We have rated AZZ a buy since January 2005. For the fourth quarter of fiscal 2008, net income increased 5% year over year to $7.3 million from $7 million a year ago. Earnings per share for the quarter rose slightly, to 60 cents from 58 cents in the year-ago quarter, continuing a trend of positive EPS growth over the past two years.
The growth indicates that AZZ's weak revenue results did not hurt the company's bottom line. Net operating cash flow increased significantly to $18.8 million. Management announced that strong market demand for galvanizing services continued during the quarter, and the company's tons processed increased 18% for the fiscal year.
Looking forward, management feels that its April 1 asset purchase agreement with AAA Industries will strengthen the company's national market leadership position and make a positive financial contribution in the first year of ownership. It is expected that the acquisition will enhance the company's growth and expansion opportunities and compliment previous acquisitions.
Previously issued projections for fiscal 2009 revenue of $320 million to $330 million were not changed based on the evaluation of the most recent data available to management. Management said its estimates assume that the company will not experience any significant delays in the delivery or timing in the receipt of orders of electrical and industrial products, and that the cost of zinc will not significantly change from current levels.EMS Technologies (ELMG) designs, manufactures and markets products for wireless communications. The company focuses on the needs of the mobile information user, with an increasing emphasis on broadband applications for high-data-rate, high-capacity wireless communications. The Defense and Space Systems segment manufactures custom-designed, highly engineered hardware for use in space and satellite communications, radar, surveillance and military countermeasures. A subsidiary, LXE Inc., manufactures rugged mobile computers and wireless local area network products whose typical uses include real-time data communications on inventory movement in large warehouses, manufacturing facilities and container yards. The EMS Wireless segment manufactures base-station antennas and repeaters for PCS/cellular communications services. The SATCOM segment is a division of the company's Canadian subsidiary and manufactures earth-based antennas, terminals and other hardware for communications via satellite link. Our rating for EMS Technologies was upgraded to buy from hold in January 2008. This change was driven by its solid stock performance, revenue growth and solid financial position. For the fourth quarter of fiscal 2007, the company's revenue increased 5% year over year, and this revenue growth appears to have trickled down to the bottom line, as earnings per share improved slightly. The company has demonstrated a pattern of positive EPS growth over the past two years, reporting an increase to 46 cents in the most recent quarter from 44 cents a year ago. A debt-to-equity ratio of 0.06 is very low, implying effective management of debt levels. We also consider the company's 41% gross profit margin to be strong. Investors have apparently begun to recognize the positive factors we see in this stock, as EMS Technologies shares rose 33% over the past year. This is a very nice gain, but we feel that the stock could move higher in the future. Bear in mind, however, that any unexpected regulatory changes and the acceptance or emergence of new standard formats are typical challenges faced by the communications equipment industry and could potentially affect this stock. Chindex (CHDX) is an American supplier of Western medical technologies to health care markets in China, including Hong Kong. Revenues are generated from the provision of health care services and the sale of medical equipment, instrumentation and products. The company operates a network of private hospitals and clinics through its Healthcare Services division. The United Family Hospitals in Beijing and Shanghai are 50-bed facilities with affiliated satellite clinics strategically located to expand geographical reach and service offerings in the company's target patient markets. The hospitals offer a full range of health care for men, women and children. They strive to deliver top-quality, international-standard health care services to the largest urban centers in China. The Medical Products division markets, distributes and sells select medical capital equipment, instrumentation and other medical products for use in hospitals in China and Hong Kong.