AZZ
AZZ
#3496
Rank
ยฃ3.16 B
Marketcap
ยฃ105.28
Share price
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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Fiscal Year Ended: February 29, 2000

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission File No. 0-2733

AZTEC MANUFACTURING CO.
(Exact name of registrant as specified in its charter)

TEXAS 75-0948250
(State of incorporation) (I.R.S. Employer Identification Number)

400 North Tarrant
Crowley, Texas 76036
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (817) 297-4361

Securities registered pursuant to section 12(b) of the act:

Title of Each Class Name of Exchange on Which Registered
------------------- ------------------------------------
Common Stock, $1.00 par value New York Stock Exchange

Securities registered pursuant to section 12(g) of the act: None

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes X No ___
---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
---

The aggregate market value of Common Stock held by non-affiliates on May 10,
2000, was approximately $63,800,000. As of May 10, 2000, there were 4,812,981
shares of Aztec Manufacturing Co. Common Stock $1.00 par value outstanding.

Documents Incorporated By Reference

Part III incorporates information by reference from the Proxy Statement for the
2000 Annual Meeting of Shareholders of Registrant.

================================================================================
PART I

Item 1. Business

Aztec Manufacturing Co. ("Aztec" or the "Company") was established in 1956 and
incorporated under the laws of the State of Texas. The Company is an electrical
equipment and components manufacturer serving the global growth markets of power
generation, power transmission and distribution, and industrial markets as well
as a leading provider of hot dip galvanizing services to the steel fabrication
market nationwide.

The Company offers a broad range of products and services through two distinct
business segments, Manufactured Products Segment and Services Segment.

Manufactured Products Segment

The Manufactured Products Segment provides highly engineered specialty
electrical components and tubular products to the power generation, power
transmission and distribution, petrochemical, and general industrial markets.
The Company markets and sells it's products through multiple subsidiaries
located throughout the United States. The Company diversified this segment in
1990 by acquiring niche companies that supply components to the power
generation, transmission and distribution and industrial markets. The Company's
first product entry was specialty lighting products for severe and hazardous
duty applications which are marketed through Rig-A-Lite Partnership LTD.,
acquired in 1990. The next product introduced is marketed through The Calvert
Co., which also was acquired in 1990. This product consists of custom designed
electrical distribution systems in the form of bar and isolated phase bus duct
products that are used to distribute electrical power to or from various
electrical apparatuses and are sold to the power generation industry. This
segment also designs and provides factory-fabricated electrical power
distribution centers for the industrial and power generation industries through
Atkinson Industries, Inc., which was acquired in 1993. The Company's latest
addition to this segment is a compressed gas insulated transmission bus duct
product manufactured and marketed through CGIT Westboro, Inc., which was
acquired in 1999. This product provides a compact, reliable and economical
alternative to conventional cable systems and overhead lines for power
distribution. Also provided by this segment are tubular products used for
petrochemical and industrial applications. The principal markets for tubular
products are the petroleum and automotive industries. The market for the
Company's Manufactured Products segment is highly competitive and consists of a
few large national companies, as well as numerous small independents.
Competition is based primarily on product quality, range of product line, price
and service. The Company believes that it can compete favorably with regard to
each of these factors. Copper, aluminum and steel are the primary raw materials
used in this segment and are readily available. This segment's products are sold
though manufacturers' representatives and its internal sales force. This segment
is not dependent on any single customer or limited number of customers for
sales, and the loss of any single customer would not have a material adverse
effect on consolidated revenues of the Company. Backlog of orders was
approximately $31.2 million at February 29, 2000, $18.2 million at February 28,
1999, and $19.9 million at February 28, 1998. All of the year-end backlog should
be delivered in the next 18 months. Orders included in the backlog are
represented by contracts and purchase orders that the company believes to be
firm. Total employment in this segment is 419 persons.

Services Segment

The Services Segment provides hot dip galvanizing services to the steel
fabrication industry through facilities located throughout the South and
Southwest. The eleven galvanizing plants of the Company are located in Texas,
Louisiana, Alabama, Mississippi, Arkansas, and Arizona. Hot dip galvanizing
provides corrosion protection of fabricated steel for extended periods up to 50
years. Galvanizing is a highly competitive business and the Company competes
with other independent galvanizing companies, captive galvanizing facilities
operated by manufacturers, and alternate forms of corrosion protection such as
paint. The Company is limited, to some extent, in its galvanizing market to
areas within a close proximity of its existing locations due to freight cost.
Zinc, the principal raw material used in the galvanizing process, is readily
available, but has volatile pricing. The Company manages its exposure to
commodity pricing of zinc by utilizing contracts with zinc suppliers that
include protective caps to guard against

2
rising commodity prices. This segment typically serves fabricators and/or
manufacturers involved in the highway construction, electrical utility,
transportation, water treatment, agriculture, petrochemical and chemical, pulp
and paper, and numerous OEM's. The market in general is broken into two major
categories, being large structural steel projects and custom fabrication. This
segment is not dependent on any single customer or limited number of customers
for sales, and the loss of any customer would not have a material adverse effect
on consolidated revenues of the Company. The backlog of galvanizing orders
generally is nominal due to the short time requirement involved in the process.
Total employment in this segment is 441 persons.


General

The Company does not have a material portion of business that may be subject to
renegotiations of profits or termination of contracts or subcontracts at the
election of the government. There were no material amounts spent on research and
development activities during the proceeding three fiscal years.


Environmental

In the course of its galvanizing operations, the Company is subject to
occasional governmental proceedings and orders pertaining to noise, air
emissions and water discharges into the environment. As part of its continuing
environmental program, the Company has complied with such proceedings and orders
without any materially adverse effect on its business.

The Company provides for costs related to contingencies when a loss is probable
and the amount is reasonably determinable. It is the opinion of management,
based on past experience, that the ultimate resolution of these contingencies,
to the extent not previously provided for, will not have a materially adverse
effect on the Company.


Executive Officers of the Registrant

<TABLE>
<CAPTION>
Business Experience for Past
Name Age Five Years; Position or Office with Registrant Held Since
- ------------------ --- ---------------------------------------------- ----------
<S> <C> <C> <C>
L. C. Martin 74 Chairman and Chief Executive Officer 1958
David H. Dingus 52 President and Chief Operating Officer 1998
President and Chief Executive Officer of Reedrill Corp 1989-1998

Dana L. Perry 51 Vice President of Finance, Chief Financial Officer, Asst. Sec. 1992

Fred L. Wright, Jr. 59 Senior Vice President/Services Segment 1992
</TABLE>

Each executive officer was elected by the Board of Directors to hold office
until the next Annual Meeting or until his successor is elected. There are no
family relationships between Executive Officers of the Registrant.

3
Item 2.    Properties

The following table sets forth information about the Company's principal
facilities owned on February 29, 2000:

<TABLE>
<CAPTION>
Buildings/
Location Land/Acres Sq. Footage Segment/Occupant
- -------- ---------- ----------- ----------------
<S> <C> <C> <C>
Crowley, Texas 152.0 7,800 Corporate Office
25,600 Services
193,200 Manufactured Products

Houston, Texas 8.7 25,800 Services
37.0 36,000 Manufactured Products
5.4 67,400 Manufactured Products

Waskom, Texas 10.6 30,400 Services
Beaumont, Texas 12.9 33,700 Services
Moss Point, Mississippi 13.5 16,000 Services
Jackson, Mississippi 5.6 22,800 Services
5.1 36,200 Manufactured Products
Pittsburg, Kansas 15.3 86,000 Manufactured Products
Citronelle, Alabama 10.8 34,000 Services
Goodyear, Arizona 11.75 36,800 Services
Prairie Grove, Arkansas 11.5 34,000 Services
Belle Chasse, Louisiana 9.5 34,000 Services
Port Allen, Louisiana 22.2 48,700 Services
Westborough, Massachusetts - (Leased) 36,400 Manufactured Products
</TABLE>

Item 3. Legal Proceedings

Environmental Proceedings

In the course of its galvanizing operations, the Company is subject to
occasional governmental proceedings and orders pertaining to noise, air
emissions, and water discharges into the environment. The Company has complied
with such proceedings and orders without any materially adverse effect on its
business.

The registrant is not a party to, nor is its property the subject of, any
material pending legal proceedings. The registrant is involved in ordinary
routine litigation incidental to business. For additional information relating
to contingencies, see Note 13 of Notes to Consolidated Financial Statements on
page 29 of the Registrant's 2000 Form 10-K.

Item 4. Submission of Matters to a Vote of Security Holders

No matter was submitted during the fourth quarter of the fiscal year ended
February 29, 2000, to a vote of security holders through the solicitation of
proxies or otherwise.

4
PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

The common stock, $1.00 par value, of Registrant ("Common Stock") is traded on
the New York Stock Exchange and its symbol is AZZ. The Company was listed on the
New York Stock Exchange and started trading on March 20, 1997. Prior to that
date, the Company's stock traded on the NASDAQ National Market.

The following table sets forth the high and low sales prices of the Company's
Common Stock on the New York Stock Exchange on a quarterly basis and dividends
declared during the period indicated.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Quarter Ended Quarter Ended Quarter Ended Quarter Ended
May 31, August 31, November 30, February 29/28,
- ----------------------------------------------------------------------------------------------------------------------
Per Share 1999 1998 1999 1998 1999 1998 2000 1999
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
High $10.563 $15.500 $13.250 $13.438 $12.125 $10.000 $12.250 $10.625
- ----------------------------------------------------------------------------------------------------------------------
Low $7.813 $12.375 $9.500 $8.750 $9.375 $6.625 $9.125 $8.250
- ----------------------------------------------------------------------------------------------------------------------
Dividends
Declared - - - - - - $0.160 $0.120
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

Effective January 7, 1999, the Board of Directors approved a stock rights plan,
which authorized and declared a dividend distribution of one right for each
share of common stock outstanding at the close of business on February 4, 1999.
The rights are exercisable at an initial exercise price of $60, subject to
certain adjustments as defined in the agreement, if a person or group acquires
15% or more of the Company's common stock or announces a tender offer that would
result in ownership of 15% or more of the common stock. Alternatively, the
rights may be redeemed at one cent per right at any time before a 15% position
has been acquired. The rights expire on January 7, 2009.

