FORT WORTH, Texas, July 9, 2021 /PRNewswire/ -- AZZ Inc.
(NYSE: AZZ), a global provider of metal coating solutions,
welding solutions, specialty electrical equipment and highly
engineered services today announced financial results for the first
quarter of fiscal year 2022, ended May
31, 2021.
First Quarter Overview:
- Strong year-over-year financial results
-
- Reported diluted earnings per share of $0.88, up 319.0%, and
- Reported net income of $22.3
million, up 303.1% versus last year's period
- Sales of $229.8 million, up 7.8%
versus last year's period
- Metal Coatings segment versus same quarter, prior year:
-
- Sales of $127.7 million, up
7.3%
- Operating Income of $31.6
million, up 25.9%
- Operating margins of 24.7%, compared with 21.1% in prior year
quarter
- Infrastructure Solutions segment versus same quarter, prior
year:
-
- Sales of $102.1 million, up
8.3%
- Operating Income of $9.6 million,
versus loss of $(1.0) million in
prior year quarter
- Operating margins of 9.4% compared with loss of (1.1)% in prior
year quarter
- Declared quarterly cash dividend in the amount of $0.17 per common share
- Repurchased 125,770 shares, totaling $6.3 million
Management Discussion
Tom Ferguson, President and Chief
Executive Officer of AZZ, commented, "We are off to a solid start
in fiscal 2022 with strong operating performance in the first
quarter, including sales increasing 7.8%, operating income up
114.5% and net income up threefold. The solid financial results
reflect the strength of our businesses and our team doing an
outstanding job executing at a high level across the board,
continuing our momentum of growth and improving operational
efficiencies."
"Our Metal Coatings segment delivered solid operating
results with sales of $127.7
million, up 7.3%, and operating margin of 24.7%, up 360
basis points versus 21.1% in last year's first quarter.
Segment level results were driven by improved market conditions,
customer mix, price, and operational improvement initiatives."
Mr. Ferguson continued, "During the first quarter, our
Infrastructure Solutions segment had sales of $102.1 million, up 8.3% and operating margin of
9.4%, a tenfold improvement, compared to last year's COVID impacted
first quarter. Results were driven by solid operating improvement
in our global welding solutions business, as refiners returned to
performing turnarounds. We are gaining confidence for an
improved second half of the year with increased domestic and
international quoting activity for turnarounds, positioning AZZ for
a potentially strong fiscal 2022. I want to thank all our employees
for their hard work and dedication in delivering outstanding
results, as well as continuing to provide exceptional service to
our customers during the quarter."
First Quarter Results
For the first quarter of fiscal year 2022, the Company reported
sales of $229.8 million compared to
$213.3 million for the comparable
period last year, an increase of 7.8%. Operating income
increased to $30.7 million, or
114.5%, compared to $14.3 million in
last year's comparable three-month period. Net income for the
current quarter increased $16.8
million to $22.3 million, or
$0.88 per diluted share compared to
$5.5 million, or $0.21 per diluted share for the same quarter in
the prior fiscal year. The provision for income taxes of
$7.6 million reflects an
effective tax rate of 25.5% for the three months ended May 31, 2021, as compared to $4.7 million, or 45.8%, for the prior year
comparable period. Bookings for the three-month period
increased to $229.8 million, compared
to $174.9 million for the same
quarter last year.
Metal Coatings Segment
For the first quarter of fiscal year 2022, Metal Coatings
segment sales increased 7.3% to $127.7
million and operating income increased 25.9% to $31.6 million compared to $119.0 million and $25.1
million respectively, for the same period in the prior
fiscal year. The higher sales for the quarter were primarily
attributable to improved price realization and customer mix.
Operating margins for the quarter were 24.7%, an improvement of 360
basis points compared to 21.1% in the first quarter of fiscal year
2021. Operating margin improvement was driven by both
improved price realization in the current quarter, and a continued
focus on operations excellence.
Infrastructure Solutions Segment
For the first quarter of fiscal year 2022, Infrastructure
Solutions segment sales increased 8.3% to $102.1 million as compared to $94.3 million in the same quarter of the prior
year. Operating income for the first quarter of fiscal year
2022 totaled $9.6 million as compared
to an operating loss of $(1.0)
million in the prior year quarter. The increase
in net sales, operating income and margin for the three-month
period was primarily attributable to improved market conditions
within our Industrial platform, which saw an improvement in
turnaround activity in both the U.S. and international markets.
Fiscal Year 2022 Guidance
Mr. Ferguson added, "Due to the improved market conditions for
many of our end markets, we have revised our previously issued
fiscal 2022 sales and earnings guidance. We now anticipate sales
will be in the range of $855 million
to $935 million and earnings per
share to be in the range of $2.65 to
$3.05 per diluted share for fiscal
year 2022. This compares to the previous guidance of sales in the
range $835 million to $935 million and earnings in the range of
$2.45 to $2.95 per diluted share for fiscal year
2022."
