SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): 6-24-98
AMERON INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-9102 77-0100596
(State or other jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
245 South Los Robles Ave., Pasadena, California 91101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (626) 683-4000
Item 5 Other Events.
The attached announcement was released to the news media on
June 24, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERON INTERNATIONAL CORPORATION
Date: June 26, 1998 By:_______________________________
Javier Solis
Senior Vice President and Secretary
NEWS RELEASE
June 24, 1998
Contacts:
Gary Wagner, Senior Vice President, Chief Financial Officer,
and Dan Stracner, Vice President, Public Affairs: 626/683-4000
Pasadena, Calif.--Ameron International Corporation (NYSE: AMN) today
reported diluted earnings of $1.09 per share on sales of $137 million for its
second quarter, which ended May 31, 1998. This compares to $1.30 per share on
sales of $131.5 million for the same period in 1997. Year-to-date diluted
earnings were 86 cents per share on sales of $239.5 million, compared to $1.53
per share on sales of $239.8 million last year.
As expected, the quarterly earnings shortfall was due in large part to a
strike that stopped work at Ameron's largest steel pipe plant for six weeks,
including the bulk of the first month of the second quarter. In addition, heavy
El Nino rainfall early in the quarter continued delaying shipments to jobsites
in the West. Now that the rain has subsided and operations have returned to
normal, sales are meeting expectations. The concrete and steel pipe business
recently received $54 million in new orders, including a major tunnel liner
contract for the Metropolitan Water District in Southern California and a large
pipeline contract in Colombia. The backlog for this business is currently the
largest in the company's 91-year history.
Three primary factors impacted quarterly and year-to-date earnings for
Ameron's worldwide protective coatings business: severe El Nino weather that
hampered projects in the western and Gulf regions in the first quarter and early
in the second quarter; competitive pressures in industrial maintenance markets
in the U.S. and Europe; and start-up, integration and system-conversion costs
associated with Ameron's recent acquisition of Croda Coatings, which included
plants in England, Australia and New Zealand.
Ameron's global fiberglass pipe business reported significantly higher
sales and earnings for the quarter and first half, with domestic and European
operations both making strong contributions. The increase was driven in part by
strong demand for fuel-handling pipe systems, including Ameron's new rigid
coaxial products.
Results from Ameron's construction products business in Hawaii also
continued to improve in the second quarter, partly because of increased demand
from the private sector. However, the outlook for construction activity in the
Islands remains uncertain because of the sluggish economy and the potential
impact of the Asian economic crisis on tourism.
"As we forecasted, we had a tough first half, primarily because of weather
problems and project delays in two of our core businesses, as well as the
strike," said James S. Marlen, Ameron chairman, president and chief executive
officer. "We're now accelerating deliveries wherever possible, and we expect
considerable improvement in the second half." Marlen noted that the main point
of contention in the strike was union participation in healthcare costs. "We
felt that management had to take a stand on this issue since it had long-term
implications for the company. We believe we now have an equitable agreement with
the unions."
Early in the third quarter, Ameron and Tokyo Steel announced their
intention to sell their ownership in Tamco, a steel mini-mill and rebar
manufacturer in Southern California. Ameron owns 50% of Tamco, which is treated
as an unconsolidated affiliate, and Tokyo Steel owns 25%. A leading supplier of
rebar in the western United States, Tamco had sales of $139 million in 1997.
"Tamco is a very solid, successful business with which Ameron has enjoyed a long
and prosperous affiliation," Marlen said. "The reason we have decided to divest
is that Tamco is not a core business for Ameron and not part of our long-range
strategic plan. Resources from the divestiture will be redeployed into our core
businesses to support our growth strategy."