The approximate number of holders of record of common stock of Registrant at May
10, 2000 was 890.

5
Item 6.    Selected Financial Data

<TABLE>
<CAPTION>
Fiscal Year
-------------------------------------------------------------------------------------
2000(a) 1999 1998(d) 1997 1996(f)
--------------- ---------------- --------------- ---------------- ---------------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Summary of operations:
Net sales $92,544 $80,922 $75,479 $57,703 $49,184
Net income 6,593 (b) 4,874 (e) 7,220 4,328 2,582

Earnings per share:
Basic earnings per common share $1.39 (b) $.87 (e) $1.21 $ .75 $ .46
Diluted earnings per common share 1.38 (b) .86 (e) 1.19 .74 .45

Total assets $84,804 $58,399 $57,902 $45,995 $42,621
Long-term debt 31,075 20,266 11,321 7,527 9,516
Total liabilities 51,783 31,514 23,582 17,421 19,461
Shareholders' equity 33,021 (c) 26,885 34,320 28,573 23,160
Working capital 15,128 15,033 16,731 12,220 7,879

EBITDA $16,994 $12,413 $13,682 $10,691 $7,407
Cash provided by operations 13,833 8,774 2,698 6,821 9,103
Capital expenditures 4,152 6,992 3,395 2,037 3,434
Depreciation & Amortization 4,770 3,630 3,035 2,664 2,227
Cash dividend per common share $.16 $.12 $.10 $.06 $.03

Weighted average shares outstanding 4,753 5,614 5,968 5,761 5,634
</TABLE>

(a) Includes the acquisition of two subsidiaries in September 1999 and February
2000.
(b) Includes the a pretax charge of $914,000 (or 10 cents per share) for the
liquidation and write-down of tubular goods inventories.
(c) Includes the repurchase of approximately 1.2 million shares of the
Company's common stock at a cost of $11.9 million.
(d) Includes the acquisition of three subsidiaries in March 1997, December
1997, and February 1998.
(e) Includes a one time tax benefit of approximately $1,076,000 (or 18 cents
per share).
(f) Includes the acquisition of a subsidiary in February 1996.


Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

Aztec Manufacturing Co. (the "Company") focuses on two distinct segments,
Manufactured Products Segment and Services Segment. The Manufactured Products
Segment serves the power generation, transmission and distribution markets and
on a limited basis the tubular products market. The Services Segment consists of
eleven hot dip galvanizing facilities located throughout the South and Southwest
that service the steel fabrication industry.

Management believes that the following commentary appropriately discusses and
analyzes the comparative results of operations and the financial conditions of
the Company for the periods covered.

6
General

For the fiscal year-ended February 29, 2000, the Company recorded record
revenues of $92.5 million compared to the prior year's revenues of $80.9
million. Approximately 56% of the Company's revenues were generated from the
Manufactured Products Segment and approximately 44% were generated from the
Service Segment. Net income for fiscal 2000 was $6.6 million compared to $4.9
million in the prior fiscal year. Net income as a percent of sales improved to
7.1% compared to 6% in the prior year, an increase of 18.3%. Earnings per share
increased by 60% to $1.38 per share for fiscal 2000 compared to 86 cents per
share in the prior fiscal year, on a diluted basis. The Company's repurchases of
approximately 1.2 million shares of the Company's common stock in fiscal 1999
are reflected in fiscal 2000 earnings per share calculations and had a minimal
effect on fiscal 1999 calculations.

A discussion concerning effects of new accounting standards can be found in note
1 of Notes to Consolidated Financial Statements.


Results of Operations

Year ended February 29, 2000 (2000) compared with year ended February 28, 1999
(1999)

Revenues

The Company's consolidated net revenues for fiscal 2000 grew by $11.6 million or
14% over the prior year.

The Manufactured Products Segment produces highly engineered specialty products
supplied to the power generation, transmission and distribution, petrochemical
markets, and general industry. The Company's electrical products are offered
though the operations of The Calvert Co., CGIT Westboro, Inc., Atkinson
Industries Inc., and Rig-A-Lite Partnership LTD. Aztec's tubular products are
supplied to the petroleum and automotive industries.

The Manufactured Products Segment recorded record revenues for fiscal 2000 of
$51.4 million, an increase of 10.9% over the prior year-end results of $46.4
million. These results were aided by the acquisition of CGIT Westboro, Inc. on
September 1, 1999. The Manufactured Products Segment exited fiscal 2000 with a
record backlog of $31.2 million, up 71% from the prior years backlog of $18.2
million.

Revenues for this segment's bar and isolated phase products were up for fiscal
2000 compared to 1999. Deregulation and the increased industry capacity required
to meet future power demand needs has benefited this product line. The Company
is currently completing an expansion project that will significantly add to the
capacity for production of this product.

The Company entered the compressed gas insulated transmission bus duct business
with the acquisition of CGIT Westboro, Inc. ("CGIT") on September 1, 1999. At
the time of this acquisition, the Company had anticipated securing a large order
that would have significantly expanded CGIT's backlog, which did not
materialize. Backlog at the end of the year was $2.2 million, below what is
required to effectively operate the facility since this business is project
driven and requires long lead times. The Company is still confident that for the
long term this product is a good strategic fit.

Fiscal 2000 revenues for electrical enclosure products increased compared to
fiscal 1999. Backlog for this product is at a record level due to extremely high
booking levels in the last six months of fiscal 2000.

Revenues for specialty lighting products were basically flat for fiscal 2000
compared to the prior year. The acceptance of our new retail lighting products
in the last half of the year was very encouraging. Bookings and revenues in the
last half of fiscal 2000 were significantly above the same period in the prior
year.

Revenues for tubular products were down for fiscal 2000 compared to fiscal 1999.
Diversification strategies that were implemented over the past year are now
having positive effects and the contribution made by non-petroleum products is
encouraging. Aztec believes that the growth that is occurring in the power
generation markets will have a

7
positive effect in the small diameter tubing produced by the Company due to the
extensive use of gas powered generators. However over the long term, tubular
products will continue to represent a diminishing portion of the Manufactured
Products Segments revenues.

The Company's Service Segment, which is made up of eleven hot dip galvanizing
facilities, generated record revenues of $41.1 million, a 19% increase over the
prior year's revenues of $34.5 million. The acquisition of Westside Galvanizing,
Inc. on January 31, 2000, had little impact on the current year, but should be a
significant contributor in fiscal 2001. The Services Segment continued to
benefit from the overall expansion of the domestic economy.

Operating Income

The Company's consolidated operating income (see note 12 to Notes to
Consolidated Financial Statements) increased $4.7 million or 39% in fiscal 2000
as compared to fiscal 1999. The Company's improved operating results for the
fiscal year just ended is a direct result of improved volumes and expanding
margins in both segments of the Company's businesses.

In the Manufactured Products Segment, operating income for fiscal 2000 increased
to $7 million, up 60% from $4.4 million in fiscal 1999. Operating margin in this
segment improved for fiscal 2000 to 14%, a 44% increase from the prior years
operating margin of 9%. Operating efficiencies, favorable product mix, and the
dynamic market environment in which the Company operates contributed to a record
year in this segment.

Operating income from bar and isolated phase products was up for fiscal 2000
compared to fiscal 1999. Substantial increases in backlog, favorable product
mix, design changes, and improved operating efficiencies lead to these improved
results.

CGIT acquired on September 1, 1999 contributed a minimum amount to operating
income for fiscal 2000. There is a worldwide excess of capacity at the present
time for the production of its products. However, the Company anticipates that
as the worldwide market improves, this product line should become a contributor
to operating income.

Fiscal 2000 operating income for factory fabricated modular power distribution
enclosures increased compared to fiscal 1999. A shift in product mix as well as
an expansion project completed in early fiscal 2000 which led to improved
operating efficiencies had dramatic positive impacts on operating margin.

Operating income for specialty lighting products was down for fiscal 2000 as
compared to fiscal 1999. Continued pricing pressures in the markets served as
well as design and tooling cost associated with new retail lighting products
contributed to this decrease.

While an operating loss was recorded for tubular products for fiscal 2000,
profitability was achieved in the fourth quarter. With product diversification
and increasing demand for small diameter tubular products, this improving trend
should continue into fiscal 2001.

In the Services Segment, operating income increased 27% to $9.5 million for
fiscal 2000 from $7.5 million for the prior year. Operating margin improved to
23.2% for fiscal 2000 from 21.6% for fiscal 1999. Operations benefited from
stable zinc markets and improved operating efficiencies as well as the continued
overall expansion of the domestic economy. The acquisition of Westside
Galvanizing, Inc. had little impact on the current fiscal year, but should have
a positive impact on fiscal 2001.

8
General Corporate Expenses

General corporate expenses for fiscal 2000 were $4.3 million, up 38% from fiscal
1999. As a percent of sales, general corporate expenses were 4.6% for fiscal
2000 compared to 3.9% in the prior year. This increase was attributed to higher
employee benefits and profit sharing expenses as well as higher expenses for
professional services primarily associated with acquisitions.

Interest expense for fiscal 2000 was $1.7 million, up 70% or $692,000 from
fiscal 1999. This increase was due to larger outstanding loan balances during
fiscal 2000 associated with the acquisitions made during the year as well as the
repurchase of 1.2 million shares of the Company's common stock in the last
quarter of fiscal 1999.

Other income and expense was made up of scrap sales and other (income) expense
items not specifically identifiable to a segment.


Year ended February 28, 1999 (1999) compared with year ended February 28, 1998
(1998)

Revenues

Aztec's consolidated net revenues for 1999 grew by $5.4 million or 7% over 1998.

Revenues from the Company's Manufactured Products Segment were up $1.5 million
or 3% for fiscal 1999 as compared to 1998. Total backlog for this segment was
$18.2 million at the end of fiscal 1999 compared to $19.9 million in fiscal
1998.

