AZZ (AZZ) Q2 2027 Earnings Report

The call was strongly positive, characterized by record sales, broad-based segment and end-market growth, margin expansion, strong cash generation, successful integration of the Seattle acquisition, progress at Washington, Missouri, active capacity expansion and raised fiscal 2027 guidance. The principal challenges were weak HVAC and appliance markets, tight substrate availability, seasonal winter risk, higher interest rates and a lower debt-reduction target related to the acquisition. Highlights significantly outweighed the lowlights.

For fiscal 27, AZZ now expects sales of $1.825 billion to $1.875 billion, adjusted EBITDA of $380 million to $420 million and adjusted diluted EPS of $7.20 to $7.30; it will also expect to reduce debt by $100 million to $140 million during fiscal 27 and continue to opportunistically purchase shares of AZZ stock. The company said Tulsa-area and other greenfield or brownfield plants require $35 million to $50 million, take about 18 months to construct and bring into production, and that normal-year sustaining spending is $50 million, with sustaining capital somewhere between 50 and $60 million. Metal Coatings is still somewhere between 60% and 70% capacity utilization, while Washington, Missouri is expected to get to that 75% anchor customer by the end of the year and is actively working the other 25%; Q4 should be relatively in line with where the company has been seasonally historically.