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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

Commission File No. 1-12777

AZZ incorporated

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (817) 810-0095

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

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.  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The aggregate market value of Common Stock held by non-affiliates on May 12, 2003, was approximately $53,993,000. As of May 12, 2003, there were 5,027,277 shares of AZZ incorporated Common Stock $1.00 par value outstanding.

Documents Incorporated By Reference

Part III incorporates information by reference from the Proxy Statement for the 2003 Annual Meeting of Shareholders of Registrant.

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Forward Looking Statements

This Report may contain “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: the level of customer demand for and response to products and services offered by the Company, including demand by the power generation markets, electrical transmission and distribution markets, the general industrial market, and the hot dip galvanizing markets; prices and raw material cost, including cost of zinc and natural gas which are used in the hot dip galvanizing process; changes in economic conditions of the various markets the Company serves, foreign and domestic, customer requested delays of shipments, acquisition opportunities, adequacy of financing, and availability of experienced management employees to implement the Company’s growth strategy. 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. The Company can give no assurances that such forward-looking statements will prove to be correct.

PART I

AZZ incorporated (“AZZ” 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 markets of power generation, transmission and distribution, and the general industrial markets as well as a leading provider of hot dip galvanizing services to the steel fabrication market nationwide.

The Company offers products through two distinct business segments, the Electrical and Industrial Products Segment and the Galvanizing Services Segment.

Electrical and Industrial Products Segment

The Electrical and Industrial Products Segment produces highly engineered specialty electrical products as well as lighting and tubular products. The Company markets and sells its products throughout the global market place. The Company classifies its products offered by this segment as electrical products and industrial products. The electrical products of this segment are defined as products that are designed, manufactured and configured to distribute electrical power to generators, transformers, switching devices or other electrical configurations (the “Electrical Products”). These electrical systems are supplied to the power generation, power transmission and power distribution markets as well as the general industrial market. While serving many of the same markets, the industrial products are defined as industrial lighting and tubular products used for petro-chemical and industrial applications (the “Industrial Products”). Lighting products are provided to the petroleum, food processing, and power generation industries, to consumer retail outlets and to industrial industries with unique lighting challenges. The principal market for tubular products is the petroleum industry. The markets for the Company’s Electrical and Industrial Products Segment are highly competitive and consist 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. While some of these companies are much larger and better financed than the Company, the Company believes that it can compete favorably with them. Copper, aluminum and steel are the primary raw materials used in this segment and are readily available. This segment’s products are sold through manufacturers’ representatives and the Company’s internal sales force. This segment is not dependent on any single customer and the loss of any single customer would not have a

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material adverse effect on consolidated revenues or net income of the Company. Backlog of orders was approximately $49.1 million at February 28, 2003, $85.3 million at February 28, 2002 and $34.8 million at February 28, 2001. All of the year-end backlog should be delivered during 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 582 persons.

Galvanizing Services Segment

The Galvanizing Services Segment provides hot dip galvanizing to the steel fabrication industry through facilities located throughout the South and Southwest United States. The eleven galvanizing plants of the Company are located in Texas, Louisiana, Alabama, Mississippi, Arkansas, and Arizona. Hot dip galvanizing is a metallurgical process by which molten zinc is applied to a customer’s material. The zinc bonding provides corrosion protection of fabricated steel for extended periods of up to 50 years. Galvanizing is a highly competitive business and the Company competes with other 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 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 industries, 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 and the loss of any customer would not have a material adverse effect on consolidated revenues or net income 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 410 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

The Company is subject to various environmental protection reviews by state and federal government agencies. 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. The Company has reserved $561,000 and $590,000 as of February 28, 2003 and 2002, respectively, for estimated costs related to environmental liabilities.

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.

Legal

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.

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Executive Officers of the Registrant

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.

Available Information

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and its rules and regulations. The Exchange Act requires us to file reports, proxy statements and other information with the SEC. Copies of these reports, proxy statements and other information can be inspected and copied at:

SEC Public Reference Room

450 Fifth Street, N.W.

Room 1024

Washington, D.C. 20549

You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also obtain copies of any material we have filed with the SEC by mail at prescribed rates from:

Public Reference Section

Securities and Exchange Commission

450 Fifth Street N.W.

Washington, D.C. 20549-0004

You may obtain these materials electronically by accessing the SEC’s home page on the Internet at:

http://www.sec.gov

In addition, we make available, free of charge, on our internet Web site, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file this material with, or furnish it to, the SEC. You may review these documents, under the heading “Investor Relations,” by accessing our Web site:

http://www.azz.com

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Also, reports and other information concerning us are available for inspection and copying at:

New York Stock Exchange

20 Broad Street

New York, New York 10005

The following table sets forth information about the Company’s principal facilities owned or leased on February 28, 2003:

Environmental Proceedings

The Company is subject to various environmental protection reviews by state and federal government agencies. 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. The Company has reserved $561,000 and $590,000 as of February 28, 2003 and 2002, respectively, for estimated cost related to environmental compliance.

