Core Insights - AZZ Inc. reported record quarterly sales, adjusted EBITDA, and adjusted EPS for the first quarter of fiscal year 2026, leading to an increase in guidance for the fiscal year [1][4][9] Financial Performance - Total sales reached $422.0 million, a 2.1% increase compared to the prior year [4][11] - Adjusted diluted EPS was $1.78, reflecting a 21.9% increase year-over-year [4][11] - Consolidated adjusted EBITDA grew to $106.4 million, representing 25.2% of sales, up from $94.1 million or 22.8% of sales in the prior year [4][11] Segment Performance - Metal Coatings segment sales were $187.2 million, up 6.0% year-over-year, with an adjusted EBITDA margin of 32.9%, an increase of 200 basis points [6][11] - Precoat Metals segment sales were $234.7 million, down 0.8% from the previous year, with an adjusted EBITDA margin of 20.7%, an increase of 50 basis points [7][11] Cash Flow and Debt Management - The company generated $314.8 million in cash from operations, including $273.2 million from the sale of the Electrical Products Group [5][8] - Debt was reduced by $285.4 million, resulting in a net leverage ratio of 1.7x [5][11] Dividend and Share Repurchase - The quarterly cash dividend was increased from $0.17 to $0.20 per share [5][11] - The company has $53.2 million remaining under its $100 million share repurchase program [8] Financial Outlook - The fiscal year 2026 guidance reflects confidence in strategic execution and operational resilience, with an anticipated effective tax rate of 25% [9][11]

