AZZ Inc. (AZZ) on Q4 2021 Results - Earnings Call Transcript
Company Representatives: Tom Ferguson - Chief Executive Officer Philip Schlom - Chief Financial Officer David Nark - Senior Vice President, Marketing and Communications and IR Joe Dorame - Managing Partner Operator: Good morning, and welcome to the AZZ, Inc. Fourth Quarter and Fiscal Year 2021 Financial Results Conference Call. All participants will be in a listen-only mode. . Please note, this event is being recorded. I would now like to turn the conference over to Joe Dorame, Managing Partner. Please go ahead. Joe Dorame: Thank you. Good morning and thank you all for joining us today to review the financial results of AZZ, Inc., for the fourth quarter of fiscal year 2021 ended February 28, 2021. Joining the call today are Tom Ferguson, Chief Executive Officer; Philip Schlom, Chief Financial Officer; and David Nark, Senior Vice President, Marketing and Communications and IR. After the conclusion of todays prepared remarks we will open the call for a question-and-answer session. Please note, there is a slide presentation for today's call which can be found on AZZ's Investor Relations page under Latest Earnings Release Presentation at www.azz.com. Tom Ferguson: Thanks Joe, and welcome to our fourth quarter and full year fiscal 2021 earnings call, and thank you for joining us this morning. First, I need to express my great appreciation for the way our AZZ employees, their families and our partners stepped up during the COVID pandemic, and also during the winter storm that impacted a significant portion of our production just two weeks before the end of our fiscal year. Due to the concerted and in some cases, extra ordinary efforts of our employees, we were able to quickly respond and finish out a profitable fourth quarter. Overall, annual sales declined 21% versus the prior year record reaching $839 million, with Metal Coatings down 8% to $458 million and Infrastructure Solutions declining by 32% to $381 million. The lower volumes were driven primarily by the impact on our customers caused by the COVID pandemic, as well as the divestitures we made during the year. I will get into the details of this as we go along. Philip Schlom: Thanks Tom. For the fourth quarter of fiscal year 2021, we reported sales of $195.6 million, $49.7 million or 20.3% lower than the fourth quarter of fiscal year 2020. Gross margin of $45.8 million for the quarter was $5.3 million, or 10.4% below prior year. However, gross margins rose to 23.4% of sales compared to 20.8% in the prior year fourth quarter, a 260 basis point improvement year-over-year. Net income for the quarter was $16.2 million compared to a loss of $10.6 million in the comparable prior year fourth quarter, while the company had recorded the loss on sale of our nuclear logistics business and recorded charges related to the impairment of assets within the Infrastructure Solutions segment. Reported diluted EPS for the quarter was $0.63 per share. As Tom had earlier indicated full year fiscal 2021 sales of $838.9 million were down 21% compared to the prior year sales of $1.06 billion, largely as a result of the impact to the business from the pandemic, divestitures and lower revenues in China as we continue to execute on our existing China backlog. Gross margins, as reported improved to 22.5% from 22.3% on a year-over-year basis, on stronger Metal Coatings performance, partially offset by the impact of the pandemic within our Industrial and Electrical Platforms which are part of our Infrastructure Solutions segment. Tom Ferguson : Thanks Philip. Here are some key indicators that we are paying particular attention to. For the Metal Coating segments, galvanizing business, we are carefully tracking fabrication and construction activity, material and labor cost inflation and progress of infrastructure legislation. For service technologies we are primarily focused on expanding our customer base and some of our customers may take considerable time in getting back to normal production. For Infrastructure Solutions we're off to a decent start with turn around and outage activity having returned to a normal level, and the fall season is currently looking to be quite good. The Electoral Platform is benefiting from transmission distribution and utility spending, and increasing data center and battery energy storage activity. Finally for corporate, we are focused on completing the strategic review of infrastructure solutions and replacing our credit facility. We remain committed to our growth strategy around Metal Coatings and achieving 21% to 23% operating margins with galvanizing performance being quite steady as we continue to improve Surface Technologies. We will remain inquisitive, particularly in galvanizing. For Infrastructure Solutions we will continue to focus on profitable growth in our core businesses. Our Infrastructure Solutions business unit should benefit from more normal turnaround and outage seasons in a solid market for T&D, utility and datacenter E-houses and switchgear. And with that, we'll open it up for questions. Operator: We will now begin the question-and-answer session. . Our first question today comes from John Franzreb with Sidoti & Company. John Franzreb: Good morning guys. First, regarding the corporate, could you just talk about the winter storm's impact, maybe on the fourth quarter and if there’s every been any differed revenue into the first quarter of ’22? Philip Schlom: I think in the first quarter we were impacted during the last couple weeks of the year, mostly here in North Texas up to the Midwest a little bit. A lot of our business was able to recover during