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.

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Legal Proceedings

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.

No matter was submitted during the fourth quarter of the fiscal year ended February 28, 2003, to a vote of security holders through the solicitation of proxies or otherwise.

PART II

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.

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 until ten business days following the first public announcement of the acquisition of 15% of the Company’s common stock. The rights expire on January 7, 2009.

The approximate number of holders of record of common stock of Registrant at May 12, 2003 was 744.

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AZZ incorporated (the “Company”) operates two distinct segments, the Electrical and Industrial Products Segment and the Galvanizing Services Segment. The Electrical and Industrial Products Segment serves the power generation, transmission and distribution market as well as the general industrial market. The Galvanizing Services Segment consists of eleven hot dip galvanizing facilities located throughout the South and Southwest United States that provides a value added galvanizing service to 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.

General

For the fiscal year-ended February 28, 2003, the Company recorded record revenues of $183.4 million compared to the prior year’s revenues of $152.9 million. Approximately 74% of the Company’s revenues were generated from the Electrical and Industrial Products Segment and approximately 26% were generated from the Galvanizing Services Segment. Net income for fiscal 2003 was $8.6 million compared to $7.8 million in the fiscal 2002. Net income as a percent of sales was 4.7% for fiscal 2003 as compared to 5.1% for fiscal 2002. The reduction in net

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income as a percentage of sales was primarily due to increased interest costs associated with acquisitions made in the latter part of fiscal 2002, lower operating profits in the Electrical and Industrial Segment associated with the closure and consolidation of the Company’s facility located in Nashville, Tennessee as well as by the overall weak economic conditions and intense competition in all of the markets served. The slow and uneven recovery of the general economy continues to negatively impact the products sold to the industrial market. Earnings per share increased by 9% to $1.63 per share for fiscal 2003 compared to $1.50 per share in fiscal 2002, on a diluted basis.

Results of Operations

Year ended February 28, 2003 (2003) compared with year ended February 28, 2002 (2002)

Revenues

The Company’s consolidated net revenues for fiscal 2003 increased by $30.5 million or 20%, as compared to fiscal 2002. Excluding the acquisitions made in the later part of fiscal 2002, revenues for fiscal 2003 declined 3% to $126.1 million, as compared to $130.5 million in fiscal 2002.

The Electrical and Industrial Products Segment produces highly engineered specialty products supplied to the power generation, power transmission, power distribution markets and general industrial markets as well as lighting and tubular products to the industrial and petroleum markets. The segment recorded record revenues for fiscal 2003 of $134.9 million, an increase of 31% over the fiscal 2002 results of $103.3 million. The full year of revenues from our fiscal 2002 acquisitions accounted for the increased revenues for this segment. Excluding the acquisitions, revenues for the Electrical and Industrial Products Segment decreased 4% to $77.6 million for fiscal 2003. This segment experienced significant increases in sales volumes for the first three quarters of the fiscal year, but finished the fourth quarter of fiscal 2003 with a decline in revenues of 28% as compared to the fourth quarter of fiscal 2002. During the first three quarters of fiscal 2003, the segment continued to benefit from backlogs that were built up during the later part of fiscal 2002 due to increased demand for these products in the power generation market.

Revenues for this segment’s Electrical Products (as defined by the products offered by the Electrical and Industrial Segment in Part I, Item 1 on page 1 and 2 of this report) increased 44% to $115.3 million for fiscal 2003 as compared to $80.1 million in fiscal 2002. Revenues from the acquisitions of Central Electric Company and Carter & Crawley, Inc. for the full year of operation in fiscal 2003 as compared to four months of operations in fiscal 2002 increased $34.8 million or 155%. Revenues for the Electrical Products, excluding the acquisitions, were $58 million for fiscal 2003, as compared to $57.6 million in fiscal 2002, an increase of 1%. While these products showed a slight improvement in same store sales for fiscal 2003, the markets served by these products slowed down dramatically in the later part of fiscal 2003, and particularly in the power generation market. The Company has aggressively attempted to offset the downturn in the power generation market with an increased presence in the international market place, an increased presence in the power distribution and transmission markets, as well as the industrial markets in general, but has been hampered by the overall weak economic conditions and intense competition in all markets served.

Revenues for Industrial Products (as defined by the products offered by the Electrical and Industrial Segment in Part I, Item 1 on page 1 and 2 of this report) of the Electrical and Industrial Products Segment decreased 16% to $19.6 million for fiscal 2003 as compared to $23.2 million for fiscal 2002. The loss of the product line offered to the automotive industry in the fourth quarter of fiscal 2002 accounted for 26% of the decrease in the Industrial Products. The continued weakness in the industrial market throughout the entire year and the softness in the petroleum market for the first three quarters of fiscal 2003 contributed the remaining portion of the decrease in revenues. The petroleum market showed some signs of improvement in the fourth quarter of fiscal 2003 as a result of increased oil and natural gas prices.

