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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the Fiscal Year Ended: February 29, 2004

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.  x

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 17, 2004, was approximately $75,406,000. As of May 17, 2004, there were 5,236,496 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 2004 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

Item 1. Business

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 electrical products of this segment are defined as products that are designed, manufactured and configured to distribute electrical power to and from generators, transformers, switching devices or other electrical configurations. 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. Lighting products are provided to the petroleum, food processing, and power generation industries 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 multinational 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 material adverse effect on consolidated revenues or net income of the Company. Backlog of orders was approximately $53.1 million at February 29, 2004, $49.1 million at February 28, 2003 and

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$85.3 million at February 28, 2002. 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 567 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 relatively 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 392 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 for additional clean-up and remediation expenses cannot presently be determined; however, as a result of an internal analysis and information developed from prior clean-up efforts, management believes the results of the reviews will not have a material impact on the Company and that the recorded reserves for estimated costs are adequate. The Company has reserved $505,000 and $561,000 as of February 29, 2004 and February 28, 2003, respectively, for estimated costs related to environmental protection and regulatory 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.

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 Website on the Internet at:

http://www.sec.gov

In addition, we make available, free of charge, on our internet Website, 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,” subheading “SEC Filings,” by accessing our Website:

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

Corporate Governance

The Company’s Board of Directors, with the assistance of its Nominating and Corporate Governance Committee, has adopted Corporate Governance Guidelines that set forth the Board’s policies regarding corporate governance. You may review the Corporate Governance Guidelines under the Heading “Investor Relations,” subheading “Corporate Governance,” by accessing our Website:

http://www.azz.com

You may also obtain a copy of the Corporate Governance Guidelines by mailing a request to:

AZZ incorporated

Investor Relations

University Centre I, Suite 200

1300 South University Drive

Fort Worth, TX 76107

In connection with the Board of Directors’ responsibility to oversee our legal compliance and conduct, the board has adopted a Code of Ethics which applies to the Company’s officers, directors and employees. You may review the Code of Ethics under the heading “Investor Relations,” subheading “Corporate Governance,” by accessing our Website:

http://www.azz.com

You may also obtain a copy of the Code of Ethics by mailing a request to:

AZZ incorporated

Investor Relations

University Centre I, Suite 200

1300 South University Drive

Fort Worth, TX 76107

The Board of Directors has adopted charters for each of its Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. You may review a copy of the charters of each of these Committees under the heading “Investor Relations,” subheading “Corporate Governance,” by accessing our Website:

http://www.azz.com

You may also obtain a copy of the charters by mailing a request to:

AZZ incorporated

Investor Relations

University Centre I, Suite 200

1300 South University Drive

Fort Worth, TX 76107

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Item 2. Properties

The following table sets forth information about the Company’s principal facilities owned or leased on February 29, 2004:

Item 3. Legal Proceedings

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 $505,000 and $561,000 as of February 29, 2004 and February 28, 2003, 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.

Other 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.

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, 2004, to a vote of security holders through the solicitation of proxies or otherwise.

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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 for the Company’s two fiscal years ended February 29, 2004 and February 28, 2003. No dividends were declared during that period.

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 17, 2004 was 690.

Item 6. Selected Financial Data

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

Overview

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 markets 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.

For the fiscal year-ended February 29, 2004, the Company recorded revenues of $136.2 million compared to the prior year’s revenues of $183.4 million. Approximately 65% of the Company’s revenues were generated from the Electrical and Industrial Products Segment and approximately 35% were generated from the Galvanizing Services Segment. Net income for fiscal 2004 was $4.3 million compared to $8.6 million in the fiscal 2003. Net income as a percent of sales was 3.1% for fiscal 2004 as compared to 4.7% for fiscal 2003. The reduction in net income as a percentage of sales was primarily due to lower operating margins in the Electrical and Industrial Products Segment. The lower operating margins for this segment are a reflection of the markets in which we participate. These markets continue to be very competitive as a result of the capacity expansion that occurred during the strong power generation market and has produced more capacity than can be absorbed by the current market. Earnings per share decreased by 51.5% to $.79 per share for fiscal 2004 compared to $1.63 per share in fiscal 2003, on a diluted basis.

Results of Operations

Year ended February 29, 2004 (2004) compared with year ended February 28, 2003 (2003)

Revenues

The Company’s consolidated net revenues for fiscal 2004 decreased by $47.2 million or 26%, as compared to fiscal 2003.

