AZZ Inc.'s earnings rise, but sales dip on weather woes

AZZ Inc. posted higher earnings in its fiscal fourth quarter, but sales slipped on weather disruptions.

The Fort Worth, Texas-based hot-dipped galvanized and coil coater reported net earnings of $20.2 million in its fiscal fourth quarter ended Feb. 28. That’s up 13% from $17.9 million a year earlier. However, net sales slipped 4% to $351.9 million in the same comparison.

“We are pleased with full-year sales growth of 2.6% … despite navigating significant weather impacts in the fourth quarter,”Tom Ferguson, president, and CEO, said in a statement after market close on Monday.

Ferguson noted that with full fiscal year sales of $1.58 billion and cash flow from operations of $250 million, “we were able to substantially complete our greenfield project in Washington, Mo., while significantly paying down debt in fiscal 2025.”

In an earnings conference call on Thursday, Ferguson said the $110-million aluminum coatings facility “is currently ramping up commercial production as we speak.”

AZZ said capital expenditures were $115.9 million during the fiscal year, which includes $52.8 million for the Missouri facility.

Metal Coatings, Precoat Metals

The company has two segments, Metal Coatings and Precoat Metals.

Metal Coatings’ sales fell 3.9% to $148.4 million in fiscal Q4 vs. a year earlier. AZZ cited “decreased volume due to unfavorable weather conditions in the quarter.”

Meanwhile, Precoat Metals’ sales declined 4.1% to $203.5 million in the same comparison. Unfavorable weather also impacted sales in this segment, as well as “lower end market demand in transportation.”

Outlook

Ferguson said on the call that there has been a rebound so far from the fiscal fourth quarter.

“Just in April alone, we’ve recovered the shortfall from the fourth quarter for Metal Coatings, and probably exceeded that,” he said.

“So we’re looking for a very strong first quarter on the Metal Coating side,” he added “So March was great. April is solid. Outlook for May is good as well.”

He commented, “On the Precoat side, its’ about the same … so we’re (also) looking for a solid first quarter” in that segment.

The company guided toward adjusted EBITDA of $360-$400 million on sales of $1.625-1.725 billion in its fiscal 2026. But it noted that the guidance “excludes M&A and any federal regulatory changes that may emerge.”

“With a focus on strategic growth initiatives, we remain committed to enhancing shareholder value and seizing future opportunities as they arise,” Ferguson said.