The Electrical and Industrial Products Segment ended fiscal 2003 with a backlog of $49.1 million, a decrease of 43% from the prior year’s backlog of $85.3 million. The backlog excluding acquisitions decreased 60% to $18.6 million for fiscal 2003. The Electrical Products (as defined by the products offered by the Electrical and Industrial Segment in Part I, Item 1 on page 1 and 2 of this report) backlog decreased 44% to $44.3 million. Backlogs returned to levels experienced prior to the dynamic expansion of the domestic power generation market as a result of deregulation. The Industrial Products (as defined by the products offered by the Electrical and Industrial Segment in Part I, Item 1 on page

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1 and 2 of this report) backlog increased 24% late in fiscal 2003 to $4.7 million due the increased opportunities in the international market.

The Company’s Galvanizing Services Segment, which is made up of eleven hot dip galvanizing facilities, generated revenues of $48.5 million, a 2% decrease from the prior year’s revenues of $49.6 million. The continuation of the weakness in the overall economic environment from fiscal 2002 prevented any internal growth in our Galvanizing Services Segment for fiscal 2003.

Operating Income

The Company’s consolidated operating income (see note 12 to Note to Consolidated Financial Statements) increased 10% to $23.8 million in fiscal 2003 as compared to $21.8 million in fiscal 2002. Improved operating profits were the result of increased revenues from our Electrical and Industrial Products Segment and cost containments implemented across all of our operating segments. Consolidated operating margins as a percent of sales declined in fiscal 2003 to 13% from the previous years operating margins of 14.2%. The overall decrease in margins resulted from the softness in the markets served, the intense competition in our markets, as well as the closure of the Company’s Nashville facility. As a result of the changing market conditions, the Company implemented stringent cost controls, improved operating efficiencies, accelerated the assimilation of the prior year acquisitions, and aggressively pursued all market opportunities. With these being implemented, the Company has positioned itself to better manage operations under these market conditions, while maintaining it’s ability to capitalize on future improvements in the economy.

In the Electrical and Industrial Products Segment, operating income for fiscal 2003 increased to $14.9 million, an increase of 2% as compared to $14.6 million in fiscal 2002. These results were aided by the elimination of goodwill amortization in accordance with SFAS No. 142, in the amount of $750,000 for fiscal 2003 as compared to fiscal 2002. Operating margins for this segment were 11% for fiscal 2003 as compared to 14.1% for fiscal 2002. Margins decreased for fiscal 2003 as compared to fiscal 2002 due to the softness in the markets served, the intense competition in our markets, and additional costs that were incurred with the closure and consolidation of the Company’s facility located in Nashville, Tennessee. The Company incurred $545,500 in cost associated with the closing the Nashville facility. These cost consisted of a $280,000 write-off of the locations leasehold improvements, $207,500 lease termination costs, and $58,000 in severance cost paid. As of February 28, 2003, the operation has been totally transferred to two of the Company’s other facilities.

Operating income for this segment’s Electrical Products (as defined by the products offered by the Electrical and Industrial Segment in Part I, Item 1 on page 1 and 2 of this report) increased 13% to $12.6 million for fiscal 2003 as compared to $11.2 million in fiscal 2002. Increased revenue from these products created the higher operating income. A portion of the increased operating profits from higher sales volumes was offset by the closure and consolidation cost of the Company’s facility located in Nashville, Tennessee. Operating margins for Electrical Products were 11% for fiscal 2003 compared to 14% for fiscal 2002. The overall decrease in margins resulted from the softness in the markets served, the intense competition in our markets, as well as the closure of the Company’s Nashville facility.

Operating income for this segment’s Industrial Products (as defined by the products offered by the Electrical and Industrial Segment in Part I, Item 1 on page 1 and 2 of this report) decreased 33% to $2.2 million in fiscal 2003 as compared to $3.3 million in fiscal 2002. Operating margins for Industrial Products were 11.4% for fiscal 2003 compared to 14.4% in fiscal 2002. Lower demand and competitive pricing in markets served negatively impacted margins during fiscal 2003. The Company continued to implement cost containments during fiscal 2003, but was unable to offset the 16% reductions in revenue for the compared periods.

In the Galvanizing Services Segment, operating income increased 25% to $9 million for fiscal 2003 as compared $7.2 million in fiscal 2002. Operating margins were 18% for fiscal 2003 as compared to 14% in fiscal 2002. These results were aided by the elimination of goodwill amortization in accordance with SFAS No. 142, in the amount of $490,000 for fiscal 2003 as compared to fiscal 2002. During fiscal 2003, the segment benefited from the stabilization of natural gas and zinc costs. Costs containments implemented in fiscal 2002 and continued in fiscal 2003 contributed to the higher margins experienced.

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General Corporate Expense

General corporate expenses for fiscal 2003 were $5.9 million, a decrease of 8% from fiscal 2002. As a percent of sales, general corporate expenses were 3.2% for fiscal 2003 as compared to 4.2% in fiscal 2002. The decrease is attributable to lower cost for professional services and employee benefit programs.

