $       37,728     $    34,963     $   40,736     $   60,456       $    63,000       to     $  68,000
Plus:
Income Tax Expense          $       22,655     $    19,995     $   22,905     $   33,913       $    37,000       to     $  40,000
Interest Expense            $        6,838     $     7,731     $   13,939     $   13,073       $    18,500       to     $  18,500
Depreciation and
Amortization                $       17,426     $    22,166     $   22,595     $   29,363       $    40,000       to     $  45,000

EBITDA                      $       84,647     $    84,855     $  100,175     $  136,805       $   158,500       to     $ 171,500


Free Cash Flow
Reconciliation

The reconciliation of cash flows provided by (used in) operations with free cash flow is as follows (in thousands):

                                                                           Actual Year Ended         Projected Year Ended 2/28/14
                               2/28/2010         2/28/2011      2/29/2012      2/28/2013                      (Range)
Cash Provided by
Operating Activities        $       82,588     $    42,085     $   64,065     $   92,738       $    95,000       to     $ 105,000
Less:
Fixed Asset Purchase
for Cash                    $       12,037     $    16,411     $   19,784     $   24,923       $    45,000   (1) to (1) $  50,000

Free Cash Flow              $       70,551     $    25,674     $   44,281     $   67,815       $    50,000       to     $  55,000

(1) Includes the rebuild of the Joliet Galvanizing Facility in Fiscal 2014.




ITEM 8.01 OTHER EVENTS

Attached is Exhibit 99.2, Financial and Other Statistical Information, which contains guidance and selected financial projections for the fiscal year ending February 28, 2014. The guidance contained in the attached exhibits consists of a projected range or management's estimate of most likely results. These projections involve risk and uncertainties, the outcome of which cannot be foreseen at this time and, therefore, actual results will vary from these forecasts. The Company undertakes no obligation to affirm, publicly or revise any forward-looking statements, whether as a result of information, future events or otherwise.

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