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 revenues for fiscal 2004 of $88.9 million, a decrease of 34% below the fiscal 2003 results of $134.9 million. The reduced revenues result primarily from lower demand from the domestic power generation market in fiscal 2004 as compared to fiscal 2003. This segment has worked through the backlog that was related to the domestic power generation projects. In addition to the lack of new domestic power generation projects, the low capital spending levels in the industrial market in fiscal 2004 had a negative impact on this segment’s revenues. The Federal Reserve Industrial Capacity Utilization report, while showing improvement in recent months, still remains below 80% utilization. Factory utilization was at 76.6% at February 29, 2004 an increase from the 75.7% posted at November 30, 2003. A return to utilization levels experienced between 1992 and 2000, which averaged 82.6%, would have a positive impact on many of this segment’s operations, which are dependant on the industrial market. The Company has continued to intensify its efforts to increase its presence in international markets and improve its position in industrial and utility markets through improvements in this segment’s distribution networks. In fiscal 2004, there were some encouraging results from the efforts in the international markets with the consummation of a co-branding and co-operative agreement with Jiangsu Changjiang Electric Group Co., Ltd. of China, and improved representation in the Middle East and Asia. These programs will better position the Company to take advantage of these markets, which are currently experiencing growth.

The Electrical and Industrial Products Segment ended fiscal 2004 with a backlog of $53.1 million, an increase of 8% as compared to fiscal 2003 backlog of $49.1 million. The segment recorded a book-to-ship ratio of 1.03 to 1 for fiscal 2004 as compared to .80 to 1 in the prior year. The backlog continues to be heavily weighted towards the distribution market. The backlog was aided by bookings for this segment’s high voltage bus duct product during the later part of fiscal 2004. Despite some modest improvements in our markets, as

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indicated by the book-to-ship ratio, they still remain extremely competitive and price sensitive as the capacity expansion that occurred during the strong power generation market has resulted in much more capacity than can be absorbed by the current market demand. Going into fiscal 2005, the Company’s major concern for the Electrical and Industrial Products Segment remains its ability to sustain the book-to-ship ratio equivalent to the one that was obtained in fiscal 2004.

The Company’s Galvanizing Services Segment, which is made up of eleven hot dip galvanizing facilities, generated revenues of $47.3 million, a 3% decrease from the prior year’s revenues of $48.5 million. The decline in revenue for fiscal 2004 was created by the increase in steel prices during the fourth quarter, which impacted many of our steel fabrication customers and delayed some scheduled projects. Due to this segment’s broad customer base, and multiple locations it was able to minimize the impact of the increased steel prices on its operations. As steel prices stabilize, revenues should return to levels experienced in fiscal 2003 and any improvements in the economy or the industrial market should provide additional opportunities for increased revenues.

Operating Income

The Company’s consolidated operating income (see note 12 to Note to Consolidated Financial Statements) decreased 37% to $15 million in fiscal 2004 as compared to $23.8 million in fiscal 2003. Consolidated operating margins as a percent of sales declined in fiscal 2004 to 11% as compared to fiscal 2003 operating margins of 13%. The decline in operating income and margins was the direct result of lower revenues, primarily in the Electrical and Industrial Segment and intense competition in both of the Company’s segments, which again resulted from difficult market conditions. The Company has sized its operations in both of its segments to reflect the extremely competitive conditions facing each of them and has continued to improve operating efficiencies which should result in improved financial performance. While significant progress has been made in this area, the Company continues to search out and seek additional improvements. During the fourth quarter of fiscal 2004, the Company began the implementation of a new ERP system, which is scheduled for completion by the end of fiscal 2005. Once the conversion is completed additional efficiencies should be recognized. The Electrical and Industrial Products Segment generated 42% of the operating income for fiscal 2004, while the Galvanizing Services Segment produced the remaining 58%.

Operating income for the Electrical and Industrial Products Segment declined $8.5 million or 57% for fiscal 2004, to $6.4 million as compared to $14.9 million for fiscal 2003. Operating margins for this segment declined to 7.2% for the current year as compared to 11% for fiscal 2003. The operating profits and margins were significantly impacted by a 34% reductions in revenues coupled with continued price competition within the markets in which these products are sold. While the Company continued to implement operational efficiencies and cost reductions it could not offset the dramatic reductions in revenues. The Company continues to align and consolidate resources to match current market conditions, while still maintaining its ability to capitalize on opportunities that arise as market conditions improve.