the last two weeks of the year, but there would be some carryover we believe into the first quarter. Tom Ferguson: It's pretty minor though. John Franzreb: Minor meaning just a couple of million or beyond that scope? Tom Ferguson: Not even that much. John Franzreb: Okay, all right. Secondly, can you talk a little bit about providing zinc costs? You mentioned in your prepared remarks Tom, roughly about 30 a pound. What kind of headwind did that present to you in the year ahead? Tom Ferguson: You know I think we're seeing zinc costs have been fairly stable now for a little while, so in that $1.25 to $1.30 range. I think it's down even a little bit more than that right now, but likely that too could be in the – I’ve thought about 25 or 26 range, and if it stays there, you know our costs – we've already got a lot within about six months, so its normal inventory in our cattle, so you know we don't look for tremendous headwinds or even significant headwinds in the first part of the year. John Franzreb: Okay, great. And you said that the turnaround season was looking better in the fall, but closer to home, what's the spring turnaround season look like relative to the last time we spoke a couple of months ago? A - Tom Ferguson: It's active. We're deployed on quite a few projects. We've only had one that I'm aware of that’s been – where the crew's been pulled back because of COVID on one international job. So for the most part, it's active. I'm just really significantly better than the spring of last year. We don't have any, what I’d call Wales you know. No mega projects, but a good stream of activity in a lot of those because there's been delays. A lot of them are having good scope growth as we’re getting on site, so it should be a good solid season. John Franzreb: Okay, I'll get back into queue and let somebody else take the questions. A - Tom Ferguson: Thanks John. Operator: Our next question comes from Noelle Dilts with Stifel. Noelle Dilts : Hi guys, and congrats on finishing out a tough year. A - Tom Ferguson: Thanks Noelle. Noelle Dilts : So my first question kind of sticks with the line of just raw material inflation. I was hoping you could speak to how you're thinking about you know steel costs that have escalated and how that impacts you know the cost side of your business with an industrial position and then if you're seeing any impact on demand as it relates to metal coatings and just generally things being produced with steel. Thanks. A - Tom Ferguson: Yeah, I think on the raw material for – particularly on the electrical side where they buy a lot of metal for fabrication, for the most part you know we have relatively short cycle times and in terms of from the time we quote to the time a job books, so you know we're talking a matter of weeks, maybe a couple of months. So for the most part we’re able to work those increased costs into our bids and so I’d say that’s the vast majority of so far what has been happening. On the Metal Coatings side, we are seeing – so far you know we haven't seen a lot of either cancellations or delays because of either availability of steel or the cost of steel, but we are hearing more of that in the market place and so you know it doesn't pose a headwind at the moment, but definitely something we're paying close attention to, and because we do have a lot of our fabricators that are running tight on steel availability for the projects. In the longer term, you know as soon as we get towards the latter part of the year, if steel continues to appreciate in cost, we could see that happen, creating some headwinds for us, but for the moment it’s just mostly noise. Noelle Dilts : Okay, that’s helpful. So then I was hoping you could expand a bit on just some of the key returns you’re seeing, the key metal coatings markets. I'm always interested in what you're hearing on T&D, galvanizing – I’m sorry, T&D forward and then the industrial and the infrastructure markets. A - Tom Ferguson: Yes, so there's been active – we've seen an uptick there and that’s always good for hot dip galvanizing, so that's been positive. Quite a bit of transmission distribution pull activity, including some of the 5G stuff and so you know we’re feeling fairly bullish on where that's been going and… Ag has been good. I think we've seen that you know coming out of the floods from the prior year, so we've seen quite a bit of Ag activity throughout the Midwest, which is positive for our sites. And the other thing, we were not expecting to see a lot of recreation staff, but we have seen some of that too and strangely enough a lot of dioxin . So it's been relatively positive and the major markets have been good. We even have a pretty good sized petrochemical project that we've seen some activity on, and so just generally positive. Noelle Dilts : Okay, great. And then obviously a lot of you know headlines in the news information, in the news about the potential for Nurasol. Could you speak to how you kind of think about your exposure to some of the categories that have been proposed to-date. I understand you know the ultimate goal will likely be you know something different from what we're looking at today, but that's sort of how you are thinking about the opportunity there. Tom Ferguson: Yeah, you know the difficulty for us is by the time this – any of the actual spend flows into our customer base, our fabricators for the most part, you know we're not looking at much and we're not expecting much of an impact this year. So it really starts to get us a little more excited about maybe next year, but almost any infrastructure spend is good for our metal coatings business, but when it comes