Part I. Financial Information [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited financial statements for Q1 FY2026 show significant net income and operating cash flow growth, primarily from a large AVAIL joint venture gain and debt reduction [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance sheets show total assets decreased to $2.16 billion due to the AVAIL JV write-off, with long-term debt significantly reduced and equity increased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | May 31, 2025 | February 28, 2025 | | :--- | :--- | :--- | | **Total Assets** | **$2,159,185** | **$2,227,101** | | Cash and cash equivalents | $3,043 | $1,488 | | Investment in AVAIL joint venture | $— | $99,379 | | **Total Liabilities** | **$944,887** | **$1,181,606** | | Long-term debt, net | $569,807 | $852,365 | | **Total Shareholders' Equity** | **$1,214,298** | **$1,045,495** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Sales increased 2.1% to $422.0 million, with net income surging to $170.9 million primarily due to a $173.5 million AVAIL JV distribution gain, yielding $5.66 diluted EPS Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 FY2026 (3 mo ended May 31, 2025) | Q1 FY2025 (3 mo ended May 31, 2024) | Change | | :--- | :--- | :--- | :--- | | Sales | $421,962 | $413,208 | +2.1% | | Operating Income | $69,549 | $69,749 | -0.3% | | Equity in earnings of unconsolidated subsidiaries | $173,523 | $3,824 | +4437% | | Net Income | $170,908 | $39,602 | +331.6% | | Diluted EPS | $5.66 | ($1.38) | N/A | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow significantly increased to $314.8 million, driven by a $273.2 million AVAIL joint venture distribution, with $295.5 million used in financing for debt payments Cash Flow Summary (in thousands) | Cash Flow Category | Q1 FY2026 (3 mo ended May 31, 2025) | Q1 FY2025 (3 mo ended May 31, 2024) | | :--- | :--- | :--- | | Net cash provided by operating activities | $314,782 | $71,944 | | Net cash used in investing activities | ($17,122) | ($27,379) | | Net cash used in financing activities | ($295,512) | ($38,542) | | Net increase in cash and cash equivalents | $1,555 | $6,197 | - A cash distribution of **$273.2 million** from the investment in the AVAIL joint venture was a primary contributor to the increase in cash from operating activities[13](index=13&type=chunk) - The company made significant payments on long-term debt and finance leases totaling **$335.8 million** during the quarter[13](index=13&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's three segments, the significant $165.8 million AVAIL JV gain, debt structure, and recent restructuring activities, including a new coil coating facility and a $3.8 million charge - The company operates in three segments: AZZ Metal Coatings (hot-dip galvanizing), AZZ Precoat Metals (coil coating), and AZZ Infrastructure Solutions (40% interest in AVAIL JV)[19](index=19&type=chunk) - In May 2025, the AVAIL JV sold its Electrical Products Group, with AZZ receiving a cash distribution of **$273.2 million**, which exceeded its investment basis, resulting in a recognized gain of **$165.8 million** recorded in 'equity in earnings'[46](index=46&type=chunk)[47](index=47&type=chunk) - During the quarter, the company initiated a restructuring of certain surface technologies facilities within the Metal Coatings segment, recognizing **$3.8 million** in charges, primarily for asset write-offs[98](index=98&type=chunk) - The new aluminum coil coating facility in Washington, Missouri became operational during the first quarter of fiscal 2026, with a total expected capital spend of **$121.8 million**[106](index=106&type=chunk) - Subsequent to the quarter end, on July 1, 2025, AZZ acquired a hot-dip galvanizing facility in Canton, Ohio for **$30.1 million**[108](index=108&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting the positive impact of the AVAIL JV distribution, segment performance, debt reduction, and non-GAAP measures with Adjusted EPS at $1.78 [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Consolidated sales increased 2.1% to $422.0 million, with Metal Coatings sales up 6.0% and Precoat Metals down 0.8%, while operating income was flat and net income surged due to a $169.7 million AVAIL JV gain Segment Sales and Operating Income (in thousands) | Segment | Sales Q1 FY26 | Sales Q1 FY25 | % Change | Op. Income Q1 FY26 | Op. Income Q1 FY25 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Metal Coatings | $187,215 | $176,651 | +6.0% | $50,732 | $47,932 | +5.8% | | Precoat Metals | $234,747 | $236,557 | -0.8% | $39,354 | $40,094 | -1.8% | - The increase in Metal Coatings operating income was driven by higher sales, partially offset by **$3.8 million** in restructuring charges[124](index=124&type=chunk) - Interest expense decreased by **$4.2 million** due to a lower average debt balance and a lower weighted average interest rate[127](index=127&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) Total liquidity was $309.4 million, with operating cash flow of $314.8 million driven by the $273.2 million AVAIL JV distribution, primarily used to reduce Term Loan B, maintaining debt covenant compliance - Total liquidity as of May 31, 2025, was **$309.4 million**, consisting of **$3.0 million** in cash and **$306.3 million** in available credit[131](index=131&type=chunk) - The company used proceeds from the AVAIL JV distribution to pay down its Term Loan B[146](index=146&type=chunk) - The company has a remaining capital commitment of **$5.0 million** for its new aluminum coil coating facility in Washington, Missouri, expected to be paid by Q2 FY2026[144](index=144&type=chunk) [Non-GAAP Disclosures](index=35&type=section&id=Non-GAAP%20Disclosures) Non-GAAP measures, excluding one-time items, show Q1 FY2026 Adjusted Net Income at $53.8 million and Adjusted EPS at $1.78, with Adjusted EBITDA increasing to $106.4 million Non-GAAP Financial Reconciliation (in thousands, except per share data) | Metric | Q1 FY2026 (3 mo ended May 31, 2025) | Q1 FY2025 (3 mo ended May 31, 2024) | | :--- | :--- | :--- | | Net Income (GAAP) | $170,908 | $39,602 | | Adjustments (net) | ($117,101) | $79,601 | | **Adjusted Net Income (Non-GAAP)** | **$53,807** | **$44,005** | | Diluted EPS (GAAP) | $5.66 | ($1.38) | | **Adjusted EPS (Non-GAAP)** | **$1.78** | **$1.46** | Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 FY2026 (3 mo ended May 31, 2025) | Q1 FY2025 (3 mo ended May 31, 2024) | | :--- | :--- | :--- | | Net Income | $170,908 | $39,602 | | Interest, Taxes, D&A | $95,318 | $54,498 | | Other Adjustments | ($159,784) | $0 | | **Adjusted EBITDA (Non-GAAP)** | **$106,412** | **$94,100** | - The Net Leverage Ratio improved significantly to **1.7x** as of May 31, 2025, down from **2.5x** as of February 28, 2025, due to debt paydown and higher Adjusted EBITDA[161](index=161&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures were reported for the quarter ended May 31, 2025, compared to the prior Annual Report on Form 10-K - There were no material changes to market risk disclosures from the most recent Annual Report on Form 10-K[162](index=162&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective by principal officers, with no material changes in internal control over financial reporting during the quarter - The company's disclosure controls and procedures were deemed effective by the CEO and CFO[163](index=163&type=chunk) - No material changes to internal controls over financial reporting occurred during the quarter[164](index=164&type=chunk) Part II. Other Information [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings, which management does not expect to materially affect its financial position, results, or cash flows - AZZ is involved in routine legal proceedings but does not anticipate a material impact on its financial condition[166](index=166&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported compared to the latest Annual Report on Form 10-K - No material changes to risk factors were reported compared to the latest Form 10-K[167](index=167&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common stock was repurchased during the quarter, with $53.2 million remaining authorized for future share repurchases under the 2020 program - No common stock was repurchased during the quarter[169](index=169&type=chunk) - As of May 31, 2025, **$53.2 million** remains authorized for future share repurchases[169](index=169&type=chunk) [Other Information](index=40&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 trading arrangements were adopted or terminated, and Kurt Russell, SVP and Chief Strategic Officer, announced his retirement effective October 1, 2025 - No directors or executive officers adopted or terminated a Rule 10b5-1 trading plan during the quarter[170](index=170&type=chunk) - Kurt Russell, SVP and Chief Strategic Officer, announced his retirement effective October 1, 2025[171](index=171&type=chunk)