Revenues for bar and isolated phase products were down for fiscal 1999 as
compared to fiscal 1998. The down turn experienced during the second half of
fiscal 1999 was a direct result of the turmoil in the Asian and Latin American
markets served. Over 80% of bus related revenues for fiscal 1999 and 1998 were
generated from these overseas markets. Backlog for this product was at a record
level at the end of fiscal 1999.

Revenues for this segments electrical enclosure products were up for fiscal 1999
as compared to fiscal 1998. This increase came primarily from the manufacture of
factory fabricated modular power distribution enclosures.

Revenues for specialty lighting products were down for fiscal 1999 as compared
fiscal 1998. The down turn was attributed to the severe decline experienced in
the petroleum related business and the unfavorable impact on international
business brought on by the economic crisis in their served geographic markets.

Revenues generated from tubular products were up for fiscal 1999 as compared to
1998. This product line has been severely impacted by the volatility in the
petroleum industry. Due to deteriorating oil prices, the Company liquidated a
significant portion of its inventories of tubular products in the last half of
fiscal 1999. These inventory liquidations increased revenues for the year but
sales were made at deep discounts. Tubular products continue to represent a
diminishing portion of Manufactured Products Segment revenues.

Revenues in the Services Segment, which were made up of the Company's ten hot
dip galvanizing facilities owned during fiscal 1999, were up 13% or $4 million
for fiscal 1999 as compared to fiscal 1998. This was due to a 4% increase in
revenues at the previously existing nine facilities and the acquisition of
International Galvanizers in late fiscal 1998. International Galvanizers
contributed $3.4 million in revenues for its first full year of operations.

Operating Income

Aztec's consolidated operating income (see Note 12 of Notes to Consolidated
Financial Statements) decreased $1.6 million or 12% for fiscal 1999 as compared
to fiscal 1998. Consolidated operating income for fiscal 1999 was negatively
impacted by a pretax charge of $914,000 associated with liquidations of tubular
inventories and inventory write-downs in the Company's Manufactured Products
Segment.

9
Operating income in the Manufactured Products Segment was down 37% or $2.5
million for fiscal 1999 as compared to 1998.

Operating income for bar and isolated phase products was down for fiscal 1999 as
compared to fiscal 1998. Again, this down turn was due to competitive pricing
pressures associated with the turmoil in the Asian and Latin American markets it
serves.

Fiscal 1999 operating income for enclosure products was up, which corresponded
with increased revenues for the year as well as reflecting increased
efficiencies associated with its plant expansion.

Operating income for specialty lighting products for fiscal 1999 was down as
compared to fiscal 1998. This down turn was due to competitive pricing pressures
in the markets it serves.

Tubular products showed a loss for fiscal 1999 as compared to an operating
income for fiscal 1998. This loss was primarily associated with the down turn in
the petroleum markets it serves leading to the liquidation and write-down of
inventories.

The Services Segment's operating income increased 14% for fiscal 1999 compared
to fiscal 1998. Operating income in this segment's nine previously existing
facilities was up 12% due to increased volumes and production efficiencies.
Newly acquired International Galvanizers contributed $268,000 in operating
income in fiscal 1999.

General Corporate Expense

General corporate expenses for fiscal 1999 decreased by 6% from fiscal 1998 due
to lower profit sharing expenses associated with lower profits for the year.

Interest expense for fiscal 1999, as compared to fiscal 1998, was up 33% or
$245,000. This increase was due to larger outstanding loan balances during the
last half of fiscal 1999 associated with the repurchase of 1.2 million shares of
the Company's common stock at a cost of $11.9 million.

Other income and expense was made up of scrap sales and other (income) expense
items not specifically identifiable to a segment.

Liquidity and Capital Resources

The Company has historically met its liquidity and capital resource needs
through a combination of cash flow from operating activities and bank
borrowings. The Company's cash requirements are generally for operating
activities, acquisitions, capital improvements, debt repayment and dividend
payments. The Company believes that working capital, borrowing capabilities, and
the funds generated from operations should be sufficient to finance anticipated
operational requirements, internal growth, and possible future acquisitions.

The Company's operating activities generated cash flow of approximately $13.8
million, $8.8 million, and $2.7 million during fiscal 2000, 1999, and 1998,
respectively. Cash flows provided by operations in fiscal 2000 included net
income in the amount of $6.6 million, depreciation and amortization in the
amount of $4.8 million, and net changes in operating assets and liabilities and
other in the amount $2.6 million.

Through the use of cash flows and bank debt, the Company made $4.2 million in
capital improvements, primarily in the Services Segment. Also $21.1 million was
utilized for acquisitions associated to the Manufactured Products and Services
Segments. Other major uses of cash during fiscal 2000 included the repayment of
long term debt in the amount of $7.3 million and payment of cash dividends in
the amount of $567,000.

The Company has a credit facility with a bank that provides for a $20 million
revolving line of credit, a $10 million term note, and a $17.5 million term
note. At the end of fiscal 2000, the Company had $9.5 million outstanding under
the revolving line of credit and $25.7 million outstanding under the two term
facilities. At February 29, 2000, the

10
Company has approximately $8.8 million available under the revolving credit
facility. The Company utilizes interest rate swap agreements to protect against
volatile interest rates. At the end of fiscal 2000, the Company had in place an
interest rate swap agreement on $8.5 million of its term debt. The Company
entered into a second interest rate swap agreement in early fiscal 2001 on an
additional $10 million of its term debt.

The Company's current ratio was 1.76 to 1 at the end of fiscal 2000, and
shareholders' equity grew 22.8% to $33 million ($6.95 per share). Due to the
Company's acquisition activity during the year, net total debt increased for
fiscal 2000 by $12 million. Long term debt as a percent of shareholders' equity
was 94% compared to 75% in the prior year.

Inflation has not had a significant impact on the Company's operations in recent
years; however, the Company attempts to recover any cost increases through
improvements to its manufacturing processes and through increases in price where
competitively feasible.


Year 2000 Compliance

In prior years, the Company discussed the nature and progress of its plans to
become year 2000 ready. In late 1999, the Company completed its remediation and
testing of systems. As a result of those planning and implementation efforts,
the Company experienced no significant disruptions in mission critical
information technology and non-information technology systems and believes those
systems successfully responded to the year 2000 date change. The Company spent
an immaterial amount during 1999 in connection with remediation of its systems.
The Company is not aware of any material problems resulting from year 2000
issues, either with its products, its internal systems, or the products and
services of third parties. The Company will continue to monitor its mission
critical computer applications and those of its suppliers and vendors throughout
fiscal 2001 to insure that any latent year 2000 matters that may arise are
addressed promptly.


Forward Looking Statements

This Report contains, and from time to time the Company or certain of its
representatives may make, "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements are generally
identified by the use of words such as "anticipate," "expect," "estimate,"
"intend," "should," "may," "believe," and terms with similar meanings. Although
the Company believes that the current views and expectations reflected in these
forward-looking statements are reasonable, those views and expectations, and the
related statements, are inherently subject to risks, uncertainties, and other
factors, many of which are not under the Company's control. Those risks,
uncertainties, and other factors could cause the actual results to differ
materially from these in the forward-looking statements. Those risks,
uncertainties, and factors include, but are not limited to, many of the matters
described in this Report: change in demand, prices and raw material cost,
including zinc which is used in the hot dip galvanizing process; changes in the
economic conditions of the various markets the Company serves, foreign and
domestic, including the market price for oil and natural gas; acquisition
opportunities, adequacy of financing, and availability of experienced management
employees to implement the Company's growth strategy; and customer demand and
response to products and services offered by the Company. The Company expressly
disclaims any obligations to release publicly any updates or revisions to these
forward-looking statements to reflect any change in its views or expectations.

11
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk

Market risk relating to the Company's operations results primarily from changes
in interest rates and commodity prices. The Company has only limited involvement
with derivative financial instruments and does not use them for trading purposes
and is not a party to any leveraged derivatives.

The Company manages its exposures to changes in interest rates by optimizing the
use of variable and fixed rate debt. The Company had approximately $26.8 million
of variable rate borrowings at February 29, 2000. In February 1999 and April
2000 the Company entered into interest rate protection agreements with its
lender to modify the interest characteristics on approximately $18.5 million of
long term debt from a variable rate to a fixed rate. The Company believes it has
adequately protected itself from increased cost under its financial
arrangements.

The Company manages its exposures to commodity prices, primarily zinc used in
its Services Segment, by utilizing contracts with its zinc suppliers that
include protective caps to guard against rising commodity prices. Management
believes these contractual agreements ensure adequate supplies and guard against
exposure to commodity price swings.

The Company does not believe that a hypothetical change of 10% of the interest
rate currently in effect or a change of 10% of commodity prices would have a
significant effect on the Company's results of operations, financial position,
or cash flows.

12
Item 8.   Financial Statements and Supplementary Data

The Report of Independent Public Accountants, Financial Statements and Notes to
Financial Statements follow.


Report of Ernst & Young LLP, Independent Auditors

Board of Directors and Shareholders
Aztec Manufacturing Co.

