AZZ Inc. reports Q1 EPS $1.14, consensus $1.16

Reports Q1 revenue $390.9M, consensus $396.7M. Tom Ferguson, CEO, commented, “Our first quarter results reflect the strength of our Metal Coatings business coupled with a full quarter of Precoat Metals. On a sequential basis, sales grew by 16%, and Adjusted EBITDA increased by 49%. Our teams executed well, resulting in continued sales momentum in both segments. Metal Coatings generated EBITDA margin of 30.7%, above our targeted EBITDA range of 25-30%. I am encouraged by the actions we have taken at Precoat Metals to address operational inefficiencies, caused by excessively high customer inventories at most plants, allowing us to deliver 560 bps of sequential improvement in margins. Through a disciplined focus on working capital, we paid down debt of $20.0 million in what is typically a high cash consuming quarter. This positions us well to attain the $75-$100 million of debt reduction we are targeting for this fiscal year. Our business is on track this year to deliver solid sales and Adjusted EBITDA growth. While we are seeing softness in certain end markets, we expect to benefit from continued secular tailwinds supported by infrastructure and renewables spending, reshoring of manufacturing, and continued migration to more environmentally friendly pre-painted steel and aluminum. Additionally, our new plant construction in Washington, Missouri is proceeding ahead of schedule and tracking to budget.”