UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





QUARTERLY
REPORT UNDER SECTION 13 OR 15 (d)


OF THE
SECURITIES EXCHANGE ACT OF 1934





For
The Quarterly Period Ended March 31, 2009





Commission
File No. 1-3920






NORTH
AMERICAN GALVANIZING & COATINGS, INC.


(Exact
name of the registrant as specified in its charter)





Delaware


(State of
Incorporation)





71-0268502
 (I.R.S.
Employer Identification No.)





5314
S. Yale Avenue, Suite 1000, Tulsa, Oklahoma 74135


(Address
of principal executive offices)





(918)
494-0964


(Registrant's
telephone number)









Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 and 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 o




Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer, as defined in Rule 12b-2 of the Exchange Act (Check
one):





Large
accelerated filer  o     
Accelerated filer  x  
     Non-accelerated filer  o       
Smaller Reporting Company  o








Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the exchange
Act). Yes o    No 
x





Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of March 31, 2009:




Common
Stock $ .10 Par Value . . . . . 16,295,901












NORTH
AMERICAN GALVANIZING & COATINGS, INC.





Index
to Quarterly Report on Form 10-Q






Part  I.
                                                    Financial
      Information
                                                    PageForward Looking
      Statements or Information
                                                    2Item 1.
                                                    Unaudited Financial
      StatementsReport of
      Independent Registered Public Accounting Firm
                                                    3Condensed
      Consolidated Balance Sheets as of March
      31, 2009, and December 31, 2008
                                                    4Condensed
      Consolidated Statements of Income for the three-month
      periods ended March 31, 2009 and 2008
                                                    5Condensed
      Consolidated Statements of Cash Flows for the
      three-month periods ended March 31, 2009 and 2008
                                                    6Condensed
      Consolidated Statement of Stockholders' Equity for the
      three-month period ended March 31, 2009
                                                    7Notes to Condensed
      Consolidated Financial Statements for the
      three-month periods ended March 31, 2009 and 2008
                                                    8-11Item 2. 
      Management's Discussion and Analysis of Financial Condition and
      Results
      of Operations
                                                    12-16Item
      3.Quantitative and
      Qualitative Disclosures About Market Risk
                                                    16-17Item 4. 
      Controls and Procedures
                                                    17Part II.
                                                    Other
    Information
                                                    17-19Signatures
                                                    19






1


Forward
Looking Statements or Information





Certain
statements in this Form 10-Q, including information set forth under the caption
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations”, constitute “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.  Such statements are
typically punctuated by words or phrases such as “anticipates,” “estimate,”
“should,” “may,” “management believes,” and words or phrases of similar
import.  The Company cautions investors that such forward-looking
statements included in this Form 10-Q, or hereafter included in other publicly
available documents filed with the Securities and Exchange Commission, reports
to the Company’s stockholders and other publicly available statements issued or
released by the Company involve significant risks, uncertainties, and other
factors which could cause the Company’s actual results, performance (financial
or operating) or achievements to differ materially from the future results,
performance (financial or operating) or achievements expressed or implied by
such forward-looking statements.  Factors that could cause or
contribute to such differences could include, but are not limited to, changes in
demand, prices, the raw materials cost of zinc and the cost of natural gas;
changes in economic conditions of the various markets the Company serves, as
well as the other risks detailed herein and in the Company’s Form 10-K filed on
February 20, 2009 with the Securities and Exchange Commission.























2


REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To
the Board of Directors and Stockholders of


North
American Galvanizing & Coatings, Inc.





We have
reviewed the accompanying condensed consolidated balance sheet of North American
Galvanizing & Coatings, Inc. and subsidiary (the “Company”) as of March 31,
2009, and the related condensed consolidated statements of income and of cash
flows for the three-month periods ended March 31, 2009 and 2008 and
stockholders’ equity for the three-month period ended March 31,
2009.  These interim financial statements are the responsibility of
the Company’s management.





We
conducted our reviews in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  A review of interim
financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting
matters.  It is substantially less in scope than an audit conducted in
accordance with the standards of the Public Company Accounting Oversight Board
(United States), the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.





Based on
our reviews, we are not aware of any material modifications that should be made
to such condensed consolidated interim financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.





We have
previously audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheet of
North American Galvanizing & Coatings, Inc. and subsidiary as of December
31, 2008, and the related consolidated statements of income, stockholders’
equity and cash flows for the year then ended (not presented herein); and in our
report dated February 20, 2009, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying condensed consolidated balance sheet as of December 31, 2008 is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.








/s/Deloitte
& Touche LLP





Tulsa,
Oklahoma


April 20,
2009





3


NORTH
      AMERICAN GALVANIZING & COATINGS, INC.CONDENSED
      CONSOLIDATED BALANCE SHEETS (UNAUDITED)(In
      thousands, except share amounts)March
      31,
                    
                    
                    December
      31,ASSETS
                    
                    2009
                    
                    
                    2008CURRENT
      ASSETS:Cash
      and cash equivalents
                    
                    $
                    9,696
                    
                    
                    $
                    9,322Trade
      receivables—less allowances of $173 for 2009 and $102 for
    2008
                    
                    
                    11,141
                    
                    
                    
                    10,880Raw
      materials inventories
                    
                    
                    7,467
                    
                    
                    
                    5,839Prepaid
      expenses and other assets
                    
                    
                    478
                    
                    
                    
                    478Deferred
      tax asset—net
                    
                    
                    1,320
                    
                    
                    
                    1,048Total
      current assets
                    
                    
                    30,102
                    
                    
                    
                    27,567PROPERTY,
      PLANT AND EQUIPMENTLand
                    
                    
                    2,167
                    
                    
                    
                    2,167Galvanizing
      plants and equipment
                    
                    
                    40,827
                    
                    
                    
                    40,13542,994
                    
                    
                    
                    42,302Less—accumulated depreciation
                    
                    
                    (23,339
                    )
                    
                    
                    (22,481
                    )Construction
      in progress
                    
                    
                    3,581
                    
                    
                    
                    2,379Total
      property, plant and equipment—net
                    
                    
                    23,236
                    
                    
                    
                    22,200GOODWILL—Net
                    
                    
                    3,448
                    
                    
                    
                    3,448OTHER
      ASSETS
                    
                    
                    2,105
                    
                    
                    