Operating income for the Galvanizing Service Segment declined $321,000 or 4% for fiscal 2004, to $8.6 million as compared to $9 million for the prior year. Operating margins were consistent at 18% for the compared periods of fiscal 2004 and 2003. The operating income decline is attributable to a slight reduction in revenues and increased cost for natural gas. This segment continues to benefit from the sizing of its operations to match market conditions. The recent metal commodity pricing including the cost of zinc is of concern. This increase may have an adverse impact on this segment’s operating results in Fiscal 2005. Difficult market conditions may inhibit the ability to fully recover through increased selling prices the anticipated increases in the cost of zinc. It is difficult to determine at this time what the overall customer reaction will be to our attempted recovery of the increased cost of zinc. This is a critical factor that impacts all participants in the hot dip galvanizing business.

General Corporate Expense

General corporate expenses were $5.9 million for fiscal 2004 and fiscal 2003. As a percent of sales, general corporate expenses were 4.3% for fiscal 2004 as compared to 3.2% in fiscal 2003. The percentage increase

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results from a 26% reduction in revenues for fiscal 2004. During fiscal 2004, other income was recorded in the amount of $298,000 for the gain on the sale of vacant land located at two of the Company’s facilities

Interest expense for fiscal 2004 was $2.4 million, a decrease of 39% as compared to $3.9 million in fiscal 2003. The decrease in interest expense resulted from significant reductions of outstanding debt and record low interest rates on our variable debt instruments. The Company ended fiscal 2004 with outstanding bank debt of $30.9 million, a decrease of 31% or $13.7 million as compared to the $44.6 million outstanding at the end of fiscal 2003. The Company’s long-term debt to equity ratio improved to .37 to 1 for fiscal 2004 as compared to .60 to 1 for fiscal 2003.

Provision For Income Taxes

The provision for income taxes reflects an effective tax rate of 38% for fiscal 2004 and 2003.

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%, to $183.4 million, as compared to $152.9 million for 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 recorded 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 received during fiscal 2003 from the Company’s fiscal 2002 acquisitions accounted for the increased revenues for this segment. 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%. Excluding the acquisitions, revenues for the Electrical and Industrial Products Segment decreased 4% to $77.6 million for fiscal 2003. The decline in revenue resulted from a weak industrial market for all of fiscal 2003 and a significant reduction in the fourth quarter in sales to the power generation market. The Company aggressively attempted to offset the downturn in the power generation market and weak industrial 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 was hampered by the overall weak economic conditions and intense competition in all markets served.

The Electrical and Industrial Products Segment ended fiscal 2003 with a backlog of $49.1 million, a decrease of 43% from a backlog of $85.3 million at the end of fiscal 2002. The backlog excluding acquisitions decreased 60% to $18.6 million at the end of fiscal 2003. Activity levels for 2003 for the industry returned to levels prior to the dynamic expansion of the domestic power generation market as a result of deregulation.

The Company’s Galvanizing Services Segment 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 income was 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 and intense competition in the Electrical and Industrial Products Segment’s markets, as well as the closure of the Company’s Nashville facility. As a result of the changing market

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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 actions, 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 in fiscal 2003 in accordance with SFAS No. 142 of goodwill amortization, which has been taken in the amount of $750,000 in 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 of the Company’s facility located in Nashville, Tennessee and its consolidation with other Company operations.. The Company incurred $545,500 in cost associated with 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 was totally transferred to two of the Company’s other facilities.

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 in fiscal 2003 in accordance with SFAS No. 142 of goodwill amortization which has been taken in the amount of $490,000 for fiscal 2002. During fiscal 2003, the segment benefited from the stabilization of natural gas and reduced zinc costs. Costs containments implemented in fiscal 2002 and continued in fiscal 2003 contributed to the higher margins experienced.

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.