We have audited the accompanying consolidated balance sheets of Aztec
Manufacturing Co. as of February 29, 2000 and February 28, 1999, and the related
consolidated statements of income, shareholders' equity, and cash flows for each
of the three years in the period ended February 29, 2000. Our audits also
included the financial statement schedule listed in the Index at Item 14(a).
These financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Aztec
Manufacturing Co. at February 29, 2000 and February 28, 1999, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended February 29, 2000, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

Fort Worth, Texas
March 31, 2000

13
AZTEC MANUFACTURING CO. CONSOLIDATED BALANCE SHEETS

February 29, 2000 and February 28, 1999

<TABLE>
<CAPTION>
Assets 2000 1999
- ------ ------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,328,139 $ 800,183
Accounts receivable, net of allowance for doubtful accounts of
$586,900 in 2000 and $428,300 in 1999 19,571,111 13,465,633
Income taxes receivable - 7,004
Inventories 12,553,318 11,191,363
Costs and estimated earnings in excess of billings on
uncompleted contracts 487,235 -
Deferred income taxes 635,673 -
Prepaid expenses and other 382,047 323,176
------------ ------------
Total current assets 34,957,523 25,787,359
Long-term investments 200,000 200,000

Property, plant, and equipment, at cost:

Land 2,027,431 1,827,431
Buildings and structures 18,923,650 17,194,254
Machinery and equipment 22,424,399 17,795,993
Furniture and fixtures 2,173,714 1,609,601
Automotive equipment 1,620,329 1,207,593
Construction in progress 1,072,380 225,179
------------ ------------
48,241,903 39,860,051
Less accumulated depreciation (19,971,944) (16,781,171)
------------ ------------
Net property, plant, and equipment 28,269,959 23,078,880

Costs in excess of fair value of assets purchased, less accumulated
amortization of $2,838,000 in 2000 and $2,028,000 in 1999 20,792,683 8,828,920
Other assets 583,576 503,802
------------ ------------

$ 84,803,741 $ 58,398,961
============ ============
</TABLE>

See accompanying notes.

14
AZTEC MANUFACTURING CO. CONSOLIDATED BALANCE SHEETS (Continued)

February 29, 2000 and February 28, 1999

<TABLE>
<CAPTION>
Liabilities and Shareholders' Equity 2000 1999
- ------------------------------------ ------------ ------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 7,302,699 $ 3,826,238
Income tax payable 229,399 -
Accrued salaries and wages 1,879,761 903,145
Other accrued liabilities 5,644,222 2,889,451
Billings in excess of costs and estimated earnings on
uncompleted contracts 405,435 -
Long-term debt due within one year 4,367,731 3,135,238
------------ ------------
Total current liabilities 19,829,247 10,754,072

Long-term debt due after one year 31,075,272 20,266,266

Deferred income taxes 878,500 493,173

Shareholders' equity:
Common stock, $1 par value; 25,000,000 shares authorized; 6,304,580
shares issued at Feb. 29, 2000 and at Feb. 28, 1999 6,304,580 6,304,580
Capital in excess of par value 11,113,565 11,422,536
Retained earnings 29,559,646 23,736,974
Less common stock held in treasury, at cost (1,503,024 shares
at Feb. 29, 2000 and 1,569,822 shares at Feb. 28, 1999) (13,957,069) (14,578,640)
------------ ------------
Total shareholders' equity 33,020,722 26,885,450
------------ ------------

$ 84,803,741 $ 58,398,961
============ ============
</TABLE>

See accompanying notes.

15
AZTEC MANUFACTURING CO. CONSOLIDATED STATEMENTS OF INCOME

Years ended February 29, 2000, February 28, 1999 and February 28, 1998

<TABLE>
<CAPTION>
2000 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
Net sales $ 92,544,434 $ 80,922,415 $ 75,479,456
Costs and expenses:
Cost of sales 68,030,479 62,525,479 55,993,665
Selling, general, and administrative 12,307,958 9,709,627 9,570,337
Net (gain) loss on sale of property, plant and
equipment (44,851) (2,161) 35,469
Interest expense 1,674,434 982,275 737,391
Other (income) expense, net 27,229 (93,200) (766,850)
------------ ------------ ------------
81,995,249 73,122,020 65,570,012
------------ ------------ ------------

Income before income taxes 10,549,185 7,800,395 9,909,444

Income tax expense 3,955,945 2,926,000 2,689,652
------------ ------------ ------------
Net income $ 6,593,240 $ 4,874,395 $ 7,219,792
============ ============ ============

Earnings per common share:
Basic $ 1.39 $ .87 $ 1.21
============ ============ ============
Diluted $ 1.38 $ .86 $ 1.19
============ ============ ============
</TABLE>

See accompanying notes.

16
AZTEC MANUFACTURING CO. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Years ended February 29, 2000, February 28, 1999 and February 28, 1998

<TABLE>
<CAPTION>
Common Stock Capital in
---------------------------
Excess of Retained Treasury
Shares Amount Par Value Earnings Stock
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance at February 28, 1997 6,145,009 $ 6,145,009 $ 10,351,523 $ 12,802,931 ($ 726,131)
Exercise of stock options 159,571 159,571 1,051,438 - -
Purchase of treasury stock
(150,000 shares) - - - - (2,091,081)
Cash dividends declared - - - (593,272) -
Net income - - - 7,219,792 -
------------ ------------ ------------ ------------ ------------
Balance at February 28, 1998 6,304,580 6,304,580 11,402,961 19,429,451 (2,817,212)
Exercise of stock options - - 19,575 - -
Purchase of treasury stock
(1,200,030 shares) - - - - (11,859,792)
Cash dividends declared - - - (566,872) -
Net income - - - 4,874,395 -
------------ ------------ ------------ ------------ ------------
Balance at February 28, 1999 6,304,580 6,304,580 11,422,536 23,736,974 (14,578,640)

Exercise of stock options - - (308,971) - 621,571
Cash dividends declared - - - (770,568)
Net income - - - 6,593,240 -
------------ ------------ ------------ ------------ ------------
Balance at February 29, 2000 6,304,580 $ 6,304,580 $ 11,113,565 $ 29,559,646 ($13,957,069)
============ ============ ============ ============ ============
</TABLE>

See accompanying notes.

17
AZTEC MANUFACTURING CO. CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended February 29, 2000, February 28, 1999 and February 28, 1998

<TABLE>
<CAPTION>
2000 1999 1998
------------------ ------------------- ------------------
<S> <C> <C> <C>
Cash flows from operating activities:

Net income $6,593,240 $4,874,395 $ 7,219,792
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 3,711,319 3,014,359 2,449,906
Amortization 1,059,046 615,891 585,389
Provision for doubtful accounts 298,487 132,107 138,883
Deferred income tax (benefit) expense (380,599) (79,306) 79,791
Net (gain) loss on sale of property, plant and equipment (44,851) (2,161) 35,469
------------------ ------------------- ------------------
11,236,642 8,555,285 10,509,230
Effects of changes in operating assets and liabilities, net of
acquisition of subsidiaries:

Accounts receivable (4,171,042) (529,056) (2,475,504)
Inventories 285,279 3,037,378 (7,186,887)
Prepaid expenses and other 15,520 (72,440) (37,037)
Other assets (121,852) (29,497) (33,507)
Net change in billings related to costs and estimated
earnings on uncompleted contracts 1,811,061 - -
Accounts payable 2,565,852 (1,485,953) 2,472,083
Accrued salaries and wages 689,537 (182,535) 225,059
Other accrued liabilities and income taxes 1,522,436 (519,334) (775,843)
------------------ ------------------- ------------------

Net cash provided by operating activities 13,833,433 8,773,848 2,697,594

Cash flows from investing activities:

Proceeds from the sale of property, plant and equipment 252,429 168,854 104,979
Purchases of property, plant and equipment (4,152,446) (6,992,063) (3,395,402)
Acquisition of subsidiaries, net of cash acquired (21,133,219) (5,528) (6,783,392)
Proceeds from the sale of long-term investments - 100,000 -
------------------ ------------------- ------------------

Net cash used in investing activities (25,033,236) (6,728,737) (10,073,815)
</TABLE>

18
AZTEC MANUFACTURING CO. CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Years ended February 29, 2000, February 28, 1999 and February 28, 1998

<TABLE>
<CAPTION>
2000 1999 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from revolving loan 12,147,000 12,200,000 5,550,000
Proceeds from long-term debt 17,500,000 10,000,000 -
Payments on revolving loan (10,397,000) (10,000,000) -
Payments on long-term debt (7,267,969) (1,875,715) (1,756,668)
Cash dividends paid (566,872) (593,272) (354,847)
Proceeds from exercise of stock options 312,600 117,939 1,211,009
Purchase of treasury stock - (11,859,792) (2,091,081)
----------------- ----------------- -----------------
Net cash (used in) provided by financing activities 11,727,759 (2,010,840) 2,558,413
----------------- ----------------- -----------------
Net (decrease) increase in cash and cash equivalents 527,956 34,271 (4,817,808)

Cash and cash equivalents at beginning of year 800,183 765,912 5,583,720
----------------- ----------------- -----------------
Cash and cash equivalents at end of year $ 1,328,139 $ 800,183 $ 765,912
================= ================= =================

Supplemental disclosures of cash flow information:
Cash paid during the year for:

Interest $ 1,567,453 $ 940,588 $ 733,796
Income taxes $ 4,041,852 $ 2,910,713 $ 3,766,345
</TABLE>

See accompanying notes.

19
Notes To Consolidated Financial Statements

1. Summary of significant accounting policies

Organization--Aztec--Manufacturing Co. (the "Company") operates primarily
------------
in the United States. Information about the Company's operations by
segment are included in Note 12 to the consolidated financial statements.

Basis of consolidation--The consolidated financial statements include the
----------------------
accounts of Aztec Manufacturing Company and its wholly-owned subsidiaries
and partnerships. All significant inter-company accounts and transactions
have been eliminated in consolidation.

Use of estimates--The preparation of the financial statements in conformity
----------------
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

Concentrations of credit risk--Financial instruments that potentially
-----------------------------
subject the Company to significant concentrations of credit risk consist
principally of cash and cash equivalents and trade accounts receivable.

The Company maintains cash and cash equivalents with various financial
institutions. These financial institutions are located throughout the
United States and Company policy is designed to limit exposure to any one
institution. The Company performs periodic evaluations of the relative
credit standing of those financial institutions that are considered in the
Company's banking relationships. The Company has not experienced any losses
in such accounts and believes it is not exposed to any significant credit
risk on cash and cash equivalents.

Concentrations of credit risk with respect to trade accounts receivable are
limited due to the Company's diversity by virtue of two operating segments,
the number of customers, and the absence of a concentration of trade
accounts receivable in a small number of customers. The Company's net
credit losses in 2000, 1999 and 1998 were approximately $168,000, $127,000
and $102,000, respectively. Collateral is usually not required from
customers as a condition of sale.