on the electrical power Gen and transmission distribution, we know the grid has to continue to be updated and expanded, particularly as we saw here in Texas through the winter storm. So that's good for not just our metals coatings side, but it’s also good for infrastructure solutions, but right now we're just looking at it. We're paying close attention as it more impacts the mood I guess and optimism if something got done, so – but it would definitely play into you know as we're looking at our facilities capacity and our capital deployment as we get through this year and into the next year. Noelle Dilts : All right, thanks very much. Tom Ferguson: Thanks Noelle. Operator: Our next question is a follow-up from John Franzreb with Sidoti and Company. John Franzreb: Yeah, can you just talk about the tax rate that you put in the fourth quarter and what you should be thinking about in 2022? A - Philip Schlom: Yeah, our tax rate finished up last year a little bit higher than we'd like to see and we’re finishing up the year we’re at with just over 22%. Might see a little bit of an uptick, 23%, 23.5%, but I think we're going to hover in that range, going for it at this point in time, unless there's obviously a tax bill change. John Franzreb: Any thoughts about the ample spending, you know at a good $37 million a year. How does that make – you know the company is currently configured in 2022. Tom Ferguson: I think that you’ll see we spent a little more last year, because we had a couple of growth initiatives. So you will see that capital spending come down a bit this year where we're continuing to invest in the business. So I think we're in the $25 million of maintenance type spending and you'll probably see us in the $30 million, $35 million on a full year spend. John Franzreb: Okay, and just one last question about labor costs. Is there any issue as far as our personnel fully staffed, more activity to kind of give us an update, yeah. Tom Ferguson: Yeah, we're fully staffed, but we are – yeah, we’ve had to enhance our recruiting programs and the cost of entry level craft has been increasing and we look for that to continue. I guess the good news is we're spread across 60 locations and so generally we're pulling from a lot of markets and in some cases for markets that are you know, are in a major metropolitan areas, so. But it's definitely something we have a lot of focus on and resources deployed to make sure that we can get access to people and we are having to use some temp-up. It’s a bit more than the – also they are very light, but then we had to in the last couple years. But generally, you know you look at the labor as a percent of our total cost. I don't know which business we want to talk about; it's manageable. John Franzreb: Okay, and comment on (a) – and I’m sorry to push this, but you know what does the pipeline look like and have you considered just giving us a kind of an update, your thoughts on them there. A - Tom Ferguson: Yeah, I think you know we've – we're normally a relational kind of buyer for the most part and so there's some things. They are just places in North America that we can't get to and without quarantining for days or weeks, so we have a really, really solid pipeline, just slowed by the impact of COVID and like I said, I think all of my officers have been vaccinated now, so for the most part we do intend – we're ready to travel and get to the locations, so that we can in some cases get into due diligence, but in most cases just finalize negotiations. And you know, I wish I could say we're going to get something done in this quarter, but it just looks like everything's dragging out an extra quarter or two in terms of our normal activity levels. So while we'd like to get two or three deals done, usually in the early part of the deal we don't have that – we just don't have anything teed up that way, so. But we will get some deals done this year and we've got enough in the pipeline to ensure that we can do that and it is loosening up, so we are getting out more and people are more willing to see us or even travel here for work, so. John Franzreb: Thank you for the follow-ups. I appreciate it. Operator: Our next question comes from DeForest Hinman with Walthausen & Co. DeForest Hinman : Thanks for taking the questions. Tom Ferguson: Hi DeForest. DeForest Hinman : A very good morning. Can you give us an update in terms of you know outlook on share repurchase activity and kind of wrapping up with a strategic review. Are we precluded from buying stock as part of the strategic review with like a black out or anything? Tom Ferguson: We are subject DeForest to a normal black out. Well I shouldn't say that actually. We’re under a 10b5-1 plan, so we aren’t subject to that and we've got some restrictions on that, but they’ve been in the market continuing to buy stock opportunistically. We’re evaluating that as part of a strategic review as to know the pricing, but we've continued to be in the market post February 28. DeForest Hinman : Perfect, that's helpful. And then just any color on the strategic up review from a benchmark perspective and from a timing perspective, you know we're waiting on the consultant to give us something. It's already been received. We’re reviewing it as the board looked at something and any color you can provide there would be very helpful to shareholders. A - Tom Ferguson: Yeah, we actually had our first in-person meeting with one of the advisors a couple of weeks ago. So that was encouraging. That's actually not a knock on anybody. It’s just you know kind of let you know it's the process. This is a complex project and we're doing – going through