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 $15 million, $22.9 million, and $14.2 million during fiscal 2004, 2003, and 2002, respectively. Cash flow from operations in fiscal 2004 included net income in the amount of $4.3 million, depreciation and amortization of intangibles and debt issue costs in the amount of $6.1 million, and net changes in operating assets and liabilities and other increases in cash flows from operations of $4.6 million. Due to reduced business levels, primarily in our Electrical and Industrial Products Segment in fiscal 2004 as compared to fiscal 2003, the Company’s working capital requirements were reduced. By the continued efficient management of working capital, the Company was able to reduce accounts receivable,

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inventories, and revenues in excess of billings by $6.6 million, $900,000, and $2.2 million, respectively. Accounts receivable days outstanding for fiscal 2004 were 58 days as compared to 56 days in fiscal 2003 and inventory turns were 6.3 times for fiscal 2004 as compared to 6.4 times in fiscal 2003. The increase in cash flow from decreases in accounts receivable, inventories, and revenue in excess of billings was partially offset by decreases in accounts payable and accrued liabilities, and prepaid and other assets in the amount of $1.5 million, $4 million and $300,000, respectively. Increases in cash flows from changes in deferred tax liabilities, provision for bad debt, and other non-cash transactions accounted for the remaining $700,000 net change in operating assets and liabilities.

During fiscal 2004 cash flow from operations was used to make capital improvements of $3.6 million and to reduce debt by $13.7 million. The breakdown of capital spending by segment for fiscal 2004, 2003, and 2002 can be found in Note 12 of the Notes to Consolidated Financial Statements. In the fourth quarter of fiscal 2004, the Company began the implementation of a new ERP system, which is scheduled for completion in fiscal 2005. The capital expenditures in fiscal 2004 for the ERP system were $860,000 and it is estimated that additional capital outlay of approximately $2 million will be incurred in fiscal 2005 to complete the implementation. The Company received proceeds from the sale of property and equipment, consisting mainly of vacant land, in the amount of $725,000 and proceeds from the exercise of stock options in the amount of $1.1 million. There were no cash dividends declared or paid in fiscal 2004 and no resumption of a cash dividend is currently anticipated.

On November 1, 2001, the Company entered into a 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 of $1.375 million through November 2006, with any remaining balance, which will be approximately $8.25 million in absence of any prepayments due December 2006. At the end of fiscal 2004, the Company had $23.4 million outstanding under the term note and $7.5 outstanding on the revolving credit facility. The revolving credit facility expires on November 1, 2005. At February 29, 2004, the Company had approximately $10.3 million available under the revolving credit facility.

On March 7, 2003, the Company amended its credit facility to reduce the amortization on the term note to $5.5 million annually from $10 million annually, extend the maturity of the term note and revolving note by one year to November 2006 and November 2005, respectively, and revise the provisions of various financial covenants. On October 15, 2003, the Company amended its credit facility to reduce the number of banks participating in the facility from five banks to three banks, reduced the Company’s Revolving Credit Commitment from $45 million to $20 million, and revised the provisions of various financial covenants. The Company’s credit facility currently provides for various financial covenants. These financial covenants consist of 1) Minimum Consolidated Net Worth 2) Maximum Leverage Ratio and 3) Minimum Fixed Charge Coverage Ratio. The Company is in compliance with all of its bank covenants. With the reduction of the revolving Credit Commitment from $45 million to $20 million, the Company will save approximately $94,000 annually in unused line fees. The reduction in the Revolving Loan commitment created a $108,000 write-off of previously incurred loan origination fees associated with the revolving line of credit. A fee of $67,000 was paid for this amendment.

The Company utilizes interest rate swap agreements to protect against volatile interest rates and manage interest rate expense. At February 29, 2004, the Company had a $2.9 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 5.68%. At February 29, 2004, the notional amount of this swap was $17.5 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 29, 2004, the fair value of this swap was a liability of $121,000. 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 $382,000 as of February 29, 2004. The accumulated balance in other comprehensive income is $325,000, net of tax of $199,000, as of February 29, 2004. This amount will be charged to interest expense over the respective terms of the two swaps.

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The Company’s current ratio was 1.86 to 1 at the end of fiscal 2004, as compared to 1.76 to 1 at the end of fiscal 2003. Shareholder equity grew 9% during fiscal 2004 to $69.3 million or $12.96 per share. Long-term debt as a percent of shareholders equity was 37% at the end of fiscal 2004 as compared to 60% at the end of fiscal 2003. The decrease in long-term debt as a percent of shareholders equity at the end of fiscal 2004 was the result of a reduction in debt of $13.7 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.

Off Balance Sheet Transactions and Related Matters

There are no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships of the Company with unconsolidated entities or other persons that have, or may have, a material effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources of the Company.