                    1,557TOTAL
      ASSETS
                    
                    $
                    58,891
                    
                    
                    $
                    54,772LIABILITIES
      AND STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIES:Trade
      accounts payable
                    
                    $
                    4,479
                    
                    
                    $
                    4,088Accrued
      payroll and employee benefits
                    
                    
                    1,479
                    
                    
                    
                    1,853Accrued
      taxes
                    
                    
                    2,043
                    
                    
                    
                    607Customer
      deposits
                    
                    
                    –
                    
                    
                    
                    538Other
      accrued liabilities
                    
                    
                    2,598
                    
                    
                    
                    2,792Total
      current liabilities
                    
                    
                    10,599
                    
                    
                    
                    9,878DEFERRED
      TAX LIABILITY—Net
                    
                    
                    195
                    
                    
                    
                    504Total
      liabilities
                    
                    
                    10,794
                    
                    
                    
                    10,382COMMITMENTS
      AND CONTINGENCIES (NOTE 5)STOCKHOLDERS’
      EQUITYCommon
      stock—$.10 par value, 18,000,000 shares authorized:Issued—16,507,813
      shares in both 2009 and 2008
                    
                    
                    1,651
                    
                    
                    
                    1,651Additional
      paid-in capital
                    
                    
                    11,560
                    
                    
                    
                    12,281Retained
      earnings
                    
                    
                    35,641
                    
                    
                    
                    32,180Common
      shares in treasury at cost— 211,912 in 2009 and 488,212 in
      2008
                    
                    
                    (755
                    )
                    
                    
                    (1,722
                    )Total
      stockholders’ equity
                    
                    
                    48,097
                    
                    
                    
                    44,390TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
                    
                    $
                    58,891
                    
                    
                    $
                    54,772See
      notes to condensed consolidated financial statements.


4


NORTH
      AMERICAN GALVANIZING & COATINGS, INC.CONDENSED
      CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(In
      thousands, except per share amounts)For
      the Three Months EndedMarch
      312009
                                      
                                      
                                      2008SALES
                                      
                                      $
                                      20,609
                                      
                                      
                                      $
                                      20,702COST
      AND EXPENSES:Cost
      of sales excluding depreciation and amortization
                                      
                                      
                                      12,083
                                      
                                      
                                      
                                      12,820Selling,
      general and administrative expenses
                                      
                                      
                                      2,693
                                      
                                      
                                      
                                      2,142Depreciation
      and amortization
                                      
                                      
                                      887
                                      
                                      
                                      
                                      857Total
      costs and expenses
                                      
                                      
                                      15,663
                                      
                                      
                                      
                                      15,819OPERATING
      INCOME
                                      
                                      
                                      4,946
                                      
                                      
                                      
                                      4,883Interest
      income and other
                                      
                                      
                                      13
                                      
                                      
                                      
                                      11INCOME
      BEFORE INCOME TAXES
                                      
                                      
                                      4,959
                                      
                                      
                                      
                                      4,894INCOME
      TAX EXPENSE
                                      
                                      
                                      1,498
                                      
                                      
                                      
                                      1,819NET
      INCOME
                                      
                                      $
                                      3,461
                                      
                                      
                                      $
                                      3,075NET
      INCOME PER COMMON SHARE:Basic
                                      
                                      $
                                      0.21
                                      
                                      
                                      $
                                      0.19Diluted
                                      
                                      $
                                      0.21
                                      
                                      
                                      $
                                      0.18See
      notes to condensed consolidated financial statements.
  5
  NORTH
      AMERICAN GALVANIZING & COATINGS, INC.CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)THREE
      MONTHS ENDED MARCH 31, 2009 AND 2008(In
      thousands)2009
                      
                      
                      2008OPERATING
      ACTIVITIES:Net
      income
                      
                      $
                      3,461
                      
                      
                      $
                      3,075(Gain)
      Loss on disposal of assets
                      
                      
                      (7
                      )
                      
                      
                      7Depreciation
      and amortization
                      
                      
                      887
                      
                      
                      
                      857Deferred
      income taxes
                      
                      
                      (581
                      )
                      
                      
                      (18
                      )Non-cash
      share-based compensation
                      
                      
                      263
                      
                      
                      
                      108Non-cash
      directors’ fees
                      
                      
                      107
                      
                      
                      
                      92Changes
      in operating assets and liabilities:Accounts
      receivable—net
                      
                      
                      (261
                      )
                      
                      
                      (706
                      )Inventories
      and other assets
                      
                      
                      (2,176
                      )
                      
                      
                      804Accounts
      payable, accrued liabilities and other
                      
                      
                      550
                      
                      
                      
                      (1,753
                      )Cash
      provided by operating activities
                      
                      
                      2,243
                      
                      
                      
                      2,466INVESTING
      ACTIVITIES:Capital
      expenditures
                      
                      
                      (1,752
                      )
                      
                      
                      (255
                      )Proceeds
      from sale of assets
                      
                      
                      7
                      
                      
                      
                      –Cash
      used in investing activities
                      
                      
                      (1,745
                      )
                      
                      
                      (255
                      )FINANCING
      ACTIVITIES:Purchase
      of common stock for the treasury
                      
                      
                      (166
                      )
                      
                      
                      (1,090
                      )Proceeds
      from exercise of stock options
                      
                      
                      42
                      
                      
                      
                      –Payments
      on long-term obligations
                      
                      
                      –
                      
                      
                      
                      (15
                      )Cash
      used in financing activities
                      
                      
                      (124
                      )
                      
                      
                      (1,105
                      )INCREASE
      IN CASH AND CASH EQUIVALENTS
                      
                      
                      374
                      
                      
                      
                      1,106CASH
      AND CASH EQUIVALENTS:Beginning
      of period
                      
                      
                      9,322
                      
                      
                      
                      2,966End
      of period
                      
                      $
                      9,696
                      
                      
                      $
                      4,072CASH
      PAID DURING THE YEAR FOR:Income
      taxes
                      
                      $
                      527
                      
                      
                      $
                      43NON-CASH
      INVESTING AND FINANCING ACTIVITIES:Acquisitions
      of fixed assets included in payables at period end
                      
                      $
                      171
                      
                      
                      $
                      79See
      notes to condensed consolidated financial statements.
  6




