Record Full Year Sales, Profitability and Cash
Flow
FORT
WORTH, Texas, April 22,
2024 /PRNewswire/ --AZZ Inc. (NYSE: AZZ), the
leading independent provider of hot-dip galvanizing and coil
coating solutions in North
America, today issued its audited consolidated financial
statements contained in the Company's Fiscal Year 2024 Annual
Report on Form 10-K for the year ended February 29,
2024.
Fiscal Year 2024 Overview (results from
continuing operations as compared to prior
year(1)(2)):
- Total Sales $1,537.6 million, up
16.2%
- Metal Coatings sales of $656.2
million, up 3.0%
- Precoat Metals sales of $881.4
million, up 28.4%
- Diluted EPS of $3.46, up 48.5%
versus prior year, Adjusted EPS of $4.53, up 34.8%
- Net Income of $101.6 million, up
53.2%; Adjusted net income of $132.8
million, up 39.5%
- Adjusted EBITDA of $333.6 million
or 21.7% of sales, versus prior year of $267.4 million or 20.2% of sales
- Segment EBITDA margin of 30.0% for Metal Coatings and 19.0% for
Precoat Metals
- Cash from operations $244.5
million, up from $91.4 million
in the prior year
- Reduced debt by $115.0 million
for the year, resulting in net leverage of 2.9x
Fourth Quarter 2024 Overview (results from
continuing operations as compared to prior
year(1)):
- Total Sales of $366.5 million, up
8.9%
- Metal Coatings sales of $154.4
million, up 3.3%
- Precoat Metals sales of $212.1
million, up 13.4%
- Diluted EPS of $0.56, up 273.3%
versus prior year, Adjusted EPS of $0.93, up 210.0%
- Net Income of $17.9 million, up
140.5%; Adjusted net income of $27.5
million, up 260.3%
- Adjusted EBITDA of $73.9 million
or 20.2% of sales, versus prior year of $57.2 million or 17.0% of sales
- Segment EBITDA margins of 28.6% for Metal Coatings and 17.8%
for Precoat Metals
____________________
|
(1)
|
Adjusted Net Income,
Adjusted EPS, and Adjusted EBITDA are non-GAAP financial measures
as defined and reconciled in the tables below.
|
(2)
|
Fiscal
2024 Precoat Metals included results for the full year
compared to only 42 weeks of results for fiscal 2023.
|
Tom Ferguson, President, and
Chief Executive Officer of AZZ, commented, "Fiscal year 2024 was a
pivotal year for AZZ, that reflects continued success in Metal
Coatings and our first full fiscal year of results in Precoat
Metals. We are pleased with full-year sales growth of 16.2%,
which includes strong results in both Metal Coatings and Precoat
Metals. For the year, our Metal Coatings segment delivered
record sales of $656.2 million, and
30.0% EBITDA margin, while Precoat Metals delivered record sales
results of $881.4 million and 19.0%
EBITDA margin.
"I want to express my gratitude to our entire AZZ team for their
outstanding performance in fiscal 2024, a great building year for
our company and the 37th consecutive year of profitability from
continuing operations. I am confident in our ability to
create value and generate significant cash as we continue to
leverage our strong market positions to meet the improving demand
in our end markets — while actively pursuing initiatives to drive
future growth and further enhance shareholder value. We are
excited about the opportunities ahead," Ferguson concluded.
Segment Performance
Full Year 2024 Metal Coatings
Strong sales of
$656.2 million, up 3.0% from prior
year. Improved sales were driven by a continued focus on
value pricing initiatives and an increase in volume for hot-dip
galvanizing driven by continued strength within the renewables,
utility and OEM construction markets.
Segment adjusted EBITDA of $196.7
million was up 4.0% versus the prior year. Adjusted
EBITDA margin of 30.0% was at the upper end of our previously
stated range of 25%-30%, and increased 30 basis points due to
working capital improvement and increased price.
Full Year 2024 Precoat Metals
Sales of
$881.4 million, including a full year
for fiscal 2024, were up 28.4% on 6% lower volume.
Segment adjusted EBITDA of $167.5
million or 19.0% of sales, was up 39.0%, on productivity,
efficiency, and cost improvement initiatives.