Contractual Commitments

Leases

The Company leases various facilities under non-cancelable operating leases with an initial term in excess of one year. As of February 29, 2004, the future minimum payments required under these operating leases are summarized as follows:

Long-term debt and letters of credit

As if February 29, 2004 the Company had outstanding debt in the amount of $30.9 million, which consisted of a $23.4 million term note and $7.5 million outstanding under the revolving credit facility. Projected interest payments based on current interest rates equate to $1.8 million for 2005, $1.5 million for 2006, and $1.3 million for 2007. Maturities of long-term debt are as follows (In thousands):

At February 29, 2004, the Company had outstanding letters of credit in the amount of $2.2 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, a warranty reserve in the amount of $879,000 million has been established to offset any future warranty claims.

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Purchase Commitments

The Company’s capital budget for Fiscal 2005 is approximately $6 million. Approximately $3 million will be spent in the Company’s Galvanizing Services Segment for routine capital improvements to maintain, upgrade and enhance the operational efficiencies of this Segment’s facilities and approximately $2 million will be spent on the installation of a new enterprise resource planning system.

Commodity pricing

The Company manages its exposure to commodity prices, primarily zinc used in its Galvanizing Services Segment, by utilizing contracts with its zinc suppliers that include protective caps that reduce the Company’s exposure to rising commodity prices. The Company utilizes these contracts for approximately 90% of its zinc requirements. The contracts are normally negotiated in December of each year and normally are for a twelve-month period of time. Management believes these contractual agreements ensure adequate supplies and partially offset exposure to commodity price swings. In the Electrical and Industrial Segment, the Company has exposure to commodity pricing for copper, aluminum, and steel. Increases in price for these items are normally managed through escalation clauses to the customer’s contracts, although during difficult market conditions these escalation clauses may be difficult to obtain.

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 impairment of long-lived assets, identifiable intangible assets and goodwill. Actual results may differ from these estimates under different assumptions or conditions. The development and selection of the critical accounting policies and the related disclosures below have been reviewed with the Audit Committee of the Board of Directors. 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

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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.

Impairment of long-lived assets, identifiable intangible assets and goodwill – The Company records impairment losses on long-lived assets, including identifiable intangible assets, when events and circumstances indicate that the assets might be impaired and the undiscounted projected cash flows associated with those assets are less than the carrying amounts of those assets. In those situations, impairment loss on a long-lived asset is measured based on the excess of the carrying amount of the asset’s fair value, generally determined based upon discounted estimates of future cash flows. A significant change in events, circumstances or projected cash flows could result in an impairment of long-lived assets, including identifiable intangible assets.

An annual impairment test of goodwill 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 impairment will be recorded. A significant change in projected cash flows or cost of capital for future years could result in an impairment of goodwill in future years.

On March 1, 2002, the Company adopted SFAS No. 142. (See Recent Accounting Pronouncements below.) The Company completed its annual impairment analysis for its two operating segments and determined that there was no impairment of goodwill as of December 31, 2003. An annual impairment test will be performed in December of each year. The test is calculated using the anticipated future cash flows from the Company’s operating segments. A significant change in projected cash flows or cost of capital 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 2004 and 2003. For more information on the adoption of SFAS No. 142, see Note 7 of the Notes to the Consolidated Financial Statements

In January 2003, the Financial Accounting Standards Board issued FIN No. 46 (FIN 46), Consolidation of Variable Entities, an interpretation of Accounting Research Bulletin No. 51. FIN 46 requires that variable interest entities be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or is entitled to receive a majority of the entity’s residual returns or both. FIN 46 also requires disclosures about variable interest entities that companies are not required to consolidate but in which a company has a significant variable interest. The consolidation requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003. In December 2003, the FASB revised FIN 46 through the release of FIN 46R, which clarifies certain aspects of FIN 46 and contains certain provisions that defer the effective date of FIN 46 to periods ending after March 15, 2004. The Company does not expect FIN 46 to have a material effect on the Company’s financial statements.

In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150 (SFAS 150), Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This statement establishes standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some

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circumstances) because that financial instrument embodies an obligation of the issuer. This statement is effective for financial instruments entered into or modified after May 31, 2003. The adoption of SFAS 150 did not have a material impact on the Company’s results of operations, financial position or cash flows.

