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): 1-29-99
AMERON INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-9102 7-0100596
(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
Item 5. Other Events
The attached announcement was released to the news media on
January 29, 1999.
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
By: _____________________________
Javier Solis
Senior Vice President & Secretary
Date: February 2, 1999
N E W S R E L E A S E
January 29, 1999
Offices:
James S. Marlen, Chairman, President & Chief Executive Officer
Gary Wagner, Senior Vice President, Chief Financial Officer
Telephone: 626-683-4000
AMERON REPORTS RECORD RESULTS
PASADENA, Calif.-Ameron International Corporation ("Ameron" or "Company")
(NYSE: AMN) today reported record results for its fiscal year ended November
30, 1998. Diluted 1998 earnings were $5.08 per share on sales of $552.1
million. Excluding the effects of non-recurring charges and gains on asset
sales, earnings from operations were $4.25 per share in 1998, the second
highest in the Company's history. In 1997, Ameron earned $4.73 per share
on sales of $533.5 million.
Fourth-quarter 1998 sales and earnings were $156.9 million and $2.71
per share, respectively. Excluding the nonrecurring items, earnings were $1.58
per share in the fourth quarter. This compares with the fourth-quarter 1997
sales and earnings per share of $147.4 million and $1.48, respectively.
As previously announced, Ameron sold its 50% ownership in Gifford-Hill-
American ("GHA"), a Texas-based concrete pipe company, in 1998 and realized
a pretax gain of $24 million. In addition to the sale of GHA, Ameron sold
two idle assets for a pretax gain of $2.8 million. Partially offsetting
these one-time gains were asset write-downs totaling $18.7 million and
charges totaling $3 million associated with a cost reduction program
implemented in the second half of 1998.
Commenting on the Company's financial results for 1998, James S. Marlen,
Ameron's Chairman, President and Chief Executive Officer, stated, "It was
a very difficult year in which we had to take decisive actions, including a
comprehensive repositioning and cost reduction program to offset an
extraordinary convergence of events that confronted our markets. Weather
conditions early in the year hampered concrete and steel pipe deliveries as
well as reducing demand for protective coatings. Also, a six-week strike
at our main steel pipe plant delayed shipments during the first half of the
year. The most significant factors, however, have been the dramatic
decline in oil prices and the Asian economic situation, which have directly
impacted our fiberglass-composite pipe and coatings businesses. Both of
these businesses are major suppliers to customers in the oil, gas and
petrochemical markets, which have responded to these economic changes by
significantly curtailing capital spending. The consequence of lower
worldwide demand in our markets has intensified competitive pressures and
reduced margins. The cost reduction actions that we implemented in 1998
will allow Ameron to remain highly competitive and enhance profitability
despite the adverse business climate."
Ameron's concrete and steel pipe business recovered from a slow first half
by accelerating deliveries during the second half. Operating profit
improved accordingly and was higher than in 1997. The West Coast market for
water-delivery pipe systems remains strong, and Ameron's concrete and steel
pipe business enters 1999 with a healthy order backlog of approximately $135
million.
Ameron's fiberglass-composite pipe business had higher sales and earnings
than last year, despite the steep decline in oil prices. Strength in the
U.S. fuel-handling market and international demand for industrial and
offshore applications more than offset the slowdown in the worldwide
oilfield markets. The outlook for fiberglass-composite pipe remains solid,
assuming no further erosion in oil prices.
Ameron Coatings had higher sales in 1998 compared to 1997, due to the
acquisition of the former Croda Coatings in April 1998. Excluding the
acquisition, sales and earnings declined compared to 1997. The business
experienced lower demand and severe competition in key market segments
worldwide, and especially in the U.S. Ameron's industrial coatings are
widely used in oil, gas and petrochemical markets, as well as offshore
platform and marine markets, all affected by the price of oil and the Asian
economy. The integration and restructuring of Croda Coatings is progressing
as planned, and it will be a positive contributor to Ameron Coatings'
financial performance and is expected to be accretive to earnings in the
first full year of operations. While the coatings markets are not expected
to improve significantly in the near term, Ameron's profitability is
expected to increase because of actions taken in 1998.
Ameron Hawaii's sales and earnings improved versus last year due to higher
government and military construction spending. Hawaiian operations have
also benefited from aggressive cost reduction programs initiated during 1997.
Construction activity on Hawaii is not expected to improve significantly over
the near term, and the Hawaiian economy continues to be slowed by lower
tourism, which has been adversely affected by the Asian economic situation.
James Marlen stated, "On balance, given the extremely difficult
circumstances, the Company performed very well in 1998, with reported
earnings being the highest and earnings from operations being the second
highest in Ameron's history. We enter 1999 as a stronger company and look
forward to improved profitability."
