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): 9-24-98
AMERON INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-9102 77-0100596
(State or other jurisdiction (Commission IRS 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
<PAGE>
Item 5 Other Events.
The attached announcement was released to the news media on September 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
/s/ Javier Solis
Date: September 25, 1998 By:-----------------------------
Javier Solis
Senior Vice President and
Secretary <PAGE>
N E W S R E L E A S E
September 24, 1998
Contact:
Gary Wagner, Senior Vice President, Chief Financial Officer
Telephone: 626/683-4000
PASADENA, Calif. Ameron International Corporation (NYSE: AMN) today
reported diluted earnings of $1.51 per share on sales of $156 million for
its third quarter, which ended August 31, 1998. This compares to $1.72
per share on sales of $146 million for the same period in 1997.
Year-to-date diluted earnings were $2.37 per share on sales of $395
million,compared to $3.25 per share on sales of $386 million last year.
James S. Marlen, Ameron Chairman, President and Chief Executive
Officer, commented that "Third-quarter performance was in line with the
revised expectations that we announced in early August. We continue to
experience soft market conditions worldwide for protective coatings and
competitive pressures have intensified. We are aggressively implementing
the cost reduction and productivity enhancement program announced earlier
to improve operating profits and strengthen our long-term competitive
position."
As expected, third-quarter earnings were significantly higher than
the first two quarters of 1998 but lower than the third quarter of last
year. Operating profits improved compared to the third quarter of 1997.
However, earnings were lower because of higher interest expense, related
primarily to the debt associated with the acquisition of Croda Coatings in
the second quarter of 1998. Each of Ameron's operations improved over the
same period last year, except for the worldwide protective coatings
business.
Worldwide protective coatings sales in the third quarter and for the
nine-month period were higher than last year, as a result of the Croda
Coatings acquisition. A slowdown in domestic markets, an increased
competitive environment and lower oil prices especially impacted U.S.
coatings operations. Worldwide earnings were down compared to last year
as a result of the decline in the U.S. While steady progress has been
made in integrating the Croda Coatings acquisition, market conditions and
sales in England, Australia and New Zealand have weakened. As part of the
cost reduction program announced in the third quarter, actions were and
are being taken to streamline U.S. operations and to accelerate the
restructuring program developed in conjunction with the Croda Coatings
acquisition.
Ameron's global fiberglass pipe business reported higher sales and
earnings for the third quarter and year to date, with domestic, Asian and
European operations all making positive contributions. U.S. operations
benefitted from higher demand for fuel-handling pipe systems, including
Ameron's new rigid coaxial products. Singapore operations had stronger
sales and earnings as a result of increased exports to Europe and the
Middle East. The decline of oil prices curtailed demand for Centron's
high-pressure fiberglass pipe supplied to domestic and international
oilfield markets.
While shipments accelerated during the third quarter, concrete and
steel pipe sales were lower than last year due to the timing of production
start-up on several major orders. Earnings were higher due to a
favorable product mix and improved manufacturing efficiencies. Sales and
earnings for the nine-month period remain below last year, primarily due
to the slow first half, which was impacted by severe weather and a six-week
strike. Fourth-quarter deliveries should be strong, and the order
backlog remains at a high level.
Ameron's construction products business in Hawaii had higher earnings
in the third quarter on flat sales. For the nine-month period, sales and
earnings were significantly higher than last year as a result of strong
first-half sales and cost reduction programs implemented in 1997. The
short-term outlook for construction spending in Hawaii remains soft due to
the slow economy and the impact of the Asian economic situation on
tourism.
During 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. Tokyo Steel owns 25% and Ameron owns
50% of Tamco, which is treated as an unconsolidated affiliate. A leading
supplier of rebar in the western United States, Tamco had sales of $139
million in 1997. The divestiture process is proceeding on schedule.