Interest expense for fiscal 2003 was $3.9 million, an increase of 64% as compared to $2.4 million fiscal 2002. The increased interest expense relates to higher levels of debt created by the prior years acquisitions. The Company ended fiscal 2003 with outstanding bank debt of $44.5 million, a decrease of 30% or $19 million as compared to the $63.5 million outstanding at the end of fiscal 2002.

Provision For Income Taxes

The provision for income taxes reflects an effective tax rate of 38% for fiscal 2003 and 2002.

Year ended February 28, 2002 (2002) compared with year ended February 29, 2001 (2001)

Revenues

The Company’s consolidated net revenues for fiscal 2002 increased by $31.5 million or 26% over the prior year.

The Electrical and Industrial Products Segment recorded revenues for fiscal 2002 of $103.3 million, an increase of 50% over the prior year results of $68.9 million. These results were aided by the acquisitions of Central Electric Company and Carter & Crawley Inc. in November 2001. These acquisitions reinforced the Company’s strategy of broadening the segment’s range of products that we are able to offer to our existing customer base. Excluding these acquisitions, revenues for the Electrical and Industrial Segment increased 17% to $80.8 million for fiscal 2002.

Revenues for this segment’s Electrical Products (as defined by the products offered by the Electrical and Industrial Segment in Part I, Item 1 on page 1 and 2 of this report) increased 72% to $80.1 million for fiscal 2002 as compared to $46.5 million in fiscal 2001. Revenues from the acquisitions of Central Electric Company and Carter & Crawley Inc. for the four months of the Company’s ownership in fiscal 2002, were $22.4 million. Revenues for the electrical products excluding the fiscal 2002 acquisitions were $57.7 million for fiscal 2002, as compared to $46.5 million in fiscal 2001, an increase of 24%. Increased demand for these products continued in fiscal 2002 as a result of the need for new power plants and the upgrading of existing power plants in order to supply economical and reliable electricity. The Company’s expansions and acquisitions enabled it to capitalize on growth of the power industry market during fiscal 2002.

Revenues for Industrial Products (as defined by the products offered by the Electrical and Industrial Segment in Part I, Item 1 on page 1 and 2 of this report) of the Electrical and Industrial Products Segment increased 4% to $23.2 million for fiscal 2002 as compared to $22.4 million for fiscal 2001. The growth was due to increased demand for petroleum products during the first half of fiscal 2002. The Company was notified in the fourth quarter of fiscal 2002 that it was being replaced as a supplier of a product being offered to the automotive industry. This product generated revenues of $950,000 for fiscal 2002 and $890,000 for fiscal 2001.

The Electrical and Industrial Products Segment ended fiscal 2002 with a backlog of $85.3 million, up 145% from the prior year’s backlog of $34.8 million. The backlog excluding acquisitions increased 34% to $46.5 million for fiscal 2002. The Electrical Products (as defined by the products offered by the Electrical and Industrial Segment in Part I, Item 1 on page 1 and 2 of this report) backlog increased $51.5 million to $81.5 million. Approximately 75% of the $51.5 million increase was related to the acquired companies, which ended fiscal 2002 with a backlog of $38.8 million. During fiscal 2002, these products benefited from a strong domestic power generation market, which contributed to the remaining 25% increase. The Industrial Products (as defined by the products offered by the Electrical and Industrial Segment in Part I, Item 1 on page 1 and 2 of this report) backlog decreased 21% to $3.8 million due the slow down in the petroleum and industrial markets as well as an overall weak general economy.

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The Company’s Galvanizing Services Segment generated revenues of $49.6 million, a 6% decrease from the prior year’s revenues of $52.5 million. The downturn in the general economy and the severe downturn of the telecommunication industry contributed to lower revenues for this segment. This segment historically has closely followed the direction of the overall industrial segment of the domestic economy.

Operating Income

The Company’s consolidated operating income (see note 12 to Note to Consolidated Financial Statements) increased 4% to $21.8 million in fiscal 2002 as compared to $20.9 million in fiscal 2001. Increased revenues for the Electrical and Industrial Segment produced the improvement in operating income for fiscal 2002. Consolidated operating margins as a percent of sales declined in fiscal 2002 to 14.2% from fiscal 2001 operating margins of 17.2% as a result of declining margins in the Galvanizing Services Segment.

In the Electrical and Industrial Products Segment, operating income for fiscal 2002 increased to $14.6 million, an increase of 29% as compared to $11.3 million in fiscal 2001. These results were aided by the acquisitions of Central Electric Company and Carter & Crawley on November 1, 2001. Excluding the acquisitions, operating income increased to $13.1 million for fiscal 2002, an increase of 16%, as compared to $11.3 million in fiscal 2001. Operating margins for this segment were 14.1% for fiscal 2002 as compared to 16.4% for fiscal 2001.