Revenue recognition--The Company recognizes revenue from product sales upon
-------------------
shipment or based upon the percentage-of-completion method of accounting as
contract services are performed. The extent of progress for revenue
recognized using the percentage-of-completion method is measured by the
ratio of contract costs incurred to date to estimated total contract costs
at completion. Costs and estimated earnings in excess of related billings
on uncompleted contracts are recorded as current assets and billings in
excess of costs and estimated earnings on uncompleted contracts are
recorded as current liabilities.

Contract costs include all direct material and labor, and certain indirect
costs. Selling, general and administrative costs are charged to expense as
incurred. Provisions for estimated losses, if any, on uncompleted contracts
are made in the period in which such losses are estimable.

Cash and cash equivalents--For purposes of reporting cash flows, cash and
-------------------------
cash equivalents include cash on hand, deposits with banks and all highly
liquid investments with an original maturity of three months or less.

Inventories--Inventories are stated at the lower of cost or market. Cost is
-----------
determined principally using a weighted-average method for the Manufactured
Products segment and first-in-first-out (FIFO) method for the Services
segment.

20
Notes To Consolidated Finacial Statements

1. Summary of significant accounting policies (continued)

Property, plant and equipment--For financial reporting purposes,
-----------------------------
depreciation is computed by the straight-line method over the estimated
useful lives of the related assets as follows:

Buildings and structures 10-25 years
Machinery and equipment 3-15 years
Furniture and fixtures 3-15 years
Automotive equipment 3 years

Maintenance and repairs are charged to expense as incurred; renewals and
betterments are capitalized.

Intangible assets and costs in excess of fair value of assets acquired
----------------------------------------------------------------------
("goodwill")--Intangible assets include purchased intangibles primarily
------------
comprised of customer lists, engineering drawings and non-compete
agreements. Such intangible assets and goodwill are being amortized using
the straight-line method over the estimated useful lives of the assets
ranging from 5 to 40 years.

Impairment of long-lived assets --The Company reviews long-lived assets and
-------------------------------
certain identifiable intangibles for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset is impaired.
Recoverability of assets to be held and used is measured by a comparison of
the carrying amount of an asset to future net cash flows expected to be
generated by the asset. If such assets are considered to be impaired, the
impairment recognized is measured by the amount by which the carrying
amount of the assets exceed the fair value of the assets. Management
assesses whether there has been an impairment of goodwill by considering
factors such as expected future operating income, current operating results
and other economic factors.

Income Taxes--Income tax expense is based on the liability method. Under
------------
this method of accounting, deferred tax assets and liabilities are
recognized based on differences between financial statement and income tax
bases of assets and liabilities using presently enacted tax rates and laws.

Stock-based compensation--The Company grants stock options for a fixed
------------------------
number of shares to employees and directors with an exercise price equal to
the fair value of the shares at the date of grant. The Company has elected
to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" (APB 25), and related interpretations in accounting
for employee stock options. Under APB 25, because the exercise price of the
Company's employee and director stock options equal the market price of the
underlying stock on the date of grant, no compensation expense is
recognized.

Financial Instruments--The Company's financial instruments consist of cash
---------------------
and cash equivalents, accounts receivables, long term investments, and long
term debt. The fair value of financial instruments is determined by
reference to various market data and other valuation techniques as
appropriate. Unless otherwise disclosed, the fair value of financial
instruments approximate their recorded values. The Company utilizes
financial instruments to manage interest rate risk associated with portions
of its long-term debt.

Reclassifications--Certain reclassifications have been made in the prior
-----------------
year's consolidated financial statements to conform to the fiscal 2000
presentation.

Pending Adoption of Accounting Standards
----------------------------------------

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which, as amended is required to be
adopted by the Company in fiscal 2002. The Company is in the process of
evaluating the effect of implementing this new standard. The Company's
management does not anticipate that the adoption of the new statement will
have a significant effect on earnings or the financial position of the
Company.

21
Notes To Consolidated Finacial Statements

Notes To Consolidated Financial Statements

2. Inventories

Inventories consist of the following:

<TABLE>
<CAPTION>
2000 1999
----------------- ----------------
(In thousands)
<S> <C> <C>
Raw materials $ 9,471 $ 7,491
Work-in-process 2,198 1,001
Finished goods 1,432 2,884
----------------- ----------------
13,101 11,376

Less reserve for obsolete and slow-moving inventory 548 185
----------------- ----------------
$12,553 $11,191
================= ================
</TABLE>

3. Costs and Estimated Earnings on Uncompleted Contracts

Costs and estimated earnings on uncompleted contracts at February 29,
2000 consist of the following (in thousands):

<TABLE>
<CAPTION>
2000
------------------
(In thousands)
<S> <C>
Costs incurred on uncompleted contracts $11,259
Estimated earnings 3,676
------------------
14,935
Less billings to date 14,853
------------------
$ 82
==================
</TABLE>

The amounts noted above are included in the accompanying balance sheet
under the following captions (in thousands):

<TABLE>
<CAPTION>
2000
------------------
(In thousands)
<S> <C>
Cost and estimated earnings in excess of billings
on uncompleted contracts $ 487
Billings in excess of costs and estimated earnings
on uncompleted contracts (405)
------------------
$ 82
==================
</TABLE>

4. Other accrued liabilities

Other accrued liabilities consist of the following:

<TABLE>
<CAPTION>
2000 1999
----------------- ----------------
(In thousands)
<S> <C> <C>
Accrued warranty $ 1,409 $ 71
Accrued common stock dividend 771 567
Accrued profit sharing 1,050 784
Other 2,414 1,467
----------------- ----------------
$ 5,644 $ 2,889
================= ================
</TABLE>

22
Notes To Consolidated Financial Statements

5. Long-term investments

The Company's long-term investments represent investments in tax-free
municipal bonds maturing in July and August 2001 and carry interest at
rates ranging from 5.1% to 5.5%. The investments were purchased and are
being held to secure the Company's outstanding letters of credit with a
bank.

6. Employee benefit plans

The Company has a trusteed profit sharing plan covering substantially all
of its employees. Under the provisions of the plan, the Company contributes
amounts as authorized by the Board of Directors. Contributions to the
profit sharing plan amounted to $1,050,000 for 2000, $784,000 for 1999 and
$992,000 for 1998.

7. Income taxes

Deferred federal and state income taxes reflect the net tax effects of
temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for
income tax purposes. Significant components of the Company's net deferred
income tax liability are as follows:

<TABLE>
<CAPTION>
2000 1999
----------------- ----------------
(In thousands)
<S> <C> <C>
Deferred tax liabilities:
Depreciation methods and property basis differences $ 1,160 $ 944
Other assets 181 155
----------------- ----------------
Total deferred income tax liabilities 1,341 1,099

Deferred tax assets:
Employee related items 247 199
Reserve for inventory 201 66
Reserve for warranty 205 24
Reserve for doubtful accounts 214 167
Other 231 150
----------------- ----------------
Total deferred tax assets 1,098 606
----------------- ----------------
Net deferred tax liability $ 243 $ 493
================= ================
</TABLE>

The provision for income taxes consists of:

<TABLE>
<CAPTION>
2000 1999 1998
---------------- ----------------- ----------------
(In thousands)
<S> <C> <C> <C>
Federal:
Current $3,835 $2,679 $2,229
Deferred (345) (72) 72
State:
Current 502 326 381
Deferred (36) (7) 8
---------------- ----------------- ----------------
$3,956 $2,926 $2,690
================ ================= ================
</TABLE>

23
Notes To Consolidated Financial Statements

7. Income taxes (continued)

A reconciliation from the federal statutory tax rate to the effective
tax is as follows:

<TABLE>
<CAPTION>
2000 1999 1998
------------- ------------ ------------
<S> <C> <C> <C>
Statutory tax rate 34.0% 34.0% 34.0 %
Expenses not deductible for tax purposes 0.7 1.3 1.1
State income taxes, net of federal income tax benefit 3.1 2.8 2.5
Stock options exercised 0 0 (7.5)
Other (0.3) (0.6) (3.0)
------------- ------------ ------------
Effective tax rate 37.5% 37.5% 27.1%
============= ============ ============
</TABLE>

8. Earnings per share

Basic earnings per share is based on the month-end average number of shares
outstanding during each year. Diluted earnings per share were similarly
computed but have been adjusted for the dilutive effect of the weighted-
average number of stock options outstanding. Cash dividends paid (or
declared) per share are $.16 in 2000, $.12 in 1999 and $.10 in 1998.

The following table sets forth the computation of basic and diluted
earnings per share:

<TABLE>
<CAPTION>
2000 1999 1998
---------------- --------------- ----------------
(In thousands, except share and per share amounts)
<S> <C> <C> <C>
Numerator:
Net income for basic and diluted
earnings per common share $ 6,593 $ 4,874 $ 7,220
================ ================ ================

Denominator:
Denominator for basic earnings
per common share -
weighted-average shares 4,753,243 5,614,026 5,967,610

Effect of dilutive securities:
Stock options 21,711 37,298 124,634
---------------- ---------------- ----------------

Denominator for diluted earnings
per common share - adjusted
weighted-average shares 4,774,954 5,651,324 6,092,244
================ ================ ================

Basic earnings per common share $ 1.39 $ .87 $1.21
======= ====== =====
Diluted earnings per common share $ 1.38 $ .86 $1.19
======= ====== =====
</TABLE>

Stock options for which the exercise price was greater than the average
market price of common shares were not included in the computation of
diluted earnings per share as the effect would be anti-dilutive. At the end
of fiscal years 2000, 1999 and 1998, there were 229,487, 248,468 and
262,763 stock options, respectively, outstanding with exercise prices
greater than the average market price of common shares.