a thorough analysis. We've received preliminary packages to review. We've had at least one review, actually probably two with the board, but you know we still have I think two or three fairly significant work streams in front of us. That'll continue on through the summer, so. And then hopefully dependent on that progress we’ll be able to tighten up and give you some more definitive milestones hopefully by the time we talk next time. DeForest Hinman : Okay. And maybe just one final question on that. Has the board given us as a consultant, a deadline in terms of when they would like this to be completed and obviously yet you know COVID is starting to wrench with some things. But is there tentatively a date when you think this would be completed? A - Tom Ferguson: Yeah, I think we probably started out with a time frame in mind, not realizing how much extra time was going to be involved because of COVID and doing video calls instead of in-person fact finding meetings and sessions and being able to travel to sites and stuff like that. So, I think we are at – I believe is we've got a lot of questions that are being explored. We've got several work streams and its proceeding. We are now on a good pace. Like I said, we had our – not that it was a kick off meeting, but we had our first face-to-face meeting just a couple weeks ago and we’d had a lot of video calls before that, a lot of teleconferences and our focus for now and probably through the next quarter or so is just making sure that Infrastructure Solutions performs, that our operations stay safe and functioning and that we are able to take care of our customers and minimize the distractions on the businesses as they focus on that. Because it is still – there are still a lot of complexities with maintaining manufacturing operations and field service deployments in the face of COVID, so that's our focus right now. DeForest Hinman : Okay, that's helpful. And I'd like to just ask you, if you could provide a little bit more color on earlier a comment as it related to steel availability. It seems like from what I've been reading, a lot of steel companies are working very hard to keep volumes up. Some commentary that some of the distributors may be unwilling to take a lot of inventory in the short term, so prices so elevated. Is there from your perspective a lack of inventory available broadly? Is it certain types of steel are not available? Any color you can provide in terms of what's happening on the ground would be very helpful. A - Tom Ferguson : Yeah, you know I think for us, its body. There's some places, some and I don't – without getting into any specific geographies or customer groups, you know it’s just general fabrication on large projects they are able to manage through this. But you've got some of those mid-sized projects where they all run into. I hesitate to call it shortages right now, just delays and I think the bigger concern is over the cost appreciation as that starts to you know come into the justification on whether projects remain financially viable or not. So far I don't, I don't think we've seen anything actually of any significance canceled. So it’s just right now it’s just delays and a lot of extra work to access the inventories or the steel they need. I'm not – I don't think it's any particular – well high beams and things like that, some of the structural stuff I think is a little harder to get to, and maybe that's more of a stocking issue. DeForest Hinman : Okay, that's helpful. Thanks for taking the questions today. Operator: Our next question is a follow up from Noelle Dilts with Stifel. Noelle Dilts: Thanks again. So I was hoping you could expand just a little bit on how you're thinking about the margin profile for the two divisions in fiscal ’22. You know I think for us the Metal Coatings margin came in a little bit ahead of our expectations. So do you think you Q2 kind of sustained margins above the high-end of our target 21% to 23% range that you talked about in the past. Any color there would be helpful. Thanks. Philip Schlom: You know, I think they had some non-recurring one time things that helped them in the fourth quarter, so, and the fact that they are one time would -- but I think they're generally running. You know I'd like to think they are going to be in the -- above the midpoint of that range and so call it 22%, 23% and of course as they are doing that, sometimes they are going to be able to pop above it. I think as we, right now Surface Technology is not a big part of what we do, but as they continue to stabilize and improve those operations, that's going to help us trend towards the upper end of that range. Philip Schlom : Hi Noelle, this is Phillip. On the other side of the Infrastructure Solutions and Electrical, I think we've seen the bottom there, you know late last year. So as we progress, you know hopefully these businesses are stabilized and we'll see better business going forward and hopefully we'll see some margin improvement there as well. Tom Ferguson: Yeah, our focus there right now is building the back logs back in some of the businesses and they're still pulled down by that little bit of well pads that they have exposure to. But we still want to train those back to double digit operating margins as strategically that's where we think they should be and we think they can get there particularly as we divested SMS, which was a low single digit if you will, operating margin business, that tended to have some fluctuation greater than its size. So I think we're better positioned with what we have and we got a better spread in WSI and the Industrial piece that’s around the world, so