Fiscal Year 2026 Guidance Narrowed
FORT WORTH, Texas, January 7, 2026 /PRNewswire/ -- AZZ Inc. (NYSE:AZZ), the leading independent provider of hot-dip galvanizing and coil coating solutions, today announced financial results for the third quarter ended November 30, 2025.
Fiscal Year 2026 Third Quarter Overview (as compared to prior fiscal year third quarter(1)):
Total Sales of $425.7 million, up 5.5%
Metal Coatings sales of $195.0 million, up 15.7%
Precoat Metals sales of $230.7 million, down 1.8%
Net Income of $41.1 million, up 22.2%; Adjusted net income of $46.0 million, up 9.7%
GAAP diluted EPS of $1.36 per share, up 21.4%; Adjusted diluted EPS of $1.52, up 9.4%
Consolidated Adjusted EBITDA of $91.2 million or 21.4% of sales, versus prior year of $90.7 million, or 22.5% of sales
Segment Adjusted EBITDA margin of 30.3% for Metal Coatings and 19.7% for Precoat Metals
Repurchased 201,416 shares of common stock, or $20.0 million at an average purchase price of $99.28
Net leverage ratio 1.6x; debt reduction in the quarter of $35 million; year-to-date $325.4 million
Cash provided by operating activities in the quarter of $79.7 million, up 20% from last year
Cash dividend of $0.20 per share to common shareholders paid during the quarter
Subsequent to the quarter end, Avail Infrastructure Solutions ("AVAIL"), completed the sale of the majority of its Welding Solutions LLC business (the "Welding Solutions Business") to Pelican Energy Partners L.P.
(1) Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, and net leverage ratio are non-GAAP financial measures as defined and reconciled in the tables below.
Tom Ferguson, President, and Chief Executive Officer of AZZ, commented, "We are pleased with our third quarter performance as sales expanded to $425.7 million, up 5.5% over the prior year. Our sales momentum and disciplined operational execution resulted in higher Adjusted EBITDA of $91.2 million, or 21.4% of sales, which generated adjusted diluted EPS of $1.52, up 9.4%. Metal Coatings delivered strong, double-digit sales gains on volume increases, while Precoat Metals continued to navigate weaker demand in certain end markets. Infrastructure-driven project spending drove Metal Coatings third quarter results, supported by growth in construction, industrial, and electrical transmission and distribution end-markets. In line with broader industry trends, Precoat Metals' sales results were lower due to softness in building construction, HVAC, and transportation end-markets. On a year-to-date basis, consolidated sales increased $39.1 million, or 3.2% over prior year and Adjusted EBITDA increased $9.6 million, or 3.5% over prior year. We continue to ramp sales at our new Washington, Missouri, facility aligned with our expectations through the fiscal year end. As we advance through the fourth quarter, we remain confident in our business momentum; therefore, we have narrowed our annual guidance range.
"During the quarter we continued to strengthen our balance sheet. We are pleased to attain a net debt leverage of 1.6x at the end of the quarter, after reducing debt by $35 million, and repurchasing $20 million shares of common stock in the quarter. The third quarter's performance generated $79.7 million cash from operations, and we will continue to closely manage working capital, capital expenditures, and debt as we progress through the balance of our fiscal year. We believe the Company is well-positioned to capitalize upon our growing pipeline of M&A opportunities, reflecting the strength of our strategy and our disciplined approach to pursuing high-quality acquisition targets. Finally, I want to thank all of our dedicated AZZ employees for their hard work, disciplined focus and pride and passion for delivering outstanding quality and service to our customers." Ferguson concluded.
Segment PerformanceThird Quarter 2026 Metal CoatingsSales of $195.0 million increased by 15.7% over the third quarter of last year, primarily due to increased volume supported by infrastructure-related project spending in several end markets, including construction, industrial, and electrical transmission and distribution. Segment Adjusted EBITDA of $59.2 million resulted in Adjusted EBITDA margin of 30.3%, a decrease of 120 basis points from the prior year third quarter due to a continued higher mix of electrical, solar, transmission and distribution projects.
Third Quarter 2026 Precoat Metals Sales of $230.7 million decreased by 1.8% compared to the third quarter of last year, primarily due to weaker end markets, including building construction, HVAC, and transportation, partially offset by container. Segment EBITDA of $45.5 million resulted in EBITDA margin of 19.7%, an increase of 60 basis points from the prior year third quarter, primarily due to lower fixed, and selling, general and administrative costs.