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 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 $13.4 million of variable rate borrowings at February 29, 2004 after its hedges. On the Company’s variable interest rate borrowings, a one percent upward or downward change in interest rates would equate to an approximate $134,000 increase or decrease to interest expense. 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 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 $56,000 to interest income during fiscal 2004. At February 29, 2004 the fair value of the February 1999 swap was a liability of $121,000. The November 2001 interest rate swap, which was designated as a hedge of the Company’s variable rate interest, has an unrealized loss of $382,000 as of February 29, 2004. The accumulated balance in other comprehensive income is $325,000, net of tax of $199,000, as of February 29, 2004. 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. In the Electrical and Industrial Segment, the Company has exposure to commodity pricing for copper, aluminum, and steel. Increases in price for these items are normally managed through escalation clauses to the customer’s contracts, although during difficult market conditions these escalation clauses may be difficult to obtain.

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. However, there can be no assurance that either interest rates or commodity prices will not change in excess of that hypothetical amount.

Item 8. Financial Statements and Supplementary Data

The index to the Company’s Consolidated Financial Statements is found on page 20. The Company’s Financial Statements and Notes to these Consolidated Financial Statements follow the index.

Item 9. Disagreements on Accounting and Financial Disclosure

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

Item 9a. Controls and Procedures

As of the last day of the period covered by this report, an evaluation was performed by management under the supervision and with the participation of the Company’s Chief Executive Officer (“CEO”) and Chief

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Financial Officer (“CFO”) of the effectiveness of the Company’s disclosure controls and procedures. Management necessarily applied its judgement in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management’s control objectives. Based on that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosures controls and procedures were effective in timely alerting them to material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and in assuring the Company that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. There were no material changes in the Company’s internal controls over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

While the Company believes that its existing disclosure controls and procedures have been effective to accomplish their objectives, the Company intends to continue to examine, refine and document its disclosures controls and procedures and to monitor ongoing developments in this area.

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 2004 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 2004 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 2004 Annual Meeting of Shareholders.

Equity Compensation Plans

The following table provides a summary of information as of February 29, 2004, relating to our equity compensation plans in which the Company’s common stock is authorized for issuance.

Equity Compensation Plan Information

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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 29, 2004, 57,750 options had vested, of which 7,000 have 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 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 29,000 shares remain available under the Plan at February 29, 2004.

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 29, 2004. The Board has no Advisory Directors at the present time and has no plans to add Advisory Directors in the future.

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 2004 Annual Meeting of Shareholders.

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PART IV

Item 14. Principal Accounting Fees and Services

The information required by this item is incorporated herein by reference to the Registrants Proxy Statement for the 2004 Annual Meeting of Shareholders.

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

A. Financial Statements

1. The financial statements filed as a part of this report are listed in the “Index to Consolidated Financial Statements” on page 20.

2. Financial Statements Schedules

Schedule II – Valuation and Qualifying Accounts and Reserves filed as a part of this report is listed in the “Index to Consolidated Financial Statements” on page 20.

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.

B. Reports on Form 8-K

The Registrant filed no reports on Form 8-K during the fourth quarter of the fiscal year ended February 29, 2004.

C. Exhibits Required by Item 601 of Regulation S-K

A list of the exhibits required by Item 601 of Regulation S-K and filed as part of this report is set forth in the Index to Exhibits beginning on page 43, which immediately precedes such exhibits.

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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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Index to Consolidated Financial Statements and Schedules

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Report of Ernst & Young LLP, Independent Registered Public Accounting Firm

Board of Directors and Shareholders

AZZ incorporated

We have audited the accompanying consolidated balance sheets of AZZ incorporated as of February 29, 2004 and February 28, 2003, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended February 29, 2004. 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 the standards of the Public Company Accounting Oversight Board (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 29, 2004 and February 28, 2003, and the consolidated results of its operations and its cash flows for each of the three years in the period ended February 29, 2004, in conformity with U.S. generally accepted accounting principles. 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.

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AZZ incorporated

CONSOLIDATED STATEMENTS OF INCOME

Years ended February 29, 2004, February 28, 2003 and 2002

See accompanying notes.

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AZZ incorporated

CONSOLIDATED BALANCE SHEETS

February 29, 2004 and February 28, 2003

See accompanying notes.

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AZZ incorporated

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended February 29, 2004, February 28, 2003 and 2002

See accompanying notes.

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AZZ incorporated

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Years ended February 29, 2004, February 28, 2003 and 2002