AZZ Inc.

AZZ reported first-quarter fiscal 27 sales of $448.5 million, up 6.3% year over year. Gross profit was $112.2 million, or 25.0% of sales, up 30 basis points year over year; SG&A was $35.1 million, or 7.8% of sales; operating income was $77 million, or 17.2% of sales; consolidated adjusted EBITDA was $99.5 million, or 22.2% of sales; GAAP net income was $52.0 million; and adjusted diluted EPS was $1.85, up 3.9% year over year. The company generated $37.1 million of operating cash flow, had net leverage of 1.4x, and ended with $133.2 million available under its share repurchase program, with no repurchases in Q1. For fiscal 27, management raised guidance to sales of $1.8 billion to $1.85 billion, adjusted EBITDA of $375 million to $415 million, adjusted diluted EPS of $6.75 to $7.15, and debt reduction of $130 million to $170 million.

Tom Ferguson said the quarter was a strong start to fiscal 27, highlighting record sales in both segments, solid cash flow, a strong balance sheet, a higher dividend, and raised full-year guidance. He emphasized structural growth drivers such as grid modernization, data centers, and infrastructure reinvestment, while describing AZZ’s investments in capacity, digital tools, and customer partnerships as central to long-term profitable growth. His tone was confident and upbeat, with repeated references to strong demand, disciplined capital deployment, and a long-duration secular opportunity set.

Jason Crawford focused on the quarter’s financial strength and margin profile. He cited sales of $448.5 million, gross profit of $112.2 million, SG&A of $35.1 million, operating income of $77 million, adjusted EBITDA of $99.5 million, and adjusted diluted EPS of $1.85, while noting interest expense improved by $7.3 million to $11.3 million due to deliberate debt reduction. He also pointed to $37.1 million of operating cash flow, $18.7 million of capex, and net leverage of 1.4x, and highlighted the 20% dividend increase to $0.24 per share as evidence of confidence in cash generation and balance sheet flexibility.

Analysts pressed management on whether energy costs, tariffs, and project timing were causing delays; Tom Ferguson said the metal coatings market remained robust, data center work was active, and Precoat substrate conditions looked more stabilized, with some imported substrate potentially becoming more attractive again. Questions on the customer de-verticalization model drew an answer that AZZ is having regular discussions with customers who want to offload galvanizing operations, and management said the recently completed transaction could become a repeatable blueprint. Analysts also asked about M&A and greenfield buildouts; management said a deal could be announced later this month, greenfield galvanizing sites would usually rely on anchor customers rather than formal take-or-pay contracts, and the company is seeing enough opportunity to keep evaluating both bolt-ons and new sites.