that we can take advantage of some of the refinery turnaround activity in other parts of the world and we're just not as dependent on the U.S. as we used to think. Noelle Dilts: Right. Okay, that’s it from me. Thanks. Tom Ferguson: Thanks Noelle. Operator: Our next question comes from Bill Baldwin, with Baldwin Anthony Securities. Bill Baldwin : Hey, good morning Tom and Phil. Tom Ferguson: Hey Bill. Bill Baldwin : Tom, you mentioned that the outlook for the grid, you continue spending on the grid. It looks like it's going to continue to be pretty good over the next several years, and you indicated that is a positive also for your Infrastructure business. Could you be more specific as far as the particular products that you think will primarily benefit from continued spending to improve the grid? Tom Ferguson: Oh, yeah. The enclosures, E-houses are really well positioned given our three locations. You know, outside of Baltimore, then in Chattanooga and Pittsburg, Kansas. And then the switchgear businesses, we like Fulton, which is more the utility grade. Switchgears is well positioned in Missouri, and then up in Oshkosh we've got more the industrial muni kind of switchgears. So we just like the range of products we have and feel good about our locations. The operations in a COVID disrupted year, we are able to really focus on their efficiencies, and driving and improving their operations and its – so we’re bullish on E-houses and switchgear, and we've got the additional opportunities in the E-house side coming from data centers and battery storage. So we're very bullish there, and then galvanizing hot dip just as soon as you get into poles and hardware and, you know solar, any of the renewable for the most part you know it’s just good steel and that's good for our galvanizing business. So I'd say that's – our other businesses may benefit, so that systems a little bit, but that’s not really – you know it was in their sweet spot, so right. Bill Baldwin : And secondly, can you give us a little feel for the – also benefit international, outside of your specialty welding business, but more of your traditional legacy, electrical and industrial business. Philip Schlom: We don't have much outside of the U.S. You know we’ve got the China work, and we see the drop in our backlog, and a big chunk to a drop in the backlogs, a reduction in China, orders we've been working on for the last couple years and haven't taken a lot of new orders in China. Tom Ferguson: Well we just took one, but so there is activity. I think being competitive and because of the travel restrictions our executives that would normally be traveling from the U.S. to Saudi or to China, you know that's just not happening. So I think that just, it creates a little bit of a hurdle for us. So as travel opens up and you know once again I mentioned most of our folks are getting vaccinated so that they can travel and I look for that as we probably get into the second quarter, into the summer. Bill Baldwin : But your JV over there in Saudi Arabia is still activity, right, and it’s still... Tom Ferguson: It is over there and it’s open for business – yeah, I think we could see some activity over there, that that would be good. Bill Baldwin : So that could be the class all right then. You can see some interesting developments. I was throwing adders – you know what you’re thinking might be – are you at all considering any kind of international activities for your coating business or … Tom Ferguson: Yeah, international if you want to call, you know North America outside of the U.S. potentially. Bill Baldwin : Sure, okay. So you are going to stick to North America outages. Tom Ferguson: Pretty much. Bill Baldwin : Okay, all right. A - Tom Ferguson: Nice talking to you Bill. Bill Baldwin : Thank you. Philip Schlom: Thanks Bill. Operator: This concludes our question-and-answer session. I'd like to turn the call back over to Mr. Tom Ferguson for any closing remarks. Tom Ferguson: I just thank everybody for being on the call with us today, and I look forward to finishing out our first quarter and being able to give you more and deeper updates on our progress on the Infrastructure Solutions evaluation work and that effort, as well as looking forward to reporting out our first quarter as a much more normalized Q1 versus what we were talking about last year. So look forward to that update in a couple of months. Thank you. Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
AZZ Inc. (NYSE:AZZ) Surpasses Earnings Estimates with Strong Financial Performance
- AZZ Inc. (NYSE:AZZ) reported an EPS of $1.39, surpassing the estimated $1.24 and reflecting significant growth.
- The company's revenue reached approximately $403.65 million, indicating a 5.8% increase year-over-year.
- AZZ announced a debt reduction of $35 million for the quarter, contributing to a healthier balance sheet.
AZZ Inc. (NYSE:AZZ) is a prominent player in the metal coatings and coil coating industry, providing essential services like hot-dip galvanizing. The company competes with other industry leaders in delivering protective coatings for metal products. AZZ's recent financial performance highlights its strong market position and operational efficiency.
On January 7, 2025, AZZ reported earnings per share (EPS) of $1.39, surpassing the estimated $1.24. This performance also exceeded the Zacks Consensus Estimate of $1.29, marking a significant improvement from the $1.19 EPS reported in the same quarter last year. The company's revenue reached approximately $403.65 million, exceeding the estimated $396.64 million, and reflecting a 5.8% increase compared to the previous year.
