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AZZ Inc. Fiscal Year 2025 Financial Overview

AZZ Inc. (NYSE: AZZ) has released its audited results for the fourth quarter and the entirety of fiscal year 2025, highlighting a robust business performance despite facing challenges from inclement weather. With total sales reaching $1,577.7 million, AZZ Inc. achieved a commendable growth of 2.6% compared to the previous fiscal year. This growth is indicative of a resilient market strategy and effective operational execution in the hot-dip galvanizing and coil coating sectors.

Overview of Sales

In its Metal Coatings segment, AZZ reported sales of $665.1 million, experiencing a 1.4% increase from FY 2024. The increased volume, particularly in hot-dip galvanizing, was driven by demand from renewable energy, utility, and construction markets. Meanwhile, the Precoat Metals division showcased a more significant sales growth at $912.6 million, up 3.5% compared to the prior year, benefiting from a steady increase in customer orders.

In terms of profitability, the company reported a net income of $128.8 million, which represents a remarkable 26.8% increase year-over-year. However, the adoption of Adjusted Net Income metrics removed the effects of one-time adjustments, leading to an adjusted net income of $156.8 million, showcasing an 18.1% rise. The Adjusted diluted EPS was recorded at $5.20, up 14.8% compared to the previous fiscal year, even as GAAP diluted EPS decreased by 48.3% to $1.79 due to a one-time premium on preferred stock redemptions.

Financial Highlights

• - Total Sales: $1,577.7 million
• - Net Income: $128.8 million (26.8% increase)
• - Adjusted Net Income: $156.8 million (18.1% increase)
• - Adjust EBITDA: $347.9 million, representing 22.0% of sales, compared to 21.7% in FY 2024.

The fourth quarter was notably impacted by adverse weather conditions, leading to a decline in total sales to $351.9 million, a 4.0% decrease from the same quarter last year. However, both segments exhibited resilience; Metal Coatings brought in $148.4 million, and Precoat Metals contributed $203.5 million despite the climatic challenges. Adjusted EBITDA for the quarter stood at $71.2 million, consistent at 20.2% of sales, mirroring the previous year's performance.

Management's Insights

Tom Ferguson, the President and CEO of AZZ Inc., reflected on the company’s impressive fiscal year, emphasizing strategic growth efforts and operational improvement which facilitated record results. He commented on the substantial cash flow from operations, which amounted to $250 million, allowing for necessary investments in their greenfield project in Washington, Missouri. Furthermore, Ferguson highlighted a debt reduction of $110.0 million, effectively lowering net leverage to below 2.5 times EBITDA.

In keeping with its strategic goals, AZZ is gearing up for FY 2026 with optimistic guidance reflecting projected sales between $1.625 billion and $1.725 billion. The company also plans to allocate proceeds from its AVAIL joint venture to bolster future growth initiatives. Ferguson concluded by thanking his team for their extraordinary commitment, reiterating confidence in AZZ’s market positioning and dedication to enhancing shareholder value.

Conclusion

AZZ Inc.'s performance in fiscal year 2025 demonstrates adaptability in a competitive landscape, with strategic growth and effective balance sheet management. As they head into FY 2026, AZZ will carry forward these strategies, poised to meet increasing market demands while focusing on enhancing operational excellence and shareholder returns.