AZZ Inc. Reports Strong Fiscal Year 2026 Third Quarter Results
AZZ Inc. (NYSE: AZZ), a leading independent provider of hot-dip galvanizing and coil coating solutions, has announced notable financial results for the third quarter ending November 30, 2025. The company's operational strength has driven growth in sales, earnings per share (EPS), cash flow, and overall value creation.
Fiscal Year 2026 Third Quarter Overview
AZZ achieved total sales of $425.7 million, reflecting a 5.5% increase compared to the same period last fiscal year. The financial performance highlights include:
- Metal Coatings sales reached $195.0 million, up 15.7%
- Precoat Metals sales amounted to $230.7 million, down 1.8%
- Net income of $41.1 million, an increase of 22.2%; adjusted net income of $46.0 million, up 9.7%
- GAAP diluted EPS was $1.36, showing a 21.4% increase; adjusted diluted EPS was $1.52, up 9.4%
- Consolidated adjusted EBITDA of $91.2 million (21.4% of sales) compared to $90.7 million (22.5% of sales) in the previous year
Key Performance Insights
Tom Ferguson, President and Chief Executive Officer of AZZ, expressed satisfaction with the company’s performance. "Our sales expanded to $425.7 million, up 5.5% from the prior year," he stated. He noted that the strong sales momentum was supported by:
- Increased demand in the construction, industrial, and electrical transmission and distribution sectors, particularly benefiting Metal Coatings
- Weaker demand in specific markets affecting Precoat Metals, including building construction and HVAC
Additionally, AZZ reported significant cash flow from operations totaling $79.7 million, which is a 20% increase from last year.
Debt Management and Shareholder Returns
AZZ made strides in strengthening its balance sheet during the quarter. The company achieved a net leverage ratio of 1.6x, following debt reduction of $35 million. Other financial highlights include:
- Repurchased 201,416 shares of common stock for $20.0 million at an average price of $99.28
- Dividend payment of $0.20 per share to common shareholders
Segment Performance Analysis
Breaking down the segments, Metal Coatings recorded sales of $195.0 million, marking a 15.7% increase due to heightened infrastructure spending. On the other hand, Precoat Metals saw a 1.8% decline in sales to $230.7 million.
In terms of adjusted EBITDA margins, Metal Coatings achieved 30.3%, while Precoat Metals recorded 19.7%.
Future Outlook and Fiscal Year 2026 Guidance
AZZ has refined its fiscal year 2026 guidance, projecting:
- Sales between $1.625 - $1.7 billion
- Adjusted EBITDA in the range of $360 - $380 million
- Adjusted diluted EPS between $5.90 - $6.20
This guidance is based on anticipated market conditions and excludes any future mergers or acquisitions.
Conclusion
AZZ Inc. continues to demonstrate resilience and operational excellence. As the company progresses through the fiscal year, it remains well-positioned to capitalize on emerging opportunities within the M&A landscape and maintain its commitment to delivering value to shareholders.