Fourth Quarter 2024 Metal Coatings
Sales
increased 3.3% to $154.4 million and
adjusted EBITDA increased 9.2% to $44.2
million versus the prior quarter in fiscal 2023. Sales
were primarily driven by increased volume and value-pricing
initiatives. Segment EBITDA margin increased to 28.6%
of sales, or 150 basis points higher than the prior year fourth
quarter EBITDA margin. The increase in EBITDA margin was a result
of higher sales and improvements in working capital.
Fourth Quarter 2024 Precoat Metals
Sales
increased 13.4% to $212.1 million and
adjusted EBITDA increased 41.4% to $37.7
million, versus the prior quarter in fiscal 2023. Sales were
seasonally higher driven by volume growth as a result of improved
end market conditions in both construction and appliance and share
gain initiatives. Segment adjusted EBITDA margin increased to
17.8% of sales, or 360 basis points higher than the prior year
fourth quarter EBITDA margin. The increase in EBITDA margin
was a result of higher volume, price, and operations improvement
initiatives.
Balance Sheet, Liquidity and Capital Allocation
The Company generated fiscal 2024 operating cash flow of
$244.5 million compared to
$91.4 million in the prior year 2023
with a full year inclusion of Precoat Metals. At the end of
the fourth quarter, net leverage was 2.9x LTM EBITDA, which
improved approximately 0.7x since the first full quarter following
the closing of the Precoat Metals acquisition on May 13, 2022. Consistent with the capital
allocation strategy, the Company paid down debt of $115.0 million and returned cash to shareholders
through cash dividend payments totaling $31.4 million. Capital expenditures were
$95.1 million during the year.
Fiscal 2025 capital expenditures are expected to be approximately
$100 - $120
million, which includes $50 -
$60 million for the greenfield plant
construction in Washington,
Missouri (completion expected in
FY25) and the balance to be allocated to maintenance, productivity
enhancements, and environmental, health and safety
initiatives. In FY2025 we will continue to allocate our
strong cash flow generated from operations to further deleverage
the company by approximately $60 -
$90 million.
Financial Outlook - Fiscal Year 2025 Guidance
Reiterating previously communicated guidance issued April 8, 2024.
|
|
Reiterating
FY25
Guidance(1)
|
Sales
|
|
$1.525 - $1.625
billion
|
Adjusted
EBITDA
|
|
$310 - $360
million
|
Adjusted Diluted
EPS
|
|
$4.50 -
$5.00
|
____________________
|
(1)
|
FY2025 Revised Guidance
Assumptions:
|
|
|
|
|
a.
|
Excludes the impact of
any future acquisitions.
|
|
b.
|
Includes approximately
$15 - $18 million of equity income from AZZ's minority interest in
its unconsolidated subsidiary.
|
|
c.
|
Adjusted Diluted EPS
guidance includes the addback of amortization related to the
Company's intangible assets.
|
Conference Call Details
AZZ Inc. will conduct a live conference call with Tom Ferguson, Chief Executive Officer,
Philip Schlom, Chief Financial
Officer, and David Nark, Senior Vice President of Marketing,
Communications, and Investor Relations to discuss financial results
for the fourth quarter of the fiscal year 2024, Monday,
April 22, 2024, 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 at (877) 344-7529 or
(412) 317-0088 (international), replay access code: 3060021,
through April 29, 2024, or by visiting
http://www.azz.com/investor-relations for the next 12
months.
About AZZ Inc.
AZZ Inc. is the leading independent provider of hot-dip
galvanizing and coil coating solutions to a broad range of
end-markets. Collectively, our business segments provide
sustainable, unmatched metal coating solutions that enhance the
longevity and appearance of buildings, products and infrastructure
that are essential to everyday life.
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," "could," "should,"
"expects," "plans," "will," "might," "would," "projects,"
"currently," "intends," "outlook," "forecasts," "targets,"
"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. Forward-looking
statements speak only as of the date they are made and are subject
to risks that could cause them to differ materially from actual
results. 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
manufactured solutions, including demand by the construction
markets, the industrial markets, and the metal coatings markets. We
could also experience additional increases in labor costs,
components and raw materials including zinc and natural gas, which
are used in our hot-dip galvanizing process; supply-chain vendor
delays; customer requested delays of our manufactured solutions;
delays in additional acquisition opportunities; an increase in our
debt leverage and/or interest rates on our debt, of which a
significant portion is tied to variable interest rates;
availability of experienced management and employees to implement
AZZ's growth strategy; a downturn in market conditions in any
industry relating to the manufactured solutions that we provide;
economic volatility, including a prolonged economic downturn or
macroeconomic conditions such as inflation 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, including in Part I,
Item 1A. Risk Factors, in AZZ's Annual Report on Form 10-K for the
fiscal year ended February 29,
2024, and other filings with the 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 when 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:
Sandy
Martin / Phillip Kupper
Three Part Advisors
(214) 616-2207
www.threepa.com
AZZ
Inc.
