AZZ Inc. Reports Fourth Quarter and Fiscal Year 2024 Full Year Results
Record Full Year Sales, Profitability and Cash Flow
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%
- Metal Coatings sales of
- 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%
- Metal Coatings sales of
- 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. |
"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
Segment adjusted EBITDA of
Full Year 2024
Sales of
Segment adjusted EBITDA of
Fourth Quarter 2024 Metal Coatings
Sales increased 3.3% to
Fourth Quarter 2024
Sales increased 13.4% to
Balance Sheet, Liquidity and Capital Allocation
The Company generated fiscal 2024 operating cash flow of
Financial Outlook - Fiscal Year 2025 Guidance
Reiterating previously communicated guidance issued
|
|
Reiterating FY25 Guidance(1) |
Sales |
|
|
Adjusted EBITDA |
|
|
Adjusted Diluted EPS |
|
|
____________________ |
||
(1) |
FY2025 Revised Guidance Assumptions: |
|
|
|
|
|
a. |
Excludes the impact of any future acquisitions. |
|
b. |
Includes approximately |
|
c. |
Adjusted Diluted EPS guidance includes the addback of amortization related to the Company's intangible assets. |
Conference Call Details
A replay of the call will be available at (877) 344-7529 or (412) 317-0088 (international), replay access code: 3060021, through
About
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
Company Contact:
(817) 810-0095
www.azz.com
Investor Contact:
Three
(214) 616-2207
www.threepa.com
|
||||||||
Condensed Consolidated Statements of Income |
||||||||
(dollars in thousands, except per share data) |
||||||||
(unaudited) |
||||||||
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
Year Ended |
||||
|
|
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 |
|
|||||||
Segment Reporting |
|||||||
(dollars in thousands) |
|||||||
(unaudited) |
|||||||
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended February 29/28, |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Sales: |
|
|
|
|
|
|
|
Metal Coatings |
$ 154,373 |
|
$ 149,415 |
|
$ 656,189 |
|
$ 636,982 |
|
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 |
|
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. |
|
||||
Condensed Consolidated Balance Sheets |
||||
(dollars in thousands) |
||||
(unaudited) |
||||
|
|
As of |
||
|
|
|
|
|
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 |
|
|
||||
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 |
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
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
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 |
|
Amount |
|
Per
Diluted |
|
Amount |
|
Per
Diluted |
|
Amount |
|
Per
Diluted |
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 |
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 |
$ 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 |
|
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- |
$ 73,877 |
|
$ 57,221 |
|
$ 333,634 |
|
$ 267,385 |
Adjusted EBITDA from Continuing Operations by Segment |
|||||||||
|
|||||||||
|
Three Months Ended |
||||||||
|
Metal |
|
|
|
Infra-
structure |
|
Corporate |
|
Total |
Net income (loss) from continuing operations |
$ 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 |
$ 44,157 |
|
$ 37,655 |
|
$ 4,270 |
|
$ (12,205) |
|
$ 73,877 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended |
||||||||
|
Metal |
|
|
|
Infra-
structure |
|
Corporate |
|
Total |
Net income (loss) from continuing operations |
$ 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 |
$ 40,419 |
|
$ 26,628 |
|
$ 1,590 |
|
$ (11,416) |
|
$ 57,221 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Year Ended |
||||||||
|
Metal |
|
|
|
Infra-
structure |
|
Corporate |
|
Total |
Net income (loss) from continuing operations |
$ 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 |
$ 196,659 |
|
$ 167,512 |
|
$ 14,911 |
|
$ (45,448) |
|
$ 333,634 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Year Ended |
||||||||
|
Metal |
|
|
|
Infra-
structure |
|
Corporate |
|
Total |
Net income (loss) from continuing operations |
$ 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 |
— |
|
— |
|
— |
|
15,320 |
|
15,320 |
Adjusted EBITDA from continuing operations |
$ 189,009 |
|
$ 120,473 |
|
$ 2,597 |
|
$ (44,694) |
|
$ 267,385 |
|
|
|
|
|
|
|
|
|
|
Debt Leverage Ratio Reconciliation |
||||||
|
||||||
|
|
Trailing Twelve Months Ended |
||||
|
|
|
|
|
|
|
|
|
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 |
(3) |
Includes Corporate expenses related to the |
(4) |
For the three months ended |
(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 |
(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. |
View original content to download multimedia:https://www.prnewswire.com/news-releases/azz-inc-reports-fourth-quarter-and-fiscal-year-2024-full-year-results-302122703.html
SOURCE