24
Notes To Consolidated Finacial Statements

9. Stock options and other shareholder matters

The Company has three Incentive Stock Option Plans for its employees. The
maximum number of shares that may be issued under each of the plans is
750,000, 322,977 and 525,000 shares respectively. At February 29, 2000,
options outstanding under these plans amounted to 298,973 of which 263,108
options are exercisable at prices (equal to the market price at the date of
grant) ranging from $4.44 to $11.13 per share. Options under these plans
vest from immediately upon issuance to ratably over a period of five years
and expire at various dates through February 2005. Included in these
outstanding options are 138,851 options granted in fiscal 2000 with an
exercise price of $10.12, which vest immediately after an employee has
completed one year of service with the Company.

The Company also has three Non-statutory Stock Option Plans for the
independent directors of the Company. The maximum number of shares that may
be issued under each of the plans is 250,000, 115,762 and 157,500 shares.
At February 29, 2000, options granted and outstanding under these plans
amounted to 123,012 of which 86,612 options are vested and exercisable at
prices ranging from $3.69 to $16.88 per share. Options under these plans
vest ratably over a five year period and expire at various dates through
July 2008.

In February 2000, the Company entered into an agreement with a company to
issue 70,000 stock options in exchange for services received and to be
received. A majority of these options vest over a period of eighteen months
contingent upon the achievement of certain performance measures. These
options expire in February 2005.

A summary of the Company's stock option activity and related information is
as follows:

<TABLE>
<CAPTION>
2000 1999 1998
-------------------------- -------------------------- --------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Options Price Options Price Options Price
---------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning
of year 369,453 $ 9.18 307,073 $ 8.90 200,420 $ 4.42
Granted 207,561 10.12 80,000 10.84 266,224 11.48
Exercised (66,798) 4.68 (12,570) 9.38 (159,571) 7.59
Forfeited (18,231) 10.51 (5,050) 17.74 - -
---------- ------------ ----------- ----------- ----------- -----------
Outstanding at end of year 491,985 $ 10.14 369,453 $ 9.18 307,073 $ 8.90
========== ============ =========== =========== =========== ===========
Exercisable at end of year 370,720 $10.01 304,853 $ 8.76 288,173 $ 8.72
========== ============ =========== =========== =========== ===========

Weighted average fair value
during the years
indicated of options
granted during such
year indicated $ 3.35 $ 4.80 $ 3.21
============ =========== ===========
</TABLE>

The following table summarizes additional information about stock options
outstanding at February 29, 2000.

<TABLE>
<CAPTION>
Weighted Weighted Weighted
Average Average Shares Average
Range of Remaining Exercise Currently Exercise
Exercise Prices Total Shares Life Price Exercisable Price
---------------------- ------------- ---------------- --------------- ------------------- ----------------
<S> <C> <C> <C> <C> <C>
$3.69-$5.25 45,937 2.5 $ 4.22 43,837 $ 4.18
$8.88-$11.13 435,548 4.5 $10.60 322,683 $10.71
$16.88 10,500 7.7 $16.88 4,200 $16.88
</TABLE>

25
Notes To Consolidated Finacial Statements

9. Stock options and other shareholder matters (continued)

Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock Based Compensation," requires the disclosure of pro forma net income
and income per share of common stock computed as if the Company had
accounted for its stock options granted subsequent to February 28, 1995

under the fair value method set forth in SFAS 123. The fair value of stock
options granted was estimated at the date of grant using the Black-Scholes
option pricing model with the following weighted average assumptions: a
risk-free interest rate ranging from 5.8% to 6.5%, a dividend yield ranging
from 1% to 1.25% and a volatility factor ranging from .445 to .498. In
addition, the fair value of these options was estimated based on an
expected life ranging from 1 1/2 years to 5 years.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options, which have no vesting
restrictions and are fully transferable. In addition, option valuation
models require the input of highly subjective assumptions, including the
expected stock price volatility. Because the Company's stock options have
characteristics significantly different from those described above, and
because changes in the subjective input assumptions can materially affect
the fair value estimate, in management's opinion the existing models do not
necessarily provide a reliable single measure of fair value for the
Company's stock options.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense on a straight-line basis over the option's
vesting period as adjusted for estimated forfeitures. The Company's pro
forma information for fiscal 2000, 1999 and 1998 is as follows:

<TABLE>
<CAPTION>
2000 1999 1998
------------- ----------- -----------
(In thousands except per share amounts)
<S> <C> <C> <C>
Pro forma net income $6,146 $4,833 $6,445
Pro forma earnings per common share:
Basic $1.30 $.86 $1.08
Diluted $1.29 $.86 $1.06
</TABLE>

As of February 29, 2000, the Company has approximately 18,695,420 shares
reserved for future issuance under the stock option plans and shareholder
rights plan.

Effective January 7, 1999, the Board of Directors approved a stock rights
plan, which authorized and declared a dividend distribution of one right
for each share of common stock outstanding at the close of business on
February 4, 1999. The rights are exercisable at an initial exercise price
of $60, subject to certain adjustments as defined in the agreement, if a
person or group acquires 15% or more of the Company's common stock or
announces a tender offer that would result in ownership of 15% or more of
the common stock. Alternatively, the rights may be redeemed at one cent per
right at any time before a 15% position has been acquired. The rights
expire on January 7, 2009.

26
Notes To Consolidated Finacial Statements

10. Long-term debt

The Company has a credit facility with a bank which provides a $20 million
revolving line of credit, a $17.5 million New Term Note A and a $10 million
Term Note B.

<TABLE>
<CAPTION>
Long-term debt consists of the following: 2000 1999
----------------- ----------------
(In thousands)
<S> <C> <C>
Term Note A payable to bank $ - $ 5,555
New Term Note A payable to bank, due in monthly
installments of $239,726 through February 2006
(interest at 7.2% on February 29, 2000) 17,260 -
Term Note B payable to bank, due in monthly installments of
$119,048 through February 2006, (interest at a fixed
rate of 6.8% for the term of the note) 8,452 9,881
Revolving line of credit with bank, due July 2002 (interest
at 7.2% on February 29, 2000) 9,500 7,750
Industrial Revenue Bonds, due in December 2003, payable in
monthly installments (interest at 5.75% on February 29,
2000) 175 215
Other 56 -
----------------- ----------------
35,443 23,401
Less amount due within one year 4,368 3,135
----------------- ----------------
$ 31,075 $ 20,266
================= ================
</TABLE>

The Company's credit facility and industrial revenue bonds are subject to
loan agreements which require the Company to comply with various financial
covenants including minimum requirements with regard to tangible net worth,
funded debt to EBITDA, dividend payments, capital expenditures and cash
flows. The Company is in compliance with these covenants as of February 29,
2000. The Company's long-term debt is secured by receivables, inventory,
equipment, and fixtures. Under the terms of the credit facility,
borrowing's on the revolving line of credit are subject to a borrowing base
calculation which is limited to 80% of certain trade accounts receivable
and a range of 50% to 60% of certain raw materials and finished good
inventories and is reduced by the balance of outstanding letters of credit
which may not exceed $2 million at any one time. At February 29, 2000, the
Company has approximately $8,758,000 after deducting for $462,000 of
outstanding letters of credit available under the revolving credit
facility.

In order to reduce interest rate risk, the Company in February 1999 entered
into an interest rate protection agreement through the bank (the Swap
Agreement) to modify the interest characteristics of the $10 million Term
Note B from a variable rate to a fixed rate. The Swap Agreement involves
the exchange of interest obligations over the life of the Term Note B
whereby the Company receives a fixed rate of 6.8% in exchange for a
variable 30-day LIBOR rate plus 1.25% (7.2% at February 29, 2000) which is
the stated interest rate under the Term Note B agreement. Management
intends to hold the Swap Agreement until maturity in March 2006. The
Company has incurred $16,000 of additional interest expense related to this
Swap Agreement for the year ended February 29, 2000. The fair value of the
Swap Agreement is approximately $233,000 at February 29, 2000.

Maturities of long-term debt are as follows (in thousands):

<TABLE>
<S> <C>
2001 $ 4,368
2002 4,355
2003 13,859
2004 4,362
2005 4,313
Thereafter 4,186
----------------
$35,443
================
</TABLE>

27
Notes To Consolidated Finacial Statements

11. Quarterly financial information, unaudited (in thousands, except per share
amounts)

<TABLE>
<CAPTION>
Quarters Ended
May 31, August 31, November 30, February 29,
1999 1999 1999 2000
-------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C>
2000
----
Net sales $20,670 $20,986 $24,654 $26,234
Gross profit 5,354 5,462 6,806 6,892
Net income 1,411 1,567 1,806 1,809
Basic earnings per common share .30 .33 .38 .38
Diluted earnings per common share .30 .33 .37 .38

<CAPTION>
Quarters Ended
May 31, August 31, November 30, February 28,
1998 1998 1998 1999
--------------- ------------- ---------------- ---------------
<S> <C> <C> <C> <C>
1999
----
Net sales $20,729 $20,721 $19,414 $20,058
Gross profit 5,311 4,965 4,426 3,695
Net income 1,576 1,445 1,149 704
Basic earnings per common share .27 .25 .21 (a) .14
Diluted earnings per common share .26 .25 .21 (a) .14
</TABLE>

(a) Included a pretax charge of $914,000 (or 10 cents per share)
for the liquidation and write-down of tubular goods
inventories.

12. Operating segments

The Company has two reportable segments as defined by the Financial
Accounting Standards Board No. 131, "Disclosures about Segments of an
Enterprise and Related Information": (1) Manufactured Products and (2)
Services. The Manufactured Products segment provides highly engineered
specialty components and tubular products to the power generation, power
transmission and distribution, petrochemical, and general industrial
markets. The Services segment provides hot dip galvanizing services to the
steel fabrication industry through facilities located throughout the south
and southwest.