Core Insights - The article discusses the author's academic and professional background in Machine Learning, Economics, and Finance, highlighting expertise in Data Science and Machine Learning applications within the banking and finance sectors [1]. Group 1: Academic Background - The author holds a PhD in Machine Learning with a focus on Economics and Finance [1]. - The author has academic affiliations with IESE Business School, ESADE Business School, and the Barcelona Supercomputing Center [1]. Group 2: Professional Experience - The author has worked at Deloitte Financial Advisory, specializing in Data Science and Machine Learning applications for clients in banking, insurance, and finance [1]. - The author currently teaches Asset Pricing and Introduction to Corporate Finance at ESADE Business School at the MSc/BSc level [1]. Group 3: Research Focus and Interests - Current research focuses on Generative AI in sustainable finance [1]. - The author's interests include machine learning and generative AI applications in finance and economics, with proficiency in Python, R, and SQL [1].

AZZ Inc. AZZ will release earnings results for the first quarter, after the closing bell on Wednesday, July 9.Analysts expect the Fort Worth, Texas-based company to report quarterly earnings at $1.60 per share, up from $1.46 per share in the year-ago period. AZZ projects to report quarterly revenue of $435.91 million, compared to $413.21 million a year earlier, according to data from Benzinga Pro.On July 1, AZZ announced that it has entered into an agreement to acquire all the assets of Canton Galvanizing, ...

Core Insights - AZZ Inc. has announced the acquisition of Canton Galvanizing, LLC, enhancing its hot-dip galvanizing capabilities in the Midwest [1][2] - The acquisition is expected to be accretive to earnings within the first year and will increase AZZ's galvanizing network to 42 sites across North America [1][2] Company Overview - AZZ Inc. is a leading independent provider of hot-dip galvanizing and coil coating solutions, serving a wide range of end-markets [4] - The company focuses on providing sustainable metal coating solutions that enhance the longevity and appearance of essential infrastructure and products [4] Canton Galvanizing Overview - Canton Galvanizing, founded in 2019, specializes in hot-dip galvanizing for small to mid-size parts and is known for its quick turnaround times and excellent customer service [3]

Core Viewpoint - AZZ Inc. has announced a 17.6% increase in its quarterly cash dividend, raising it from $0.17 to $0.20 per share, payable on July 31, 2025, to shareholders of record as of July 10, 2025 [1] Company Overview - AZZ Inc. is a leading independent provider of hot-dip galvanizing and coil coating solutions, serving a wide range of end-markets [3] - The company's business segments offer sustainable metal coating solutions that enhance the longevity and appearance of essential infrastructure and products [3] Dividend Policy - AZZ intends to pay regular quarterly cash dividends in the foreseeable future, with future dividends subject to review and declaration by the Board of Directors based on various factors [2]

Company Overview - AZZ Inc. is the leading independent provider of hot-dip galvanizing and coil coating solutions, serving a broad range of end-markets [3] - The company's business segments offer sustainable metal coating solutions that enhance the longevity and appearance of buildings, products, and infrastructure essential to everyday life [3] Financial Results Announcement - AZZ Inc. will conduct a conference call to review the financial results for the first quarter of fiscal year 2026 on July 10, 2025, at 11:00 a.m. ET [1] - A press release reporting the first quarter financial results will be issued after the market closes on July 9, 2025 [1] Conference Call Details - Interested parties can access the conference call by dialing (844) 855-9499 or (412) 317-5497 for international calls [2] - A webcast of the call will be available on the Company's Investor Relations page [2] - A replay of the call will be available until July 17, 2025, with specific access codes provided [2]

