#United States #Fort Worth #AZZ Inc. #Metal Coatings #Precoat Metals

AZZ Inc. Reports Strong Financial Performance for Q1 2027

AZZ Inc. (NYSE: AZZ), a prominent name in hot-dip galvanizing and coil coating solutions, has revealed its impressive financial results for the first quarter ended May 31, 2026. With total sales reaching $448.5 million, the company has achieved a growth of 6.3% compared to the same period last year, thanks to robust performance in both its Metal Coatings and Precoat Metals segments.

Key Highlights

The highlights of AZZ's first-quarter report include:

• - Sales Performance: Metal Coatings sales surged by 12.3% to $210.3 million, driven by increased project spending across various sectors, including construction and industrial. Meanwhile, Precoat Metals enjoyed steady growth with sales of $238.2 million, marking a 1.5% increase.
• - Net Income: Despite a noteworthy decrease in net income to $52.0 million, primarily due to last year’s strong equity earnings from the AVAIL joint venture, the adjusted net income showed a slight increase of 3.6%, reaching $55.8 million.
• - Earnings per Share (EPS): The diluted EPS decreased to $1.72. However, when adjusted, it increased by 3.9% to $1.85, reflecting strong operational performance amid challenging comparisons with the prior year's extraordinary earnings.
• - Adjusted EBITDA: The company reported an adjusted EBITDA of $99.5 million, representing 22.2% of sales, although this was down from the previous year's figure of $106.4 million. This decline was influenced by the absence of significant equity earnings that benefitted last year’s comparison.
• - Cash Flow: Cash flow from operations stood at a solid $37.1 million, allowing the company to increase its dividend payment to $0.20 per share while also announcing a new increase to $0.24, emphasizing its commitment to shareholder returns.

Segment Overview

In terms of segment performance, the Metal Coatings sector was particularly noteworthy, achieving a 30.3% adjusted EBITDA margin despite a 260 basis point decline from the previous year. This was largely due to heightened demand in key sectors, resulting in a considerable volume of galvanized steel sold.

Conversely, Precoat Metals reported an EBITDA margin of 21.7%, up 100 basis points, driven by a stronger performance at their newly ramped-up Washington facility. This segment's first-quarter sales were positively impacted by adjustments made to account for rising material and input costs, highlighting the operational agility aimed at addressing market pressures.

Looking Ahead: Increased Guidance

AZZ Inc. has taken a bullish stance on the fiscal year ahead, leading to an upward revision of its annual guidance. The new projections reflect an optimistic outlook based on ongoing strategic initiatives and external market visibility. The company now expects:

• - Sales: Between $1.80 billion and $1.85 billion
• - Adjusted EBITDA: Between $375 million and $415 million
• - Adjusted Diluted EPS: Between $6.75 and $7.15

These projections assume an annualized effective tax rate of 25% and reaffirm the company's confidence in its operational resilience amid evolving market dynamics.

Conclusion

As AZZ Inc. continues to navigate the evolving landscape, the positive financial outcomes followed by a revised upward guidance signal a robust strategy that positions the company for long-term success. The leadership, represented by President and CEO Tom Ferguson, expressed gratitude towards the employees for their contributions, reinforcing the company's core values of operational excellence and employee engagement.

Looking ahead, AZZ Inc. remains committed to innovating within the metal coating sector, driven by an ambitious growth strategy that seeks to capitalize on upcoming market opportunities, thereby enhancing shareholder value and operational stability.