|
Condensed
Consolidated Statements of Income
|
(dollars in thousands,
except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended February 29/28,
|
|
Year
Ended February
29/28,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Sales
|
|
$
366,499
|
|
$
336,504
|
|
$
1,537,589
|
|
$
1,323,649
|
Cost of
sales
|
|
285,452
|
|
275,251
|
|
1,174,128
|
|
1,027,706
|
Gross
margin
|
|
81,047
|
|
61,253
|
|
363,461
|
|
295,943
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
38,774
|
|
25,058
|
|
141,861
|
|
122,305
|
Operating
income
|
|
42,273
|
|
36,195
|
|
221,600
|
|
173,638
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(24,734)
|
|
(27,061)
|
|
(107,065)
|
|
(88,800)
|
Equity in earnings of
unconsolidated subsidiaries
|
|
4,271
|
|
1,591
|
|
15,407
|
|
2,597
|
Other income,
net
|
|
152
|
|
658
|
|
161
|
|
1,240
|
Income from continuing
operations before income taxes
|
|
21,962
|
|
11,383
|
|
130,103
|
|
88,675
|
Income tax
expense
|
|
4,099
|
|
3,956
|
|
28,496
|
|
22,336
|
Net income from
continuing operations (GAAP)
|
|
17,863
|
|
7,427
|
|
101,607
|
|
66,339
|
Income (loss) from
discontinued operations, net of tax
|
|
—
|
|
(4,356)
|
|
—
|
|
12,770
|
Loss on disposal of
discontinued operations, net of tax
|
|
—
|
|
(2,010)
|
|
—
|
|
(132,083)
|
Net loss from
discontinued operations
|
|
—
|
|
(6,366)
|
|
—
|
|
(119,313)
|
Net income
(loss)
|
|
17,863
|
|
1,061
|
|
101,607
|
|
(52,974)
|
Dividends on preferred
stock
|
|
(3,600)
|
|
(3,600)
|
|
(14,400)
|
|
(8,240)
|
Net income (loss)
available to common shareholders
|
|
$
14,263
|
|
$
(2,539)
|
|
$
87,207
|
|
$
(61,214)
|
Basic earnings (loss)
per share
|
|
|
|
|
|
|
|
|
Earnings per common
share from continuing operations
|
|
$
0.57
|
|
$
0.15
|
|
$
3.48
|
|
$
2.34
|
Loss per common share
from discontinued operations
|
|
$
—
|
|
$
(0.26)
|
|
$
—
|
|
$
(4.81)
|
Earnings (loss) per
common share
|
|
$
0.57
|
|
$
(0.10)
|
|
$
3.48
|
|
$
(2.47)
|
Diluted earnings (loss)
per share
|
|
|
|
|
|
|
|
|
Earnings per common
share from continuing operations
|
|
$
0.56
|
|
$
0.15
|
|
$
3.46
|
|
$
2.33
|
Loss per common share
from discontinued operations
|
|
$
—
|
|
$
(0.25)
|
|
$
—
|
|
$
(4.78)
|
Earnings (loss) per
common share
|
|
$
0.56
|
|
$
(0.10)
|
|
$
3.46
|
|
$
(2.45)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding - Basic
|
|
25,094
|
|
24,903
|
|
25,041
|
|
24,828
|
Weighted average
shares outstanding - Diluted
|
|
25,346
|
|
25,013
|
|
25,209
|
|
24,978
|
AZZ
Inc.
