AZZ Inc. Reports Fiscal Year 2026 First Quarter Results

Delivers Record Quarterly Sales, Adjusted EBITDA, and Adjusted EPS over Prior Year

Raising Fiscal Year 2026 Guidance on Strong Earnings

FORT WORTH, Texas, July 9, 2025 /PRNewswire/ -- AZZ Inc. (NYSE:AZZ), the leading independent provider of hot-dip galvanizing and coil coating solutions, today announced financial results for the first quarter ended May 31, 2025. 

Fiscal Year 2026 First Quarter Overview (as compared to prior fiscal year first quarter⁽¹⁾):

• Total Sales of $422.0 million, up 2.1%
  • Metal Coatings sales of $187.2 million, up 6.0%
  • Precoat Metals sales of $234.7 million, down 0.8%
• $273.2 million cash received from our minority interest in AVAIL related to the sale of the Electrical Products Group to nVent Electric plc
• Net Income of $170.9 million, up 331.6%; Adjusted net income of $53.8 million, up 22.3%
• GAAP diluted EPS of $5.66 per share, up 510.1%; Adjusted diluted EPS of $1.78, up 21.9%
• Adjusted EBITDA of $106.4 million or 25.2% of sales, versus prior year of $94.1 million, or 22.8% of sales
• Segment Adjusted EBITDA margin of 32.9% for Metal Coatings and 20.7% for Precoat Metals
• Debt reduction of $285 million in the quarter, resulting in net leverage ratio 1.7x
• Cash dividend of $0.17 per share to common shareholders paid in the quarter

Tom Ferguson, President, and Chief Executive Officer of AZZ, commented, "We are off to a great start in the fiscal year as sales grew to $422.0 million, up 2.1% over the prior year, with Adjusted diluted EPS of $1.78 up 21.9%. Consolidated Adjusted EBITDA grew to $106.4 million, or 25.2% of sales, primarily driven by higher volume for hot-dip galvanized steel and operational productivity over the prior year. Metal Coatings benefited from improved zinc utilization and delivered an Adjusted EBITDA margin of 32.9%.  Precoat Metals' Adjusted EBITDA margin improved to 20.7%, primarily due to favorable mix and improved operational performance. While volumes were slightly lower for Precoat Metals, customer demand improved, as shipments of customer inventories increased compared to first quarter of last year.

Our fiscal first quarter cash from operations of $314.8 million, including proceeds from AVAIL's sale of the Electrical Products Group, allowed us to reduce debt by $285.4 million. We ended the quarter with a net leverage ratio of 1.7x. Subsequent to the quarter, we successfully closed a bolt-on acquisition within our Metal Coatings segment and announced the increase of our quarterly cash dividend to common shareholders from $0.17 to $0.20 per share. I want to thank all of our dedicated AZZ employees for their hard work, dedicated focus on sales volume, and productivity improvements. Our employees continue to demonstrate their pride and passion for delivering outstanding quality and service to our customers, while driving operational excellence. We are on track to set new profitability records in fiscal year 2026 as we continue to execute on our strategic plans." Ferguson concluded.

Segment Performance

First Quarter 2026 Metal Coatings

Sales of $187.2 million increased by 6.0% over the first quarter of last year, primarily due to increased volume supported by infrastructure related project spending in several end markets, including construction, industrial, and electrical transmission and distribution. Segment Adjusted EBITDA of $61.5 million resulted in Adjusted EBITDA margin of 32.9%, on increased volume and improved zinc utilization, an increase of 200 basis points from the prior year first quarter.

First Quarter 2026 Precoat Metals 

Sales of $234.7 million were 0.8% lower than the first quarter of last year on decreased volume in certain end markets, including construction, HVAC, and appliance. Segment EBITDA of $48.5 million resulted in EBITDA margin of 20.7%, an increase of 50 basis points from the prior year first quarter.

Balance Sheet, Liquidity and Capital Allocation

The Company generated significant operating cash of $314.8 million for the first three months of fiscal year 2026 through improved earnings, which included a distribution of $273.2 million from the AVAIL JV following AVAIL's sale of its Electrical Products Group, coupled with our disciplined working capital management.  At the end of the first quarter, the Company's net leverage was 1.7x trailing twelve months Adjusted EBITDA.  During the first three months of fiscal year 2026, the Company paid down debt of $285.4 million and returned cash to common shareholders through cash dividend payments totaling $5.1 million. Capital expenditures for the first three months of fiscal year 2026 were $20.9 million, including $3.2 million of spending related to the new Washington, Missouri facility, and full fiscal year capital expenditures are expected to be approximately $60 - $80 million. Pursuant to the Company's existing $100 million Share Repurchase Program, the Company has a remaining balance of $53.2 million available for repurchases. 

Financial Outlook — Fiscal Year 2026 Guidance

We are adjusting fiscal year guidance, reflecting confidence in our strategic execution, operational resilience, and market positioning. Fiscal year 2026 guidance reflects our best estimates given anticipated market conditions for the full year, lower interest expense, an annualized effective tax rate of 25% and excludes M&A activity and any federal regulatory changes that may emerge.

