AZZ Inc. (AZZ) Reports Fiscal Year 2024 Second Quarter Results: Strong Cash Generation and ...
AZZ Inc. (NYSE:AZZ) reported total sales of $398.5 million, down 2.0% from the prior year.
Diluted EPS of $0.97, up 4.3% versus prior year, and Adjusted EPS of $1.27, up 5.0%.
Net income of $28.3 million, up 12.8% from the previous year.
Reduced debt by $40.0 million in the quarter, resulting in net leverage of 3.4x.
On October 10, 2023, AZZ Inc. (NYSE:AZZ), a leading provider of hot-dip galvanizing and coil coating solutions, announced its financial results for the second quarter ended August 31, 2023. Despite a slight decrease in total sales, the company demonstrated strong profitability and cash generation.
Company Performance and Financial Highlights
AZZ Inc. (NYSE:AZZ) reported total sales of $398.5 million, a decrease of 2.0% from the prior year. The Metal Coatings segment recorded sales of $169.8 million, up 2.4%, while Precoat Metals sales were $228.7 million, down 5.0%. The company's diluted EPS was $0.97, up 4.3% versus the prior year, and the adjusted EPS was $1.27, up 5.0%. The net income was $28.3 million, up 12.8%, and the adjusted net income was $37.2 million, up 5.5%.
Tom Ferguson, President, and Chief Executive Officer of AZZ, commented,
I am pleased to report that our second quarter results were in line with our expectations and set us up well for the balance of the year. While Precoat Metals faced softer market conditions, particularly in certain construction and appliance markets, the team focused on driving profitability, and exceeded 20% EBITDA margin. Metal Coatings continued to benefit from infrastructure spending, posted another record quarter for sales and operating income, and exceeded 30% EBITDA margin."
Balance Sheet, Liquidity, and Capital Allocation
The company generated significant operating cash flow of $118.3 million in the first six months of the year through improved earnings and prudent working capital management. During the second quarter, the company paid down debt of $40.0 million and returned cash to shareholders through cash dividend payments totaling $7.9 million. Capital expenditures were $25.7 million during the quarter, and fiscal year 2024 capital expenditures are expected to be approximately $125 million.
Financial Outlook - Fiscal Year 2024 Guidance
Management reaffirms fiscal year 2024 guidance with sales of $1.40 billion to $1.55 billion, adjusted EBITDA of $300-$325 million, and adjusted earnings per diluted share of $3.85-$4.35.
The company's strong performance in the second quarter, coupled with its reaffirmed guidance for fiscal year 2024, demonstrates AZZ Inc. (NYSE:AZZ)'s resilience and strategic focus on profitability and cash generation. This bodes well for the company's future growth and value creation for its shareholders.
This article first appeared on GuruFocus.