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.<PAGE>
Ameron International Corporation
Consolidated Statements of Income
Third Quarter Ended August 31,
(In thousands except share and per share data)
1998 1997
--------- ---------
Sales $155,707 $146,323
Cost of Sales 117,565 107,833
--------- ---------
Gross Profit 38,142 38,490
Selling, General and Administrative Expenses 26,276 27,375
--------- ---------
Operating Profit 11,866 11,115
Royalty, Equity and Other Income 2,899 3,128
--------- ---------
Income before Interest and Income Taxes 14,765 14,243
Interest, net 5,260 3,396
--------- ---------
Income before Income Taxes 9,505 10,847
Income Taxes 3,327 3,797
--------- ---------
Net Income $ 6,178 $ 7,050
========= =========
Basic Net Income Per Share (Based on
Weighted Average Shares Outstanding
of 4,012,875 Shares in 1998 and
4,002,830 Shares in 1997) $ 1.54 $ 1.76
========= =========
Diluted Net Income Per Share (Based on
Diluted Common Shares Outstanding
of 4,098,610 Shares in 1998 and
4,082,831 Shares in 1997) $ 1.51 $ 1.72
========= =========
Cash Dividends Paid $ .32 $ .32
========= =========
<PAGE>
Ameron International Corporation
Consolidated Statements of Income
Nine Months Ended August 31,
(In thousands except share and per share data)
1998 1997
--------- ---------
Sales $395,207 $386,109
Cost of Sales 296,537 284,728
--------- ---------
Gross Profit 98,670 101,381
Selling, General and Administrative Expenses 80,920 80,107
--------- ---------
Operating Profit 17,750 21,274
Royalty, Equity and Other Income 8,362 8,073
--------- ---------
Income before Interest and Income Taxes 26,112 29,347
Interest, net 11,146 8,950
--------- ---------
Income before Income Taxes 14,966 20,397
Income Taxes 5,238 7,139
--------- ---------
Net Income $ 9,728 $ 13,258
========= =========
Basic Net Income Per Share (Based on
Weighted Average Shares Outstanding
of 4,012,875 Shares in 1998 and
4,002,830 Shares in 1997) $ 2.42 $ 3.31
========= =========
Diluted Net Income Per Share (Based on
Diluted Common Shares Outstanding
of 4,098,610 Shares in 1998 and
4,082,831 Shares in 1997) $ 2.37 $ 3.25
========= =========
Cash Dividends Paid $ .96 $ .96
========= =========<PAGE>
Ameron International Corporation
Consolidated Statements of Cashflow
Nine Months Ended August 31,
(In thousands)
1998 1997
--------- ---------
Operating Activities
Net Income $ 9,728 $ 13,258
Adjustments to Reconcile
Net Income to Net Cash 13,797 13,614
Changes in Operating Assets
and Liabilities (20,193) (43,505)
--------- ---------
Cash Provided (Used) By Operations 3,332 (16,633)
Investing Activities
Proceeds from Sale of Assets 732 532
Additions to Property, Plant
and Equipment, and Acquisitions (64,797) (17,607)
Other, Net (1,065) (2,277)
--------- ---------
Cash Used by Investing Activities (65,130) (19,352)
Financing Activities
Short and Long-Term Borrowings, Net 65,400 44,076
Dividends on Common Stock (3,851) (3,843)
Other, Net 920 667
--------- ---------
Cash Provided by Financing Activities 62,469 40,900
Effect of Exchange Rate Changes on Cash (370) (794)
--------- ---------
Net Change in Cash $ 301 $ 4,121
========= =========<PAGE>
Ameron International Corporation
Consolidated Balance Sheets
(In thousands)
August 31, November 30,
1998 1997
--------- ---------
ASSETS
Current Assets
Cash and Equivalents $ 10,149 $ 9,848
Receivables, Net 138,079 122,352
Inventories 124,166 95,752
Other 11,877 13,340
--------- ---------
Total Current Asset 284,271 241,292
Investments and Advances -
Affiliated Companies 33,689 33,777
Property, Plant and Equipment, Net 160,773 127,678
Other Assets 28,715 30,478
--------- ---------
Total Assets $507,448 $433,225
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-Term Borrowings $ 3,949 $ 715
Current Portion of Long-Term Debt 17,654 17,654
Trade Payables 36,983 31,988
Accrued Liabilities and Other 48,862 36,908
--------- ---------
Total Current Liabilities 107,448 87,265
Long-Term Debt, Less Current Portion 205,373 140,917
Other Liabilities 40,445 52,061
--------- ---------
Total Liabilities 353,266 280,243
Stockholders' Equity
Common Stock 13,007 12,946
Additional Paid-In Capital 17,828 16,969
Retained Earnings 177,446 171,569
Cumulative Translation Adjustments (11,320) (5,723)
Treasury Stock (42,779) (42,779)
--------- ---------
Total Stockholders' Equity 154,182 152,982
--------- ---------
Total Liabilities and Stockholders'
Equity $507,448 $433,225
========= =========
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<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> NOV-30-1998 NOV-30-1997
<PERIOD-END> AUG-31-1998 AUG-31-1997
<CASH> 10,149 22,502
<SECURITIES> 0 0
<RECEIVABLES> 138,079 112,336
<ALLOWANCES> 0 0
<INVENTORY> 145,166 106,683
<CURRENT-ASSETS> 284,271 256,401
<PP&E> 160,773 126,430
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 507,448 447,019
<CURRENT-LIABILITIES> 107,448 94,240
<BONDS> 0 0
0 0
0 0
<COMMON> 13,007 12,944
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<TOTAL-LIABILITY-AND-EQUITY> 507,448 447,019
<SALES> 395,207 386,109
<TOTAL-REVENUES> 395,207 386,109
<CGS> 296,537 284,728
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<OTHER-EXPENSES> 80,920 80,107
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 11,467 9,141
<INCOME-PRETAX> 14,966 20,397
<INCOME-TAX> 5,238 7,139
<INCOME-CONTINUING> 9,728 13,258
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 9,728 13,258
<EPS-PRIMARY> 2.42 3.31
<EPS-DILUTED> 2.37 3.25
</TABLE>