Operating income for this segment’s Electrical Products (as defined by the products offered by the Electrical and Industrial Segment in Part I, Item 1 on page 1 and 2 of this report) increased 45% to $11.2 million for fiscal 2002 as compared to $7.7 million in fiscal 2001. The acquisitions made on November 1, 2001 contributed operating income of $1.5 million for fiscal 2002. The additional $2 million of increased operating income, excluding acquisitions, is a result of increased demand for the segment’s electrical systems. Margins for Electrical Products were 14% for fiscal 2002 compared to 16.6% for fiscal 2001. The decline in operating margins is a result of the lower margin products offered by the fiscal 2002 acquisitions as compared with the Company’s previously existing Electrical Products

Operating income for this segment’s Industrial Products (as defined by the products offered by the Electrical and Industrial Segment in Part I, Item 1 on page 1 and 2 of this report) decreased 5% to $3.4 million in fiscal 2002 as compared to $3.6 million in fiscal 2001. Operating margins for Industrial Products were 14.4% for fiscal 2002 compared to 15.8% in fiscal 2001. Pricing pressures on these products in order to maintain market share contributed to lower margins. During the fourth quarter of fiscal 2002 the Company was notified it was being replaced with an alternative vendor for it’s product offered to the automotive industry. Due to the effects of the loss of this product and current economic conditions in the general industrial market, management instituted cost reducing measures.

In the Galvanizing Services Segment, operating income decreased 26% to $7.2 million for fiscal 2002 as compared $9.7 million in fiscal 2001. Operating margins were 14% for fiscal 2002 as compared to 18% in fiscal 2001. Operating income and margins were impacted by higher natural gas and zinc costs for the first half of fiscal 2002. In addition this segment experienced significant reductions in sales volumes due to the downturn in the general economy. During the fourth quarter of fiscal 2002, management instituted cost reductions to offset a portion of the effect of lower sales volumes.

General Corporate Expenses

General corporate expenses for fiscal 2002 were $6.4 million, up 23% from fiscal 2001. As a percent of sales, general corporate expenses were 4.2% for fiscal 2002 compared to 4.3% in the prior year.

Interest expense for fiscal 2002 was $2.4 million, up 3% or $78,000 from fiscal 2001. The additional debt required for making the acquisitions of Central Electric Company and Carter & Crawley Inc. in the later part of fiscal 2002 created the additional interest. A portion of the increased interest costs associated with the acquisitions was offset by lower variable interest rates.

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Provision for Income Taxes

The provision for income taxes reflects an effective tax rate of 38% for fiscal 2002 and 37.7% for fiscal 2001. The increase in the effective tax rate is a result of higher state taxes and increased non-deductible expenses.

Liquidity and Capital Resources

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

The Company’s operating activities generated cash flows of approximately $22.9 million, $14.2 million, and $12.4 million during fiscal 2003, 2002, and 2001, respectively. Cash flow from operations in fiscal 2003 included net income in the amount of $8.6 million, depreciation and amortization of intangibles and debt issue costs in the amount of $7.1 million, and net changes in operating assets and liabilities and other increases in cash flows from operations of $7.2 million. Decreases in outstanding accounts receivable balances and inventory levels contributed to the majority of the $7.2 million in other increases in cash flow.

The cash flow from operations was used to make capital improvements of $4 million and to reduce debt by $19 million. The breakdown of capital spending by segment can be found in Note 12 of the Notes to Consolidated Financial Statements. There were no cash dividends declared or paid in fiscal 2003 and no resumption of a cash dividend is currently anticipated.

On November 1, 2001, the Company entered into a new syndicated credit facility, which replaced the previous term notes and revolving line of credit. This agreement included a $40 million term facility and a $45 million revolving credit facility. The availability under the revolving credit facility is contingent on asset-based collateral of inventories and accounts receivables. The remaining balance outstanding on the term-loan is payable in quarterly installments ranging from $1.375 million to $2.5 million through November 2006, with any remaining balance due December 2006. At the end of fiscal 2003, the Company had $30 million outstanding under the term note and $14.5 outstanding on the revolving credit facility. At February 28, 2003, the Company had approximately $7.3 million available under the revolving credit facility. On March 7, 2003, the Company amended its credit facility, which amended certain terms and provisions of the credit agreement by reducing the amortization on the term note to $5.5 million annually from $10 million annually, extending the maturity of the term note and revolving note by one year, and revising the provisions of various financial covenants, including the rolling ninety day EBITDA covenant as of December 31, 2002 which brought Registrant back into compliance with that covenant.