Cautionary statement for purposes of the "Safe Harbor" provisions of The
Private Securities Litigation Reform Act of 1995: Any statements in this
report 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 situations. Matters
affecting the economy generally, including the state of economics worldwide,
can affect Ameron's results. Forward-looking statements represent
the Company's judgment only as of the date of this report. 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
Fourth Quarter Ended November 30,
(In thousands except share and per share data)
1998 1997
--------- ---------
Sales $ 156,939 $ 147,397
Cost of Sale (116,397) (113,095)
--------- ---------
Gross Profit 40,542 34,302
Selling, General and Administrative Expense ( 30,228) ( 22,968)
Royalty, Equity and Other Income 3,572 2,630
--------- ---------
Operating Profit 13,886 13,964
Gain/(Loss) on Sales of Assets 26,862 ( 210)
Asset Write-Downs and Other Charges ( 19,866) 0
--------- ---------
Income before Interest and Income Taxes 20,882 13,754
Interest, net ( 3,931) ( 2,905)
--------- ---------
Income before Income Taxes 16,951 10,849
Income Taxes ( 5,933) ( 4,735)
--------- ---------
Net Income $ 11,018 $ 6,114
========= =========
Basic Net Income Per Share (Based on
Weighted Average Shares Outstanding
of 4,016,852 Shares in 1998 and
4,003,452 Shares in 1997) $ 2.74 $ 1.53
========= =========
Diluted Net Income Per Share (Based on
Diluted Common Shares Outstanding
of 4,084,377 Shares in 1998 and
4,094,885 Shares in 1997) $ 2.71 $ 1.48
========= =========
Cash Dividends Paid $ .32 $ .32
========= =========
Ameron International Corporation
Consolidated Statements of Income
Twelve Months Ended November 30,
(In thousands except share and per share data)
1998 1997
--------- ---------
Sales $ 552,146 $ 533,506
Cost of Sales (412,934) (397,823)
--------- ---------
Gross Profit 139,212 135,683
Selling, General and Administrative Expenses (109,345) (103,075)
Royalty, Equity and Other Income 11,943 10,557
--------- ---------
Operating Profit 41,810 43,165
Gain/(Loss) on Sales of Assets 26,853 ( 64)
Asset Write-Downs and Other Charges ( 21,669) -
--------- ---------
Income before Interest and Taxes 46,994 43,101
Interest, net ( 15,077) ( 11,855)
--------- ---------
Income before Income Taxes 31,917 31,246
Income Taxes ( 11,171) ( 11,874)
--------- ---------
Net Income $ 20,746 $ 19,372
========= =========
Basic Net Income Per Share (Based on
Weighted Average Shares Outstanding
of 4,016,852 Shares in 1998 and
4,003,452 Shares in 1997) $ 5.17 $ 4.84
========= =========
Diluted Net Income Per Share (Based on
Diluted Common Shares Outstanding
of 4,084,377 Shares in 1998 and
4,094,885 Shares in 1997) $ 5.08 $ 4.73
========= =========
Cash Dividends Paid $ 1.28 $ 1.28
========= =========
Ameron International Corporation
Consolidated Statements of Cashflow
Twelve Months Ended November 30,
(In thousands)
1998 1997
--------- ---------
Operating Activities
Net Income $ 20,746 $ 19,372
Adjustments to Reconcile
Net Income to Net Cash 12,693 21,704
Changes in Operating Assets
and Liabilities 4,673 (49,195)
--------- ---------
Cash Provided (Used) By Operations 38,058 (8,119)
Investing Activities
Proceeds from Sale of Assets 30,395 2,287
Additions to Property, Plant
and Equipment (32,744) (24,860)
Acquisitions (46,419) -
Investment in Affiliated Companies 1,000 -
Other, Net 584 (2,645)
--------- ---------
Cash Used by Investing Activities (47,184) (25,218)
Financing Activities
Short and Long-Term Borrowings, Net 19,822 29,676
Dividends on Common Stock (5,141) (5,124)
Other, Net 920 808
--------- ---------
Cash Provided by Financing Activities 15,601 25,360
Effect of Exchange Rate Changes on Cash 53 (556)
--------- ---------
Net Change in Cash $ 6,528 $ (8,533)
========= =========
Ameron International Corporation
Consolidated Balance Sheets
(In thousands)
As of November 30
1998 1997
--------- ---------
ASSETS
Current Assets
Cash and Equivalents $ 16,376 $ 9,848
Receivables, Net 136,380 122,352
Inventories 112,514 95,752
Other 14,280 13,340
--------- ---------
Total Current Assets 279,550 241,292
Investments and Advances -
Affiliated Companies 22,182 33,777
Property, Plant and Equipment, Net 157,918 127,678
Other Assets 46,429 30,478
--------- ---------
Total Assets $ 506,079 $ 433,225
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-Term Borrowings $ 3,024 $ 715
Current Portion of Long-Term Debt 12,681 17,654
Trade Payables 37,273 31,988
Accrued Liabilities and Other 53,353 32,561
Federal and other income taxes 23,499 4,347
--------- ---------
Total Current Liabilities 129,830 87,265
Long-Term Debt, Less Current Portion 165,308 140,917
Other Liabilities 43,773 52,061
--------- ---------
Total Liabilities 338,911 280,243
Stockholders' Equity
Common Stock 13,007 12,946
Additional Paid-In Capital 17,828 16,969
Retained Earnings 187,174 171,569
Accumulated Comprehensive Income (8,062) (5,723)
Treasury Stock (42,779) (42,779)
--------- ---------
Total Stockholders' Equity 167,168 152,982
--------- ---------
Total Liabilities and Stockholders' Equity $ 506,079 $ 433,225
========= =========
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<FISCAL-YEAR-END> NOV-30-1998 NOV-30-1997
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