AZZ Inc. Q4 FY2026 earnings call

• Tom noted strong close to the year with record sales and profitability for third consecutive year, recovery from winter storm, and fortifying competitive position by driving market share gains across segments. • Made organic investments, completed Greenfield pre-coat metals facility in Washington, Missouri, and acquired galvanizing facility in Canton, Ohio. • Highlighted secular tailwinds like infrastructure-related investment themes driving long-term growth, including industrial reshoring, bridge/highway investments, data center expansion, power generation, etc. • Drove incremental improvements across network using digital systems at metal coating plants and COAZO in pre-coated metals. • Jason detailed year and quarterly results, financial position including debt reduction, capital expenditures, and shareholder returns. • David discussed end market performance, with construction, electrical/industrial showing growth, consumer up due to beverage market shift, and pre-coat metals facing headwinds in residential construction.

Full year sales totaled $1.65 billion. Metal coating sales increased 14.1% with strong EBITDA of over $235 million (31% of sales). Pre-coat metals had a 2.3% sales decline but generated solid EBITDA of $176 million (19.8% of sales). Fourth quarter sales were $385.1 million, with metal coating up 25.7% and pre-coat metals down 2.4%. Fourth quarter gross profit was $87.6 million (22.7% of sales), operating income was $57.1 million (14.8% of sales).

• Reiterated fiscal 2027 guidance: sales expected to be in range of $1.725 to $1.775 billion, adjusted EBITDA in range of $360 million to $400 million, adjusted diluted earnings per share in range of $6.50 to $7. • Estimated debt reduction to range from $130 to $170 million in fiscal 2027. • Remain selectively aggressive in M&A opportunities focusing on strengthening metal coatings and pre-coated metal segments, expanding geographic reach, and deepening customer relationships.

Q: On metal coatings growth for fiscal 2027 and pre-coat headwinds.

A: Metal coatings expected mid-single to upper single digits growth, pre-coat metals relatively flat with 75% of end markets in construction and 30% residential exposure.

Q: On zinc prices and raw material trends.

A: Zinc prices had prior upward trend, general inflation in segments with price surcharges for transportation/fuel costs and margin protection.

Q: On pre-coat commercial market affordability besides high interest rates.

A: Project costs inflated, availability of substrate an issue with tariffs and domestic supply constraints.

Q: On data center demand handling and sales disaggregation.

A: Broad-based data center demand with network of facilities, sales disaggregation varies by order origin.

Q: On M&A pipeline.

A: Pipeline good, mostly metal coating bolt-ons with 3-4 in active discussions, 1 underway in due diligence, and one pre-coat in active discussions.

Q: On CapEx impact and buybacks.

A: CapEx for hot dip capacity expansions with incremental EBITDA impact, committed to buybacks for minimizing dilution.

Q: On transmission and distribution visibility.

A: Attend conferences, compare with customer feedback and market data.

Q: On Washington facility utilization and revenue contribution.

A: Running at ~40% utilization, revenue contribution ~$11 million in fiscal 2026, ramping up.

Q: On municipality spending concern.

A: Municipalities in good shape in some areas, challenges with big facilities but not creating problems this year.

Q: On paint cost pass-through and pre-coat inventory.

A: Paint pass-through one for one, pre-coat has ~3-4 weeks inventory, all bought to customer order.

Q: On pre-coat quarterly cadence.

A: Expected flat across year with new Washington facility adding growth as it ramps