Coil Coaters
AZZ Logs Higher Net Income, Sales in Fiscal Q1
July 14, 2023
AZZ Inc. reported an 18% increase in net income in its fiscal first quarter of 2024, driven by a strong performance in its Metal Coatings business and by a full quarter with its Precoat Metals acquisition.
The Fort Worth, Texas-based galvanizer and coil coater posted net income of $28.5 million in its fiscal Q1 ended May 31 compared to net income of $24.1 million a year earlier on sales that increased 89% to $390.9 million.
In its Metals Coatings segment, sales increased year-over-year by 3% to $168.8 million in fiscal Q1, with quarterly sequential growth of 13%, the company said on July 7. AZZ said sequential sales increased because of higher volume and “continued price realization.”
AZZ’s Precoat Metals business posted sales of $222.1 million in fiscal Q1, up 18.7% on compared to the prior quarter. The increase driven by seasonally improved volume, value-pricing initiatives, and a shift in sales mix for the business, the company said.
Recall that AZZ completed its $1.28 billion buy of Precoat Metals in May 2022.
“Our first-quarter results reflect the strength of our Metal Coatings business, coupled with a full quarter of Precoat Metals,” AZZ president and CEO Tom Ferguson said in a statement. He added that AZZ 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,” Ferguson said.
Turning to operations, he noted that the company’s new plant in Washington, Mo., is proceeding ahead of schedule and tracking to budget. AZZ announced plans last November to build a greenfield aluminum coil coating facility near St. Louis.
By Ethan Bernard, ethan@steelmarketupdate.com
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