Feb. 7, 2006 — North American Galvanizing & Coatings, Inc. reported net income of $254,000 on sales of $13.1 million for the fourth quarter and net income of $644,000 on sales of $47.9 million for the year ended December 31, 2005.

Fourth Quarter Results—The $254,000 net income ($.03 per diluted share) compares to a net loss of $142,000 ($.02 loss per diluted share) for the fourth quarter of 2004. Sales volumes at same plants were 19% higher than the fourth quarter of 2004 and 43% higher in total, including the new Canton, Ohio, galvanizing plant.

Full Year Results—The $644,000 net income ($.08 per diluted share) compares to net income of $397,000 ($.05 per diluted share) for 2004. The company attributes the increase in net income primarily to increased sales volume.

Revenues increased 34% over the prior year due primarily to contribution from the Canton, Ohio, galvanizing facility that was purchased February 28, 2005. Same-plant revenues for the year improved 14% over 2004. North American Galvanizing's same plants started the year with a period of slow demand in the first two months. A general increase in demand due to increased commercial spending and higher construction activity led to a positive trend in same-plant revenues continuing throughout the remainder of 2005. Sales volumes at same plants during 2005 were 11% higher than 2004 and 30% higher in total, including Ohio.

Cash provided by operating activities increased to $6,640,000 for the year ended December 31, 2005, compared to $2,581,000 for 2004. Management's focus on improving working capital resulted in increased cash flow over the prior year. The company's investment of $4,200,000 to purchase the Canton, Ohio, galvanizing plant during the first quarter of 2005 was financed primarily by debt; however, due to strong operating cash flow, debt levels at December 31, 2005 were $832,000 lower than the debt levels at December 31, 2004.

Management Comments—Commenting on the results for the fourth quarter and fiscal 2005, Ronald J. Evans, President and CEO, said, "Fourth quarter earnings improvement of $.05 per share over the prior year was achieved primarily through volume increases. We believe the market is recognizing our earlier capital investment programs to improve operating efficiencies, and our management team dedicated to providing quality product and service. Our goal is to continue that trend of improved efficiencies into 2006 and implement similar programs at the Ohio facility, purchased in 2005. Although SG&A expenses, including the incremental costs associated with the Canton purchase, declined as a percent of sales, Sarbanes Oxley compliance costs, audit fees, and legal fees associated with defending litigation were significantly higher than prior year. Programs to control these expenses are being reviewed."

Evans continued, "Rapidly rising zinc prices are of concern from both a management of gross margin and competitive product substitution perspective."

North American Galvanizing is a leading provider of hot dip galvanizing and coatings for corrosion protection of fabricated steel products. The company conducts its galvanizing and coating business through a network of plants located in Canton, Ohio; Denver, Hurst (Dallas/Forth Worth), Houston, Kansas City, Louisville, Nashville, St. Louis and the Tulsa area.