|
Segment
Reporting
|
(dollars in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
February 29/28,
|
|
Year
Ended
February
29/28,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Sales:
|
|
|
|
|
|
|
|
Metal
Coatings
|
$
154,373
|
|
$
149,415
|
|
$
656,189
|
|
$
636,982
|
Precoat
Metals
|
212,126
|
|
187,089
|
|
881,400
|
|
686,667
|
Total Sales
|
$
366,499
|
|
$
336,504
|
|
$ 1,537,589
|
|
$ 1,323,649
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
Metal
Coatings
|
$
44,157
|
|
$
40,419
|
|
$
196,659
|
|
$
189,009
|
Precoat
Metals
|
37,655
|
|
26,628
|
|
167,512
|
|
120,473
|
Infrastructure
Solutions
|
4,270
|
|
1,590
|
|
14,911
|
|
2,597
|
Total Segment Adjusted
EBITDA(1)
|
$
86,082
|
|
$
68,637
|
|
$
379,082
|
|
$
312,079
|
____________________
|
(1)
|
See the Non-GAAP
disclosure section below for a reconciliation between the various
measures calculated in accordance with GAAP to the non-GAAP financial measures.
|
AZZ
Inc.
|
Condensed
Consolidated Balance Sheets
|
(dollars in
thousands)
|
(unaudited)
|
|
|
As of
|
|
|
February 29,
2024
|
|
February 28,
2023
|
Assets:
|
|
|
|
|
Current
assets
|
|
$
366,999
|
|
$
417,416
|
Property, plant and
equipment, net
|
|
541,652
|
|
498,503
|
Other non-current
assets, net
|
|
1,286,854
|
|
1,305,560
|
Total assets
|
|
$
2,195,505
|
|
$
2,221,479
|
|
|
|
|
|
Liabilities, Mezzanine
Equity, and Shareholders' Equity:
|
|
|
|
|
Current
liabilities
|
|
$
194,306
|
|
$
187,240
|
Long-term debt,
net
|
|
952,742
|
|
1,058,120
|
Other non-current
liabilities
|
|
113,966
|
|
122,659
|
Mezzanine
Equity
|
|
233,722
|
|
233,722
|
Shareholders'
Equity
|
|
700,769
|
|
619,738
|
Total liabilities,
mezzanine equity, and shareholders' equity
|
|
$
2,195,505
|
|
$
2,221,479
|
|
AZZ
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(dollars in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Year Ended February
29/28,
|
|
|
2024
|
|
2023
|
Net cash provided by
operating activities of continuing operations
|
|
$
244,468
|
|
$
91,430
|
Net cash used in
investing activities of continuing operations
|
|
(95,064)
|
|
(1,228,921)
|
Net cash provided by
(used in) financing activities of continuing operations
|
|
(147,888)
|
|
1,027,335
|
Cash provided by
discontinued operations
|
|
—
|
|
97,389
|
Effect of exchange rate
changes on cash
|
|
13
|
|
505
|
Net increase in cash
and cash equivalents
|
|
1,529
|
|
(12,262)
|
Cash and cash
equivalents at beginning of period
|
|
2,820
|
|
15,082
|
Cash and cash
equivalents from continuing operations at end of period
|
|
$
4,349
|
|
$
2,820
|
AZZ Inc.
Non-GAAP
Disclosure
Adjusted Net Income, Adjusted Earnings Per
Share and Adjusted EBITDA
In addition to reporting financial results in accordance with
Generally Accepted Accounting Principles in the United States ("GAAP"), we provide
adjusted net income, adjusted earnings per share and adjusted
EBITDA (collectively, the "Adjusted Earnings Measures"), which are
non-GAAP measures. Management believes that the presentation
of these measures provides investors with greater transparency when
comparing operating results across a broad spectrum of companies,
which provides a more complete understanding of our financial
performance, competitive position and prospects for future capital
investment and debt reduction. Management also believes that
investors regularly rely on non-GAAP financial measures, such as
adjusted net income, adjusted earnings per share and adjusted
EBITDA to assess operating performance and that such measures may
highlight trends in our business that may not otherwise be apparent
when relying on financial measures calculated in accordance with
GAAP.
Management defines adjusted net income and adjusted earnings per
share to exclude intangible asset amortization, acquisition
expenses, transaction related expenses and certain legal
settlements and accruals, from the reported GAAP measure.
Management defines Adjusted EBITDA as earnings excluding
depreciation, amortization, interest, provision for income taxes,
acquisition expenses, transaction related expenses and certain
legal settlements and accruals. Management believes Adjusted
EBITDA is used by investors to analyze operating performance and
evaluate the Company's ability to incur and service debt and its
capacity for making capital expenditures in the future.