"As previously stated for fiscal 2022, we remain highly focused
on growing our Metal Coatings segment and building our
Infrastructure Solutions backlog in enclosures, switchgear and
welding solutions. The underlining fundamentals of our
business remain strong providing us the foundation to aggressively
pursue growth opportunities that fit our strategic plan. As part of
our corporate commitment to Trust, Respect, Accountability,
Integrity, Teamwork and Safety ("TRAITS"), we continue to carefully
manage our workforce to ensure a safe and healthy operating
environment, while flexing our capacity to better match our
customers improved demand for our products and services."
"We continue to actively pursue initiatives to enhance
shareholder value, drive growth, and accelerate our strategy to
become predominately a metal coatings company. The previously
announced board-led strategic review of our portfolio and capital
allocation is complete, and we are actively pursuing multiple
recommendations that align with and support our strategy. We
are a much stronger company today and well-positioned to meet the
growing demands for infrastructure improvements in the U.S and
globally," concluded Mr. Ferguson.
Conference Call Details
AZZ Inc. will conduct a conference call to discuss financial
results for the first quarter of fiscal year 2022 today,
Friday July 9, 2021, at 11:00 A.M. ET. Interested parties can access the
conference call by dialing (844) 855-9499 or (412) 317-5497
(international). A webcast of the call will be available on the
Company's Investor Relations page at
http://www.azz.com/investor-relations.
A replay of the call will be available for three days at (877)
344-7529 or (412) 317-0088 (international), confirmation # 10157738, or for 30 days at
http://www.azz.com/investor-relations.
There will be a slide presentation accompanying today's event.
The Company's slide presentation for the call will be available on
the Investor Relations page at
http://www.azz.com/investor-relations.
About AZZ Inc.
AZZ Inc. is a global provider of galvanizing and a variety of
metal coating solutions, welding solutions, specialty electrical
equipment and highly engineered services to a broad range of
markets, including but not limited to the power generation,
transmission, distribution, refining and industrial markets. The
Company's Metal Coatings segment is a leading provider of metal
finishing solutions for corrosion protection, including hot dip
galvanizing, spin galvanizing, powder coating, anodizing and
plating, to the North American steel fabrication industry. The
Company's Infrastructure Solutions segment is dedicated to
delivering safe and reliable transmission of power from generation
sources to end customers, and automated weld overlay solutions for
corrosion and erosion mitigation to critical infrastructure in the
energy and waste management markets worldwide.
Safe Harbor Statement
Certain statements herein about our expectations of
future events or results constitute forward-looking statements for
purposes of the safe harbor provisions of The Private Securities
Litigation Reform Act of 1995. You can identify forward-looking
statements by terminology such as "may," "should," "expects,"
"plans," "anticipates," "believes," "estimates," "predicts,"
"potential," "continue," or the negative of these terms or other
comparable terminology. Such forward-looking statements are based
on currently available competitive, financial and economic data and
management's views and assumptions regarding future events. Such
forward-looking statements are inherently uncertain, and investors
must recognize that actual results may differ from those expressed
or implied in the forward-looking statements. Certain factors could
affect the outcome of the matters described herein. This press
release may contain forward-looking statements that involve risks
and uncertainties including, but not limited to, changes in
customer demand for our products and services, including demand by
the power generation markets, electrical transmission and
distribution markets, the industrial markets, and the metal
coatings markets. In addition, within each of the markets we
serve, our customers and our operations could potentially be
adversely impacted by the ongoing COVID-19 pandemic. We could
also experience fluctuations in prices and raw material cost,
including zinc and natural gas which are used in the hot dip
galvanizing process; supply-chain vendor delays; customer requested
delays of our products or services; delays in additional
acquisition opportunities; currency exchange rates; adequacy of
financing; availability of experienced management and employees to
implement AZZ's growth strategy; a downturn in market conditions in
any industry relating to the products we inventory or sell or the
services that we provide; economic volatility or changes in the
political stability in the United
States and other foreign markets in which we operate; acts
of war or terrorism inside the United
States or abroad; and other changes in economic and
financial conditions. AZZ has provided additional information
regarding risks associated with the business in AZZ's Annual Report
on Form 10-K for the fiscal year ended February 28, 2021 and other filings with the
Securities and Exchange Commission ("SEC"), available for viewing
on AZZ's website at www.azz.com and on the
SEC's website at www.sec.gov . You are urged to
consider these factors carefully in evaluating the forward-looking
statements herein and are cautioned not to place undue reliance on
such forward-looking statements, which are qualified in their
entirety by this cautionary statement. These statements are based
on information as of the date hereof and AZZ assumes no
obligation to update any forward-looking statements, whether as a
result of new information, future events, or otherwise.