The Company utilizes interest rate swap agreements to protect against volatile interest rates and manage interest rate expense. At February 28, 2003, the Company had a $4.3 million interest rate swap agreement that was entered into in February 1999 at a fixed rate of 6.8%. On November 1, 2001, the Company entered into an interest rate swap agreement covering an additional $40 million of debt at a fixed rate of 5.69%. At February 28, 2003, the notional amount of this swap was $27.5 million. In conjunction with the Company’s new financing agreement the Company discontinued hedge accounting for the February 1999 interest rate swap effective November 1, 2001. At February 28, 2003, the fair value of this swap was a liability of $251,000. The fair value of the November 2001 interest rate swap, which was designated as a hedge of the Company’s variable rate interest payments, was a liability of $795,000 as of February 28, 2003. The accumulated balance in other comprehensive income is $625,000, net of tax of $383,000, as of February 28, 2003. This amount will be charged to interest expense over the respective terms of the two swaps.

At February 28, 2003, the Company had outstanding letters of credit in the amount of $1.9 million. These letters of credit are issued to a portion of the Company’s customers to cover any potential warranty costs that the customer might incur. In addition, warranty reserve in the amount of $1.2 million has been established to offset any future warranty claims.

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The Company’s total off-balance sheet contractual obligations of $5.6 million at February 28, 2003, consist of long-term operating leases for four of the Electrical and Industrial Products Segment’s production facilities and the corporate offices located in Fort Worth, Texas. The various leases expire from 2005 to 2012.

The Company’s current ratio was 1.76 to 1 at the end of fiscal 2003, as compared to 1.70 to 1 at the end of fiscal 2002. Shareholder equity grew 16% during fiscal 2003 to $63.4 million or $12.01 per share. Long-term debt as a percent of shareholders equity was 60% at the end of fiscal 2003 as compared to 98% at the end of fiscal 2002. The decrease in long-term debt as a percent of shareholders equity at the end of fiscal 2003 was the result of a reduction in debt of $19 million. The funds used for debt repayment came from cash flows generated from operations.

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 process and through increases in price where competitively feasible.

Critical Accounting Policies and Estimates

The preparation of the consolidated financial statements requires the Company to make estimates that affect the reported value of assets, liabilities, revenues and expenses. The Company’s estimates are based on historical experience and various other factors that are believed to be reasonable under the circumstances, and form the basis for the Company’s conclusions. The Company continually evaluates the information used to make these estimates as the business and the economic conditions change. Accounting policies and estimates considered most critical are allowances for doubtful accounts, accruals for contingent liabilities, revenue recognition and goodwill impairment. More information regarding significant accounting policies can be found in Note 1 of the Notes to Consolidated Financial Statements

Allowance for Doubtful Accounts—The carrying value of the accounts receivables is continually evaluated based on the likelihood of collection. An allowance is maintained for estimated losses resulting from our customer’s inability to make required payments. The allowance is determined by historical experience of uncollected accounts, the level of past due accounts, overall level of outstanding accounts receivables, information about specific customers with respect of their inability to make payments and future expectations of conditions that might impact the collectibility of accounts receivables. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Accruals for Contingent Liabilities—The amounts the Company records for estimated claims such as self insurance programs, warranty and other contingent liabilities requires the Company to make judgments regarding the amount of expenses that will ultimately be incurred. The Company uses past history and experience, as well as other specific circumstances surrounding these claims in evaluating the amount of liability that should be recorded. Actual results may be different than the Company’s estimates.

Revenue Recognition—Revenue is recognized for the Galvanizing Services Segment upon completion of the galvanizing services or shipment of product. Revenue is recognized for the Electrical and Industrial Products Segment upon transfer of title and risk to customers, 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. Contract costs include direct labor and material, 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 able to be determined. The assumptions made in determining the estimated cost could differ from actual performance resulting in a different outcome for profits or losses than anticipated.

Goodwill Impairment—On March 1, 2002, the Company adopted SFAS No. 142. The Company completed its initial and annual impairment analysis for its two operating segments and determined that there was no impairment of goodwill as of March 1, 2002 and December 31, 2002. An annual impairment test will be performed in December of each future year. The test is calculated using the anticipated future cash flows from the Company’s operating segments. Based on the present value of the future cash flow, the Company will determine whether an impairment

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will be recorded. A significant change in projected cash flows for future years could result in an impairment of goodwill in future years.

Recent Accounting Pronouncements

Effective January 1, 2002, the Company adopted SFAS No. 142, Goodwill and Other Intangible Assets. Under the new rules, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests in accordance with the Statement. Other intangible assets continue to be amortized over their useful lives. Application of the non-amortization provisions of the Statement increased the Company’s income before income taxes by approximately $1.2 million in 2003. For more information on the adoption of SFAS No. 142, see Note 7 of the Notes to the Consolidated Financial Statements on page 37.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations. SFAS No. 143 became effective for the Company for fiscal years beginning after June 15, 2002. This statement addresses financial accounting and reporting for obligations associated with the retirement of long-lived assets and their associated asset retirement costs. SFAS 143 requires a company to record the fair value of an asset retirement obligation as a liability in the period in which the company incurs a legal obligation associated with the retirement of a long-lived asset. As of February 28, 2003, the adoption of SFAS No. 143 did not have a material impact on its results of operations, financial position or cash flows.

