Aug. 1, 2006 — North American Galvanizing & Coatings, Inc. announced consolidated net earnings of $1.4 million on sales of $18.2 million for the second quarter, and net earnings of $2.4 million on sales of $33.6 million for the first six months of 2006.

Second Quarter Results—The $1.4 million consolidated net earnings ($.18 per diluted share) compare with net earnings of $.1 million ($.02 per diluted share) in the second quarter of 2005 and net earnings of $.9 million ($.13 per diluted share) in the first quarter of 2006. The company says the record quarterly results are primarily attributable to higher average selling prices, favorable zinc contract purchases, and an 18% increase in volume over the prior year first half.

Sales reflect a 42% increase compared to the second quarter of 2005. The company says the main reason for the increase in revenues was a higher average sales price and a 2% increase in volume. Sales prices have increased related to increases in zinc and energy costs.

Average selling prices for galvanizing and related coating services were 40% higher than the prior-year second quarter.

Six Month Results—Net earnings of $2.4 million ($.30 per diluted share) compare with net earnings of $.2 million ($.03 per diluted share) in the first six months of 2005.

Sales reflect a 52% increase compared to the first six months of 2005. The company says the increase in revenues is due to a higher average sales price and an 18% increase in volume over the same period in 2005. Average selling prices for galvanizing and related coating services were 29% higher than for the first half of 2005.

Management Comments—Commenting on the results of the second quarter 2006, Ronald J. Evans, President and CEO, said, "We are extremely pleased that our first half volumes were at all time high levels. Sustained higher volume, coupled with improved net margins and continuing operating efficiencies produced record earnings this quarter."

The London Metals Exchange (LME) market price for zinc in the first half of 2006 averaged $1.26 per pound, compared to $.59 in the first half of 2005. At June 30, 2006 the LME market price for zinc was $1.48 per pound. With these increases in zinc costs, the market could react by using other corrosion protection alternatives, such as paint, or by postponing projects. The company cannot be assured that continuing zinc price increases will be absorbed by the market.

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.