AZZ's Metal Coatings segment saw a 3.3% rise in sales to $168.6 million, while Precoat Metals sales increased by 7.6% to $235.1 million. The company's net income for the quarter was $33.6 million, a 25% increase, with adjusted net income reaching $41.9 million, up 20.5%. The adjusted EBITDA was $90.7 million, representing 22.5% of sales, with segment margins of 31.5% for Metal Coatings and 19.1% for Precoat Metals.
The company also made a debt reduction of $35 million during the quarter, contributing to a fiscal year-to-date debt reduction of $80 million, resulting in a net leverage ratio of 2.6x. AZZ announced a cash dividend of $0.17 per share and successfully repriced its Term Loan B, reducing the future borrowing rate by 75 basis points to SOFR+2.50%.
AZZ's financial metrics indicate a strong market valuation, with a price-to-earnings (P/E) ratio of approximately 20.60 and a price-to-sales ratio of about 1.59. The enterprise value to sales ratio is around 1.61, and the enterprise value to operating cash flow ratio is approximately 10.26. The company's earnings yield is about 4.85%, and it maintains a low debt-to-equity ratio of 0.03, with a current ratio of approximately 1.77, indicating solid financial health.
AZZ Inc. (NYSE:AZZ) Surpasses Earnings Estimates with Strong Financial Performance
- AZZ Inc. (NYSE:AZZ) reported an EPS of $1.39, surpassing the estimated $1.24 and reflecting significant growth.
- The company's revenue reached approximately $403.65 million, indicating a 5.8% increase year-over-year.
- AZZ announced a debt reduction of $35 million for the quarter, contributing to a healthier balance sheet.
AZZ Inc. (NYSE:AZZ) is a prominent player in the metal coatings and coil coating industry, providing essential services like hot-dip galvanizing. The company competes with other industry leaders in delivering protective coatings for metal products. AZZ's recent financial performance highlights its strong market position and operational efficiency.
On January 7, 2025, AZZ reported earnings per share (EPS) of $1.39, surpassing the estimated $1.24. This performance also exceeded the Zacks Consensus Estimate of $1.29, marking a significant improvement from the $1.19 EPS reported in the same quarter last year. The company's revenue reached approximately $403.65 million, exceeding the estimated $396.64 million, and reflecting a 5.8% increase compared to the previous year.
AZZ's Metal Coatings segment saw a 3.3% rise in sales to $168.6 million, while Precoat Metals sales increased by 7.6% to $235.1 million. The company's net income for the quarter was $33.6 million, a 25% increase, with adjusted net income reaching $41.9 million, up 20.5%. The adjusted EBITDA was $90.7 million, representing 22.5% of sales, with segment margins of 31.5% for Metal Coatings and 19.1% for Precoat Metals.
The company also made a debt reduction of $35 million during the quarter, contributing to a fiscal year-to-date debt reduction of $80 million, resulting in a net leverage ratio of 2.6x. AZZ announced a cash dividend of $0.17 per share and successfully repriced its Term Loan B, reducing the future borrowing rate by 75 basis points to SOFR+2.50%.
AZZ's financial metrics indicate a strong market valuation, with a price-to-earnings (P/E) ratio of approximately 20.60 and a price-to-sales ratio of about 1.59. The enterprise value to sales ratio is around 1.61, and the enterprise value to operating cash flow ratio is approximately 10.26. The company's earnings yield is about 4.85%, and it maintains a low debt-to-equity ratio of 0.03, with a current ratio of approximately 1.77, indicating solid financial health.
AZZ Inc. (NYSE:AZZ) Earnings Preview: Key Financial Insights
- Earnings per share projected to be $1.24 with revenue expected to reach approximately $396.6 million.
- Price-to-earnings (P/E) ratio stands at 21.05, and price-to-sales ratio is 1.56, indicating market valuation.
- Enterprise value to sales ratio of 2.15 and enterprise value to operating cash flow ratio of 13.77 highlight AZZ's valuation and financial leverage.
AZZ Inc. (NYSE:AZZ) is a prominent player in the industrial sector, specializing in hot-dip galvanizing and coil coating solutions. The company is headquartered in Fort Worth, Texas, and is known for its robust service offerings. As AZZ prepares to release its quarterly earnings on January 8, 2025, investors are keenly observing the company's financial health and market performance.
