AZZ Inc. Reports Fiscal Year 2026 Third Quarter Results

Core Insights - AZZ Inc. reported a third-quarter sales increase to $425.7 million, reflecting a 5.5% growth year-over-year, driven by strong performance in the Metal Coatings segment and operational execution [4][6] - Adjusted EBITDA for the quarter was $91.2 million, representing 21.4% of sales, with adjusted diluted EPS rising to $1.52, a 9.4% increase from the previous year [4][6] - The company narrowed its fiscal year 2026 guidance, projecting sales between $1.625 billion and $1.7 billion, with adjusted EBITDA expected to be between $360 million and $380 million [11][12] Financial Performance - Sales for the Metal Coatings segment reached $195.0 million, up 15.7% due to increased volume from infrastructure-related projects, while Precoat Metals saw a decline in sales to $230.7 million, down 1.8% due to weaker demand in certain markets [6][8] - Net income for the quarter was $41.1 million, a 22.2% increase, with adjusted net income rising to $46.0 million, up 9.7% [6][19] - Cash generated from operations was $79.7 million, a 20% increase from the previous year, contributing to a net debt leverage ratio of 1.6x after a $35 million debt reduction [5][9] Segment Analysis - The Metal Coatings segment's adjusted EBITDA margin was 30.3%, while Precoat Metals achieved a margin of 19.7%, reflecting a 60 basis point increase year-over-year [6][8] - The overall adjusted EBITDA for the company was $91.2 million, slightly up from $90.7 million in the prior year, indicating stable operational efficiency despite market challenges [6][7] Balance Sheet and Capital Allocation - The company reduced its debt by $35 million during the quarter and repurchased $20 million worth of common stock, demonstrating a commitment to strengthening its balance sheet [5][9] - For the first nine months of fiscal year 2026, AZZ generated $452.9 million in operating cash, supported by improved earnings and a focus on working capital management [9][19] Guidance and Outlook - The company has provided narrowed guidance for fiscal year 2026, anticipating an effective tax rate of 24% and excluding any future acquisitions or changes in federal regulations [11][12] - The expected adjusted diluted EPS for the fiscal year is projected to be between $5.90 and $6.20, reflecting confidence in continued operational momentum [12][11]