NORTH
      AMERICAN GALVANIZING & COATINGS, INC.CONDENSED
      CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
  (UNAUDITED)THREE
      MONTHS ENDED MARCH 31, 2009(In
      thousands, except share amounts)Common
      Stock
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        Additional$.10
      Par Value
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        Paid-in
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        Retained
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        Treasury
      StockShares
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        Amount
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        Capital
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        Earnings
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        Shares
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        Amount
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        TotalBALANCE—December
      31, 2008
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        16,507,813
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        $
                                                                                                                                                                                                                                                                        1,651
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        $
                                                                                                                                                                                                                                                                        12,281
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        $
                                                                                                                                                                                                                                                                        32,180
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        488,212
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        $
                                                                                                                                                                                                                                                                        (1,722
                                                                                                                                                                                                                                                                        )
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        $
                                                                                                                                                                                                                                                                        44,390Net
      income
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        3,461
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        3,461Purchase
      of common stock for the treasury
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        42,166
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        (166
                                                                                                                                                                                                                                                                        )
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        (166
                                                                                                                                                                                                                                                                        )Issuance
      of treasury shares for nonvested stock awards
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        (831
                                                                                                                                                                                                                                                                        )
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        (233,166
                                                                                                                                                                                                                                                                        )
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        831
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –Incentive
      Stock Plan Compensation
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        263
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        263Stock
      units for Director Stock Unit Program
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        107
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        107Issuance
      of treasury shares for stock option transactions
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        (158
                                                                                                                                                                                                                                                                        )
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        (56,250
                                                                                                                                                                                                                                                                        )
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        200
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        42Issuance
      of treasury shares for Director Stock UnitProgram
      transactions
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        (102
                                                                                                                                                                                                                                                                        )
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        (29,050
                                                                                                                                                                                                                                                                        )
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        102
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        –BALANCE—March
      31, 2009
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        16,507,813
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        $
                                                                                                                                                                                                                                                                        1,651
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        $
                                                                                                                                                                                                                                                                        11,560
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        $
                                                                                                                                                                                                                                                                        35,641
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        211,912
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        $
                                                                                                                                                                                                                                                                        (755
                                                                                                                                                                                                                                                                        )
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                        $
                                                                                                                                                                                                                                                                        48,097See
      notes to condensed consolidated financial
  statements.
  7


NORTH
AMERICAN GALVANIZING & COATINGS, INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE THREE MONTHS ENDED MARCH 31, 2009 and 2008


UNAUDITED






Note
1.  Basis of Presentation





The
condensed consolidated financial statements included in this report have been
prepared by North American Galvanizing & Coatings, Inc. (the “Company”)
pursuant to its understanding of the rules and regulations of the Securities and
Exchange Commission for interim reporting and include all normal and recurring
adjustments which are, in the opinion of management, necessary for a fair
presentation. The condensed consolidated financial statements include the
accounts of the Company and its subsidiary.





Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations for interim reporting.  The Company believes that the
disclosures are adequate to make the information presented not
misleading.  However, these interim financial statements should be
read in conjunction with the financial statements and notes thereto included in
the Company's Annual Report on Form


10-K for
the year ended December 31, 2008.  The financial data for the interim
periods presented may not necessarily reflect the results to be anticipated for
the complete year.





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the balance
sheet dates and the reported amounts of revenues and expenses for each of the
periods.  Actual results will be determined based on the outcome of
future events and could differ from the estimates. The Company’s sole business
is hot dip galvanizing and coatings which is conducted through its wholly owned
subsidiary, North American Galvanizing Company (“NAGC”).





Note
2.  Share-based Compensation





At March
31, 2009 the Company has two share-based compensation plans, which are
shareholder-approved, the 2004 Incentive Stock Plan and the Director Stock Unit
Program.  The Company’s 2004 Incentive Stock Plan (the Plan) permits
the grant of share options and shares to its employees and directors for up to
2,500,000 shares of common stock.  Director Stock Unit Program shares
are issued under the plan.  The Company believes that such awards
better align the interests of its employees and directors with those of its
shareholders.





The
compensation cost for the Plan, exclusive of the Director Stock Unit Program,
was $263,000 and $108,000 for the three-months ended March 31, 2009 and 2008,
respectively.  No tax benefit was recognized in income tax expense for
the 2009 or 2008 incentive stock plan compensation cost.  There was no
share-based compensation cost capitalized during 2009 or 2008.





Non-vested
Shares.During January 2009, the Compensation Committee
recommended and the Board of Directors approved a grant totaling 153,168
non-vested shares for management employees and 79,998 non-vested shares for
directors.  The weighted-average grant price of restricted stock
granted in 2009 was $3.67.  During February and March 2008, the
Compensation Committee recommended and the Board of Directors approved a grant
totaling 126,667 non-vested shares for management employees and 66,667
non-vested shares for directors.  During July 2008, the Compensation
Committee recommended and the Board of Directors approved a grant totaling
80,000 non-vested shares for non-management directors.  The
weighted-average grant price of restricted stock granted in 2008 was
$4.70.  Non-vested shares granted to management employees, including
management


8


directors,
vest and become nonforfeitable on the date that is four years after the date of
grant; or if the participant is a non-employee director of the Company at the
time of the grant, the date that is two years after the date of the grant. The
Company is recognizing this compensation expense over the two year or four year
vesting period, as applicable, on a ratable basis.  Non-vested shares
are valued at market value on the grant date.  The Company recognized
$176,000 and $18,000 in amortization expense related to restricted stock in the
first three months of 2009 and 2008 respectively.





Stock
Options.Option awards are granted with an exercise
price equal to the market price of the Company’s stock at the date of grant;
those option awards usually vest based on 4 years of continuous service and have
10-year contractual terms.  No stock options were issued in the first
three months of 2009 or 2008.  The Company recognized $87,000 and
$90,000 in the first 3 months of 2009 and 2008 respectively for amortization
expense related to stock options.





Director Stock Unit
Program.At the Company’s Annual Meeting held July 21, 2004,
stockholders approved a Director Stock Unit Program (the
“Program”).  Under the Program, effective January 1, 2005, each
non-management director is required to defer at least 50% ($17,500) of his or
her annual fee, and may elect to defer 75% ($26,250) or 100% ($35,000) of the
annual fee.  The director must make the annual deferral decision
before the start of the year.  Amounts deferred under the Program are
converted into a deferred Stock Unit grant under the Company’s 2004 Incentive
Stock Plan at the average of the closing prices for a share of the Company’s
Common Stock for the ten trading days before the quarterly director fee payment
dates.