Management provides non-GAAP financial measures for
informational purposes and to enhance understanding of the
Company's GAAP consolidated financial statements. Readers
should consider these measures in addition to, but not instead of
or superior to, the Company's financial statements prepared in
accordance with GAAP, and undue reliance should not be placed on
these non-GAAP financial measures. Additionally, these
non-GAAP financial measures may be determined or calculated
differently by other companies, limiting the usefulness of those
measures for comparative purposes.
The following tables provides a reconciliation for the three
months ended and year ended February 29, 2024 and
February 28, 2023 between the non-GAAP Adjusted Earnings
Measures to the most comparable measures, calculated in accordance
with GAAP (dollars in thousands, except per share data):
Adjusted Net
Income and Adjusted Earnings Per Share from Continuing
Operations
|
|
|
Three Months Ended
February 29/28,
|
|
Year Ended February
29/28,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Amount
|
|
Per
Diluted
Share(1)
|
|
Amount
|
|
Per
Diluted
Share(1)
|
|
Amount
|
|
Per
Diluted
Share(1)
|
|
Amount
|
|
Per
Diluted
Share(1)
|
Net income from
continuing operations (GAAP)
|
$ 17,863
|
|
|
|
$
7,427
|
|
|
|
$
101,607
|
|
|
|
$ 66,339
|
|
|
Less: preferred stock
dividends
|
(3,600)
|
|
|
|
(3,600)
|
|
|
|
(14,400)
|
|
|
|
(8,240)
|
|
|
Net income from
continuing operations
|
14,263
|
|
|
|
3,827
|
|
|
|
87,207
|
|
|
|
58,099
|
|
|
Impact of preferred
stock dividends
|
3,600
|
|
|
|
—
|
|
|
|
14,400
|
|
|
|
8,240
|
|
|
Net income and diluted
earnings per share from
continuing operations for Adjusted net income
calculation(2)
|
17,863
|
|
$ 0.61
|
|
3,827
|
|
$ 0.15
|
|
101,607
|
|
$ 3.46
|
|
66,339
|
|
$ 2.35
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
transaction-related expenditures(3)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
15,320
|
|
0.54
|
Amortization of
intangible assets
|
5,852
|
|
0.19
|
|
4,998
|
|
0.20
|
|
23,960
|
|
0.83
|
|
22,613
|
|
0.79
|
Legal settlement and
accrual(4)
|
6,793
|
|
0.23
|
|
—
|
|
—
|
|
17,043
|
|
0.58
|
|
—
|
|
—
|
Subtotal
|
12,645
|
|
0.42
|
|
4,998
|
|
0.20
|
|
41,003
|
|
1.41
|
|
37,933
|
|
1.33
|
Tax
impact(5)
|
(3,035)
|
|
(0.10)
|
|
(1,200)
|
|
(0.05)
|
|
(9,841)
|
|
(0.34)
|
|
(9,104)
|
|
(0.32)
|
Total
adjustments
|
9,610
|
|
0.32
|
|
3,798
|
|
0.15
|
|
31,162
|
|
1.07
|
|
28,829
|
|
1.01
|
Adjusted net income and
adjusted earnings per
share from continuing operations (non-GAAP)
|
$ 27,473
|
|
$ 0.93
|
|
$
7,625
|
|
$ 0.30
|
|
$
132,769
|
|
$ 4.53
|
|
$ 95,168
|
|
$ 3.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding - Diluted
|
|
|
29,463
|
|
|
|
25,013
|
|
|
|
29,326
|
|
|
|
28,283
|
Adjusted EBITDA
from Continuing Operations
|
|
|
Three Months
Ended
February 29/28,
|
|
Year
Ended
February
29/28,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net income from
continuing operations (GAAP)
|
$
17,863
|
|
$
7,427
|
|
$
101,607
|
|
$
66,339
|
Interest
expense
|
24,734
|
|
27,061
|
|
107,065
|
|
88,800
|
Income tax
expense
|
4,099
|
|
3,956
|
|
28,496
|
|
22,336
|
Depreciation and
amortization(6)
|
20,388
|
|
18,777
|
|
79,423
|
|
74,590
|
Adjustments:
|
|
|
|
|
|
|
|
Acquisition and
transaction-related expenditures(3)
|
—
|
|
—
|
|
—
|
|
15,320
|
Legal settlement and
accrual
|
6,793
|
|
—
|
|
17,043
|
|
—
|
Adjusted EBITDA from
continuing operations (non-
GAAP)
|
$
73,877
|
|
$
57,221
|
|
$
333,634
|
|
$
267,385
|
Adjusted EBITDA
