Azz Q1 2025 Earnings Report
Key Takeaways
AZZ Inc. reported strong Q1 2025 results with a 5.7% increase in total sales to $413.2 million and adjusted EPS of $1.46. The company saw growth in both Metal Coatings and Precoat Metals segments, with improved EBITDA margins. They also strengthened their balance sheet by redeeming the Series A Preferred Stock and reducing debt.
Total sales increased by 5.7% to $413.2 million, driven by growth in both Metal Coatings and Precoat Metals segments.
Net income was $39.6 million, up 38.8%, while adjusted net income reached $44.0 million, a 31.9% increase.
EBITDA grew to $94.1 million, representing 22.8% of sales, up from 21.8% in the prior year.
The company generated $71.9 million in operating cash flow, enabling debt reduction of $25.0 million and a net leverage ratio of 2.8x.
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Forward Guidance
The company reiterated its FY25 guidance issued on April 8, 2024.
Positive Outlook
- Sales are expected to be between $1.525 billion and $1.625 billion.
- Adjusted EBITDA is projected to be in the range of $310 million to $360 million.
- Adjusted diluted EPS is anticipated to be between $4.50 and $5.00.
- Guidance excludes the impact of any future acquisitions.
- Guidance includes approximately $15 - $18 million of equity income from AZZ’s minority interest in its unconsolidated subsidiary.
Challenges Ahead
- Guidance excludes the impact of any future acquisitions.
- Includes approximately $15 - $18 million of equity income from AZZ’s minority interest in its unconsolidated subsidiary.
- Adjusted Diluted EPS guidance includes the addback of amortization related to the Company’s intangible assets.
- Changes in customer demand for manufactured solutions, including demand by the construction markets, the industrial markets, and the metal coatings markets.
- 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.