To
encourage deferral of fees by non-management directors, the Company makes a
matching Stock Unit grant ranging from 25% to 75% of the amount deferred by the
director as of the same quarterly payment dates.





Under the
Program, the Company automatically defers from the management director’s salary
a dollar amount equal to 50% ($17,500) of the director fees for outside
directors.  The management director may elect to defer an amount equal
to 75% ($26,250) or 100% ($35,000) of the director fees for non-management
directors from his or her compensation, and the Company matches deferrals by the
management director with Stock Units at the same rate as it matches deferrals
for non-management directors.





Deliveries
of the granted stock are made five calendar years following the year for which
the deferral is made subject to acceleration upon the resignation or retirement
of the director or a change in control.





All of
the Company’s non-management directors elected to defer 100% of the annual board
fee for both 2009 and 2008, and the Company’s chief executive officer elected to
defer a corresponding amount of his salary in 2009 and 2008.  During
the first three months of 2009, fees, salary and Company matching deferred by
the directors represented a total of 29,050 stock unit grants valued at $3.69
per stock unit.  During the first three months of 2008, fees, salary
and Company matching deferred by the directors represented a total of 19,728
stock unit grants valued at $4.66 per stock unit.  Company matching
contributions under this plan were $46,000 and $39,000 in the first three months
of 2009 and 2008 respectively.


9


Note
3. Earnings Per Common Share





Basic
earnings per common share for the periods presented are computed based upon the
weighted average number of shares outstanding.  Diluted earnings per
common share for the periods presented are based on the weighted average shares
outstanding, adjusted for the assumed exercise of stock options and for
non-vested shares using the treasury stock method.  The shares and
earnings per share for all periods have been adjusted to reflect the Company’s
four-for-three stock split effected in the form of a stock dividend on September
14, 2008.





Three Months Ended March 31
                
                Number
      of Shares2009
                
                
                2008Basic
                
                
                15,739,454
                
                
                
                16,431,853Diluted
                
                
                16,174,134
                
                
                
                17,098,851


There
were no options priced higher than the share market value at March 31,
2009.





Note
4.  Credit Agreement





The
Company’s credit agreement provides for a revolving credit facility in the
aggregate principal amount of $25 million with future increases of up to an
aggregate principal amount of $10 million at the discretion of the
lender.  The credit facility matures on May 16, 2012, with no
principal payments required before the maturity date and no prepayment
penalty.  The ongoing purpose of the facility is to provide for
issuance of standby letters of credit, acquisitions, and for other general
corporate purposes.





At March
31, 2009, the Company had unused borrowing capacity of  $24.8 million,
based on  no borrowings outstanding under the revolving credit
facility, and $0.2 million of letters of credit to secure payment of current and
future workers’ compensation claims.





Substantially
all of the Company’s accounts receivable, inventories, fixed assets and the
common stock of its subsidiary are pledged as collateral under the agreement,
and the credit agreement is secured by a full and unconditional guaranty from
NAGC.





Note
5.  Commitments and Contingencies




The
Company has commitments with domestic and foreign zinc producers and brokers to
purchase zinc used in its hot dip galvanizing operations.  Commitments
for the future delivery of zinc reflect rates then quoted on the London Metals
Exchange and are not subject to price adjustment or are based on such quoted
prices at the time of delivery.  At March 31, 2009 the aggregate
commitments for the procurement of zinc at fixed prices were approximately $1.1
million.  The Company reviews these fixed price contracts for losses
using the same methodology employed to estimate the market value of its zinc
inventory.  The Company had no unpriced commitments for zinc purchases
at March 31, 2009.





The
Company’s financial strategy includes evaluating the selective use of derivative
financial instruments to manage zinc and interest costs.  As part of
its inventory management strategy, the Company expects to continue evaluating
hedging instruments to minimize the impact of zinc price
fluctuations.  The Company had no derivative instruments required to
be reported at fair value at March 31, 2009 or December 31, 2008, and did not
utilize derivatives in the three-month period ended March 31, 2009 or the year
ended December 31, 2008, except for the forward purchase agreements described
above, which are accounted for as normal purchases.


10


The
Company’s total off-balance sheet contractual obligations at March 31, 2009,
consist of approximately $1.6
million for long-term operating leases for vehicles, office space, office
equipment, galvanizing facilities and galvanizing equipment and approximately
$1.1 million for zinc purchase commitments.  The various leases for
galvanizing facilities, including option renewals, expire from 2009 to
2017.  At March 31, 2009 the Company has approximately $1.5 million in
outstanding commitments for various machinery, equipment and building
improvements and $0.8 million in outstanding commitments for other operating
obligations.





NAGC was
notified in 1997 by the Illinois Environmental Protection Agency (“IEPA”) that
it was one of approximately 60 potentially responsible parties under the
Comprehensive Environmental Response, Compensation, and Liability Information
System (“CERCLIS”) in connection with cleanup of an abandoned site formerly
owned by Sandoval Zinc Co., an entity unrelated to NAGC.  The IEPA
notice includes NACG as one of the organizations which arranged for the
treatment and disposal of hazardous substances at Sandoval.  The
estimated timeframe for resolution of the IEPA contingency is
unknown.  The IEPA has yet to respond to a proposed work plan
submitted in August 2000 by a group of the potentially responsible parties or
suggest any other course of action, and there has been no activity in regards to
this issue since 2001. Until the work plan is approved and completed, the range
of potential loss or remediation, if any, is unknown, and in addition, the
allocation of potential loss between the 60 potentially responsible parties is
unknown and not reasonably estimable.  Therefore, the Company has no
basis for determining potential exposure and estimated remediation costs at this
time and no liability has been accrued.




In
September 2008, the United States Environmental Protection Agency (the “EPA”)
notified the Company of a claim against the Company as a
potentially responsible party related to a Superfund site in Texas City,
Texas.  This matter pertains to galvanizing facilities of a
Company subsidiary and its disposal of waste, which was handled
by their supplier in the early 1980’s.  The EPA offered the Company a
special de minimis
party settlement to resolve potential liability that the Company and its
subsidiaries may have under CERCLA at this Site.  The Company accrued the
$112,145 de minimis
settlement amount during the third quarter of 2008 and accepted the EPA’s offer
before the deadline of December 30, 2008.




