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 [15] - Adjusted EBITDA for the quarter was $106.4 million, representing a margin of 25.2%, compared to $94.1 million or 22.8% in the prior year [20] - Net income for Q1 was $170.9 million, significantly up from $39.6 million in the prior year, with adjusted net income at $53.8 million or $1.78 per diluted share, a 22.2% increase year-over-year [20][27] 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 [16][19] - Adjusted EBITDA margins for Metal Coatings were 32.9% and 20.7% for Precoat Metals, indicating strong performance in both segments [7] Market Data and Key Metrics Changes - Demand from infrastructure-related projects benefited the company across multiple end markets, particularly in construction and electrical sectors [24] - The aluminum transition in food and beverage packaging remains a key growth driver, with expectations for continued demand due to reshoring activities and tariffs [24] 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 [26] - Recent acquisitions, such as Canton Galvanizing, are aimed at scaling the galvanizing business and enhancing customer relationships [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fiscal year 2026, reiterating sales and EBITDA guidance while increasing EPS guidance due to strong demand forecasts [26][27] - The company remains cautious about sales due to ongoing tariff uncertainties but is confident in its ability to manage costs and improve margins [62] Other Important Information - The company generated cash flow from operations of $314.8 million, including $273.2 million from the Avail divestiture, allowing for significant debt reduction [21][22] - The Board approved a 17.6% increase in the quarterly cash dividend from $0.17 to $0.20 per share [22] Q&A Session Summary Question: Did Q1 benefit from normalization in volumes? - Management confirmed that Q1 saw recovery from Q4 weather impacts, contributing to organic growth [30] Question: What drove improved zinc utilization for Metal Coatings? - Management attributed it to digital tools, training, and operational excellence, nearing theoretical efficiency levels [31][33] Question: Outlook for Precoat Metals given customer inventory levels? - Management noted that while overall market demand is down, customer inventory drawdowns indicate true demand, with tariffs impacting imports [40][42] Question: Plans for share repurchases and capital allocation? - Management confirmed commitment to share buybacks and strategic acquisitions, with a focus on maintaining a disciplined capital allocation strategy [50][52] Question: Impact of copper tariffs on business? - Management indicated that while recent tariff announcements are new, prior positive trends in project viability remain, with ongoing monitoring of customer feedback [55][56] Question: Expectations for Precoat Metals segment? - Management expects continued margin improvement despite lower volumes, with the new facility ramping up production [77][80]