Ameron Reports Improved Second Quarter Earnings
PASADENA, Calif. - Ameron International Corporation (NYSE:AMN) today reported diluted earnings of $1.50 per share on sales of $149.5 million for the second quarter ended May 31, 1999. Ameron earned $1.09 per share on sales of $137.0 million for the same period in 1998. Year-to-date diluted earnings totaled $1.75 per share on sales of $272.4 million, compared to 86 cents per share on sales of $239.5 million in 1998.
Commenting on the Company's results, James S. Marlen, Ameron's Chairman, President and Chief Executive Officer, stated, "Ameron continued to do well in the first half of 1999. The profitability of all of our businesses exceeded the levels of 1998. We are benefitting from the profit-enhancement programs implemented in 1998 and the strength of several of our markets, especially those served by our Concrete and Steel Pipe business."
The Concrete and Steel Pipe business continued to accelerate in the second quarter because of favorable weather conditions and the timing of pipe deliveries. Sales and profits were significantly higher than in the same period of 1998.
Ameron's worldwide Fiberglass-Composite Pipe business continued the trend of the first quarter with slightly lower sales but higher profits. Profits remained higher because of improved product mix and the restructuring steps taken in 1998. The depressed oil industry continued to hamper sales. The impact of oil prices was partially offset by the residual strength of the U.S. fuel-handling market and by the continued strength of Asian operations. Sales and profits from Asian operations, including a plant in Singapore and the Company's new plant in Malaysia, were almost twice as high in 1999 as in the first half of 1998.
While Ameron's worldwide Coatings business had higher sales and profits in the first six months of 1999 than in the same period of 1998, sales and profits declined slightly during the second quarter. The sales increase came from the acquisition of the former Croda Coatings businesses in April 1998. The slowdown reflects the continued softness in the worldwide coatings markets served by Ameron, principally due to the weakness of businesses related to the oil industry. Ameron's coatings are used extensively in such markets to protect petrochemical plants, offshore platforms and marine vessels. Additionally, Ameron's European coatings operations continued to be adversely impacted by the general economic conditions in the U.K.
Ameron's Construction & Allied Products business continued to generate improved sales and profits in the second quarter and year to date.
James S. Marlen commented, "We remain pleased with Ameron's strong performance for the first half of 1999, given the difficult conditions in some of the markets we serve. The current outlook confirms our earlier full-year forecast that Ameron will report higher profitability in 1999."
Ameron and Tokyo Steel Manufacturing Co. Ltd. ("Tokyo Steel") have decided to retain their ownership of TAMCO. On June 12, 1998, Ameron and Tokyo Steel had announced the intent to seek a buyer for the 75% of TAMCO owned by Ameron and Tokyo Steel. TAMCO is a leading manufacturer of reinforcing bar for West Coast markets.
Commenting on Ameron's decision to retain its 50% ownership of TAMCO, James S. Marlen stated, "The perceived value for TAMCO was affected by the overall decline in the steel industry which began in the latter part of 1998. Although TAMCO had an outstanding operating year in 1998 and is doing even better in 1999, potential buyers have been preoccupied with the declines in their respective businesses. We feel that TAMCO is a significant asset with a strong market position that will continue to provide superior returns."
Ameron International Corporation is a leading producer of high-performance coatings and finishes, fiberglass-composite pipe, concrete and steel pipe systems and other specialized construction products. The Company operates businesses in North America, South America, Europe, Asia and Australasia.
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.