Statement No. 131 modified existing standards for reporting information
about operating segments in annual financial statements and requires
selected information about operating segments in interim financial reports
issued to stockholders. Operating segments are defined as components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker, or decision
making group, in deciding how to allocate resources and in assessing
performance. The segments follow the same accounting policies as described
in the summary of significant accounting policies (see Note 1). Information
regarding operations and assets by segment is as follows:

28
Notes To Consolidated Financial Statements

12. Operating Segments (continued)

<TABLE>
<CAPTION>
2000 1999 1998
---------------- ----------------- ----------------
(In thousands)
<S> <C> <C> <C>
Net sales:
Manufactured Products $51,459 $46,400 $44,940
Services 41,085 34,522 30,539
---------------- ----------------- ----------------
$92,544 $80,922 $75,479
================ ================= ================

Operating income (a):
Manufactured Products $ 7,004 $ 4,380 $ 6,904
Services 9,519 7,474 6,543
----------------- ----------------- ----------------
16,523 11,854 13,447

General corporate expenses 4,292 3,119 3,316
Interest expense 1,674 982 737
Other (income) expense, net (b) 8 (47) (515)
----------------- ----------------- ----------------
5,974 4,054 3,538
----------------- ----------------- ----------------
Income before income taxes $10,549 $ 7,800 $ 9,909
================= ================= ================

Depreciation and amortization:
Manufactured Products $ 1,910 $ 1,152 $ 994
Services 2,745 2,358 1,941
Corporate 115 120 100
----------------- ----------------- ----------------
$ 4,770 $ 3,630 $ 3,035
================= ================= ================

Expenditures for acquisitions, net of cash,
and property, plant and equipment:

Manufactured Products $ 9,508 $ 3,556 $ 2,372
Services 15,580 3,312 7,751
Corporate 198 130 56
------------------ ---------------- ----------------
$25,286 $ 6,998 $10,179
================== ================ ================

Total assets:
Manufactured Products $43,184 $28,994 $29,877
Services 39,152 27,235 25,916
Corporate 2,468 2,170 2,109
------------------ ---------------- ----------------
$84,804 $58,399 $57,902
================== ================ ================
</TABLE>

(a) Operating income consists of net sales less cost of sales, specifically
identifiable general and administrative expenses and selling expenses.

(b) Other (income) expense, net includes gains and losses on sale of property,
plant and equipment and other (income) expense not specifically
identifiable to a segment.

29
Notes To Consolidated Financial Statements

13. Commitments and contingencies

Leases

The Company leases various facilities under non-cancelable operating
leases with an initial term in excess of one year. As of February 29,
2000, the future minimum payments required under these operating leases
are summarized as follows:

Operating
Leases
------------------
(In thousands)
2001 $ 258
2002 266
2003 275
2004 275
2005 229
------------------
Total $1,303
==================

Rental expense for real estate and personal property was approximately
$800,000, $369,000 and $148,000 for the years ended February 29, 2000,
February 28, 1999 and 1998, respectively.

Litigation and Environmental Contingencies

The Company is subject to various environmental protection reviews by
state and federal government agencies and has been identified as a
potential responsible party in certain investigations conducted by these
agencies. The Company did not expense any significant amounts related to
environmental liabilities in 2000, 1999 or 1998. The ultimate liability,
if any, which might result from such reviews or additional clean-up and
remediation expenses cannot presently be determined; however, as a result
of an internal analysis and prior clean-up efforts, management believes
the results will not have a material impact on the Company and that the
recorded reserves for estimated losses are adequate.

In order to maintain permits to operate certain of the Company's
facilities, future capital expenditures for equipment may be required to
meet new or existing environmental regulations.

The Company is involved from time to time in various suits and claims
arising in the normal course of business. In management's opinion, the
ultimate resolution of these matters will not have a material effect on
the Company's financial position or results of operations.

14. Acquisitions

In fiscal year 2000, the Company purchased two businesses. The total
purchase price, net of cash acquired, for these two businesses was
approximately $13 million and $10.6 million, respectively, and comprised
of cash paid of $10.9 million and $9.9 million and liabilities assumed of
$2.1 million and $752,000, respectively. The assets purchased were
recorded at estimated fair value and the costs in excess of fair value
for these acquisitions of approximately $7.3 million and $5.7 million
were recorded as goodwill. Pursuant to the provisions of the purchase
agreement for one of the acquisitions, in the event the acquired
business' revenue is below $12.4 million for calendar year 2000, the
Company is to receive from the seller purchase price refunds equal to 11%
of the amount by which revenue for calendar year 2000 is below $12.4
million.

30
Notes To Consolidated Financial Statements

14. Acquisitions (continued)

These acquisitions were accounted for under the purchase method of
accounting. The excess of costs over fair value for these two
acquisitions is being amortized over a period of 15 and 20 years,
respectively. Operations applicable to acquired businesses are included
in the accompanying Consolidated Statements of Income from their
respective dates of acquisitions. The pro forma consolidated results of
operations for the years ended February 29, 2000 and February 28, 1999,
assuming the acquisitions had been consummated as of March 1, 1999 and
March 1, 1998 are as follows:

<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
2000 1999
---------------- ----------------
(In thousands)
<S> <C> <C>
Net Sales $104,787 $100,789
Net Income $ 6,048 $ 4,819
Earnings per common share:
Basic $1.27 $.86
Diluted $1.27 $.85
</TABLE>

In fiscal year 1998, the Company purchased substantially all of the
assets of three businesses for approximately $3.9 million, $1.7 million
and $1.2 million in cash, respectively. The assets purchased were
recorded at estimated fair value; the costs in excess of fair value for
these acquisition of approximately $2.8 million, $350,000 and $190,000,
respectively, were recorded as goodwill. In connection with two of these
acquisitions, the Company paid the selling shareholders $250,000 and
$50,000, respectively, pursuant to an agreement not to compete. All
acquisitions in fiscal year 1998 were accounted for under the purchase
method of accounting. Operations applicable to acquired businesses in
1998, which are immaterial to the consolidated operations of the Company,
are included in the accompanying Consolidated Statements of Income from
their respective dates of acquisition. The excess of costs over fair
value for these acquisitions is being amortized over a period of 15
years.

31
SCHEDULE II
Aztec Manufacturing Co.


Valuation and Qualifying Accounts and Reserves
(in thousands)

<TABLE>
<CAPTION>
Year Ended
-----------------------------------------------
Allowance for Doubtful Accounts February 28, February 28, February 29,
1998 1999 2000
-------------- -------------- --------------
<S> <C> <C> <C>
Balance at beginning of year $ 386 $ 423 $ 428
Additions charged to income 139 132 298
Additions from acquisitions 0 0 28
Balances written off, net of recoveries (102) (127) (167)
----------- ----------- ----------
Balance at end of year $ 423 $ 428 $ 587
=========== =========== ==========
</TABLE>

32
Item 9.   Disagreements on Accounting and Financial Disclosure

No changes in accountants or disagreements with accountants on accounting and/or
financial disclosure have arisen.


PART III

Item 10. Directors and Executive Officers

The information required by this item with regard to executive officers is
included in Part I, Item 1 of this report under the heading "Executive Officers
of the Registrant."

The other information required by this item is incorporated herein by reference
to the Registrant's Proxy Statement for the 2000 Annual Meeting of Shareholders.


Item 11. Executive Compensation

The information required by this item is incorporated herein by reference to the
Registrant's Proxy Statement for the 2000 Annual Meeting of Shareholders.


Item 12. Security Ownership of Certain Beneficial Owners and Management

The information required by this item is incorporated herein by reference to the
Registrant's Proxy Statement for the 2000 Annual Meeting of Shareholders.


Item 13. Certain Relationships and Related Transactions

The information required by this item is incorporated herein by reference to the
Registrant's Proxy Statement for the 2000 Annual Meeting of Shareholders.

33
PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) 1. Financial Statements

<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Auditors 13
Consolidated Balance Sheets as of February 29, 2000 and February 28, 1999 14-15
Consolidated Statements of Income for the years ended 16
February 29, 2000, February 28, 1999, and February 28, 1998
Consolidated Statements of Shareholders' Equity for the years ended 17
February 29, 2000, February 28, 1999, and February 28, 1998
Consolidated Statements of Cash Flows for the years ended 18-19
February 29, 2000, February 28, 1999, and February 28, 1998
Notes to Consolidated Financial Statements 20-31

2. Financial Statement Schedules

Schedule II - Valuation and Qualifying Accounts and Reserves 32
</TABLE>

Schedules and compliance information other than those referred to above have
been omitted since the required information is not present or is not present in
amounts sufficient to require submission of the schedule, or because the
information required is included in the consolidated financial statements and
the notes thereto.


3. Exhibits

The following exhibits are filed as a part of this report:

3(1) - Articles of Incorporation, and all amendments thereto (incorporated by
reference to the Annual Report on Form 10-K filed by Registrant for the fiscal
year ended February 28, 1981).

3(2) - Articles of Amendment to the Article of Incorporation of the Registrant
dated June 30, 1988.*

3(3) - Articles of Amendment to the Articles of Incorporation of the Registrant
dated October 25, 1999.*

3(4) - Bylaws adopted by the Board of Directors of Registrant on May 11, 1999.
(Incorporated by reference to Exhibit 3(c) of Registrants From 10-K for the
fiscal year ended February 28, 1999).

10(1) - 1986 Incentive Stock Option Plan of Aztec Manufacturing Co.
(incorporated by reference to the Annual Report on Form 10-K filed by Registrant
for the fiscal year ended February 28, 1986).

10(2) - Change In Control Agreement between Registrant and Mr. L.C. Martin
dated March 1, 1986 (incorporated by reference to Exhibit 10e of the Annual
Report on Form 10-K filed by Registrant for the fiscal year ended February 28,
1987).

10(3) - Amendment No. 1 dated May 15, 1992 to the Change in Control Agreement
dated April 25, 1986 (incorporated by reference to Exhibit 10f of the Annual
Report on Form 10-K filed by Registrant for fiscal year ended
February 28, 1999).

10(4) - 1988 Nonstatutory Stock Option Plan of Aztec Manufacturing Co.
(incorporated by reference to Exhibit 10g of the Annual Report on Form 10-K
filed by Registrant for the fiscal year ended February 29, 1988).