The
Company is committed to complying with all federal, state and local
environmental laws and regulations and using its best management practices to
anticipate and satisfy future requirements. As is typical in the galvanizing
business, the Company will have additional environmental compliance costs
associated with past, present and future operations. Management is committed to
discovering and eliminating environmental issues as they arise. Because of
frequent changes in environmental technology, laws and regulations management
cannot reasonably quantify the Company’s potential future costs in this
area.




North
American Galvanizing & Coatings, Inc. and its subsidiary are parties to a
number of other lawsuits and environmental matters which are not discussed
herein.  Management of the Company, based upon their analysis of known
facts and circumstances and reports from legal counsel, does not believe that
any such matter will have a material adverse effect on the results of
operations, financial condition or cash flows of the Company.







Note
6.  Submission of Matters to a Vote of Security Holders




As of
April 2, 2009, the holders of a majority of the outstanding shares of common
stock of North American Galvanizing & Coatings, Inc. (the “Company”) had
provided written consent approving an amendment to the Company’s Restated
Certificate of Incorporation, as amended, pursuant to the Company’s consent
solicitation authorized by the Company’s Board of Directors.  Through
the written consent, the holders of a majority of the outstanding shares of the
Company’s common stock approved an increase in the number of authorized shares
of the Company’s common stock from 18,000,000 shares to 25,000,000
shares.





Only
stockholders who owned shares of the Company’s common stock, as of the close of
business on February 27, 2009, were eligible to provide their written
consent.





The
Company filed a Certificate of Amendment of the Restated Certificate of
Incorporation, as amended, with the Secretary of State of Delaware on April 2,
2009, which provides that the aggregate number of shares of the Company’s common
stock which the Company shall have authority to issue is 25,000,000
shares.


11


North
American Galvanizing & Coatings, Inc.





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





GENERAL





North
American Galvanizing is a leading provider of corrosion protection for iron and
steel components fabricated by its customers. Hot dip galvanizing is the process
of applying a zinc coating to fabricated iron or steel material by immersing the
material in a bath consisting primarily of molten zinc.  Based on the
number of its operating plants, the Company is one of the largest merchant
market hot dip galvanizing companies in the United States.





During
the three-month period ended March 31, 2009, there were no significant changes
to the Company’s critical accounting policies previously disclosed in Form 10-K
for the year ended December 31, 2008.





The
Company’s galvanizing plants offer a broad line of services including centrifuge
galvanizing for small threaded products, sandblasting, chromate quenching,
polymeric coatings, and proprietary INFRASHIELDSM Coating
Application Systems for polyurethane protective linings and coatings over
galvanized surfaces.  The Company’s mechanical and chemical engineers
provide customized assistance with initial fabrication design, project estimates
and steel chemistry selection.





The
Company’s galvanizing and coating operations are composed of ten facilities
located in Colorado, Kentucky, Missouri, Ohio, Oklahoma, Tennessee and Texas. In
addition, the Company is constructing a new hot dip galvanizing plant in
Benwood, West Virginia which is expected to begin operating in the second
quarter, 2009.  These facilities operate galvanizing kettles ranging
in length from 16 feet to 62 feet, and have lifting capacities ranging from
12,000 pounds to 40,000 pounds.





The
Company maintains a sales and service network coupled with its galvanizing
plants, supplemented by national account business development at the corporate
level. In 2008, the Company galvanized steel products for approximately 1,800
customers nationwide.





All of
the Company’s sales are generated for customers whose end markets are
principally in the United States.  The Company markets its galvanizing
and coating services directly to its customers and does not utilize agents or
distributors.  Although hot dip galvanizing is considered a mature
service industry, the Company is actively engaged in developing new markets
through participation in industry trade shows, metals trade associations and
presentation of technical seminars by its national marketing service
team.





Hot dip
galvanizing provides metals corrosion protection for many product applications
used in commercial, construction and industrial markets. The Company’s
galvanizing can be found in almost every major application and industry that
requires corrosion protection where iron or steel is used, including the
following end user markets:





·
            highway
      and transportation


·
            power
      transmission and distribution


·
            wireless
      and telecommunications


·
            utilities


·
            petrochemical
      processing


·
            industrial
      grating


·
            infrastructure
      including buildings, airports, bridges and power
  generation


·
            wastewater
      treatment




12




·
            fresh
      water storage and transportation


·
            pulp
      and paper


·
            pipe
      and tube


·
            food
      processing


·
            agricultural
      (irrigation systems)


·
            recreation
      (boat trailers, marine docks, stadium
scaffolds)


·
            bridge
      and pedestrian handrail


·
            commercial
      and residential lighting poles


·
            original
      equipment manufactured products, including general
      fabrication.





As a
value-added service provider, the Company’s revenues are directly influenced by
the level of economic activity in the various end markets that it
serves.  Economic activity in those markets that results in the
expansion and/or upgrading of physical facilities (i.e., construction) may
involve a time-lag factor of several months before translating into a demand for
galvanizing fabricated components.  Despite the inherent seasonality
associated with large project construction work, the Company maintains a
relatively stable revenue stream throughout the year by offering fabricators,
large and small, reliable and rapid turn-around service.





The
Company records revenues when the galvanizing processes and inspection utilizing
industry-specified standards are completed.  The Company generates all
of its operating cash from such revenues, and utilizes a line of credit secured
by the underlying accounts receivable and zinc inventory to facilitate working
capital needs.





Each of
the Company’s galvanizing plants operate in a highly competitive environment
underscored by pricing pressures, primarily from other public and
privately-owned galvanizers and alternative forms of corrosion protection, such
as paint.  The Company’s long-term response to these challenges has
been a sustained strategy focusing on providing a reliable quality of
galvanizing to standard industry technical specifications and rapid turn-around
time on every project, large and small.  Key to the success of this
strategy is the Company’s continuing commitment and long-term record of
reinvesting earnings to upgrade its galvanizing facilities and provide technical
innovations to improve production efficiencies; and to construct new facilities
when market conditions present opportunities for growth. The Company is
addressing long-term opportunities to expand its galvanizing and coatings
business through programs to increase industry awareness of the proven, unique
benefits of galvanizing for metals corrosion protection.  Each of the
Company’s galvanizing plants is linked to a centralized system involving sales
order entry, facility maintenance and operating procedures, quality assurance,
purchasing and credit and accounting that enable the plant to focus on providing
galvanizing and coating services in the most cost-effective manner.





