AZZ Inc. Reports 5.8% Revenue Growth to $403.7 Million for Quarter Ended November 30, 2024

AZZ Inc. reported a solid financial performance for the three and nine months ended November 30, 2024, with consolidated sales reaching $403.7 million for the quarter, a 5.8% increase from $381.6 million in the same period last year. For the nine-month period, sales totaled $1.23 billion, up 4.7% from $1.17 billion in the prior year. The company achieved a net income of $33.6 million for the quarter, compared to $26.9 million in the previous year, and $108.6 million for the nine months, up from $83.7 million. This resulted in basic earnings per share of $1.12 for the quarter and $1.12 for the nine-month period, reflecting increases from $0.93 and $2.91, respectively.

The financial results were bolstered by growth in the AZZ Metal Coatings and AZZ Precoat Metals segments, which saw sales increases of 3.3% and 7.6%, respectively, for the quarter. The Metal Coatings segment benefited from a higher volume of steel processed, while the Precoat Metals segment's growth was driven by increased coil coating volumes. Operating income for the quarter rose to $58.5 million, a 10.8% increase from the prior year, with both segments contributing positively despite rising costs in some areas.

Strategically, AZZ completed a secondary public offering in April 2024, raising approximately $310.2 million, which was primarily used to redeem its Series A Convertible Preferred Stock. This redemption, completed in May 2024, amounted to $308.9 million and included a redemption premium of $75.2 million, which was recorded as a deemed dividend. The company is also expanding its operations with a new aluminum coil coating facility in Washington, Missouri, expected to be operational in fiscal 2026, supported by a take-or-pay contract for 75% of its output.

Operationally, AZZ's total assets increased to $2.24 billion as of November 30, 2024, up from $2.20 billion at the end of the previous fiscal period. The company reported a decrease in cash and cash equivalents to $1.5 million, down from $4.3 million, while trade accounts receivable and inventories remained relatively stable. The company’s long-term debt decreased to $879.5 million, reflecting a reduction in interest expense due to lower average debt outstanding and interest rates.

Looking ahead, AZZ anticipates that sales prices in its Metal Coatings and Precoat Metals segments will remain stable, although fluctuations in product mix may impact average selling prices. The company expects demand to follow typical seasonal patterns, supported by consistent customer inventories. However, management acknowledges the uncertainty surrounding future economic conditions and their potential impact on demand for its products.