AZZ Inc Reports Fiscal Year 2024 Second Quarter Results.

FORT WORTH, Texas: AZZ Inc. (NYSE: AZZ), the leading independent provider of hot-dip galvanizing and coil coating solutions, today announced financial results for the second quarter ended August 31, 2023.

Second Quarter Overview (results from continuing operations as compared to prior year(1)):

Total Sales $398.5 million, down 2.0%

Metal Coatings record sales of $169.8 million up 2.4%

Precoat Metals sales of $228.7 million, down 5.0%

Diluted EPS of $0.97, up 4.3% versus prior year, Adjusted EPS of $1.27, up 5.0%

Net Income of $28.3 million, up 12.8%

Adjusted net income of $37.2 million, up 5.5%

Recognized a charge of $5.75 million for a litigation settlement related to the Infrastructure Solutions segment (reflected in Selling, General & Administrative Expenses)

Adjusted EBITDA $88.0 million or 22.1% of sales, versus prior year of $88.7 million or 21.8% of sales

EBITDA margin of 30.4% for Metal Coatings and 20.3% for Precoat Metals

Reduced debt by $40.0 million in the quarter, resulting in net leverage of 3.4x

(1) Adjusted Net Income, Adjusted EPS, and Adjusted EBITDA are non-GAAP financial measures as defined and reconciled in the tables below.

Tom Ferguson, President, and Chief Executive Officer of AZZ, commented, "I am pleased to report that our second quarter results were in line with our expectations and set us up well for the balance of the year. While Precoat Metals faced softer market conditions, particularly in certain construction and appliance markets, the team focused on driving profitability, and exceeded 20% EBITDA margin. Metal Coatings continued to benefit from infrastructure spending, posted another record quarter for sales and operating income, and exceeded 30% EBITDA margin. Through better earnings and continued good management of working capital, we reduced year-to-date debt by $60.0 million, which included $20.0 million of debt reduction from the first quarter. We also repriced our term loan B, resulting in more favorable interest rates.

"Our new plant construction in Washington, Missouri continues to progress ahead of schedule and budget. After careful consideration, we made the decision to internally fund the construction of the new plant in Washington, Missouri versus funding a portion of it through a sale/leaseback transaction. As we have stated previously, the project will not have an impact on AZZ's debt leverage nor our previously stated goal of 3.0x debt leverage by the end of FY2024. Our business is structured...