#United States #Fort Worth #AZZ Inc. #hot-dip galvanizing #coil coating

AZZ Inc. Reports Strong Financial Results for Third Quarter of FY 2025

AZZ Inc., a prominent player in the hot-dip galvanizing and coil coating sectors, presented an impressive performance for the third quarter of its fiscal year 2025, which ended on November 30, 2024. The company’s latest financial results reflect a robust sales growth that has set the stage for an optimistic outlook as they navigate the remaining months of the fiscal year.

Financial Highlights

During the third quarter, AZZ Inc. achieved total sales of $403.7 million, marking a 5.8% increase compared to the same period last year. This increase was driven predominantly by strong performance in their Metal Coatings and Precoat Metals segments. Specifically, Metal Coatings contributed sales of $168.6 million (up 3.3%), while Precoat Metals saw a more substantial jump, reaching $235.1 million with a remarkable 7.6% gain.

Net income for the quarter came in at $33.6 million, a substantial 25% rise from the prior year’s $26.9 million. This growth translated into an adjusted net income of $41.9 million, improving by 20.5%. Notably, the company reported a diluted earnings per share (EPS) of $1.12, which reflects a significant increase of 21.7% compared to the previous year’s figures.

In addition to better sales and net income, AZZ Inc. also reported an adjusted EBITDA of $90.7 million, indicating a healthy margin of 22.5% of sales. The Metal Coatings sector specifically brought in a 31.5% margin, attributed largely to reduced zinc costs and improved utilization rates.

Operational Efficiency

The quarter also saw AZZ Inc. significantly reducing its debt levels by $35 million, which is part of a broader effort that allowed a total reduction of $80 million year-to-date. The current net leverage ratio stands at 2.6x, highlighting the company’s commitment to improving its financial position.

Tom Ferguson, the company’s President and CEO, stated, “Third quarter results exceeded expectations, with sales growth primarily fueled by our hot-dip galvanized steel and coil-coated materials. Furthermore, increased operational productivity has been critical in achieving these results.” Tom emphasized the importance of their dedicated workforce in driving the company’s growth and service excellence.

Market Performance

Each of AZZ’s main segments displayed positive momentum in their operations. In particular, the Metal Coatings segment benefitted from project spending in significant end markets, including construction and industrial applications, which supported the 3.3% sales growth. Galvanizing sales specifically increased by 5.2%, partially offsetting declines in other sales areas within the segment.

The Precoat Metals segment exhibited a robust performance as their 7.6% sales increase was driven by market share expansion and favorable shifts in end-market demands. The adjusted EBITDA for this segment reached $45 million with an EBITDA margin improvement to 19.1%.

Future Projections

Looking ahead, AZZ Inc. has revised its financial guidance for the entirety of fiscal year 2025. The company now anticipates total sales between $1.55 billion and $1.6 billion, with adjusted EBITDA predictions set between $340 million and $360 million. Furthermore, adjusted diluted EPS is projected to range from $5.00 to $5.30.

“Given anticipated market conditions, we remain optimistic in achieving our revised targets. The ongoing improvements in operational performance, alongside strategic market engagements, are anticipated to further reinforce our competitive position,” stated Ferguson.

Conclusion

AZZ Inc.’s third-quarter results underscore a period of significant growth, reflecting both resilient sales performance and effective operational management. The firm appears well-positioned to continue this positive trajectory into the future as it leverages its strong market presence and enhances its operational capabilities. The upcoming conference call on January 8, 2025, will offer more insights as the leadership team discusses the latest results and strategic plans moving forward.