Wall Street projects AZZ's earnings per share to be $1.24, with revenue expected to reach approximately $396.6 million. Despite these optimistic forecasts, Zacks Investment Research suggests that AZZ might not have the ideal mix of factors to exceed these expectations. This has led to a cautious approach among investors and analysts as they await the earnings report.
AZZ's financial metrics provide a deeper understanding of its market position. The company has a price-to-earnings (P/E) ratio of 21.05, reflecting the market's valuation of its earnings. Additionally, the price-to-sales ratio is 1.56, indicating the amount investors are willing to pay for each dollar of sales. These figures help investors gauge AZZ's market valuation.
The enterprise value to sales ratio of 2.15 and the enterprise value to operating cash flow ratio of 13.77 highlight AZZ's valuation, considering its debt and cash positions. These metrics are crucial for understanding the company's financial leverage and cash-generating capabilities. AZZ's debt-to-equity ratio of 0.92 further illustrates its leverage level, while a current ratio of 1.85 suggests a strong ability to meet short-term liabilities.
As the earnings release date approaches, analysts have revised their forecasts, reflecting the anticipation surrounding AZZ's financial performance. The company's earnings yield of 4.75% offers insight into the potential return on investment for shareholders. This upcoming announcement is expected to draw significant attention from investors and stakeholders interested in AZZ's market trajectory.
AZZ Inc. (NYSE:AZZ) Earnings Preview: Key Financial Insights
- Earnings per share projected to be $1.24 with revenue expected to reach approximately $396.6 million.
- Price-to-earnings (P/E) ratio stands at 21.05, and price-to-sales ratio is 1.56, indicating market valuation.
- Enterprise value to sales ratio of 2.15 and enterprise value to operating cash flow ratio of 13.77 highlight AZZ's valuation and financial leverage.
AZZ Inc. (NYSE:AZZ) is a prominent player in the industrial sector, specializing in hot-dip galvanizing and coil coating solutions. The company is headquartered in Fort Worth, Texas, and is known for its robust service offerings. As AZZ prepares to release its quarterly earnings on January 8, 2025, investors are keenly observing the company's financial health and market performance.
Wall Street projects AZZ's earnings per share to be $1.24, with revenue expected to reach approximately $396.6 million. Despite these optimistic forecasts, Zacks Investment Research suggests that AZZ might not have the ideal mix of factors to exceed these expectations. This has led to a cautious approach among investors and analysts as they await the earnings report.
AZZ's financial metrics provide a deeper understanding of its market position. The company has a price-to-earnings (P/E) ratio of 21.05, reflecting the market's valuation of its earnings. Additionally, the price-to-sales ratio is 1.56, indicating the amount investors are willing to pay for each dollar of sales. These figures help investors gauge AZZ's market valuation.
The enterprise value to sales ratio of 2.15 and the enterprise value to operating cash flow ratio of 13.77 highlight AZZ's valuation, considering its debt and cash positions. These metrics are crucial for understanding the company's financial leverage and cash-generating capabilities. AZZ's debt-to-equity ratio of 0.92 further illustrates its leverage level, while a current ratio of 1.85 suggests a strong ability to meet short-term liabilities.
As the earnings release date approaches, analysts have revised their forecasts, reflecting the anticipation surrounding AZZ's financial performance. The company's earnings yield of 4.75% offers insight into the potential return on investment for shareholders. This upcoming announcement is expected to draw significant attention from investors and stakeholders interested in AZZ's market trajectory.
Jefferies Initiates Coverage on AZZ with a Buy Rating
- Jefferies has initiated coverage on AZZ, signaling a positive outlook towards the company's future.
- AZZ holds an average brokerage recommendation (ABR) of 1.67, indicating a strong belief in its growth potential.
- The company's stock has shown significant growth, with a high of $84.52 from a low of $34.59, demonstrating resilience and potential for further appreciation.
Jefferies, a well-known financial services company, recently initiated coverage on NYSE:AZZ, giving it a Buy rating. This move, as reported by StreetInsider, signals a positive outlook from Jefferies towards AZZ. At the time of this rating, AZZ's stock was trading at $76.63. AZZ Inc. operates in the specialty electrical equipment and engineering services sector, providing solutions to industrial, power generation, and utility markets. Its activities include manufacturing electrical equipment and providing galvanizing services. The company competes with other firms in the electrical and industrial service sectors, but this optimistic rating from Jefferies suggests confidence in AZZ's market position and growth potential.