from Continuing Operations by Segment
|
|
|
Three Months Ended
February 29, 2024
|
|
Metal
Coatings
|
|
Precoat
Metals
|
|
Infra-
structure
Solutions
|
|
Corporate
|
|
Total
|
Net income (loss) from
continuing operations
(GAAP)
|
$ 36,501
|
|
$ 30,121
|
|
$ 4,270
|
|
$ (53,029)
|
|
$ 17,863
|
Interest
expense
|
—
|
|
—
|
|
—
|
|
24,734
|
|
24,734
|
Income tax
expense
|
—
|
|
—
|
|
—
|
|
4,099
|
|
4,099
|
Depreciation and
amortization(6)
|
6,706
|
|
7,534
|
|
—
|
|
6,148
|
|
20,388
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Legal
accrual
|
950
|
|
—
|
|
—
|
|
5,843
|
|
6,793
|
Adjusted EBITDA from
continuing operations
(non-GAAP)
|
$ 44,157
|
|
$ 37,655
|
|
$ 4,270
|
|
$ (12,205)
|
|
$ 73,877
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
February 28, 2023
|
|
Metal
Coatings
|
|
Precoat
Metals
|
|
Infra-
structure
Solutions
|
|
Corporate
|
|
Total
|
Net income (loss) from
continuing operations
(GAAP)
|
$ 32,249
|
|
$ 16,319
|
|
$ 1,590
|
|
$ (42,731)
|
|
$ 7,427
|
Interest
expense
|
—
|
|
—
|
|
—
|
|
27,061
|
|
27,061
|
Income tax
expense
|
—
|
|
—
|
|
—
|
|
3,956
|
|
3,956
|
Depreciation and
amortization(6)
|
8,170
|
|
10,309
|
|
—
|
|
298
|
|
18,777
|
Adjusted EBITDA from
continuing operations
(non-GAAP)
|
$ 40,419
|
|
$ 26,628
|
|
$ 1,590
|
|
$ (11,416)
|
|
$
57,221
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended February
29, 2024
|
|
Metal
Coatings
|
|
Precoat
Metals
|
|
Infra-
structure
Solutions
|
|
Corporate
|
|
Total
|
Net income (loss) from
continuing operations
(GAAP)
|
$
164,856
|
|
$
139,571
|
|
$ 9,161
|
|
$
(211,981)
|
|
$
101,607
|
Interest
expense
|
—
|
|
—
|
|
—
|
|
107,065
|
|
107,065
|
Income tax
expense
|
—
|
|
—
|
|
—
|
|
28,496
|
|
28,496
|
Depreciation and
amortization(6)
|
26,353
|
|
27,941
|
|
—
|
|
25,129
|
|
79,423
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Legal settlement and
accrual(4)
|
5,450
|
|
—
|
|
5,750
|
|
5,843
|
|
17,043
|
Adjusted EBITDA from
continuing operations
(non-GAAP)
|
$
196,659
|
|
$
167,512
|
|
$
14,911
|
|
$ (45,448)
|
|
$
333,634
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended February
28, 2023
|
|
Metal
Coatings
|
|
Precoat
Metals
|
|
Infra-
structure
Solutions
|
|
Corporate
|
|
Total
|
Net income (loss) from
continuing operations
(GAAP)
|
$
156,054
|
|
$ 80,274
|
|
$ 2,597
|
|
$
(172,586)
|
|
$ 66,339
|
Interest
expense
|
—
|
|
—
|
|
—
|
|
88,800
|
|
88,800
|
Income tax
expense
|
—
|
|
—
|
|
—
|
|
22,336
|
|
22,336
|
Depreciation and
amortization(6)
|
32,955
|
|
40,199
|
|
—
|
|
1,436
|
|
74,590
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Acquisition and
transaction-related
expenditures(3)
|
—
|
|
—
|
|
—
|
|
15,320
|
|
15,320
|
Adjusted EBITDA from
continuing operations
(non-GAAP)
|
$
189,009
|
|
$
120,473
|
|
$ 2,597
|
|
$ (44,694)
|
|
$
267,385
|
|
|
|
|
|
|
|
|
|
|
Debt Leverage
Ratio Reconciliation
|
|
|
|
Trailing Twelve
Months Ended
|
|
|
February
29,
|
|
February
28,
|
|
August
31,
|
|
|
2024
|
|
2023
|
|
2022
|
Gross debt
|
|
$
1,010,250
|
|
$
1,125,250
|
|
$
1,323,750
|
Less: Cash per bank
statement
|
|
(24,807)
|
|
(9,500)
|
|
—
|
Add: finance lease
liability
|
|
3,474
|
|
1,329
|
|
1,115
|
Consolidated
indebtedness
|
|
$
988,917
|
|
$
1,117,079
|
|
$
1,324,865
|
|
|
|
|
|
|
|
Net income
|
|
$
101,607
|
|
$
66,339
|
|
$
63,737
|
Depreciation and
amortization
|
|
79,423
|
|
74,590
|
|
50,044
|
Interest
expense
|
|
107,065
|
|
88,800
|
|
38,588
|
Income tax
expense
|
|
28,496
|
|
22,336
|
|
27,865
|
EBITDA
|
|
316,591
|
|
252,065
|
|
180,234
|
