Financial Data and Key Metrics Changes - The company reported record high sales of $422 million for Q1 2026, a 2.1% increase from $413.2 million in the same quarter last year [12][13] - Adjusted EBITDA for the quarter was $106.4 million, representing a margin of 25.2%, up from $94.1 million or 22.8% in the prior year [17][18] - Net income for Q1 was $170.9 million compared to $39.6 million in the prior year, with adjusted net income of $53.8 million or adjusted diluted EPS of $1.78, up from $44 million or $1.46 [17][19] Business Line Data and Key Metrics Changes - The Metal Coatings segment saw a 6% increase in sales due to higher steel volume processed, while Precoat Metals experienced a slight decline of 0.8% in sales due to inventory challenges [12][13][14] - Adjusted EBITDA margins for Metal Coatings were 32.9%, while Precoat Metals had margins of 20.7% [6][12] - The company incurred a $3.8 million restructuring charge related to the closure of a powder coating facility and divestiture of a plating facility [14] Market Data and Key Metrics Changes - Demand from infrastructure-related projects benefited the company across multiple end markets, particularly in construction and electrical sectors [20] - The aluminum transition in food and beverage packaging remains a key growth driver, with the new Greenfield plant ramping production [20] - Prepainted imports fell 38% year-over-year in May, indicating a positive impact from tariffs on domestic sourcing [38] Company Strategy and Development Direction - The company is focused on disciplined execution of its strategic plan, including market share expansion and converting customers from post-paint to prepay [23] - Recent acquisitions, such as Canton Galvanizing, are aimed at scaling the galvanizing business and enhancing customer relationships [9][10] - The company plans to pursue regular and opportunistic share repurchases and has increased its quarterly cash dividend by 17.6% [19][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial position and growth trajectory, despite ongoing tariff uncertainties [56] - The company anticipates continued demand growth driven by infrastructure spending and reshoring initiatives [20][21] - Future sales and EBITDA guidance remains unchanged, with adjusted diluted EPS expected to increase by 10-20% over the previous fiscal year [24][23] Other Important Information - The company generated cash flow from operations of $314.8 million, including $273.2 million from the Avail divestiture [18] - The net leverage ratio improved to 1.7 times, down from 2.8 times in the prior year [19] - The company is committed to maintaining a disciplined capital allocation strategy focused on debt reduction and strategic acquisitions [19] Q&A Session Summary Question: Did Q1 benefit from normalization in volumes? - Yes, about half of the recovery was from Q4 and the other half was organic growth [27] Question: What drove improved zinc utilization for Metal Coatings? - The team has been focusing on digital tools, training, and operational excellence, nearing theoretical zinc efficiency levels [28][29] Question: How are customer inventory levels impacting Precoat? - Customers are pulling down inventory, indicating true demand, despite overall market declines [36] Question: What is the outlook for Precoat given tariff impacts? - Precoat has been affected by tariffs, but margins are up, demonstrating adaptability in cost structure [72] Question: Will share repurchases increase in future quarters? - Yes, the company is committed to share buybacks and has a $100 million facility approved for this purpose [46] Question: What is the outlook for solar projects? - There is an expectation of a pull forward in solar projects due to recent legislative changes [81]