Balance Sheet, Liquidity and Capital AllocationThe Company generated significant operating cash of $452.9 million for the first nine months of fiscal year 2026 through improved earnings, which included a distribution of $273.2 million from the AVAIL JV following the sale of its Electrical Products Group, coupled with a continued focus on working capital management. At the end of the third quarter, the Company's net leverage was 1.6x trailing twelve months Adjusted EBITDA. During the first nine months of fiscal year 2026, the Company paid down debt of $325.4 million, repurchased $20.0 million of common shares, completed an acquisition in the Metal Coatings segment of $30.1 million and returned cash to common shareholders through cash dividend payments totaling $17.1 million. Capital expenditures for the first nine months of fiscal year 2026 were $58.7 million, and full fiscal year capital expenditures are expected to be approximately $60 - $80 million.
Subsequent EventOn December 31, 2025, Avail Infrastructure Solutions ("AVAIL"), in which we have an unconsolidated investment through the AVAIL JV, completed the sale of the majority of its Welding Solutions LLC business (the "Welding Solutions Business") to Pelican Energy Partners LP.
Following the sale, AZZ will continue to own a 40% interest in AVAIL, which will consist of AVAIL's Industrial Lighting and the remaining Welding Solutions business.
Financial Outlook, Fiscal Year 2026 Guidance NarrowedWe are narrowing our fiscal year guidance for the year ending February 28, 2026, which reflects our best estimates given anticipated market conditions for the full year, lower interest expense, an annualized effective tax rate of 24% and excludes M&A activity and any federal regulatory changes that may emerge.
FY2026 Guidance(1)
Sales
$1.625 - $1.7 billion
Adjusted EBITDA
$360 - $380 million
Adjusted Diluted EPS
$5.90 - $6.20
(1) FY2026 Guidance Assumptions:
a.
Excludes any future acquisitions.
b.
Excludes any future equity in earnings (loss) from AVAIL joint venture.
c.
Management defines adjusted earnings per share to exclude intangible asset amortization, restructuring charges and additional stock compensation expense related to the adoption of our executive retiree long-term incentive program from the reported GAAP measure.
d.
Assumes EBITDA margin range of 27 - 32% for the Metal Coatings segment and 17% - 22% for the Precoat Metals segment.
Conference Call DetailsAZZ Inc. will conduct a live conference call with Tom Ferguson, Chief Executive Officer, Jason Crawford, Chief Financial Officer, and David Nark, Chief Marketing, Communications, and Investor Relations Officer to discuss financial results for the third quarter of the fiscal year 2026, Thursday, January 8, 2026, 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 (855) 669-9658 or (412) 317-0088 (international), replay access code: 9962123 through January 15, 2026, 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 in North America. 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 StatementCertain 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, including increases due to inflation, in labor costs, components and raw materials including zinc and natural gas, which are used in our hot-dip galvanizing process, paint used in our coil coating process; 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; tariffs, 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 28, 2025, 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, Chief Marketing, Communications, and Investor Relations OfficerAZZ Inc.(817) 810-0095www.azz.com
Investor Contact:Sandy Martin / Phillip KupperThree Part Advisors(214) 616-2207 or (817) 368-2556www.threepa.com
---Financial tables on the following page---
AZZ Inc.
Condensed Consolidated Statements of Income
(dollars in thousands, except per share data)
(unaudited)
Three Months Ended November 30,
Nine Months Ended November 30,
2025
2024
2025
2024
Sales
$ 425,746
$ 403,654
$ 1,264,983
$ 1,225,869
Cost of sales
323,805
305,876
957,620
921,907
Gross margin
101,941
97,778
307,363
303,962
Selling, general and administrative
32,462
39,243
99,874
108,032
Operating income
69,479
58,535
207,489
195,930
Interest expense, net
(12,206)
(19,223)
(44,434)
(63,906)
Equity in earnings (loss) of unconsolidated subsidiaries
(1,437)
7,168
231,431
12,470
Other income, net
(276)
(763)
1,239
(142)
Income before income taxes
55,560
45,717
395,725
144,352
Income tax expense
14,485
12,114
94,396
35,728
Net income
41,075
33,603
301,329
108,624
Series A Preferred Stock Dividends
—
—
—
(1,200)
Redemption premium on Series A Preferred Stock
—
—
—
(75,198)
Net income available to common shareholders
$ 41,075
$ 33,603
$ 301,329
$ 32,226
Basic earnings per common share
$ 1.37
$ 1.12
$ 10.05
$ 1.12
Diluted earnings per common share
$ 1.36
$ 1.12
$ 9.97
$ 1.11
Weighted average shares outstanding - Basic
29,963
29,879
29,983
28,819
Weighted average shares outstanding - Diluted
30,198
30,118
30,231
29,076
Cash dividends declared per common share
$ 0.20
$ 0.17
$ 0.57
$ 0.51
AZZ Inc.
Segment Reporting
(dollars in thousands)
(unaudited)
Three Months Ended November 30,
Nine Months Ended November 30,
2025
2024
2025
2024
Sales:
Metal Coatings
$ 194,998
$ 168,599
$ 572,197
$ 516,750
Precoat Metals
230,748
235,055
692,786
709,119
Total Sales
$ 425,746