The
principal raw materials essential to the Company’s galvanizing and coating
operations are zinc and various chemicals which are normally available for
purchase in the open market.





Key
Indicators





Key
industries which historically have provided the Company some indication of the
potential demand for galvanizing in the near-term, (i.e., primarily within a
year) include highway and transportation, power transmission and distribution,
telecommunications and the level of quoting activity for regional metal
fabricators. In general, growth in the commercial/industrial sectors of the
economy generates new construction and capital spending which ultimately impacts
the demand for galvanizing.





Key
operating measures utilized by the Company include new orders, zinc inventory,
tons of steel galvanized, revenue, pounds and labor costs per hour, zinc usage
related to tonnage galvanized, and lost-time safety
performance.  These measures are reported and analyzed on various
cycles, including daily, weekly and monthly.





The
Company utilizes a number of key financial measures to evaluate the operations
at each of its galvanizing plants, to identify trends and variables impacting
operating productivity and current and future business results, which
include:  return on capital employed, sales, gross profit, fixed and
variable costs, selling and general administrative expenses, operating cash
flows, capital expenditures, interest expense, and a number of ratios such as
profit from operations and accounts receivable turnover.  These
measures are reviewed by the Company’s operating and executive management each
month, or more frequently, and compared to prior periods, the current business
plan and to standard performance criteria, as applicable.


13


RESULTS
OF OPERATIONS


The
following table shows the Company’s results of operations for the three-month
periods ended March 31, 2009 and 2008:





(Dollars
      in thousands)Three
      Months Ended March 31,2009
                                                                  
                                                                  
                                                                  2008%
      of
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  %
      ofAmount
                                                                  
                                                                  
                                                                  Sales
                                                                  
                                                                  
                                                                  Amount
                                                                  
                                                                  
                                                                  SalesSales
                                                                  
                                                                  $
                                                                  20,609
                                                                  
                                                                  
                                                                  
                                                                  100.0%
                                                                  
                                                                  
                                                                  $
                                                                  20,702
                                                                  
                                                                  
                                                                  
                                                                  100.0%Cost
      of sales excluding depreciation and amortization
                                                                  
                                                                  
                                                                  12,083
                                                                  
                                                                  
                                                                  
                                                                  58.6%
                                                                  
                                                                  
                                                                  
                                                                  12,820
                                                                  
                                                                  
                                                                  
                                                                  62.0%Selling,
      general and administrative expenses
                                                                  
                                                                  
                                                                  2,693
                                                                  
                                                                  
                                                                  
                                                                  13.1%
                                                                  
                                                                  
                                                                  
                                                                  2,142
                                                                  
                                                                  
                                                                  
                                                                  10.3%Depreciation
      and   amortization
                                                                  
                                                                  
                                                                  887
                                                                  
                                                                  
                                                                  
                                                                  4.3%
                                                                  
                                                                  
                                                                  
                                                                  857
                                                                  
                                                                  
                                                                  
                                                                  4.1%Operating
      income
                                                                  
                                                                  
                                                                  4,946
                                                                  
                                                                  
                                                                  
                                                                  24.0%
                                                                  
                                                                  
                                                                  
                                                                  4,883
                                                                  
                                                                  
                                                                  
                                                                  23.6%Interest
      income
                                                                  
                                                                  
                                                                  13
                                                                  
                                                                  
                                                                  
                                                                  0.1%
                                                                  
                                                                  
                                                                  
                                                                  11
                                                                  
                                                                  
                                                                  
                                                                  0.1%Income
      before income taxes
                                                                  
                                                                  
                                                                  4,959
                                                                  
                                                                  
                                                                  
                                                                  24.1%
                                                                  
                                                                  
                                                                  
                                                                  4,894
                                                                  
                                                                  
                                                                  
                                                                  23.7%Income
      tax expense
                                                                  
                                                                  
                                                                  1,498
                                                                  
                                                                  
                                                                  
                                                                  7.3%
                                                                  
                                                                  
                                                                  
                                                                  1,819
                                                                  
                                                                  
                                                                  
                                                                  8.8%Net
      income
                                                                  
                                                                  $
                                                                  3,461
                                                                  
                                                                  
                                                                  
                                                                  16.8%
                                                                  
                                                                  
                                                                  $
                                                                  3,075
                                                                  
                                                                  
                                                                  
                                                                  14.9%


2009
COMPARED TO 2008





Sales.Sales for
the first quarter ended March 31, 2009 were comparable to the prior year first
quarter.  Sales volumes for the first quarter of 2009 increased 18%
over the first quarter of 2008 due to an overall increase in demand from
existing customers and incremental project work.  The average selling
price for the first quarter of 2009 was lower than the average selling price for
the same period in 2008, as a result of decreased zinc costs.





Cost of
Sales.   The decrease in cost of sales from 2008 to 2009
resulted from a decrease in zinc costs. Other items impacting cost of sales
include reduced utility costs of $.4 million due to lower natural gas costs,
offset by increased other overhead expenses totaling $.3 million.





Selling, General and Administrative
(SG&A) Expenses.SG&A increased $0.6 million from the
prior year first quarter.  The increase is due to increases in legal
and professional fees of $.3 million and increases of $0.3 million in incentive
compensation.





Operating
Income.Operating income increased $.1 million from the first
three months of 2008 to the first three months of 2009.  Operating
income as a percent of sales increased from 23.6% to 24% for the first quarter
of 2009 versus the first quarter of 2008.  Increases in operating
income result from the factors explained above.





Income Taxes.The Company’s effective income tax
rates for the first quarter of 2009 and 2008 were 30.2% and 37.2%,
respectively.   The first quarter 2009 rate differed from the federal
statutory rate primarily due to state income taxes and adjustments to previous
tax estimates.





Net Income.For
the first quarter of 2009, the Company reported net income of $3.5 million
compared to net income of $3.1 million for the first quarter of
2008.  Increases in net income result from the factors explained
above.


14


LIQUIDITY
AND CAPITAL RESOURCES





The
Company’s cash flow from operations and borrowings under credit facilities
have been adequate to fund its current facilities’ working capital and
capital spending requirements and is expected to be sufficient to fund the
recurring level of operations for the next twelve months.  During 2009
and 2008, operating cash flow has been the primary sources of
liquidity.  The Company monitors working capital and planned capital
spending to assess liquidity and minimize cyclical cash flow.