Company Contact:
David Nark,
Senior Vice President of Marketing, Communications and Investor
Relations
AZZ Inc.
(817) 810-0095
www.azz.com
Investor Contact:
Joe
Dorame, Managing Partner
Lytham Partners
(602) 889-9700
www.lythampartners.com
---Financial tables on the following page---
AZZ
Inc.
|
Condensed
Consolidated Statements of Income
|
(dollars and shares
in thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
May 31,
|
|
|
2021
|
|
2020
|
Sales
|
|
$
|
229,826
|
|
|
$
|
213,293
|
|
Cost of
sales
|
|
171,899
|
|
|
171,085
|
|
Gross
margin
|
|
57,927
|
|
|
42,208
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
27,215
|
|
|
27,890
|
|
Operating
income
|
|
30,712
|
|
|
14,318
|
|
|
|
|
|
|
Interest
expense
|
|
1,697
|
|
|
2,634
|
|
Other (income)
expense, net
|
|
(969)
|
|
|
1,456
|
|
Income before income
taxes
|
|
29,984
|
|
|
10,228
|
|
Income tax
expense
|
|
7,647
|
|
|
4,687
|
|
Net income
|
|
$
|
22,337
|
|
|
$
|
5,541
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
Basic
|
|
$
|
0.89
|
|
|
$
|
0.21
|
|
Diluted
|
|
$
|
0.88
|
|
|
$
|
0.21
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
|
25,270
|
|
|
26,192
|
|
AZZ
Inc.
|
Segment
Reporting
|
(dollars in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
May 31,
|
|
|
2021
|
|
2020
|
Sales:
|
|
|
|
|
Metal
Coatings
|
|
$
|
127,735
|
|
|
$
|
118,991
|
|
Infrastructure
Solutions
|
|
102,091
|
|
|
94,302
|
|
Total
sales
|
|
$
|
229,826
|
|
|
$
|
213,293
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
Metal
Coatings
|
|
$
|
31,576
|
|
|
$
|
25,085
|
|
Infrastructure
Solutions
|
|
9,624
|
|
|
(1,048)
|
|
Corporate
|
|
(10,488)
|
|
|
(9,719)
|
|
Total operating
income
|
|
$
|
30,712
|
|
|
$
|
14,318
|
|
|
|
|
|
|
AZZ
Inc.
|
Condensed
Consolidated Balance Sheets
|
(dollars in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
May 31,
2021
|
|
February 28,
2021
|
Assets:
|
|
|
|
|
Current
Assets(1)
|
|
$
|
334,908
|
|
|
$
|
303,492
|
|
Property, Plant and
Equipment, Net
|
|
207,689
|
|
|
205,909
|
|
Other assets,
net
|
|
496,642
|
|
|
487,041
|
|
Total
assets
|
|
$
|
1,039,239
|
|
|
$
|
996,442
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity:
|
|
|
|
|
Current
liabilities
|
|
$
|
131,194
|
|
|
$
|
113,850
|
|
Long-term debt due
after one year, net
|
|
185,435
|
|
|
178,419
|
|
Other
liabilities
|
|
85,199
|
|
|
80,881
|
|
Shareholders'
equity
|
|
637,411
|
|
|
623,292
|
|
Total liabilities and
shareholders' equity
|
|
$
|
1,039,239
|
|
|
$
|
996,442
|
|
(1)
Includes assets held for sale of $5,628 and $3,684 as of May 31,
2021 and February 28, 2021, respectively.
|
AZZ
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(dollars in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
May 31,
|
|
|
2021
|
|
2020
|
Net cash provided by
(used in) operating activities
|
|
$
|
11,060
|
|
|
$
|
(11,184)
|
|
Net cash used in
investing activities
|
|
(7,466)
|
|
|
(10,847)
|
|
Net cash (used in)
provided by financing activities
|
|
(5,610)
|
|
|
11,036
|
|
Effect of exchange
rates on cash
|
|
(418)
|
|
|
722
|
|
Net decrease in cash
and cash equivalents
|
|
(2,434)
|
|
|
(10,273)
|
|
Cash and cash
equivalents at beginning of period
|
|
14,837
|
|
|
36,687
|
|
Cash and cash
equivalents at end of period
|
|
$
|
12,403
|
|
|
$
|
26,414
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/azz-inc-reports-results-for-first-quarter-of-fiscal-year-2022-generates-eps-of-0-88-and-revises-guidance-301328529.html
SOURCE AZZ Inc.