34
10(5) - 1991 Incentive Stock Option Plan of Aztec Manufacturing Co.
(incorporated by reference to Exhibit 10h of the Annual Report on Form 10-K
filed by Registrant for the fiscal year ended February 28, 1991).

10(6) - 1991 Nonstatutory Stock Option Plan of Aztec Manufacturing Co.
(incorporated by reference to Exhibit 10i of the Annual Report on Form 10-K
filed by Registrant for the fiscal year ended February 28, 1991).

10(7) - Buy-Sell and Termination Agreement between Registrant and Mr. L.C.
Martin dated January 27, 1994 (incorporated by reference to Exhibit 10j of the
Annual Report on Form 10-K filed by Registrant for the fiscal year ended
February 28, 1994).

10(8) - 1998 Incentive Stock Option plan of Aztec Manufacturing Co.
(incorporated by reference to Exhibit 10k of the Annual Report on Form 10-K
filed by Registrant for the fiscal year ended February 28, 1998).

10(9) - 1998 Nonstatutory Stock Option plan of Aztec Manufacturing Co.
(incorporated by reference to Exhibit 10l of the Annual Report on Form 10-K
filed by Registrant for the fiscal year ended February 28, 1998).

10(10) - 1997 Nonstatutory Stock Option Grants of Aztec Manufacturing Co.
(incorporated by reference to Exhibit 10m of the Annual Report on Form 10-K
filed by Registrant for the fiscal year ended February 28, 1998).

10(11) - Aztec Manufacturing Co. Employee Plan and Trust as amended and restated
as of December 1, 1999 (incorporated by reference to Form S-8 Registration
Statement Number 333-92377 filed on December 8, 1999).

10(12) - 1999 Independent Director Share Ownership Plan (incorporated by
reference to Form S-8 Registration Statement Number 333-31716 filed on March 3,
2000).

10(13) - Business Loan Agreement between Registrant and Bank of America, Texas,
N.A., dated June 28, 1996.*

10(14) - First Amendment to Business Loan Agreement between Registrant and Bank
of America, Texas, N.A., dated February 12, 1997.*

10(15) - Second Amendment to Business Loan Agreement between Registrant and Bank
of America, Texas, N.A., dated October 16, 1997.*

10(16) - Third Amendment to Business Loan Agreement between Registrant and Bank
of America, Texas, N.A., dated December 26, 1997.*

10(17) - Fourth Amendment to Business Loan Agreement between Registrant and Bank
of America, Texas, N.A., dated August 21, 1998.*

10(18) - Fifth Amendment to Business Loan Agreement between Registrant and Bank
of America, Texas, N.A., dated January 14, 1999.*

10(19) - Sixth Amendment to Business Loan Agreement between Registrant and Bank
of America, Texas, N.A., dated February 3, 1999.*

10(20) - Seventh Amendment to Business Loan Agreement between Registrant and
Bank of America, Texas, N.A., dated August 26, 1999.*

10(21) - Eight Amendment to Business Loan Agreement between Registrant and Bank
of America, Texas, N.A., dated January 31, 2000.*

35
21 - Subsidiaries of Registrant*.

23 - Consent of Ernst & Young LLP*.

24 - Power of Attorney*.

27 - Financial Data Schedule*



______________
*Filed herewith.


(b) Reports on Form 8-K

The Registrant filed reports on Form 8-K dated September 15, 1999 and Form 8-K/A
dated November 15, 1999, relating to the acquisition of CGIT Westboro, Inc.

36
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

AZTEC MANUFACTURING CO.
(Registrant)


Date: 5/25/2000 By: /s/ L.C. Martin
--------------------------- ----------------------------------
L.C. Martin, Principal Executive
Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Registrant and in
the capacities and on the dates indicated.

<TABLE>
<S> <C>
/s/ L.C. Martin /s/ Dana L. Perry
- --------------------------------------------- ----------------------------------------------
L.C. Martin, Principal Executive Dana L. Perry, Principal Accounting Officer,
Officer and Director Principal Financial Officer, and Director


David H. Dingus* /s/ Sam Rosen
- --------------------------------------------- ----------------------------------------------
David H. Dingus, President, Chief Operating Sam Rosen, Director
Officer and Director


Robert H. Johnson* R.J. Schumacher*
- --------------------------------------------- ----------------------------------------------
Robert H. Johnson, Director R.J. Schumacher, Director


Martin C. Bowen* Dr. H. Kirk Downey*
- --------------------------------------------- ----------------------------------------------
Martin C. Bowen, Director Dr. H. Kirk Downey, Director


W.C. Walker* Kevern R. Joyce*
- ---------------------------------------------- ----------------------------------------------
W.C. Walker, Director Kevern R. Joyce, Director


/s/ L.C. Martin
- ----------------------------------------------
L.C. Martin, Attorney-in-Fact
</TABLE>

37
EXHIBIT INDEX

<TABLE>
<CAPTION>
Sequentially
Exhibit Description Numbered Page
------- ----------- -------------
<S> <C> <C>
3(1) Articles of Incorporation, and all amendments thereto (incorporated by
reference to the Annual Report on Form 10-K filed by Registrant for the
fiscal year February 28, 1981). _____________

3(2) Articles of Amendment to the Article of Incorporation of the Registrant dated
June 30, 1988.* _____________

3(3) Articles of Amendment to the Articles of Incorporation of the Registrant dated
October 25, 1999.* _____________

3(4) Bylaws adopted by the Board of Directors of Registrant on May 11, 1999.
(Incorporated by reference to Exhibit 3(c) of Registrants From 10-K for the
fiscal year ended February 28, 1999). _____________

10(1) 1986 Incentive Stock Option Plan of Registrant (incorporated by reference to
the Annual Report on Form 10-K filed by Registrant for the fiscal year ended
February 28, 1986). _____________

10(2) Change in Control Agreement between Registrant and Mr. L.C. Martin dated March 1,
1986 (incorporated by reference to Exhibit 10f of the Annual Report on Form 10-K
filed by Registrant for the fiscal year ended February 29, 1987). _____________

10(3) Amendment No. 1 dated May 15, 1992 to the Change in Control Agreement dated April
25, 1986 (incorporated by reference to Exhibit 10f of the Annual Report on
Form 10-K filed by Registrant for fiscal year ended February 28, 1999). _____________

10(4) 1988 Nonstatutory Stock Option Plan of Aztec Manufacturing Co. (incorporated by
reference to Exhibit 10g of the Annual Report on Form 10-K filed by Registrant for
the fiscal year ended February 29, 1988). _____________

10(5) 1991 Incentive Stock Option Plan of Aztec Manufacturing Co. (incorporated by
reference to Exhibit 10h of the Annual Report on Form 10-K filed by Registrant
for the fiscal year ended February 28, 1991). _____________

10(6) 1991 Nonstatutory Stock Option Plan of Aztec Manufacturing Co. (incorporated by
reference to Exhibit 10i of the Annual Report on Form 10-K filed by Registrant
for the fiscal year ended February 28, 1991). _____________

10(7) Buy-Sell and Termination Agreement between Registrant and Mr. L.C. Martin dated
January 27, 1994 (incorporated by reference to Exhibit 10j of the Annual Report
on Form 10-K filed by Registrant for the fiscal year ended February 28, 1994). _____________

10(8) 1998 Incentive Stock Option Plan of Aztec Manufacturing Co. (incorporated by
reference to Exhibit 10k of the Annual Report on Form 10-K filed by Registrant
for the fiscal year ended February 28, 1998). _____________

10(9) 1998 Nonstatutory Stock Option Plan of Aztec Manufacturing Co. (incorporated by
reference to Exhibit 10l of the Annual Report on Form 10-K filed by Registrant
for the fiscal year ended February 28, 1998). _____________
</TABLE>

38
<TABLE>
<CAPTION>
Sequentially
Exhibit Description Numbered Page
------- ----------- -------------
<S> <C> <C>
10(10) 1997 Nonstatutory Stock Option Grants of Aztec Manufacturing Co. (incorporated
by reference to Exhibit 10m of the Annual Report on Form 10-K filed by Registrant
for the fiscal year ended February 28, 1998). _____________

10(11) Aztec Manufacturing Co. Employee Plan and Trust as amended and restated as of
December 1, 1999 (incorporated by reference to Form S-8 Registration Statement
Number 333-92377 filed on December 8, 1999). _____________

10(12) 1999 Independent Director Share Ownership Plan (incorporated by reference to
Form S-8 Registration Statement Number 333-31716 filed on March 3, 2000). _____________

10(13) Business Loan Agreement between Registrant and Bank of America, Texas, N.A.,
dated June 28, 1996.* _____________

10(14) First Amendment to Business Loan Agreement between Registrant and Bank of
America, Texas, N.A., dated February 12, 1997.* _____________

10(15) Second Amendment to Business Loan Agreement between Registrant and Bank of
America, Texas, N.A., dated October 16, 1997.* _____________

10(16) Third Amendment to Business Loan Agreement between Registrant and Bank of
America, Texas, N.A., dated December 26, 1997.* _____________

10(17) Fourth Amendment to Business Loan Agreement between Registrant and Bank of
America, Texas, N.A., dated August 21, 1998.* _____________

10(18) Fifth Amendment to Business Loan Agreement between Registrant and Bank of
America, Texas, N.A., dated January 14, 1999.* _____________

10(19) Sixth Amendment to Business Loan Agreement between Registrant and Bank of
America, Texas, N.A., dated February 3, 1999.* _____________

10(20) Seventh Amendment to Business Loan Agreement between Registrant and Bank of
America, Texas, N.A., dated August 26, 1999.* _____________

10(21) Eight Amendment to Business Loan Agreement between Registrant and Bank of
America, Texas, N.A., dated January 31, 2000.* _____________

21 Subsidiaries of Registrant.* _____________

23 Consent of Ernst & Young LLP.* _____________

24 Power of Attorney.* _____________

27 Financial Date Schedule* _____________
</TABLE>

__________________
* Filed herewith

39