Cash flow
from operating activities for the first three months of 2009 and 2008 was $2.2
million and $2.5 million, respectively. In the first quarter 2009, cash flow
from operating activities reflected an outflow of $2.2 million due to an
increase in inventory and other assets.  This was mainly due to an
increase in zinc inventory.





Capital
expenditures for the first three months of 2009 were $1.8
million.  Expenditures in the first quarter 2009 include the
construction of the new facility in Benwood, West Virginia and upgrading
facilities at the Hurst, Texas plant.  In the first three months of
2008, the Company spent $.3 million for capital expenditures. The Company
expects capital expenditures for 2009 to approximate $6.9 million including $3.3
million for the new plant in Benwood, West Virginia.





During
the first three months of 2009 and 2008, the company repurchased common stock
for the treasury totaling $0.2 million and $1.1 million,
respectively.  The Company has no outstanding debt as of March 31,
2009.





The
Company’s credit agreement provides for a revolving credit facility in the
aggregate principal amount of $25 million with future increases of up to an
aggregate principal amount of $10 million at the discretion of the
lender.  The credit facility matures on May 16, 2012, with no
principal payments required before the maturity date and no prepayment
penalty.  The ongoing purpose of the facility is to provide for
issuance of standby letters of credit, acquisitions, and for other general
corporate purposes.





At March
31, 2009, the Company had unused borrowing capacity of  $24.8 million,
based on  no borrowings outstanding under the revolving credit
facility, and $0.2 million of letters of credit to secure payment of current and
future workers’ compensation claims.





Substantially
all of the Company’s accounts receivable, inventories, fixed assets and the
common stock of its subsidiary are pledged as collateral under the agreement,
and the credit agreement is secured by a full and unconditional guaranty from
NAGC.





The
Company has various commitments primarily related to vehicle and equipment
operating leases, facilities operating leases, and zinc purchase commitments.
The Company’s off-balance sheet contractual obligations at March 31, 2009,
consist of $1.3 million for long-term operating leases for galvanizing and
office facilities, $0.3 million for vehicle and equipment operating leases, and
$1.1 million for zinc purchase commitments.  In addition, at March 31,
2009 the Company has approximately $1.5 million in outstanding commitments for
various machinery, equipment and building improvements and $0.8 million in
outstanding commitments for other operating obligations.  The various
leases for galvanizing facilities, including option renewals, expire from 2009
to 2017. The vehicle leases expire annually on various schedules through 2012.
NAGC periodically enters into fixed price purchase commitments with domestic and
foreign zinc producers to purchase a portion of its requirements for its hot dip
galvanizing operations; commitments for the future delivery of zinc can be for
up to one year.





ENVIRONMENTAL
MATTERS





The
Company’s facilities are subject to extensive environmental legislation and
regulations affecting their operations and the discharge of
wastes.  The cost of compliance with such regulations in the first
three months of 2009 and 2008 was approximately $0.4 million and $0.3 million,
respectively, for the disposal and recycling of wastes generated by the
galvanizing operations.


15


NAGC was
notified in 1997 by the Illinois Environmental Protection Agency (“IEPA”) that
it was one of approximately 60 potentially responsible parties under the
Comprehensive Environmental Response, Compensation, and Liability Information
System (“CERCLIS”) in connection with cleanup of an abandoned site formerly
owned by Sandoval Zinc Co., an entity unrelated to NAGC.  The IEPA
notice includes NACG as one of the organizations which arranged for the
treatment and disposal of hazardous substances at Sandoval.  The
estimated timeframe for resolution of the IEPA contingency is
unknown.  The IEPA has yet to respond to a proposed work plan
submitted in August 2000 by a group of the potentially responsible parties or
suggest any other course of action, and there has been no activity in regards to
this issue since 2001. Until the work plan is approved and completed, the range
of potential loss or remediation, if any, is unknown, and in addition, the
allocation of potential loss between the 60 potentially responsible parties is
unknown and not reasonably estimable.  Therefore, the Company has no
basis for determining potential exposure and estimated remediation costs at this
time and no liability has been accrued.




In
September 2008, the United States Environmental Protection Agency (the “EPA”)
notified the Company of a claim against the Company as a
potentially responsible party related to a Superfund site in Texas City,
Texas.  This matter pertains to galvanizing facilities of a
Company subsidiary and its disposal of waste, which was handled
by their supplier in the early 1980’s.  The EPA offered the Company a
special de minimis
party settlement to resolve potential liability that the Company and its
subsidiaries may have under CERCLA at this Site.  The Company accrued the
$112,145 de minimis
settlement amount during the third quarter of 2008 and accepted the EPA’s offer
before the deadline of December 30, 2008.




The
Company is committed to complying with all federal, state and local
environmental laws and regulations and using its best management practices to
anticipate and satisfy future requirements. As is typical in the galvanizing
business, the Company will have additional environmental compliance costs
associated with past, present and future operations. Management is committed to
discovering and eliminating environmental issues as they arise. Because of
frequent changes in environmental technology, laws and regulations management
cannot reasonably quantify the Company’s potential future costs in this
area.




North
American Galvanizing & Coatings, Inc. and its subsidiary are parties to a
number of other lawsuits and environmental matters which are not discussed
herein.  Management of the Company, based upon their analysis of known
facts and circumstances and reports from legal counsel, does not believe that
any such matter will have a material adverse effect on the results of
operations, financial conditions or cash flows of the Company.







Item
3. Quantitative and Qualitative Disclosures About Market Risk





The
Company’s operations include managing market risks related to changes in
interest rates and zinc commodity prices.





Interest Rate
Risk.  The Company is exposed to financial market risk related
to changes in interest rates to the extent the company has borrowing
outstanding.  At March 31, 2009, the Company had no outstanding
debt.





Zinc Price
Risk.NAGC periodically enters into fixed price purchase
commitments with domestic and foreign zinc producers to purchase a portion of
its zinc requirements for its hot dip galvanizing
operations.  Commitments for the future delivery of zinc, which can be
for up to one (1) year, reflect rates quoted on the London Metals
Exchange.  At March 31, 2009, the aggregate fixed price commitments
for the procurement of zinc were approximately


$1.1
million.  With respect to these zinc fixed price purchase commitments,
a hypothetical decrease of 10% in the market price of zinc from the March 31,
2009 level represented a potential lost gross margin opportunity of
approximately $110,000.


