AZZ Inc. Swings to Profit in Fiscal Q2 on Infrastructure Spending

AZZ Inc. swung to a profit in its fiscal second quarter of 2024 as its metal coatings business was lifted by infrastructure spending.

The Fort Worth, Texas-based galvanizer and coil coater posted a profit of $28.3 million in its fiscal Q2 ended Aug. 31 vs. a loss of $57.6 million a year earlier on sales that slipped 2% to $398.5 million. (See chart above.)

“I am pleased to report that our second-quarter results were in line with our expectations and set us up well for the balance of the year,” President and CEO Tom Ferguson said in a statement.

AZZ’s Precoat Metals business faced softer market conditions. Sales of $228.7 million in Q2 dropped year over year by 5% due to lower volume in HVAC, transportation, and certain construction end markets, he said.

Recall that AZZ acquired Precoat, a steel and aluminum coil coater, in May 2022 for approximately $1.28 billion.

The company’s metal coatings business, a separate division from Precoat, “continued to benefit from infrastructure spending.” This segment had “record sales” of $169.8 million in the quarter, up 2.4% vs. a year earlier, Ferguson said.

On the operations side, construction on AZZ’s new plant in Washington, Mo., “continues to  progress  ahead  of  schedule  and  budget,” he said.

AZZ announced plans last November to build a greenfield aluminum coil coating facility near St. Louis.

Ferguson noted the company has decided to internally fund the construction of the plant instead of funding a portion of it through a sale/leaseback transaction.

AZZ expects a stronger half of this fiscal year vs. last year, even though the second half is typically seasonally slower, Ferguson said.

Among the reasons for that optimism are infrastructure and renewables spending, reshoring of manufacturing, and “continued migration to more environmentally friendly pre-painted steel and aluminum,” he said.