Conference Call Details

AZZ Inc. will conduct a live conference call with Tom Ferguson, Chief Executive Officer, Jason Crawford, Chief Financial Officer, and David Nark, Chief Marketing, Communications, and Investor Relations Officer to discuss financial results for the first quarter of the fiscal year 2026, Thursday, July 10, 2025, at 11:00 A.M. ET. Interested parties can access the conference call by dialing (844) 855-9499 or (412) 317-5497 (international). A webcast of the call will be available on the Company's Investor Relations page at http://www.azz.com/investor-relations.  

A replay of the call will be available at (877) 344-7529 or (412) 317-0088 (international), replay access code: 2234808 through July 17, 2025, or by visiting http://www.azz.com/investor-relations for the next 12 months.

About AZZ Inc.

AZZ Inc. is the leading independent provider of hot-dip galvanizing and coil coating solutions to a broad range of end-markets in North America. Collectively, our business segments provide sustainable, unmatched metal coating solutions that enhance the longevity and appearance of buildings, products and infrastructure that are essential to everyday life.

Safe Harbor Statement

Certain statements herein about our expectations of future events or results constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by terminology such as "may," "could," "should," "expects," "plans," "will," "might," "would," "projects," "currently," "intends," "outlook," "forecasts," "targets," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Such forward-looking statements are based on currently available competitive, financial, and economic data and management's views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied in the forward-looking statements. Forward-looking statements speak only as of the date they are made and are subject to risks that could cause them to differ materially from actual results. Certain factors could affect the outcome of the matters described herein. This press release may contain forward-looking statements that involve risks and uncertainties including, but not limited to, changes in customer demand for our manufactured solutions, including demand by the construction markets, the industrial markets, and the metal coatings markets. We could also experience additional increases in labor costs, components and raw materials including zinc and natural gas, which are used in our hot-dip galvanizing process, paint used in our coil coating process; supply-chain vendor delays; customer requested delays of our manufactured solutions; delays in additional acquisition opportunities; an increase in our debt leverage and/or interest rates on our debt, of which a significant portion is tied to variable interest rates; availability of experienced management and employees to implement AZZ's growth strategy; a downturn in market conditions in any industry relating to the manufactured solutions that we provide; economic volatility, including a prolonged economic downturn or macroeconomic conditions such as inflation or changes in the political stability in the United States and other foreign markets in which we operate; tariffs, acts of war or terrorism inside the United States or abroad; and other changes in economic and financial conditions. AZZ has provided additional information regarding risks associated with the business, including in Part I, Item 1A. Risk Factors, in AZZ's Annual Report on Form 10-K for the fiscal year ended February 28, 2025, and other filings with the SEC, available for viewing on AZZ's website at www.azz.com and on the SEC's website at www.sec.gov.

You are urged to consider these factors carefully when evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. These statements are based on information as of the date hereof and AZZ assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Company Contact:     

David Nark, Chief Marketing, Communications, and Investor Relations Officer

AZZ Inc.

(817) 810-0095

www.azz.com 

Investor Contact:

Sandy Martin / Phillip Kupper

Three Part Advisors

(214) 616-2207 or (817) 368-2556

www.threepa.com 

 

 

 

 

 

AZZ Inc.

Non-GAAP Disclosure

Adjusted Net Income, Adjusted Earnings Per Share and Adjusted EBITDA

In addition to reporting financial results in accordance with Generally Accepted Accounting Principles in the United States ("GAAP"), we provide adjusted net income, adjusted earnings per share and Adjusted EBITDA (collectively, the "Adjusted Earnings Measures"), which are non-GAAP measures. Management believes that the presentation of these measures provides investors with greater transparency when comparing operating results across a broad spectrum of companies, which provides a more complete understanding of our financial performance, competitive position, prospects for future capital investment and debt reduction. Management also believes that investors regularly rely on non-GAAP financial measures, such as adjusted net income, adjusted earnings per share and Adjusted EBITDA to assess operating performance and that such measures may highlight trends in our business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP.

Management defines adjusted net income and adjusted earnings per share to exclude intangible asset amortization, restructuring charges, and additional stock compensation expense related to the adoption of our executive retiree long-term incentive program from the reported GAAP measure.  Management defines Adjusted EBITDA as adjusted net income excluding depreciation, amortization, interest, provision for income taxes and Series A Preferred Stock dividends. Management believes Adjusted EBITDA is used by investors to analyze operating performance and evaluate the Company's ability to incur and service debt, as well as its capacity for making capital expenditures in the future. 

Management provides non-GAAP financial measures for informational purposes and to enhance understanding of the Company's GAAP consolidated financial statements. Readers should consider these measures in addition to, but not instead of or superior to, the Company's financial statements prepared in accordance with GAAP, and undue reliance should not be placed on these non-GAAP financial measures. Additionally, these non-GAAP financial measures may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

The following tables provide a reconciliation for the three months ended and year ended May 31, 2025 and May 31, 2024 between the non-GAAP Adjusted Earnings Measures to the most comparable measures, calculated in accordance with GAAP (dollars in thousands, except per share data):

 

Adjusted Net Income and Adjusted Earnings Per Share

          See notes on page 10.

 

Adjusted EBITDA

          See notes on page 10.

 

Adjusted EBITDA by Segment

          See notes on page 10.

 

          See notes on page 10.

 

Debt Leverage Ratio Reconciliation

 

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SOURCE AZZ, Inc.