AZZ Inc. Reports Fiscal Year 2026 Second Quarter Results

Core Insights - AZZ Inc. reported solid financial results for the second quarter of fiscal year 2026, with total sales of $417.3 million, reflecting a 2.0% increase year-over-year, and adjusted diluted EPS of $1.55, up 13.1% [2][9] - The company maintains its fiscal year 2026 guidance, projecting sales between $1.625 billion and $1.725 billion, adjusted EBITDA of $360 million to $400 million, and adjusted diluted EPS of $5.75 to $6.25 [7][8] Financial Performance - Total sales for the second quarter reached $417.3 million, up 2.0% from the previous year, with Metal Coatings sales increasing by 10.8% to $190.0 million, while Precoat Metals sales decreased by 4.3% to $227.3 million [2][9] - Adjusted EBITDA for the quarter was $88.7 million, representing 21.3% of sales, down from $91.9 million or 22.5% of sales in the prior year [9] - Net income surged to $89.3 million, a 152.3% increase, while adjusted net income rose by 13.8% to $46.9 million [9] Segment Performance - Metal Coatings segment achieved sales of $190.0 million, up 10.8%, driven by infrastructure-related project spending, with an adjusted EBITDA margin of 30.8% [4][9] - Precoat Metals segment reported sales of $227.3 million, down 4.3%, primarily due to weaker demand in building construction, HVAC, and appliance markets, with an EBITDA margin of 20.2% [5][9] Balance Sheet and Cash Flow - The company generated $58.4 million in cash from operations during the quarter, with a net debt leverage ratio of 1.7x at the end of the quarter [3][6] - Significant operating cash of $373.2 million was generated in the first six months of fiscal year 2026, including a distribution of $273.2 million from the AVAIL joint venture [6][14] - AZZ Inc. completed a $30.1 million acquisition during the quarter and increased its cash dividend to $0.20 per share [3][9] Guidance and Outlook - The fiscal year 2026 guidance remains unchanged, reflecting anticipated market conditions, lower interest expenses, and an effective tax rate of 24% [7][8] - The company continues to monitor customer trends in key markets to ensure the achievability of its financial targets for the year [2][3]