In September 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The new Statement supercedes previous accounting guidance relating to impairment of long-lived assets and provides a single accounting methodology for long-lived assets to be disposed of, and also supercedes existing guidance with respect to reporting the effects of the disposal of a business. The Company adopted SFAS No. 144 on March 1, 2002. The adoption of this statement did not have a material impact on the Company’s results of operations, financial position or cash flows.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements Nos. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections. SFAS No. 145 requires that gains and losses from extinguishment of debt be classified as extraordinary items only if they meet the criteria in Accounting Principles Board of Opinion No. 30 (“Opinion No. 30”). Applying the provision of Opinion No. 30 will distinguish transactions that are part of an entity’s recurring operations from those that are unusual and infrequent that meet criteria for classification as an extraordinary item. As allowed under the provisions of SFAS No. 145, the Company adopted the provisions of SFAS No. 145 as of April 1, 2002. The adoption of this statement did not have a material impact on the Company’s results of operations, financial position or cash flows.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. SFAS No. 146 requires companies to recognize costs associated with exit or disposal activities, such as restructurings, involuntarily terminating employees and consolidation of facilities, when they are incurred rather than at the time of a commitment to an exit or disposal plan. SFAS No. 146 is to be applied prospectively to such activities that are initiated after December 31, 2002. The adoption of SFAS No. 146 did not have a material impact on its results of operations, financial position or cash flows.

In November 2002, the FASB issued Interpretation No. 45 Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, (“FIN 45”). FIN 45 requires a guarantor to recognize; at the time it issues a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. FIN 45 provides specific guidance identifying the characteristics of contracts that are subject to its guidance. The recognition and measurement provisions of FIN 45 apply on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements of FIN 45 are effective for annual period financial statements ending after December 15, 2002. The Company’s adoption of FIN 45 did not have a material impact on its results of operations, financial position or cash flows.

As of March 1, 2001, the Company adopted SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, which was amended by SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, (collectively Statement 133). As amended, Statement 133 establishes accounting and reporting

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standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. The Statement requires that an entity recognize all derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value. Changes in the fair value of derivative financial instruments are either recognized periodically in income or in stockholders’ equity as a component of comprehensive income depending on whether the derivative financial instrument qualifies for hedge accounting, and if so, whether it qualifies as a fair value hedge or a cash flow hedge. The ineffective portion of a derivative’s change in fair value will be immediately recognized in earnings. At March 1, 2001, the Company’s derivatives consisted of two interests rate swap agreements, which qualified for hedge accounting.

The Company accounted for the adoption of Statement 133 as a cumulative effect of a change in accounting principle. The adoption of Statement 133 resulted in a cumulative effect adjustment net of tax of $185,000, which was recognized as a charge to cumulative other comprehensive income (equity). The offsetting fair value of the interest rate swaps was recognized in accrued liabilities. Through October 31, 2001, an additional $164,000 was accrued in association with these swaps. In conjunction with the Company’s new financing, the Company discontinued hedge accounting for these two swaps effective November 1, 2001. In fiscal 2003 one of these swaps expired. The Company entered into a new interest rate swap in November 2001, which was designated as a hedge of the Company’s variable rate interest exposure. At February 29, 2003 the fair market value of the Company’s remaining swaps created a liability of $1 million and losses of $625,000, net of tax, have been accumulated in other comprehensive income and will be recognized over the remaining term of the swaps. In fiscal 2002 and fiscal 2003 the Company recognized a mark to market gain of $36,000 and a loss of $72,000, respectively, for the swaps which were outstanding on November 1, 2001.

Information about the Company’s accounting treatment for swap agreements are included in Note 10 to the consolidated financial statements.

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 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 $17.1 million of variable rate borrowings at February 28, 2003 after its hedges. In November 2001, the Company entered into an interest rate protection agreement with its lender to modify the interest characteristics of $40 million of debt from variable rate to a fixed rate. In conjunction with the Company’s new financing agreement the Company discontinued hedge accounting for the February 1999 interest rate swap effective November 1, 2001. Due to the discontinuance of hedge accounting on this swap, the Company recorded $99,000 to interest expense during fiscal 2003. At February 28, 2003 the fair value of the February 1999 swap was a liability of $251,000. The November 2001 interest rate swap, which was designated as a hedge of the Company’s variable rate interest, has an unrealized loss of $795,000 as of February 28, 2002. The accumulated balance in other comprehensive income is $625,000, net of tax of $383,000, as of February 28, 2003. This amount will be charged to interest expense over the respective terms of the two swaps. The Company believes it has adequately protected itself from increased interest cost under these financial arrangements.

The Company manages its exposures to commodity prices, primarily zinc used in its Galvanizing 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 partial offset 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 significantly adverse effect on the Company’s results of operations, financial position, or cash flows.

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The index to the Company’s Consolidated Financial Statements is found on page 22. The Company’s Financial Statements and Notes to these Consolidated Financial Statements follow the index.