16


The
Company’s financial strategy includes evaluating the selective use of derivative
financial instruments to manage zinc and interest costs.  As part of
its inventory management strategy, the Company recognizes that hedging
instruments may be effective in minimizing the impact of zinc price
fluctuations.  The Company’s current zinc forward purchase commitments
are considered derivatives, but the Company has elected to account for these
purchase commitments as normal purchases.





Item
4.  Controls and Procedures





As of the
end of the period covered by this report, management, including our chief
executive officer and chief financial officer, evaluated the effectiveness of
the design and operation of our disclosure controls and procedures. Based upon,
and as of the date of, the evaluation, our chief executive officer and chief
financial officer concluded that the disclosure controls and procedures were
effective, in all material respects, to ensure that information required to be
disclosed in the reports we file and submit under the Exchange Act is recorded,
processed, summarized and reported as and when required.





The
Company’s certifying officers have indicated that there were no significant
changes in internal controls over financial reporting that have occurred during
the fiscal quarter ended March 31, 2009 that materially affected, or were
reasonably likely to materially affect, internal controls over financial
reporting.





Part
II   Other Information





Item
1.  Legal Proceedings.





NAGC was
notified in 1997 by the Illinois Environmental Protection Agency (“IEPA”) that
it was one of approximately 60 potentially responsible parties under the
Comprehensive Environmental Response, Compensation, and Liability Information
System (“CERCLIS”) in connection with cleanup of an abandoned site formerly
owned by Sandoval Zinc Co., an entity unrelated to NAGC.  The IEPA
notice includes NACG as one of the organizations which arranged for the
treatment and disposal of hazardous substances at Sandoval.  The
estimated timeframe for resolution of the IEPA contingency is
unknown.  The IEPA has yet to respond to a proposed work plan
submitted in August 2000 by a group of the potentially responsible parties or
suggest any other course of action, and there has been no activity in regards to
this issue since 2001. Until the work plan is approved and completed, the range
of potential loss or remediation, if any, is unknown, and in addition, the
allocation of potential loss between the 60 potentially responsible parties is
unknown and not reasonably estimable.  Therefore, the Company has no
basis for determining potential exposure and estimated remediation costs at this
time and no liability has been accrued.




In
September 2008, the United States Environmental Protection Agency (the “EPA”)
notified the Company of a claim against the Company as a
potentially responsible party related to a Superfund site in Texas City,
Texas.  This matter pertains to galvanizing facilities of a
Company subsidiary and its disposal of waste, which was handled
by their supplier in the early 1980’s.  The EPA offered the Company a
special de minimis
party settlement to resolve potential liability that the Company and its
subsidiaries may have under CERCLA at this Site.  The Company accrued the
$112,145 de minimis
settlement amount during the third quarter of 2008 and accepted the EPA’s offer
before the deadline of December 30, 2008.


17


Item
1A.  Risk Factors.





There are
no material changes from risk factors as previously disclosed in the Company’s
Annual Report on Form 10-K filed on February 20, 2009.





Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds.





In August
1998, the Board of Directors authorized $1,000,000 for a share repurchase
program for shares to be purchased in private or open market
transactions.  In March 2008, the Board of Directors authorized the
company to buy back an additional $2,000,000 of its common stock, subject to
market conditions.  The company has completed the August 1998 and
March 2008 share repurchase programs.  In August 2008, the Board of
Directors authorized the company to buy back an additional $3,000,000 of its
common stock, subject to market conditions.  Unless terminated earlier
by resolution of the Board of Directors, the program will expire when the
Company has purchased shares with an aggregate purchase price of no more than
the $307,867 remaining under the program at March 31, 2009.





Issuer
Purchases of Equity Securities


Total
                  
                  ApproximateNumber
      of
                  
                  Dollar
      ValueShares
                  
                  of
      SharesPurchased
                  
                  that
      May YetAverage
                  
                  as
      Part of
                  
                  be
      PurchasedPeriod
                  Shares
                  
                  Price
      Paid
                  
                  Publicly
                  
                  Under(from/to)
                  Purchased
                  
                  per
      Share
                  
                  Announced
      Plan
                  
                  the
      PlanJanuary
      1, 2009 - January 31, 2009
                  42,166
                  
                  $  3.95
                  
                  1,463,893
                  
                  $  307,867





Item
3.  Defaults Upon Senior Securities – Not applicable.





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





As of
April 2, 2009, the holders of a majority of the outstanding shares of common
stock of North American Galvanizing & Coatings, Inc. (the “Company”) had
provided written consent approving an amendment to the Company’s Restated
Certificate of Incorporation, as amended, pursuant to the Company’s consent
solicitation authorized by the Company’s Board of Directors.  Through
the written consent, the holders of a majority of the outstanding shares of the
Company’s common stock approved an increase in the number of authorized shares
of the Company’s common stock from 18,000,000 shares to 25,000,000
shares.





Only
stockholders who owned shares of the Company’s common stock, as of the close of
business on February 27, 2009, were eligible to provide their written
consent.





The
Company filed a Certificate of Amendment of the Restated Certificate of
Incorporation, as amended, with the Secretary of State of Delaware on April 2,
2009, which provides that the aggregate number of shares of the Company’s common
stock which the Company shall have authority to issue is 25,000,000
shares.


18


Item
5.  Other Information – Not applicable.







Item
6.  Exhibits




No.
                      Description


3.1
            The
      Company’s Restated Certificate of Incorporation, as amended (incorporated
      by reference to Exhibit 3.1 to the Company’s Pre-Effective Amendment No. 1
      to Registration Statement on Form S-3 (Reg. No. 333-4937) filed with the
      Commission on June 7, 1996).





3.2
            The
      Company’s Amended and Restated Bylaws (incorporated by reference to
      Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q dated March 31,
      1996).




15
              Awareness
      Letter of Deloitte & Touche
LLP.
  31.1
                  Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.
  31.2
                        Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.
 32
                          Certifications
      pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the
      Sarbanes-Oxley Act of
2002.





SIGNATURES





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







NORTH AMERICAN GALVANIZING
& COATINGS, INC.


(Registrant)






By:/s/ Beth B.
Hood


Vice President and


Chief Financial Officer


(Principal Financial
Officer)






Date:  April
20, 2009





19