Cautionary statement for purposes of the "Safe Harbor" provisions of "The
Private Securities Reform Act of 1995": Any of the above statements that refer
to Ameron's estimated or anticipated future results 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 conditions. Matters affecting the economy generally, including the state
of economics worldwide, can affect the Company's results. These forward-looking
statements represent the Company's judgment only as of the date of this
communication. 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
Consolidated Statements of Income
Second Quarter Ended May 31,
(In thousands except share and per share data)
1998 1997
--------- ---------
Sales $136,974 $131,525
Cost of Sales 100,648 96,317
--------- ---------
Gross Profit 36,326 35,208
Selling, General and Administrative Expenses 29,598 26,449
--------- ---------
Operating Profit 6,728 8,759
Royalty, Equity and Other Income 3,692 2,326
--------- ---------
Income before Interest and Income Taxes 10,420 11,085
Interest, net 3,393 3,098
--------- ---------
Income before Income Taxes 7,027 7,987
Income Taxes 2,537 2,717
--------- ---------
Net Income $ 4,490 $ 5,270
========= =========
Basic Net Income Per Share (Based on
Weighted Average Shares Outstanding
of 4,009,773 Shares in 1998 and 4,002,001 Shares in 1997)
$ 1.12 $ 1.32
========= =========
Diluted Net Income Per Share (Based on
Diluted Common Shares Outstanding
of 4,115,941 Shares in 1998 and 4,069,733 Shares in 1997)
$ 1.09 $ 1.30
========= =========
Cash Dividends Paid $ .32 $ .32
========= =========
Ameron International Corporation
Consolidated Statements of Income
Six Months Ended May 31,
(In thousands except share and per share data)
1998 1997
--------- ---------
Sales $239,500 $239,786
Cost of Sales 178,972 176,895
--------- ---------
Gross Profit 60,528 62,891
Selling, General and Administrative Expenses 54,644 52,732
--------- ---------
Operating Profit 5,884 10,159
Royalty, Equity and Other Income 5,463 4,945
--------- ---------
Income before Interest and Income Taxes 11,347 15,104
Interest, net 5,886 5,554
--------- ---------
Income before Income Taxes 5,461 9,550
Income Taxes 1,911 3,342
--------- ---------
Net Income $ 3,550 $ 6,208
========= =========
Basic Net Income Per Share (Based on
Weighted Average Shares Outstanding
of 4,009,773 Shares in 1998 and 4,002,001 Shares in 1997)
0.89 $ 1.55
========= =========
Diluted Net Income Per Share (Based on
Diluted Common Shares Outstanding
of 4,115,941 Shares in 1998 and 4,069,733 Shares in 1997)
$ 0.86 $ 1.53
========= =========
Cash Dividends Paid $ .64 $ .64
========= =========<PAGE>
Ameron International Corporation
Consolidated Statements of Cashflow
Six Months Ended May 31,
(In thousands)
1998 1997
--------- ---------
Operating Activities
Net Income $ 3,550 $ 6,208
Adjustments to Reconcile
Net Income to Net Cash 11,776 9,402
Changes in Operating Assets
and Liabilities (13,935) (36,419)
--------- ---------
Cash Provided (Used) By Operations 1,391 (20,809)
Investing Activities
Proceeds from Sale of Assets 326 355
Additions to Property, Plant
and Equipment, and Acquisitions (61,129) (11,496)
Other, Net (699) (1,518)
--------- ---------
Cash Used by Investing Activities (61,502) (12,659)
Financing Activities
Short and Long-Term Borrowings, Net 58,633 31,275
Dividends on Common Stock (2,566) (2,561)
Other, Net 343 628
--------- ---------
Cash Provided by Financing Activities 56,410 29,342
Effect of Exchange Rate Changes on Cash (69) (354)
--------- ---------
Net Change in Cash $ (3,770) $ (4,480)
========= =========<PAGE>
Ameron International Corporation
Consolidated Balance Sheets
(In thousands)
May 31, November 30,
1998 1997
--------- ---------
ASSETS
Current Assets
Cash and Equivalents $ 6,078 $ 9,848
Receivables, Net 129,258 122,352
Inventories 125,993 95,752
Other 13,024 13,340
--------- ---------
Total Current Assets 274,353 241,292
Investments and Advances -
Affiliated Companies 33,689 33,777
Property, Plant and Equipment, Net 161,288 127,678
Other Assets 28,683 30,478
--------- ---------
Total Assets $498,013 $433,225
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-Term Borrowings $ 1,311 $ 715
Current Portion of Long-Term Debt 17,645 17,654
Trade Payables 43,106 31,988
Accrued Liabilities and Other 39,845 36,908
--------- ---------
Total Current Liabilities 101,907 87,265
Long-Term Debt, Less Current Portion 201,117 140,917
Other Liabilities 43,627 52,061
--------- ---------
Total Liabilities 346,651 280,243
Stockholders' Equity
Common Stock 12,969 12,946
Additional Paid-In Capital 17,289 16,969
Retained Earnings 172,553 171,569
Cumulative Translation Adjustments (8,670) (5,726)
Treasury Stock (42,779) (42,779)
--------- ---------
Total Stockholders' Equity 151,362 152,982
--------- ---------
Total Liabilities and Stockholders' Equity $498,013 $433,225
========= =========
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<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> NOV-30-1998 NOV-30-1997
<PERIOD-END> MAY-31-1998 MAY-31-1997
<CASH> 6,078 13,901
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