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

PART III

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 2003 Annual Meeting of Shareholders.

The information required by this item is incorporated herein by reference to the Registrant’s Proxy Statement for the 2003 Annual Meeting of Shareholders.

The information required by this item is incorporated herein by reference to the Registrant’s Proxy Statement for the 2003 Annual Meeting of Shareholders.

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Equity Compensation Plans

The following table provides a summary of information as of February 28, 2003, relating to our equity compensation plans in which the Company’s common stock is authorized for issuance.

Equity Compensation Plan Information

Description of Plan Not Approved by the Shareholders

Grant to Consultant

The Grant to Consultant was approved by the Board of Directors on February 22, 2000. These 70,000 options, granted to the Company’s financial public relations firm, were to vest contingent upon the achievement of certain performance measures. Subsequently the grant was amended to allow additional time, which has now expired, for the firm to meet revised measures. As of February 28, 2003, 57,750 options had vested, of which 7,000 has been exercised. The remaining 12,250 terminated without vesting.

Description of other Plans for the Grant of Equity Compensation

The following are plans under which shares of the Company’s Common Stock have been reserved for issuance as compensation to the Company’s Independent Directors and Advisory Directors. The shares covered by those plans are not included in the table above on equity compensation plans because they do not provide for options, warrants or rights.

1999 Independent Director Share Ownership Plan

On January 19, 1999, the Board of Directors established the 1999 Independent Director Share Ownership Plan (as amended, the “Independent Director Plan”). Each independent member of the Board of Directors is granted 500 shares of Common Stock after each annual meeting of the shareholders after which he continues to serve as Director. Also, under the Plan, each newly elected independent Director who has not previously served on the Board is granted such number of shares as the Board of Directors may deem appropriate, but not less than 1,000 shares of Common Stock or, if less, Common Stock having a value of $15,000. Grants under the Independent Director Plan terminate as to each

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Independent Director when a total of 5,000 shares have been granted to him or her. During their tenure on the Board of Directors, each Director is to retain a number of shares equal to at least one-half the number of shares granted pursuant to the Independent Director Plan. A total of 50,000 shares were covered by the Plan, of which 32,500 shares remain available under the Plan at February 29, 2003.

2000 Advisory Director Share Ownership Plan

On March 28, 2000, the Board of Directors established the 2000 Advisory Director Share Ownership Plan (the “Advisory Director Plan”). Under that Plan, Advisory Directors receive a grant of 500 shares of Common Stock of the Company after each annual shareholders meeting after which they continue to serve as an Advisory Director until they receive a total of 5,000 shares, including shares received while serving as an active member of the Board of Directors. A total of 10,000 shares were covered by the Plan, of which, 6,500 shares remain available under the Plan at February 28, 2003.

The information required by this item is incorporated herein by reference to the Registrant’s Proxy Statement for the 2003 Annual Meeting of Shareholders.

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PART IV

The certifying officers of the Company are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and have (i) designed such disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiary, is made known to them by others within those entities, particularly during the period in which this annual report is being prepared; and (ii) evaluated the effectiveness of the Company’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”). Based on this evaluation, the chief executive officer and the chief financial officer of the Company have concluded that the Company’s disclosure controls and procedures were effective during the period being reported on in this annual report.

The Company’s certifying officers have indicated that there were no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of their most recent evaluation, including any significant deficiencies or material weaknesses that would require corrective actions.

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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.

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.

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Section 302 Certification

I, the undersigned David H. Dingus, President and Chief Executive Officer of AZZ incorporated, hereby certify that:

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Section 302 Certification

I, the undersigned Dana L. Perry, Vice President and Chief Financial Officer of AZZ incorporated hereby certify that:

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Index to Consolidated Financial Statements and Schedules

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Report of Ernst & Young LLP, Independent Auditors

Board of Directors and Shareholders

AZZ incorporated

We have audited the accompanying consolidated balance sheets of AZZ incorporated as of February 28, 2003 and 2002, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended February 28, 2003. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements 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 AZZ incorporated at February 28, 2003 and 2002, and the consolidated results of its operations and its cash flows for each of the three years in the period ended February 28, 2003, 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.

As described in Note 1 to the consolidated financial statements, effective March 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.

/s/ Ernst & Young

Fort Worth, Texas

March 28, 2003

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AZZ incorporated

CONSOLIDATED STATEMENTS OF INCOME

Years ended February 28, 2003, 2002 and 2001

See accompanying notes.

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AZZ incorporated

CONSOLIDATED BALANCE SHEETS

February 28, 2003 and 2002

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AZZ incorporated

CONSOLIDATED BALANCE SHEETS (Continued)

February 28, 2003 and 2002

See accompanying notes.

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AZZ incorporated

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended February 28, 2003, 2002 and 2001

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AZZ incorporated

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Years ended February 28, 2003, 2002 and 2001

See accompanying notes.

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AZZ incorporated

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Years ended February 28, 2003, 2002 and 2001