Adjustment to EBITDA as
defined in the Credit Agreement
|
|
—
|
|
(87,476)
|
|
45,968
|
EBITDA per Credit
Agreement
|
|
316,591
|
|
164,589
|
|
226,202
|
Cash
items(7)
|
|
25,443
|
|
15,236
|
|
15,236
|
Non-cash
items(8)
|
|
9,510
|
|
145,357
|
|
124,031
|
Equity in earnings, net
of distributions
|
|
(12,294)
|
|
(2,597)
|
|
—
|
Adjusted EBITDA per
Credit Agreement
|
|
$
339,250
|
|
$
322,585
|
|
$
365,469
|
|
|
|
|
|
|
|
Net leverage
ratio
|
|
2.9x
|
|
3.5x
|
|
3.6x
|
____________________
|
(1)
|
Earnings per share
amounts included in the table above may not sum due to rounding
differences.
|
(2)
|
For the three months
ended and year ended February 29, 2024, diluted earnings per share
is based on weighted average shares outstanding of 25,346 and
25,209, respectively, as the preferred shares are
anti-dilutive. The calculations of adjusted diluted earnings
per share is based on weighted average shares outstanding of 29,463
and 29,326, respectively, as the preferred shares are dilutive for
these calculations. For the year ended February 28, 2023,
diluted earnings per share is based on weighted average shares
outstanding of 24,978, as the preferred shares are
anti-dilutive. The calculation of adjusted diluted earnings
per share is based on weighted average shares outstanding of
28,283, as the preferred shares are dilutive for this calculation.
Adjusted net income for adjusted earnings per share also includes
the addback of preferred dividends for the periods noted
above.
|
(3)
|
Includes Corporate
expenses related to the Precoat Metals acquisition and the
divestiture of AZZ Infrastructure Solutions business into the AVAIL
JV.
|
(4)
|
For the three months
ended February 29, 2024, represents a legal accrual related to the
Metal Coatings segment of $1.0 million and $5.8 million
for the settlement of a litigation matter that was acquired as
part of the Precoat Acquisition and relates to the business
activities that were discontinued prior to our acquisition.
For the year ended February 29, 2024, consists of the $5.5 million
accrual for the Metal Coatings segment, $5.8 million for the
settlement of a litigation matter related to the AIS segment that
was retained following the sale of the AIS business, and $5.8
million for the settlement of a litigation matter that was acquired
as part of the Precoat Acquisition mentioned above.
|
(5)
|
The non-GAAP effective
tax rate for each of the periods presented is estimated at
24.0%.
|
(6)
|
For the three months
ended and year ended February 29, 2024, amortization expense for
acquired intangible assets of $5.9 million and $24.0 million,
respectively, are included in Corporate expenses in "Selling,
general and administrative" expense, as these expenses are not
allocated to the segments. For the three months ended and
year ended February 28, 2023, amortization expense for acquired
intangible assets of $1.7 million and $7.1 million, respectively,
are included in the AZZ Metal Coatings expense in "Cost of sales",
and $3.3 million and $15.5 million, respectively, are included in
AZZ Precoat Metals in "Selling, general and administrative"
expense.
|
(7)
|
Cash items includes
certain legal settlements and accruals, costs associated with the
AVAIL JV transition services agreement and costs associated with
the Precoat Acquisition.
|
(8)
|
Non-cash items includes
losses related to the divestiture of the AIS business, stock-based
compensation expense and other non-cash expenses.
|
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SOURCE AZZ Inc.