The optimism from Jefferies is echoed by other Wall Street analysts as well. According to Zacks Investment Research, AZZ holds an average brokerage recommendation (ABR) of 1.67, positioning it between Strong Buy and Buy. This rating is derived from the recommendations of three brokerage firms, with two-thirds of them rating AZZ as a Strong Buy. This consensus among analysts indicates a strong belief in AZZ's potential for growth and favorable market performance.
AZZ's stock performance and market valuation further support the positive outlook from analysts. Despite a slight decrease of $0.27 in its stock price, bringing it to $76.63, the company's shares have shown significant growth over the year, reaching a high of $84.52 from a low of $34.59. This growth trajectory highlights AZZ's resilience and potential for further appreciation. With a market capitalization of approximately $2.28 billion and a trading volume of 235,231 shares, AZZ demonstrates solid market presence and investor interest.
The company's stock price fluctuation within the trading day, ranging from a low of $75.455 to a high of $77.3, reflects normal market volatility. However, the overall positive trend in its yearly performance, coupled with strong support from financial analysts, suggests a stable and promising future for AZZ. The backing by Jefferies, along with the favorable average brokerage recommendation, underscores confidence in AZZ's strategic direction, operational efficiency, and ability to navigate market challenges.
In summary, the initiation of coverage by Jefferies with a Buy rating, alongside the optimistic view shared by other analysts, paints a bright picture for AZZ. The company's strong market position, evidenced by its stock performance and analyst ratings, indicates potential for continued growth and success in its sector. Investors and market watchers will likely keep a close eye on AZZ, anticipating its moves in the competitive landscape of the specialty electrical equipment and engineering services market.
AZZ Inc. Receives New $85 Price Target from B.Riley's Lucas Pipes
Lucas Pipes of B.Riley Financial Sets New Price Target for AZZ Inc. (NYSE:AZZ)
Lucas Pipes of B.Riley Financial has recently set a new price target of $85 for AZZ Inc. (NYSE:AZZ), as reported by StreetInsider on April 23, 2024. This adjustment suggests a potential upside of approximately 11.11% from the stock's trading price at the time of the announcement, which was $76.5. This optimistic outlook from the analyst comes on the heels of AZZ's Q4 2024 Earnings Conference Call, which provided a comprehensive overview of the company's financial performance and strategic direction. The earnings call, detailed in a transcript published by Seeking Alpha, featured key company participants and was attended by analysts including Lucas Pipes, indicating a keen interest in AZZ's business trajectory.
AZZ Inc. reported a notable quarterly earnings of $0.93 per share, surpassing the Zacks Consensus Estimate of $0.70 per share. This performance not only represents a significant improvement from the $0.30 per share reported in the same quarter a year ago but also marks an earnings surprise of 32.86% for the quarter. Such a strong financial outcome underscores the company's robust position in the electrical equipment manufacturing sector and its ability to exceed market expectations consistently. This follows a trend where AZZ outperformed earnings expectations in the previous quarter as well, with earnings of $1.19 per share against an anticipated $0.99, resulting in a 20.20% surprise.
In terms of revenue, AZZ announced figures of $366.5 million for the quarter ending in February 2024, which also beat the Zacks Consensus Estimate by 3.49%. This revenue figure not only represents an increase from the $336.5 million reported in the year-ago period but also highlights the company's consistent ability to surpass consensus revenue estimates in three of the last four quarters. Such performance is indicative of AZZ's strong presence and competitive edge in the Manufacturing - Electronics industry.
For the fiscal year 2024, AZZ Inc. achieved remarkable financial milestones, including total sales of approximately $1.54 billion, marking a 16.2% increase from the previous year. This sales growth was driven by its Metal Coatings and Precoat Metals segments, showcasing the company's diversified and robust business model. The company's diluted earnings per share (EPS) stood at $3.46, a 48.5% increase, highlighting significant profitability improvements. Additionally, AZZ reported a net income rise to about $101.6 million, a 53.2% increase, with adjusted net income at approximately $132.8 million, up 39.5%. Such financial health is further evidenced by the company's ability to reduce its debt by $115.0 million during the year, showcasing strong financial management and operational efficiency.
The financial results and strategic achievements discussed during AZZ's Q4 2024 Earnings Conference Call provide a solid foundation for Lucas Pipes' optimistic price target. The company's record sales, profitability, and cash flow for the fiscal year ended February 29, 2024, coupled with its consistent performance in exceeding earnings and revenue estimates, paint a promising picture for AZZ's future. This backdrop of strong financial health and strategic direction likely informed Pipes' analysis and the subsequent setting of a new price target, reflecting confidence in AZZ's continued growth and value creation.