Summary of AZZ (AZZ) FY Conference Call - June 18, 2025 Company Overview - AZZ is a metal coatings provider, specifically known for its hot dip galvanizing and coil coating services [5][6] - Established in 1956, AZZ operates 41 galvanizing locations and 15 coil coating lines across the United States [9][10] - The company reported sales of $1.5 billion and an EBITDA of $384 million for the last fiscal year, achieving a margin of 24.4% [12] Business Segments - **Metal Coatings Business**: Focuses on batch hot dip galvanizing, which is less commoditized and involves specialized processes [7][8] - **Precoat Metals Business**: Involves roll coating paint with a strong emphasis on custom finishes, including over 200 shades of white [10][11] Market Position and Strategy - AZZ is the largest independent hot dip batch galvanizer in the U.S. and is positioned strategically close to its customer base to minimize transportation costs [9] - The company is actively pursuing mergers and acquisitions (M&A) to strengthen its market position, focusing on bolt-on acquisitions in both segments [13][70] - AZZ is capitalizing on secular tailwinds such as reshoring and increased demand in sectors like data centers and semiconductors [14] Industry Dynamics - The construction sector is a significant market for AZZ, with exposure to both residential (sub 20%) and commercial projects [26][28] - Public infrastructure projects are well-funded and moving forward, while private projects are experiencing a cautious "wait and see" approach due to economic uncertainties [31][32] - Tariffs have had a limited impact on AZZ since it operates as a toll processor and does not purchase raw materials like aluminum and steel [30] Competitive Landscape - AZZ faces competition from companies like Nucor and Valmont, but believes that its unique offerings and operational efficiencies provide a competitive edge [20][21] - The company is insulated from competition with imports for its galvanized products, as these require fabrication before galvanization [49] Financial Health - AZZ has successfully reduced its debt-to-EBITDA ratio from 4.3 times to 2.5 times through consistent debt repayment, strengthening its balance sheet [77][78] - The company has maintained its guidance for sales, adjusted EBITDA, and EPS, reflecting confidence in its performance despite market fluctuations [85][86] Technology and Innovation - AZZ has invested in proprietary technology solutions to enhance operational efficiency, including a digital galvanizing system that automates order tracking and customer interactions [60][62] - The company is focused on sustainability and has received recognition for its ESG efforts, indicating a commitment to responsible business practices [72] Future Outlook - AZZ is optimistic about the second half of the year, anticipating potential tailwinds from reduced imports and increased domestic production [33][39] - The company is exploring opportunities in the aluminum market, particularly through a new facility dedicated to coating aluminum used in beverage containers [64][66] Conclusion - AZZ is well-positioned in the metal coatings industry with a strong market presence, innovative technology, and a focus on sustainability. The company is actively pursuing growth through strategic acquisitions and is optimistic about future demand driven by infrastructure investments and reshoring trends [12][14][72]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on AZZ, and emphasizes the importance of using these recommendations in conjunction with other analytical tools for making investment decisions [1][5][10]. Group 1: Brokerage Recommendations for AZZ - AZZ has an average brokerage recommendation (ABR) of 1.67, indicating a position between Strong Buy and Buy, based on recommendations from nine brokerage firms [2]. - Out of the nine recommendations, six are classified as Strong Buy, accounting for 66.7% of the total recommendations [2]. Group 2: Limitations of Brokerage Recommendations - Brokerage recommendations may not effectively guide investors towards stocks with the highest potential for price appreciation, as studies suggest limited success in this regard [5]. - Analysts from brokerage firms often exhibit a strong positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell recommendations [6][10]. Group 3: Zacks Rank as an Alternative Tool - The Zacks Rank, which categorizes stocks from Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell), is presented as a more reliable indicator of near-term stock performance, based on earnings estimate revisions [8][11]. - Unlike the ABR, the Zacks Rank is updated more frequently and reflects timely changes in earnings estimates, making it a more effective tool for predicting future stock prices [12]. Group 4: Current Earnings Estimates for AZZ - The Zacks Consensus Estimate for AZZ's earnings for the current year remains unchanged at $5.73, indicating steady analyst views on the company's earnings prospects [13]. - Due to the unchanged consensus estimate and other factors, AZZ holds a Zacks Rank of 3 (Hold), suggesting caution despite the Buy-equivalent ABR [14].

In the latest trading session, AZZ (AZZ) closed at $92.85, marking a -1.68% move from the previous day. The stock's performance was behind the S&P 500's daily gain of 0.09%.The electrical equipment maker's shares have seen an increase of 3.22% over the last month, not keeping up with the Industrial Products sector's gain of 8.52% and the S&P 500's gain of 7.21%.Analysts and investors alike will be keeping a close eye on the performance of AZZ in its upcoming earnings disclosure. The company is forecasted to ...